The BCCI's "Operation Clean Up": Governance not Cheerleaders

The Board of Control for Cricket in India (BCCI) has announced a 12-point plan to address the fixing scandal that threatens the Indian Premier League. First, some background courtesy of the WSJ:

Shoving a towel into their waistbands, fiddling with a necklace, untucking their shirts; these are signals that investigators allege three Indian cricketers used to communicate with bookmakers across India in an attempt to fix parts of matches for illicit financial gain.

Delhi Police said Thursday they had arrested three players from the Rajasthan Royals cricket franchise for allegedly spot-fixing—trying to arrange a predetermined outcome in certain key moments—in the Indian Premier League. The league is a hugely popular annual tournament involving many of the best cricketers from

Spot fixing in cricket occurs when a player deliberately rigs part of the game, for example by bowling a poor delivery from which a batsman can easily score runs. Several high-profile international convictions have tarnished the sport in recent years, which resulted in fines, player bans and even jail time.

The scandal has already led the head of the BCCI, which oversees cricket in India, to step aside. The BCCI 12-point plan is a further response to the scandal.

The 12-point plan is as follows:

1. Removal of sleaze; no cheerleaders, no after-match parties for players and support staff.
2. Strict code of conduct to be followed by players, support staff and franchise owners.
3. Restriction of movement in players’ dug-out and dressing room. The owners from now on will be restricted from entering the dug-out and dressing room during matches.
4. All players and support staff of franchises need to furnish their telephone numbers with the BCCI before the start of the tournament.

5. Adequate number of ACSU officials in the team hotel as well as the ground to supervise the proceedings.
6. Jamming of cell phone towers at the ground during matches.
7. Captains’ meeting to be held in order to get more suggestions and prepare elaborate blueprint.
8. No national selector will be allowed to get associated with any franchise in any capacity.
9. All the players need to disclose every financial transaction they are carrying out with any particular organisation or person.
10. Franchises need to furnish all details of the remunerations and contractual obligations of players and support staff.
11. Players from now on will be prohibited from using ear plugs and microphones.
12. Security control policy will be formulated soon.

These proposals range from the farcical (no cheerleaders as a way of addressing fixing?!) and the just plain dumb ((jamming of cell phone towers?) to the profoundly innovative (player disclosure of financial transactions). Journalists, professors (me included) and politicians routinely have to disclose remuneration which falls outside of their professional contracts. Why not athletes?  In the US the NFL has already adopted a similar set of policies.

Reform is likely going to have to go deeper. In a 2011 submission to an inquiry on governance of the International Cricket Council, Transparency International made recommendations for the harmonization of governance standards across ICC member federations. These were as follows:

30. The ICC should require, as a condition of membership, that domestic boards have in place codes of conduct and procedures that reflect the global best practice that TI recommends ICC itself puts into place.

This would include:

• Tone from the top and ethical leadership
• Code of ethical conduct covering all relevant areas including conflicts of interest
• Risk assessment
• Best-practice policies and procedures and their independent monitoring and review
• Creation of an Anti-corruption Tribunal at domestic level to hold individuals and organisations to account, if existing anti-corruption mechanisms are inadequate.

31. All of the above would need to be underpinned by greater transparency and independence, with the ICC having oversight of each domestic board’s adherence to these requirements. The ICC should be able to review whether domestic boards are adhering to these codes of conduct and procedures, and should have strong sanctions, including financial sanctions, available to it if member countries’ boards or federations are judged to have infringed the rules. For example, ICC should be empowered to exclude a member nation from competing in international matches if fails to adopt and enforce an approved Anti-Corruption Code in its own jurisdiction.

32. This will undoubtedly represent a significant change in the governance of world cricket, and inertia or vested interests may cause there to be opposition. However, TI considers it vital that if a message of zero tolerance for corruption is going to be taken seriously, the managers, administrators and leaders of the game operate to the highest standards of ethics and integrity.

As with FIFA and its various scandals, effective reform will necessarily result from the adoption of standards of good governance and best practices which have been developed in contexts outside of sport. So far, FIFA has been resistant. Perhaps the BCCI and ICC can do better. To do so, however, it is probably best to focus on the governance, not the cheerleaders. 

Financial Fair Play, the English Language and Legal Standing

At Capital.de Stefan Szymanski has a delightful essay on the offense to the English language that is UEFA's Financial Fair Play. Stefan has kindly posted up the original English version at Soccernomics. Here is an excerpt:

Whenever Financial Fair Play is mentioned the names of Roman Abramovitch and Sheikh Mansour are quoted- what they are doing to football, it is alleged, is unfair. Yet in reality they are convenient scapegoats for a political deal that UEFA has stitched up between football’s rich and poor.

The economic reality is that most clubs do not have a sugar daddy and a very large fraction are insolvent. According to UEFA 55% of clubs in Europe’s top divisions reported a net loss in 2011, 38% of clubs reported negative net equity, and 16% of club accounts reviewed contained a qualification expressed by the auditors as to financial viability of the company. This does not make UEFA look like a good housekeeper, so they want to impose tighter regulations. However, since almost all of the insolvent clubs are minnows, it might look as if they were doing the bidding of the big clubs. UEFA would not dare to restrict the freedoms of the established powers and by focusing on sugar daddies they are actually helping them by ensuring that no currently small club will ever pose a serious challenge. Voila, call it Financial Fair Play, and who could disagree?

This was Orwell’s point. The decline of English, he thought, was a political phenomenon. “Political language has to consist largely of euphemism, question-begging and sheer cloudy vagueness”, and if we allow this to go unchallenged we will indeed fall into slovenly thought. UEFA, with the support of many politicians, want us to use warm phrases emptied of their original meaning as camouflage for the pursuit of an agenda which has little to do with fair play and much to do with the exercise of power. But if we listen to Orwell, we need not be fooled. All we have to do is to ask what the words really mean.

It is safe to conclude that Szymanski is not a fan of FFP. Here is the conclusion of a recent academic that Sztmanski collaborated on with Thomas Peeters, which explored the effects of FFP on the EPL via an economic model (Vertical Restraints in Soccer: Financial Fair Play and the English Premier League, here in PDF):

[W]e find that had the Financial Fair Play regulations applied fully in the English Premier League in the 2009/10 season, wage to turnover ratioswould have fallen by as much as 15%, which is in line with the theoretical predictions of Dietl et al (2009). As such, the FFP break-even rule will in many ways resemble a North American salary cap, although the latter applies the same spending cap to all teams. In other words, our paper shows that in this context a vertical restraint may restrict competition in exactly the same way as a horizontal agreement between competing firms. Salary caps have been justified in US courts under the theory that they promote competitive balance among the teams. On top of this, they are agreed upon in a system of collective bargaining with unions representing the players, and such agreements are exempt from antitrust. The break-even rule under FFP has not been negotiated as part of a collective bargaining agreement with unions, and furthermore such agreements are not exempt from competition law in the EU. Therefore, analyzing the impact of FFP on competition in national leagues is important to assess whether it complies with EU competition law.

The rationale advanced by UEFA for its regulation is not the promotion of competitive balance, but “discipline and rationality” in club finances. Considered as a vertical restraint, this might be deemed to have pro-competitive properties if the rules help to preserve the integrity of the competition and the financial stability of the clubs. On the other hand, our results demonstrate that the break-even rule could be construed as a means to raising profitability and therefore an anti-competitive vertical restraint under EU competition law.

The Swiss Ramble recently offered a deep dive into the economics of FFP, and like Szymanski, offers a fairly negative evaluation:

While the majority of clubs are in favour of FFP’s attempts to tackle football’s economic woes, there is a concern that far from making football fairer, all this initiative will achieve is to make permanent the domination of the existing big clubs: survival of the fattest, if you will. The argument goes that those clubs that already enjoy large revenue (like Real Madrid, Barcelona, Manchester United and Bayern Munich) will continue to flourish, while any challengers will no longer be able to spend big in a bid to catch up.

However, more fundamental than the policy effectiveness of FFP is likely to be its legality under European law. The regime has already been challenged, here is The Guardian reporting:

UEFA's financial fair play regulations face a legal challenge in the European courts after a players' agent argued the rules will unfairly restrict the amount of money he can earn. Daniel Striani, an agent registered in Belgium, has lodged a formal complaint with the European commission against the rules, which require clubs in European competitions from 2011 to move towards breaking even financially.

Striani is represented by Jean Louis-Dupont, a lawyer who in 1995 successfully challenged football's contract rules on behalf of a Belgian player, Jean-Marc Bosman, a legal victory which allowed players to move for free at the end of their contracts. Dupont argues that, as in the Bosman case, he will defeat Uefa's FFP rules even though they are supported by the European Commission.

He argues that Uefa's regulations, which prevent clubs making heavy financial losses whether backed by an owner or not, will have five separate consequences he claims are anti-competitive. The first is that they will restrict investment in a club by no longer allowing them to run at a loss.

The second is the key concern being voiced particularly in England, that it will lock in the power of the already rich clubs, whose dominance will no longer be able to be broken by the odd club like Manchester City or Chelsea which has losses supported by a mega-rich owner.

He then argues that the aim of FFP to dampen down players' wage and transfer fee inflation is "anti-competitive", a breach ofEU law. This is because FFP will lead to a "reduction of the number of transfers, of the transfer amounts and of the number of players under contracts per club", and will have a "deflationary effect on the level of players' salaries".

In conclusion, Striani argues that FFP will be "anti-competitive" because it will affect his own ability to earn agents' fees from players' wages and transfer fees.

Stay tuned, more action to come at the lex sportiva frontier!

Top 5 Bad Financial Habits to Break

... Do you or someone you know have any bad financial habits? I do …
  

Most of us have one … or two … or several bad financial habits. From experience, my bad financial habits resulted in some very expensive mistakes. It’s ok! As long as bad financial habits are broken or at least controlled, they will have minimal effect on your financial success. The first step is identifying your bad financial habits.
  
Here are the top 5 bad financial habits to avoid that keep people from getting a positive grip on their finances.
 
Impulse shopping.  Impulse shopping happens unexpectedly sometimes. Think of shopping like alcohol. It should be done “responsibly” and can become addictive, if not careful. Make shopping a planned activity with a list or a budgeted amount.  Unplanned or impulse shopping may sabotage your spending plan / budget.  Also for large ticket items, give yourself 24 to 48 hours to shop for a better deal or to figure out if you really want it and can afford it. You’ll be glad you waited.
   
Retail therapy.  Retail therapy may help you to feel good for a moment but they buyer’s remorse is painful. When you are emotionally down, distraught or highly emotional, avoid shopping or making any large purchases.  The more emotional we are, the less financially objective we become.  Do something that doesn’t cost anything or very little, like go for a walk, spend time with family or friends, etc. Your bank account will thank you when you start to feel better.
  
Overdraft protection.  Overdraft or “Courtesy Pay” is so convenient! However, overdraft protection (a financial oxymoron in my opinion) is relatively designed to allow you to overspend. It allows or approved checks or charges to go through even when you do not have enough in your account for a Fee.  A fee of $27 up to $35 is charged to your account for every overdraft, even if the amount runs $1 or $5 over the amount you have in your account. Generally it is like a very short-term line of credit with a ridiculously high effective interest rate. Now was that cup of coffee really worth $40? Besides, we spend more when we use debit cards. Use cash instead.
  
Savings tampering.  Savings is money set aside for a specific purpose like emergency, down payment of a house or car, school, etc. Avoid using savings for something that is outside of its purpose. The best way to do this is to establish a savings account that is not easily accessible with a certain amount directly deposited every pay period. Savings accounts are supposed to grow, not be chiseled away. 
  
Financial promiscuity. Financial Promiscuity is when multiple credit cards are used for small purchases when cash should be used.  Avoid using credit to purchase that "value meal" or anything less than $50.  This will ensure that Financial STDs (Substantially Tremendous Debt) will not be slowly acquired.
  
By acknowledging our bad financial habits, we can focus on stopping and changing them. Some bad financial habits may be more challenging to quit than others, but it can be done.  Contact a financial coach to help with ideas and techniques of replacing bad financial habits with good financial habits to help you reach your financial goals faster.


Financially True, 
  

Tarra Jackson ... Making Money Sexy

The Iran Job

I saw The Iran Job on my flight back from London last week. It is a really neat documentary about US basketball player Kevin Sheppard's journey to Iran to play basketball (Sheppard also has the distinction as being capped for the US Virgin Islands football squad).

Here is an excerpt from a Washington Post article on the film:

Iranian teams offer lavish salaries to foreigners willing to play there, and every year a handful of Americans are scattered through the country’s basketball league. The idea for the film was to find an American “who would go into Iran with a lot of the same perceptions and misperceptions as a lot of us,” said Till Schauder, who wrote, produced, directed and shot it.

Sheppard, born in the U.S. Virgin Islands in 1979 — the year that Iranians staged a revolution and occupied the U.S. Embassy in Tehran — fit the bill. He said he knew little about Iran before going there.

In the film, Sheppard teaches the Iranians how to raise the level of their play and pump themselves up, and the Iranians teach him about Persian politeness and subtle ways of circumventing government oppression.

Along the way, Sheppard’s views on Iran evolve. “I had all the preconceptions that people were on camels, that they were terrorists, that they were probably making bombs,” he said in a telephone interview from the Virgin Islands, where he runs a basketball camp for disadvantaged youths.

Instead, he finds teammates who confide in him about girl troubles and refuse to let him pay for dinner. He meets women who express their frustration with state-imposed restrictions and young fans who shyly ask for his do-rag as a memento.

Sheppard said he hopes the film, expected to be released next year, will alter U.S. perceptions of Iran at a time when diplomacy is at a low. “I think that once you get an opportunity to see it, you must have a change of heart about the Iranians because you’re going to see real live people, with real lives and real struggles,” he said.

The film is full of funny moments, such as when Sheppard enlists his baffled building manager to help him find a Christmas tree, or when an elderly man selling antiques eagerly tells Sheppard that he smoked marijuana in the United States.

Schauder and his wife and co-producer, Sara Nodjoumi, who is of Iranian descent, said an Iranian government official was initially supportive but then abruptly changed his mind and told them the project was “garbage.” They were denied journalist visas, so Schauder, a German citizen, went on a tourist visa and shot with a small hand-held camera. Eventually authorities caught on, and he was barred from entering Iran. By then, he had shot most of the film.

Despite rising tensions between the United States and Iran, Sheppard said he never had a problem on either end during the two additional seasons he went on to play there. Entering Iran, “I would say, ‘Bazi [play] basketball!’ and they say, ‘Great!’ and let you go. It’s like athletes transcend political pressures. We’re entertainers; we kind of take them away from the problems.”

It is due to be out in the US soon. Check it out, highly recommended.

Technology Aids in Referee Decision Making

Over at the Guardian's Political Science blog I have a commentary up extolling the use of technological aids in referee decision making. I open the piece as follows:

Writing in Nature last week, Nic Fleming argues that "the introduction of goal-line technology to football is likely to perpetrate a mass deception on television viewers." He further worries that, "It will miss a huge opportunity to educate people about the role of uncertainty in science. And it will exacerbate the approaching danger of fake computer-generated video footage."

Here I take the other side. People, especially the sports-viewing public, understand uncertainties just fine. Contrary to Fleming's concern, the opportunities that may actually be missed here include the chance to educate scientists that the public are far more sophisticated than experts generally believe, and the fact that the introduction of technological aids may actually make sports better.

Have a look at both Fleming's Nature piece and my reaction. Is there a dangerhere related to public understanding of uncertainties? I don't think so, but I welcome hearing other views.

Several people have mentioned the Collins/Evans papers on the use of the Hawkeye system in tennis and cricket. I included a link to them (thanks to a suggestion by @AliceBell), though I only agree with parts of their argument.

The parts that I agree with have to do with the central-ness of of legitimacy derived through an alignment of outcome as judged by the officials and as judged by the spectators (this is my jargon, Collins and Evans have their own). I also agree with their conclusion that such technological aids offer much in the way of positive benefits to decision making in sport.

The parts that I disagree with focus on the supposed new-ness of technologies in sport and a corresponding risk to public understanding of uncertainties. My view is much more aligned with Allenby and Sarewitz in that refereeing systems are what they call techno-human systems. The technologies of refereeing sporting events have been evolving for a long time. I would argue that the addition of the Hawkeye system -- or for that matter more, or less officials, instantaneous communication among officials, video replays, heat sensors, doping tests, timing devices, photo finish cameras, changes to the guidelines for adjudicating contingencies and so on -- represents the evolution of a techno-human system that has been under constant evolution, not something so fundamentally new.

Collins and Evans (and Fleming in Nature) worry that the results from Hawkeye (and the like) are presented to viewers without accompanying statistics on uncertainty. However, this is no different than the fact that lines calls have always been presented to viewers without accompanying statistics on uncertainty (such as the number of chair overrules in tennis or missed given goals).

The presentation of such apparently deterministic information has not prevented the public from concluding that uncertainty nonetheless remains -- at least in the context of weather forecasts where there has been a great deal of investigation of public understanding of uncertainties (e.g., here in PDF). Based on that large literature I'd think it likely that people are pretty sophisticated when it comes to sport as well, as it shares many of the same characteristics as weather forecasts (i.e., especially the fact that there are many chances to observe expert judgment and real-world outcomes).

At a minimum, those expressing concern about a danger to the public from increasingly sophisticated techniques of arbitrating sporting events should provide some empirical evidence in support of that danger. As I see it, such sophistication in adjudication simply parallels increasing sophistication in our ability to view the games. Our techno-human systems are evolving. And that is a good thing.

Which Way for Sunil Gulati?

I have a commentary up at Play the Game on Sunil Gulati, head of US Soccer, and his new role on the FIFA Executive Committee. Here is an excerpt to whet your interest:

Gulati, who has not commented on the alleged corruption at CONCACAF which took place while he helped govern the organization, served on the FIFA governance reform committee until his recent election to the FIFA Executive Committee. Thus he helped to develop its recommendations aimed at improving the governance of the organization. Now as a member of the FIFA Executive Committee, Gulati found himself last week in the odd position of receiving advice that he has helped to prepare.

Gulati and colleagues identified as “indispensable” several of the recommendations that the reform committee has proposed to FIFA, but which have not yet been adopted. These include a call for independent integrity checks, term limits in office and full disclosure of compensation.

Surely, as one who helped develop the “indispensable” advice, Gulati might have been expected to be a vocal champion for implementation of the proposals at last week’s FIFA Congress, right? Think again. Since joining the FIFA Executive Committee, Gulati has been almost entirely invisible on issues related to FIFA reform, and based on his actions last week, perhaps even an obstacle.

Go here to read the whole thing, and feel free to come back and comment.

Wise Words from @ChangeFIFA

Let there be no doubt: There are many good people in FIFA & football working very hard to make things better. Our gratitude & respect.
— changeFIFA (@changeFIFA) June 1, 2013