Entrepreneurship and good governance in sport

Date : 15/03/2017

Transparency International Belgium was invited by B-Sportunity at Stayen nv in Sint-Truiden to join a panel debate about entrepreneurship and good governance in sport. Dr. Arnout Geeraert, expert to TI Belgium and Postdoctoral Researcher at LINES Institute (KU Leuven International and European Studies), kindly accepted to address the topic on our behalf.

B-Sportunity is an initiative from the training institute Syntra Limburg. Students of the programme Sport Management, in collaboration with the state of the art stadium Stayen nv, organised this event to address ‘Entrepreneurship in Sport’.

During the first panel session, the discussion illustrated how difficult it is for a lot of sport federations and clubs to be financially independent and sustainable. Depending on the type of sport, the accommodation often requires huge investments. Combined with the general running costs of the organisation, in most cases it is difficult to balance expenses with income from member contributions only.

Top sport is prestigious, it can put countries on the international map. Mr Paul Rowe, General Director and Head of Top Sport at Sport Vlaanderen mentioned the rather modest investment in top sport in Belgium. The Flemish Government spends approximately 21 million euros per year on top sport (excluding infrastructure), which roughly equals 3,50 euros per citizen in Flanders per year.

From Mr. Marc Frederix, responsible for the marketing department of the Nationale Loterij, we learned that they sponsor the sector with 22 million euros per year. Flemish sports federations also receive subsidies from the government. These are not only based on membership volume, but also on adherence to basic principles of good governance. This due to the ‘Code Muyters’, based on indicators of good governance in Flemish sport federations, developed by Dr. Arnout Geeraert in collaboration with Prof. Dr. Edith Drieskens. The indicators are implemented within the framework of a new Flemish decree on sport, which entered into force as off January 2017. For more information about the Code for Good Governance in Flemish Sports Federations, click here.

Against this background of precarious financial situations, the sector does generate a lot of commercial activity. Television broadcasting companies and the gambling industry for instance, have an audience that enables them to successfully commercialise sport. This tension creates a breeding ground for malpractices. Transparency International Belgium therefore closely follows trends and developments.

What is good governance in sport?

Arnout Geeraert illustrated the importance of measuring instruments to make progress in this field. Good governance in sport requires transparency, democracy and internal accountability. This posed immediately the question if a sport federation should be managed like any other business. After all, a lot of organisations are managed by volunteers and professionalization and innovation can be a difficult challenge.

Although this process can indeed be challenging, this is necessary and attainable for every sport federation, explained our expert. Moreover, once a strong balanced team is taking the lead, the overall performance of the federation or club improves, which has a positive effect on being a trusted potential partner for sponsors. When members of the Board have a strong sport technical expertise and management skills come second, this creates a risk that is quite common today. Hence, a first important step is to define clear recruitment profiles to compose a balanced board.

Mr. Kumpen, Chair of Voka and member of the Board of Circuit Zolder, added that the Board of Directors should have the mandate to define the strategy and control, but must refrain from operational involvement. Structures, small and large, need at the operational level professional managers and staff. They must operate based on a mutual trust relationship with the Board.

An important side note, was that international investors create larger risks. Sportclubs for which ownership moves outside of our own country, are more difficult to control. Money is power, but we should not compromise. Even with small budgets, a lot can be achieved.

What have we learned from scandals at FIFA?

The above was illustrated by Mr. Geeraert. After a long struggle, a number of ‘bad apples’ were removed from the FIFA management. We should be aware that this is not the solution to the problem. Only the ‘symptoms’ were removed, but the structures have remained and continue to create the same risk as in the past.

How can small federations professionalise with limited means?

A trend has started for small federations to merge their back offices. This creates an important opportunity for professionalization. 
TV broadcasting rights will not bring any relieve, as only football has access to this kind of revenue in Belgium.

Serious concerns of the panellists are about the rise of e-sports that creates fictive, manipulated games. The gambling mafia is powerful. The before mentioned foreign ownership of clubs makes it more difficult to fight match-fixing. Doping obviously also remains a ‘disease’ that is hard to cure.

Nevertheless, the evening ended on a positive note. Sports promotes health and creates important social communities for many. We should not forget that a lot of passionate volunteers and professionals make this happen every day. Especially for smaller associations, not only the code, but additional support is needed to professionalise governance, mentioned Arnout Geeraert. In general, awareness about the importance of good governance in sport increases. The trend has started and we expect step by step more progress in the coming years.

21/03/2017, Hanneke de Visser - TI Belgium