Risk

Risk

Second piece in series highlights risks associated with sport

Professor Simon Chadwick

Posted: July 31, 2014

Tagged: events / legacy / management / risk

This is the second of two posts (the first having appeared yesterday) about risk in sport. The piece is the original version of a shortened, edited piece that appeared in the ICSS journal.

Since the last edition of the journal, the standout international story has been the annexation of Crimea by Russia. This action followed a period of civil unrest in Ukraine, which reached a peak around the time of the Sochi Winter Olympics in February and culminated in the ousting of then Ukrainian President, Viktor Yanukovych.

The timing of the conflict, whether planned or entirely coincidental, raised some initial, immediate issues for event organisers. Following heavy investment in the event and the international glare focused on Sochi, Russia could ill-afford for attention and association to be diverted elsewhere.

On this basis, it indicates that event organisers need to address the geo-political environments in which they operate, and the potential threat level of event risks posed by, for example, territorial disputes. As both Brazil and Qatar are finding, global scrutiny can shine a light on domestic problems. But as Russia has now found, a country’s external activities can also pose problems (such as causing reputational damage) for events.

Given the stand-off between pro-European west Ukranians and their pro-Russian counterparts in the east of the country, the nation’s Premier League was suddenly thrust centre-stage. With potentially explosive games ahead – such as Arsenal Kiev against Metalurh Donetsk (in essence, west versus east), the league was suspended.

It is not difficult to understand why the league took such a decision under the circumstances: large groups of football fans moving around the country, some of whom have a reputation for violent behaviour, many motivated by regional loyalties, and at a time that is era-defining for the Ukrainian nation.

For the domestic football association and the scheduling of games, the suspension created problems, especially given that this is a World Cup year and FIFA dictates that all domestic games must be completed by a specific date. At the same time, such disruption for example disrupts training regimes, travel plans and, relations with commercial partners – challenges that all have to be managed.

Notwithstanding the nature of the West’s response to the Crimean situation, economic sanctions imposed by the United States could begin to have an impact on Russian sport and possibly beyond. In one case, the Chief Executive of the energy company Rosneft is now subject to US sanctions and shares in the company immediately fell by around 1.5% upon this announcement.

Rosneft is a majority owner of the CSKA sports club in Moscow, and is also an active sport sponsor of, for example, ice hockey. Clearly the enforcement and/or development of US economic sanctions are seemingly yet to have a tangible effect on sport. With the further strengthening or severity though, it could be that we start to see some spill-over effects.

It is likely that this situation is being monitored by the likes of Roman Abramovich (the owner of Chelsea FC) and Alexander Usmanov (a shareholder at Arsenal). Some commentators have called for sanctions to be taken against both individuals. If this was to happen, measures that might include restrictions on capital movements could affect, for instance, player signings.

As the crisis in Ukraine continues, a race row has recently raged in the in the United States’ National Basketball Association (NBA). Los Angeles Clippers owner Roger Sterling was secretly taped in April making racist and provocative comments about his female partner and her friendship with several African-Americans. When these tapes emerged in the media, it caused an immediate furore resulting in several advertisers immediately pulling-out of contracts with the NBA.

Within seven days, the new and recently installed NBA commissioner, Adam Silver, announced that Sterling was being banned from the sport for life from the NBA and that the NBA would be seeking to force the Clippers owner to sell the franchise.

The cases raise a multitude of issues, most notably because racism clearly continues to be a major issue that many sports still appear to have difficulty in dealing with. What is especially pertinent about the Sterling case however is that market-forces and business commerce increasingly appear to be exerting pressure on stakeholders to respond to behaviour deemed unacceptable to fans and customers.

At the same time, the speed and assertiveness of Silver’s actions set a precedent that could well pose some interesting challenges for the NBA, and indeed other sports, in the future. Indeed, within 24 hours of Silver making his public announcement about Sterling, Fédération Internationale de Football Association (FIFA) President, Sepp Blatter, expressed on Twitter his full support for the decision.

Expect matters concerning how to address racism, how to regulate owners in sport, and how to respond to commercial partners’ concerns to rise up the sporting agenda over the next 12 months.

In the same week as the Sterling case, FC Barcelona and Brazilian international footballer Dani Alves was racially abused during a game against Villareal. Following the award of a corner, a supposed Villareal fan threw a banana at Alves with player responding by picking the banana up, eating it and then taking the corner.

The incident was thrust centre stage of the social media world by tweets of support from fellow footballers (most notably Alves’ fellow Brazilian footballer Neymar), other sports people and even politicians. Most people condemned the fan’s behaviour and Alves used the incident to make a public statement about the state of racism in Spain.

Days later, the international media began reporting that Alves’s eating of the banana and Neymar’s response to it was actually part of a pre-planned campaign devised by a marketing agency, Loducca. At the time of writing, it is still unclear what the precise nature of the entire incident actually is.

Suffice to say that, if the Loducca story is true, it poses some significant questions for sport. For example, should players be allowed to unilaterally act in addressing problems they might perceive in the sport where they participate?

While it is acknowledged that Alves’ and Neymar’s actions have raised awareness of a totally abhorrent practice, they nevertheless deceived many people in doing so. It will be interesting to see whether other marketers, commercial partners and stakeholders engage in other similar such forms of activity. If so, how then will the authorities respond?

With the FIFA World Cup ahead and the continued likelihood of further problems in Ukraine, it we await with interest developments in issues raised by this column.

 

 

 

 

 

About Professor Simon Chadwick

Professor Simon Chadwick set-up and edits The Scorecard. He is Director of CIBS (Centre for the International Business of Sport) at Coventry University, where he works as Professor of Sport Business Strategy and Marketing.  Simon tweets via Prof_Chadwick