The business of sports is a multi-million dollar global enterprise. Athletes are on television in a variety of sports such as soccer, American football, rugby, Australian Rules football, cricket, basketball, tennis and track and field, earning a considerable income for using their talent, and bringing pleasure to audiences worldwide. These are our new heroes who provide inspiration to millions of people. However, many of us do not realize that the athletes earn only a fraction of the revenues from this global enterprise.
My eyes were opened to the vast sums earned while I lived in the US. The student athletes at the university I attended did not receive a single penny of the multi-millions earned by the school from television rights. It is a fact that they received a free education because of the athletic scholarships they earned due to their talent, but many would never reach the professional ranks they aspired to. Many Afro-Americans who failed to make it to the exclusive club of professional athletes were confined to the ranks of ignominy.
The West Indies Cricket team had, in the past, earned an enviable reputation for entertaining millions with high quality cricket. Yet, for much of our history, our cricketers earned a pittance until Kerry Packer of World Series Cricket radically changed the rules by which players were compensated. The challenge which West Indies cricket teams of the recent past encountered had much to do with player compensation or the lack thereof.
There has always been tension between the owners of sports teams concerning this aspect of the business of sport. How much should the owners compensate those who actually perform in the arena? Some may say that it is the players who draw the crowds. It was said that Yankee Stadium, home of the New York Yankees, was the house that Babe Ruth built. The owners also make a direct contribution in terms of facilities and investment in player development. Should the owners not be able to earn a reasonable return on their investments?
Revenues from sport are not only earned as gate receipts. Spectators are not only to be found in the stadiums but in homes, offices and sports bars worldwide, where they watch sporting events via satellite telecast. Television rights generate significant revenues. The Federation of International Football Association (FIFA), the worldwide governing body for soccer, has been able to transform itself into a very powerful organization via revenues generated by the FIFA World Cup.
Where are these revenues generated? There are revenues from television rights as mentioned earlier, revenues from the use of team logos; players’ image rights are a significant source of revenues for the players themselves and their teams. There are product endorsements of company goods and services by teams or individual players on the team; an example is Digicel’s sponsorship of the West Indies cricket.
I suspect that we in the Caribbean are somewhat ignorant concerning the business of sport. The reason I consider this to be the case is that our West Indies Cricket team has been the centre of controversy for quite some time. The issues may be long standing and difficult to deal with. However, there are solutions out there. Sporting organizations in other countries have dealt with similar issues and resolved them. There is no need to reinvent the wheel here. Perhaps there is a need to move to a more professional basis, a more structured Cricket Tournament. It requires the involvement of Government to successfully implement. What we have not done is to invest similar time, interest and financial resources into the development of sport in the regional systems for player development.
Some may say the lack of financial resources prevents us from transforming our sporting organizations into fully professional bodies that administer and develop sporting disciplines. This view is contrasted by the talent which we in the Caribbean possess which allows us to compete successfully against the best in the world. We successfully staged the 2007 World Cup.
The financial crisis currently afflicting our region requires that we develop new areas of economic activity. Investing in the development of sport is as good an investment as any, and may not require as much financial resources as we may think. We have developed world class cricketers and track and field athletes with the most basic of sporting infrastructures. From time to time, there have been North American scouts coming to our region to assess our talent. Many of our best track and field athletes are recruited by North American universities to take part in their track programs. Ambassador Obadele Thompson is a good example.
The returns from such investment in sports are significant and multiple. Not only do they provide national recognition to the athletes involved but also add to national prestige. There are also the endorsements for our national sportspersons and the creation of centres of excellence, where sportspersons from all over the world can come and try to replicate our way of developing our athletes. The inherent spin-off, the creation of sporting goods industries would also be a source of significant employment.
Jamaica, through the performance of its track and field athletes, has created a model for the rest of the region to follow. The rest of the region should all take note.
Edward Hunte is an Attorney-at-Law, the holder of an MBA with concentrations in Economics & Finance, and was also an economist with the Ministry of Finance and Economic Affairs.