Competition means fair competition with everybody equal
Stuart Thomson
Group Managing Director at JOHNSONS - Accounts | Tax | Wealth - Free no obligation quote 020 8567 3451
In the last week, we have seen British values of fair competition being challenged.
Now I'm a rugby fan, probably due to having two left feet at school, and my team Ealing Trailfinders stands top of the English Championship. But will the rules of the pandemic league go against them. Saracens, relegated for cheating will have a largely unchanged squad from last year back after international duty, to play what will no doubt be the promotion decider and yet my side has beaten them this season already. That's sport and however much I dislike it the rules were clear for all and nobody objected at the start.
However this weekend, football is reeling in Its own distortion of fair play. I don't mean the usual weekend post match arguments about refereeing decisions or use of football’s equivalent of hawk eye but the decision to create a new European Super League with founder members guaranteed their place. In America the World Series may technically include the entire world but the lack of any teams outside North America does make one question whether that sport is reaching the echelons of true potential that the threat of promotion and relegation would create if more teams competed. Promotion and relegation is a core part of sport. A dismal season has potential disastrous ramifications. Success and promotion can have lasting benefits for years to come. Guaranteed places will take out the incentive to innovate. The class of ’92 would not have been kept in tact. Messi and Ronaldo would not have been valued as highly in a world valuing mediocrity.
One only has to look at the Scottish Leagues to see the impact of a lack of desire (not by the fans but by the club). Glasgow Rangers’ demise brought them from the pinnacle of Scottish professional football to the bottom. They reinvented themselves and are back on top but in the meantime their arch rivals, Celtic had no true competition and won season after season. But without the competitive drive to beat Rangers, Celtic did not progress as much as others as their performance in Europe testifies. That's not a criticism of players, managers or fans. It's just an observation that without the hunger, the drive and the fear of losing, performance is not at the cutting edge. Why would Celtic spend more to improve a squad unnecessarily?
So how can a sport benefit from a lack of competition? I'm not sure that the most popular sport in the world, with the billions of dollars behind it, needs to create additional financial support for the few. And that's what this proposal is. It's a form of economic protectionism. If successful it will be even harder to see success at other clubs in the top flight of local leagues. The wonderment of Leicester Football Club becoming league champions will not happen again. Every fan starts the season with the hope to “do a Leicester”. There are already accusations that the money of the big clubs, make the sport an unfair competition. Saracens and Glasgow Rangers have both shown the benefit of money in sport albeit they got caught out bending the rules!
Sport unites everyone. It brings social cohesion and whilst sometimes rivalry can go too far on the whole it's healthy competition bringing positives and economic activity to local communities. But a sport dominated by television and advertising rights removes the impact of fans. And it's exactly that issue which is driving this greed and economic protectionism.
In other industries protectionism is acknowledged to result in reduced innovation and higher prices. Now in unviable sports then perhaps protecting value is important if not necessary to secure investment. But can we really say the three big European leagues (the English Premiership, Spanish La Liga and Italian Serie A) are in need of financial protection. Yes I'm sure some could point to the economic woes caused by the pandemic. Barcelona have acknowledged that they cannot finance talent acquisitions like before. But if we consider that predicament with those clubs in the lower leagues one can only see this as greed protecting the wealthy. Would Stephen Gerrard, Frank Lampard and Pep Guardiola have been given their opportunity without a track record. The first two had no experience before taking the top job in top clubs. Pep took football to another level but it involved playing differently. Innovation requires risk taking and where that's not rewarded playing safe is better. As IBM famously said “nobody gets fired for buying IBM” but that applied to a nascent IT industry not a long established uber sport.
The fans will pay for this European Super League. This is about getting more and whose going to pay. It may not be in ticket prices but television rights will drive up advertising revenues which will impact on ordinary people. Football is universally popular and this universal appeal attracts advertisers and sponsors. And advertisers and sponsors pay more to the clubs then they will ask their customers to fund it.
Now so far I’ve talked football and tried to apply economic protectionism to sport. But this distortion of competition is also prevalent in the political world. Last week David Cameron (ex Prime Minister) has been accused of seeking political interference in the affairs of a struggling GreensillCapital. I'm sure he didn't break rules. But not breaking rules does not make it right. I have little doubt that his appointment was solely based on his ability to bring political insight or weight to decisions – after all he didn't have a CV steeped in directorships of supply chain financiers. Is it so wrong to allow such influence? Could transparency not deal with the concerns of undue influence? The company is just using its business network and don't we all use our own networks to our own advantage. Yes of course and so you cannot blame him for trying – after all one could generously be persuaded he was trying to save jobs! But these arguments miss the point. Transparency addresses the behaviour of the individuals but an economy thrives when competition is equal. If David Cameron would make the same representations for companies of which he was not a director then economically speaking this would not be an issue of an unequal playing field. As it was I don't believe any of my clients who suffered during the pandemic, for which there are sadly a few, would getting anything other than short shrift if they called on David Cameron for help. It was his unique position as a director of the company which made him make this call. That's not a level playing field. It sought to distort the economics of the risk – reward conundrum.
The political press is still focussing on the appropriateness of such a call. I'm sure that can be justified. But the bigger picture is the distortion of competition. Should I as a business owner appoint Rishi Sunak when he leaves political office (as PM?) to my board even though he's not qualified? I hope everyone agrees that has to be wrong. If our politicians or former politicians need to earn more, then pay them more and this can be funded through the economic gains of a truly level economic landscape and not from the coffers of a few who then seek to charge the many.
Both the weekend’s football revelations and David Cameron’s actions have one thing in common. The few seeking to protect their position through the distortion of competition.
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3 年Stuart I see what you mean but Football has prostituted it self to Venture Capitalists so I don’t see fans complaining about all the TV money I don’t believe they can have their cake ?? and eat it ??