October 31 – Professional football clubs are under a growing threat from organised crime. Only 25% of clubs in top leagues worldwide produce publically-available financial reports. And only 40% of national associations are financially viable without the help of FIFA, an organisation whose top officials are being chased down by the US Justice Department under their RICO laws that are used to investigate mafia-style crime rings.
These are the top line findings of an independent report of the Financial Integrity and Transparency in Sport (FITS) Global Project, an independent research initiative launched by ICSS INSIGHT in 2014.
Emanuel Macedo de Medeiros, ICSS INSIGHT CEO, said: “Incredible sums of money are being invested in the acquisition of sporting clubs around the world. Investment in sport is welcome, but it must be clean and transparent.
Macedo said there was very little due diligence or effective oversight of the deals with regulations not fit for purpose in this regard to tackle “the mounting challenges posed by a fast growing, globalised, financially sophisticated and increasingly complex industry.
“As the first FITS study highlighted, plenty of ‘dark spaces’ exist in the finances of football and the wider sports industry. This must change if we are to safeguard sport from the growing influences of corrupt and unfit investors, money launderers and organised crime.”
The research report, led by Harvard University school of international development, says that men’s professional football is the biggest sport in the world with revenue of $33 billion a year.
“The weaknesses in the sector have emerged largely because the sector is dominated by a small elite of clubs, players and owners centered in Europe’s top leagues. The thousands of clubs beyond this elite have very little resources, constituting a vast base of ‘have-nots’ in football’s financial pyramid…The growth has also led to increasingly complex transactions—in player transfers, club ownership and financing (and more)—and an expansion in opportunities for illicit practices like match-fixing, money laundering and human trafficking. We argue that football’s governing bodies – including FIFA – helped establish this pyramid,” say the authors.
The picture painted by the researchers makes miserable reading. They estimate that a majority of global clubs and governing bodies are at ‘medium to high risk’ of financial failure. They also say that European tax debts have grown despite Financial Fair Play, and confederations and FIFA contribute to a pattern of weak Fiscal Responsibility.
And if that wasn’t enough, they say that “football’s governing bodies face a crisis of legitimacy stemming from a failure to tackle moral turpitude, set standards and regulate effectively. We suggest a set of reforms to re-structure FIFA in particular, separating its functions and stressing its regulatory role.”
Medeiros – who has been an evangelical preacher warning of the pickle football is in for some time – has announced the organisation is now to carry out further research and is teaming up with the International Association of Lawyers (UIA) form partnership to work on the first phase of The FITS Global Study on the Legal, Financial and Integrity Aspects of Club Ownership.
The three-part study will analyse current legislation and regulations in place that apply to club ownership and investment structures in world football.
More good news on the way?
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