Category Archives: Business and Law

Representing Players in Sport: Bargaining for A Fair Deal for Athletes in an Olympic Year

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This post was contributed by James Brown, from Birkbeck’s Department of External Relations.

In the week that former darts champion Jocky Wilson passed away, it was fascinating to hear the Birkbeck Sport Business Centre discussion about the welfare of athletes both during and after their sporting career on 27 March 2012.

The rise and fall of Wilson is one of the more extreme that sport has known. In his eighties pomp, he was an ever-present in the latter stages of the World Championship, winning the title twice. With the sport regularly attracting 8 million views, Wilson became a folk hero with his large frame betraying the pub lineage that darts was trying so hard to leave behind. Never flash, the extent of his largesse was to splash out £1200 on new dentures following his 1982 title triumph. Yet within seven years of his second and final World Championship in 1989, Wilson was living in a council flat, aged 45, surviving on the disability benefits that were granted to him after his lifestyle brought on diabetes. When he was elected to the Darts Hall of Fame in 1996, it took a further two years for him to be informed of the honour, so far had he retreated from the game he had once dominated.

I was reminded of his story in listening to Barry McGuigan talk at the Birkbeck Sport Business Centre. In managing athletes, he was keen to emphasise that they should be prepared not just for their sporting career but also for what happens after their career has ended – or if it never happens at all. By his calculation, 85% of boxers don’t make a career out of the sport, and only 5% make any real money. Television holds most of the power in the sport, because it provides most of the money. McGuigan counted five boxers in the UK who would draw an audience big enough to attract television coverage – for the rest “it is a very tough business”.

McGuigan, like Wilson, was hugely successful in the Eighties, his fights attracting huge television audiences. He became WBA Featherweight Champion and was voted BBC Sports Personality of the Year, both in 1985. But his career since retiring from sport has been no less successful. A boxing pundit and commentator across most British broadcasters, he’s also had stints as a chat show host and won Hell’s Kitchen in 2007. But more importantly, and perhaps borne out of an eventually fractious relationship with his own manager, he founded the Barry McGuigan Boxing Academy in 2009. Its aim is to target people who are enthusiastic about boxing, but who have fallen out of love with education, and use the sport as a hook to get them back to learning: “It is so laudable to see students going back to college no matter how old they are – I’m into lifelong learning”.

Encouraging boxers back into education is difficult, said McGuigan. The nature of boxing in particular, where bravado is a key element of the boxer’s makeup, means that those attempting to make a career out of the sport have to believe in their ability to be the best, or that lack of confidence will soon be found out. But in doing so, trying to persuade aspiring boxers that they may not be a success can be a thankless task. And even if you do get them to college, they are naturally suspicious of spending time in class with other boxers who they may well be fighting in the ring next week.

But his Boxing Academies are helping to overturn some of that negativity. Now working with five further education colleges across the country, and there are hopes of extending the arrangement to more. “If you can invest 20% of the energy you put into sport, you can succeed in other areas of life”. It’s safe to say that, on McGuigan’s induction into the International Boxing Hall of Fame in 2005, it didn’t take two years for him to find out about the honour.

Which brings us back to Jocky Wilson. “I don’t want anyone feeling sorry for me,” he said in 1996. “There’s only one person to blame for the situation I’m in, and that’s me.” Here’s hoping that future sportsmen will also invest the 20% that means they won’t have to say the same thing.

Military Economics: defence choices for the UK

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The Inaugural Ronald Tress Memorial Lecture by Professor Ron Smith

 This blog post was contributed by Betty Low, a Birkbeck alumna who graduated with a MSc Economics in 1975.

The last time I had seen Ron Smith he was a lecturer, it was in the old Gresse Street Building (don’t ask) and he had dark hair. Gresse Street is long gone and, well, my hair isn’t dark any more either.

I say this not to be glib, but to emphasise that Ron’s lecture was never going to be an ordinary economics lecture. The inaugural Ronald Tress Memorial Lecture was launched to commemorate the 40th anniversary of the establishment of the Birkbeck Economics Department by the eminent economist and one-time Master of Birkbeck.

So the audience that had gathered to listen to Professor Smith’s “Military Economics: defence choices for the UK” was understandably an eclectic cocktail of alumnae, old (such as myself) and new (such as my daughter), current students, fellow academics and a contingent from the Tress family. Like all good writing Ron’s words were accessible and meaningful on many different thought levels. He used the lecture to reflect on the past and the future and how looking back always helped one to understand how to look forward.

Ron overlaid MOD spending behaviour with a layer of rigour and structure to explain both to the knowledgeable and to the neophytes the context and consequences of military personnel making commercial decisions.

Procurement practice at the Ministry of Defence was affected by three biases of which observers should be aware: “optimism bias”, “certainty bias” and can-do bias”. The first results in habitual under-estimation of the cost of projects and by the time this is obvious, those involved have moved on so there is no accountability. The certainty bias is the habit of Whitehall to treat everything as more predictable than it in fact can ever be. The “can-do bias” is another word for misplaced confidence; not to accept what our military tells us is tantamount to not believing in motherhood and apple pie.

The biases seem to be well understood and accepted but inescapable.

This prompted a non-practising economics alumna such as myself to think, “If you were charged today with creating a system for defence procurement, would you recommend that which now exists?” No.

As if to answer the question Ron deftly compared the British experience with the French.  They were similar – both had difficulty in financing their strategic objectives and both let arms exports determine foreign policy – yet different – the French resisted reappraisal while the British had regular defence reviews in response to economic crises. It was scarce comfort to hear Ron point out that the British experience is no different from the American but that they just had more money to throw at the problem.

The defence community is not just the MOD officials. It is comprised of representatives of the armed services, politicians, civil servants, science and industry. To quote Professor Smith, “Each of these groups face incentives that generate outcomes that, while rational in terms of the objectives of each group, are severely dysfunctional for MOD as a whole.”

In the private sector measuring output is simple; it is the bottom right-hand corner. The public sector has different challenges. There are no easy measures of output. As Ron said, “A good result for the Ministry of Defence is no activity. Defence is like an insurance policy. If it works you deter and don’t need it at all.” Not an easy one to benchmark.

Those of us who work in the private sector often fail to grasp how challenging and different it is to work in an environment of conflicting and often illogical agenda. At the risk of sounding like Yes, Minister, it is important to remember that decision-making is being made in an atmosphere of constant, inherent tensions between bureaucrats and politicians and that the public sector does not celebrate innovation. Introducing any change in Whitehall is like turning around one of the MOD’s biggest submarines.

In introducing the Inaugural Ronald Tress Memorial Lecture Birkbeck College Master David Latchman had reminded us that the founder of the Economics Department had been “a sound bastion of common sense”. What successive generations of British defence planners sometimes lack, the erstwhile Master had in spades.

For it was Ronald Tress who almost 40 years ago appointed Ron Smith.