Sports must stop giving cover to fraudsters

Sports must stop giving cover to fraudsters
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First Published: Thu, Feb 26 2009. 12 50 AM IST

Updated: Thu, Feb 26 2009. 12 50 AM IST
What did Texan-born billionaire R. Allen Stanford know about cricket? The game is famously impenetrable to everyone outside of its English, Australian, Indian and Caribbean heartlands. It would be hard to imagine anything less Texan than a slow, genteel contest, where dress codes and tea breaks are as important as the score itself.
And yet Stanford turns out to have been a major sponsor of the sport, muscling into the limelight as a promoter and champion. Now that he has been accused by the US Securities and Exchange Commission of running a massive, ongoing fraud; he has caused huge embarrassment to the England and Wales Cricket Board, one of the recipients of his boundless generosity.
It isn’t the first time a questionable company or tycoon has been a big sponsor of sporting events. In reality, too, many sports organizations have allowed themselves to become a front for flimsy, over-ambitious types. While money and sports will always work together, the point has been reached where many sports are effectively colluding with get-rich-quick businessmen.
It is time they cleaned up their act, or pretty soon they won’t have a sport worth selling.
Turn the clock back a few years, and you will recall that Calisto Tanzi, the former chief executive officer of the collapsed Italian food maker Parmalat Finanziaria SpA, was supporting a range of tournaments. The company financed a Formula One racing team for many years, lavished money on skiing events, supported soccer teams in Italy and Brazil, and hired soccer star Ronaldo to promote its products. Tanzi was sentenced to 10 years in a Milan prison last December for misleading investors.
Likewise, Enron Corp. was a big supporter of the Houston Astros baseball team, at one point agreeing to pay $100 million (Rs498 crore today) for the right to put its name on the home stadium.
Then there was Thaksin Shinawatra, the former Thai prime minister who fled to the UK after facing corruption charges in his own country, took control of Manchester City Football Club and sold it to an Abu Dhabi investment company.
And while no one would accuse collapsed banks of any crime worse than arrogance and stupidity, it is noticeable that the lender was lavishing tens of millions on sports deals: It was one of the main supporters of rugby’s Six Nations competition.
The only surprise is that Bernard Madoff wasn’t sponsoring any sporting events. A Palm Beach golf tournament might have been the perfect venue for meeting some fresh clients. There are two points to be made about those links, one major and one minor.
The minor one is that investors should scan the shirts of soccer teams, the hoods of Formula One racing cars and the names on the billboards behind the rugby goalposts. If a company is spending a suspiciously large sum on sports deals, then it is a good idea to sell the shares, or pull your money out of its funds.
The more important point is that professional sport has allowed itself to become the vehicle by which questionable businesses legitimize themselves.
No one should be fooled that men such as Stanford or Tanzi are spending millions on sporting events for the love of the games.
Occasionally, a wealthy entrepreneur spends money on a local team because it is a passion. More often, sponsorship is as cold and precise a calculation as any made in the boardroom. For any fraudster, the most elusive commodities are credibility, respectability and access. Big-time sport provides all three. In the 19th century, people bought British peerages to make their way in society. In the 21st century, they buy soccer teams, Formula One teams or cricket events. And they are doing it for the same reason: It makes them appear important very quickly.
Naturally, money and sport have always been tangled up together. Even the Olympics, founded as a celebration of dedicated amateur sports, have turned into an often nauseating display of corporate puffery and nationalistic breast-beating.
Lines still must be drawn. The rampant wage inflation that dominates most sports, with bigger and bigger payments to stars and their agents every year, has forced many of them into the arms of every swindler seeking a veneer of respectability.
There is no point in being sentimental. There is no more chance of taking money out of sport than there is of taking greed out of banking, or ambition out of politics. But when a man such as Stanford buys his way into cricket, or a politician such as Thaksin buys his way into soccer, the people in charge must surely know they are selling credibility to people who otherwise may not have any.
The trouble is, you can sell your reputation only two or three times at most.
After all, sport is meant to be about fierce but fair competition. Many sports have lost touch with that completely: They have become little more than arenas for mercenary athletes and on-the-make businessmen to fill their wallets.
Cynics may say that doesn’t matter. They are wrong. Over time, sports that don’t represent anything nobler than the ability to write out a cheque won’t mean anything to the fans. And then they won’t have any reputation left to sell.
Bloomberg
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First Published: Thu, Feb 26 2009. 12 50 AM IST