Over the last fifteen years, sports organisations have undergone profound changes in their operating and funding conditions thanks to the strong increase in revenues from television rights and sponsorship generated by the organisation of very lucrative events such as World cups or championships and / or the staging of international circuits[1]. Therefore, these hybrid organisations, must reconcile their not profit aim with a business logic to ensure their development at the cost of the management of identity compromises (Bayle, 2007). The International Sports Federations (IF) and the International Olympic Committee (IOC), which are in a quasi monopoly historically, are not directly subject to a public control system or to the stock market (except for the financial review system of associations). The situation of the IOC and the IF is not unique, we find the same type of structure in NGOs (futuristic, 2001; Igallens and Queinnec, 2004), such as the Comité International de la Croix Rouge[2].
The running of the IOC and of the IF is totally private and originates from a democratic system although they are non-profit and “public interest” organisations. Contrary to companies where the financial result is essential and where the interest of the shareholders plays a major part, international non-profit organisations do not aim primarily at financial performance. This does not preclude the need for the development of their resources and for a balanced budget for the development of the media coverage of a sport and its expansion to new countries or continents. In addition, these organisations should strive to avoid dishonest transactions (personal enrichment, secret funding …) which are in sharp contrast to the humanistic values they seek to promote.
The governance of the IOC and of the IF has often been at fault, like other large organisations. In the early 2000s this fact was illustrated by the questioning of the way the International Olympic Committee (Chappelet, 2002), the International Federation of Volleyball and Beach Volleyball (FIVB), the Fédération Internationale de Football Association FIFA and of other IF were run. Since the early 2000s, the IOC has made important changes in its governance modes (and Chantelat Chappelet in Bayle, 2007). The IF, including FIFA, one of the most famous IF, were mostly created in the late 19th and early 20th century. They are recognised by the International Olympic Committee (IOC) and belong to the Olympic movement that the IOC oversees; they are given the task to organise, promote and develop sports in the world (Chappelet and Bayle, 2005). In this regard, they define and are the guardians of the rules in their disciplines. Generally they are also the owners of the World championships.
Over the past few years, due to a lack of control over the governance of various sports associations, a large number of problems or scandals emerged such as the choice of Salt Lake City Olympics in 1998, questions relating to the appointment of Sepp Blatter as the head of FIFA in 1998, governance problems in the International Taekwondo Federation (WTF) in early 2000, the marks concerning figure skating at the Olympics in Salk Lake City in 2002 at the International Skating Union (ISU), the financial scandal in 2002 due to the bankruptcy of ISL[3] for FIFA, the legal action by the President of the Argentinean Volleyball Federation against the President of the FIVB in 2003, the problem related to the medal awards in wrestling for the Fédération Internationale de Lutte Amateur (FILA) at the Beijing Olympics in 2008, match fixing at the Union Européenne de Football Association (UEFA) in 2010 and that same year, the suspicion of corruption in the choice of the host country of the World football championships of FIFA, only for the most famous scandals.
Contrary to the governance models and regulation of (large) companies, relatively few studies and recommendations have been carried out on non-profit organisations (in France, l’Institut Français des Administrateurs (2009), and outside, the studies by Carver -1997 and 2001 with the setting up of reference frames – cf. the book published by IFA 2009). Most of the works focuses on the role of the Board of Directors. In the world of sports organisations, the major studies are the following ones: the “IOC Commission 2000”[4] , Chappelet (2006 and 2010), and Arcioni (2007, 2009 and 2010).
The aim of this paper is to propose a study for the creation of a regulatory body (World Sport Governance Agency: WSGA) based on the literature of the governance of NGOs, non-profit organisations (NPOs), sports and existing models for the world of profit organisations as well as some NGOs. Indeed, the elements resulting from the creation of such an agency would be used to improve governance practices which are key factors in their performance (Chappelet and Bayle, 2005).
Firstly, we will analyse the research studies on the governance and regulation of NPOs and also in sport. Secondly, we will present the methodology used. Thirdly, we will make a proposal for the creation of a regulatory body including an analysis of the risks for the world of sport if such an agency is not created.
[1] As an example the football world cup in 2006, one of the most profitable, generated a turnover of 557 million Euros with a profit of 155 million Euros. This event is owned by FIFA which concedes its staging. FIFA has a turnover of 553 million Euros and a profit of 184 million Euros. Source JF. Bourg 2008.
[2] The credibility of actions and the legitimacy of CICR are sometimes questioned: payment of rights of way in Africa, ethical value of some representatives, running of the Headquarters…
[3] ISL was established in 1983 by Horst Dassler, who was the head of Adidas Company. He understood that his dominant position in the world of sports equipment should find its natural continuation in the purchase of television rights and marketing. Very quickly, the man realised that sport would grow considerably and would unleash the lust of television channels which would be willing to pay large sums of money to buy the world’s most coveted entertainments, the football World Cup and the Olympics, first on the list. His company soon became the leader in a growing market. The untimely death of Horst Dassler in 1987 did not affect the rise of the company which was bound by long-term contracts with the most important sports federations in the world. Nothing seemed to hinder that phenomenal success during the y90s which was marked by ever greater achievements and results. ISL became a true empire, despite increasing competition. But at the end of the decade, ISL became increasingly bulimic and began a series of risky investments that caused its loss. It paid a high price ($ 1.2 billion) for the rights of the nine greatest male tennis tournaments for ten years. It bought the Brazilian and the Chinese football. It invested in CART racing in the United States, thinking each time to have found a juicy vein. Stronger still, it became the owner of television rights for the following two football World Cups together with the German group Leo Kirch for $ 0.7 billion CHF. The 2002 World Cup was very difficult to sell to European TV channels because the schedules were inadequate and the prices prohibitive. However, who would have imagined that the company would be in dire financial straits, no one dared to believe it. Yet the Swiss court’s decision (the company has its headquarters in Lucerne) ended nearly twenty years of almost absolute power. A portion of ISL was taken by one of the two other giants of the world, the Leo Kirch group.