It’s no surprise to hear of corruption in the sports world. After all, the news stories are full of scandal in politics and the corporate world, wherever money can buy influence. There is a lot of money in sports.
A recent headline is the disclosure that leaders in FIFA, the governing body for soccer, have been taking bribes from potential sponsors of the World Cup for years. Millions of dollars change hand to secure a city or country for a future site of the championship games.
This form of corruption, which occurs primarily with foreign nations competing for the World Cup, became a crusade for U.S. federal agents. The arrest of seven FIFA officials in Switzerland attending a federation meeting in May shocked the international sporting world.
The most vociferous critics question why the United States is blowing the lid off what has become a “business as usual” culture among the foreign nations that covet sponsoring the World Cup.
After all, soccer is more popular in Europe and Asia, so why is the United States making a case against the accepted custom of bribes and payoffs?
Apparently, the principal reason for these arrests and potential indictments involves money laundering through U.S. banking channels. It will be interesting to see if this position will stand up to legal opposition if the officials are extradited for prosecution in U.S. courts.
Media outrage over the U.S. intervention has been extensive. Russia objects to the United States setting itself up as a judge far outside its borders. In response, America claims the right to go after anyone who uses its banking system to clear payments for illegal schemes.
All the international publicity forced the long-time head of FIFA, Sepp Blatter, to step down. Observers speculate that his $10 million salary and other perks don’t implicate him in the bribery scandal. He already makes a lot.
The arrests of FIFA officials may reach into very dark corners of the Zurich headquarters. Evidence of systemic corruption has been accumulating for years. FIFA controls $4 billion of television and marketing rights, The Economist reports. That is a powerful tool for negotiation.
The legal process got underway when Chuck Blazer, once the most powerful soccer official in the United States, spilled the beans, according to The Economist.
Blazer pleaded guilty to racketeering by accepting bribes to vote for preferred sites for the World Cup. His activity began about 1993 and continued through the early 2000s, when he and other members of the FIFA executive committee received bribes and kickbacks.
Another former FIFA official, Jack Warner of South Africa, claims that bribes paid to the executive committee were intended to promote football development, not influence voting. Warner was among 14 soccer officials and businessmen named in the May indictment.
Despite the international uproar over the U.S. meddling in football affairs, reform advocates say somebody has to do it. The legal tools were originally enacted to prosecute the Mafia leaders. Commonly known as RICO, the Racketeer Influenced and Corrupt Organizations Act was passed in 1970. It has broad interpretations to define the cheaters.
Some question whether RICO has jurisdiction outside the United States. The extradition and trial of the officials may have an application to other sporting events where betting and payoffs exist.
Following the money seems to be standard for sports. Not too many years ago, U.S. baseball and football had a more amateur image as entertainment for a general public. Television and big brand endorsements changed all that. Players wanted to share the advertising revenues, the free-agent system took over and millions of dollars were tossed around.
San Diego has experienced the big business of sports with the transition of team ownerships over the past five decades. C. Arnholt Smith bought the Pacific Coast League Padres and the team’s value went up substantially when it joined the major leagues in 1969. Several changes in ownership since then have seen the value of the team increase exponentially.
When Ray Kroc stepped in to save the Padres from leaving San Diego in 1974, his investment was $12 million. His widow, Joan, sold the team in 1990 for $75 million to the Tom Werner Group. John Moores then bought the team for about $80 million in 1994.
The O’Malley Group bought the Padres in 2012 from majority owner Moores and a group of minority owners formed by Jeff Moorad in 2009. The 2012 sale price of about $800 million included a $200 million TV agreement.
No doubt the increase in the value of the Chargers franchise since the Spanos family acquired it from Gene Klein is considerable and would probably be worth even more if they moved to Los Angeles.
Greed is drawn to big money in politics and industry. It’s no surprise sports has the same attraction.