Thursday, 14 January 2010

How to fund sport through betting...

News from Australia that Betfair is one of 32 sponsors for the Australian Open which starts on 18th January proves again (if the myriad of Premiership shirt sponsorships from the gambling industry, not to mention deals like Betfair's with Manchester United and Barcelona) how money from betting flows into sport through sponsorship deals that work for both parties, with commercial teams hammering out terms.

It seems pretty obvious. But anyone who has been following the debate in the UK about how sport should get money out of betting will know that while it may be true that individual sporting organisations happily sign deals which land them significant sums of money, attempts to foster commercial relationships between National Governing Bodies of sport (NGBs) and the betting industry have foundered on the fact that sports believe they have a right to money from betting, just for putting on the show; and the betting industry believes it should have something in exchange for whatever cash it outlays.

I've written before, at some length, about why I think the position adopted by sport makes no sense (such as a piece I wrote for the Guardian in December), so I won't reiterate all those arguments. But what I find striking about the agreements we have in Australia (and this latest, with Tennis Australia, is not the only one with an NGB) is the difference in the way that the sports come to the table.

Eighteen months ago, I had lunch with Richard Caborn, the former Sports minister, and Chris Bell, the Ladbrokes CEO. We talked about putting together a Grass Roots Trust for sport, funded by the gambling industry but at arm's length from it (that is, administered by independent Trustees), which we thought could generate something around £3million a year. At the time, that would have meant £10million ahead of London 2012, and our suggestion was that the Trustees, once appointed, might like to consider whether it go towards something in connection with that.

When we suggested it formally to government, we put one condition on it: we wouldn't put money into a Trust only to have a sports levy imposed at the behest of NGBs a short time afterwards. There is a finite pot of money that any gambling operator will spend on sport, and if a levy came about, the Trust would have to be wound up. There was no point in starting something, only to pull it shortly after. So, the condition was that the NGBs should be told clearly that there was to be no sports levy, and should instead accept that betting already supported sport in a number of different ways.

The long and the short of what followed is that nothing happened. The condition was not met, and the Grass Roots Trust idea died a death. The NGBs continue to pursue their quest for a levy, taking their fight to the media, Westminster, and Brussels.

Two months ago, I found myself sitting next to the former Ipswich Chairman David Sheepshanks at a League Managers' Association dinner. Early in the conversation he asked me, "can I get you involved in the National Football Centre?" by which he meant, "will you help to fund it?" I explained to him why we would not get involved with funding sport at that sort of non-commercial level: because we had the threat of the levy hanging over our head, being lobbied for, hard, by the sports. But then I asked him how much he needed. His reply was £5million. Eighteen months had passed since the idea of a sporting trust was mooted, and the National Football Centre was just the sort of thing which it might have funded, had its Trustees decided that the Centre was a better home for it than 2012. The maths hung in the air over our main course.

You might argue that if the sports successfully got a compulsory levy out of betting, through legislation either from Westminster or from Brussels, then the quantum of money raised would dwarf £3million a year. You may be right. But I would suggest that if (for the independent observer who looks at both sides) the argument against a levy is at least as convincing as the argument for it, then it seems a battle not worth fighting - particularly when money is passed up in the interim. Better to reach a deal that works for both sides, since it brings in cash, than to argue a 'right' which is in great dispute.

Perhaps that is the view of the Australians.

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