Sports has been a lucrative industry in any country. The support of people toward any sports has been tremendous as shown in the crowd participation in the NFL, NBA, NCAA, or any other sports league in the world (Badenhausen, 2011). It is because sports has physical and psychological impacts on the viewers or fans. It is an institution that has been strengthened by social practice because of the values that different sports events impart to the participants. As the sporting events have evolved over time, its popularity has also increased, which has been translated into profits to sports companies. From the Greeks Olympics into the current various sports leagues in the world, fans all over the world have given enough money and attention to the said institution.
Unfortunately, the remarkable fanaticism of basketball, football, and soccer enthusiasts globally has inevitably resulted to gambling, match-fixing, and the emergence of game waging. These unethical practices have also become an institution. Spectators have engaged in such practices to earn extra income. Unfortunately, the number of league officials and private game fixers has also mushroomed. Of course, these activities have adversely affected the reputation of the big sports leagues in the world.
The proliferation of such illegal activities can be attributed to the way the league is being managed. It directly relates to good governance or the administration of the league by the top officials. The rampant nature of unethical practices during games is an indication of poor governance by the top management of these leagues.
In relation, the main thesis of this paper is that corruption, game fixing, gambling, and other illegal activities are manifestations of bad governance of league officials who are conniving with private entities. In this context, it is has already become a syndicate because of its large-scale operation.
Statement of the Problem
The research paper intends to answer the following questions:
- What are the major causes of the proliferation of game fixing, gambling, and such practices in the NFL?
- How does the management of NFL adhere to the principles of good governance?
- How does the implementation of the laws affect the unethical practices by the top management?
- What are the steps taken by the NFL officials to prevent corruption in the league?
Objectives of the Study
The research paper has various objectives that would benefit certain stakeholders. One of its objectives is to trace the root causes of corruption in the league. This would be beneficial to the sports enthusiasts and the top officials. Managing the league with low degree of corruption would help rebuild the reputation of the sports events.
The second objective is to find ways to weed out the illegal activities that tend to cling to the sports events. Through these activities, some groups are earning profits illegal that would make them parasitical on the popularity of the sports. In this research paper, such activities would be prevented eventually.
Policy makers would also be updated about the issue of corruption in sports through this research paper. The analysis would aid in the creation of new laws in apprehending the perpetrators of the illegal activities. Consequently, the modification of laws in the prevention of corruption would be helpful in making the games more fairly.
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Review of Related Literature
The Concept of Good Governance
Good governance is a necessary principle in the adherence of fair play or competition especially in sports. It has various criteria namely, accountability and transparency, consensus oriented, effectiveness and efficiency, etc. These criteria would have to be implemented by the top officials especially in a big league like the NFL. Consequently, the money making activities that relate to illegal transactions such as game fixing are certainly not manifestations of good governance.
For one thing, sports like football tend to promote fairness and competition. If there are activities that interfere in the adherence of fairness, then the result is bad governance. Results of the games would be predictable if game fixing is rampant. The level of interests of the viewers would eventually decrease if there is predictability on games. The issue of transparency and accountability would come in since game fixing and other corrupt activities are done without the knowledge of the public. The transactions are based on financial gains of the stakeholders, not on the true spirit of the sport.
Sports: A Big Business Industry
Sport is indeed a business that generates billions of dollars. In fact, the revenues of prominent sports leagues in the world have increased in the past 25 years, as a proof of their popularity. For instance, the NFL has increased its income to almost 700% with its $3.8 billion. The league already has 32 teams that from the said income every year that comes from broadcast deals. This is the main reason as to why NFL has become the venue for corruption and other illegal practices (Landrith, 2013).
In tracing its causes, the said practices can be attributed to certain political and private concerns. This opens up possibilities for corrupt activities such as game fixing just to suit certain business or personal interests. Unfortunately, transactions that lead to corruption are done confidentially. It is why corruption in large sports events is unchecked and perpetuated. The conspiracy among some officials with the private entities is actually perpetuated behind closed doors.
Accordingly, corruption in sports takes into various forms such as bribery on the referees or players to fix a game. This is executed by conniving with certain officials in the league that may include team managers or team owners in exchange for a higher profit. This can also take a form of money laundering through the advertising and sponsorship. The activities are so complex and complicated that police authorities are not able to track them immediately.
The NFL Cases
Corruption in a sport league is exemplified in the National Football League. It is a sports league that generates billions of dollars from advertisers and ticket sales aside from sponsorship. The league is considered as a tax-exempt nonprofit organization and has a special broadcast antitrust exemption. With these financial amenities, the NFL has inevitably generate revenues like no any other sports leagues in the world.
This has made the league very prone to corruption. Critics have accused NFL commissioner, Roger Goodell, as one of the reasons for the corrupt activities and lawlessness in the league. The proliferation of corruption and the business like operation of the NFL are the reasons why its tax exemption would be revoked eventually. NFL is indeed a big business that nurtures unethical and illegal practices by private entities and top officials of the league (Rodenberg & Kaburakis, 2013).
There are concrete evidences that corruption in NFL is quite rampant. For one thing, there the collective bargaining agreement between the NFL and the players ended in 2010. So in a sense, there has been no collective bargaining agreement that protects the players from undesirable decisions of the top management. Without the knowledge of the public, the compensation of the players were kept at low. The NFL owners conspired with Goodell to lower the salaries of the players, which was illegal. Though it was legal to have a salary cap, it was illegal to impose it secretly without the knowledge of the players (Reece, 2011).
Another incident of corruption in NFL was the bounty scandal. In the said scandal, it was allegedly found out that the New Orleans Saints paid their players to physically harm the important players of the other team. After the investigation, Goodell penalized the culprits particularly imposing harsh penalties such as banishing coaches and players from the league. However, when the suspected players challenged the ruling of Goodell, a panel of investigators found out that facts were distorted to suit the wishes of the said commissioner. Eventually, the players were returned to the league and Goodell’s reputation had been seriously tarnished.
In an FBI report some time in 2005, it was found out that NFL referees and game officials were paid by a New York Mafia leader to fix certain games during that season. The referees were instructed to give favor to the said group in exchange for an amount of $100,000. Prior to that, there were already rumors of game fixing by some game officials who were consistently engaged in game fixing for profitable purposes. Unfortunately, the FBI did not pursue the case because of insufficient evidence. However, it was already conclusive that these officials were clearly participating in such practices because of numerous witnesses who did not come out to continue the litigation due to fear of their safety (Moldea).
The said incidents were not new in the NFL, unfortunately. Game fixing and other corrupt practices have been going on in the league for over 40 years. In fact, there were 70 NFL games that were game fixed according to the Dan Moldea’s book entitled, “Interference”. These games were perpetuated by 2 referees and other league officials who conspired for the sake of profit that led to damaged reputation of the league. Incidentally, the game fixing was attributed to the gambling activities of the fans where high bets were at stake. Also, it was proven that such illegal activities were supported by affluent families in the gambling world.
The referees were paid by the syndicate more than their earnings in the league. For one thing, NFL Referees were not fully compensated since they were just part-time employees. Their temporary status was the main reason for their inclination to easily engage in game fixing. As they were earning from $25K to $70K per season and they were not really employees of any team, they were basically susceptible to any temptations for illegal activities for monetary purposes (Moldea).
On the part of the players, they are also prone to agree on game fixing because they are being paid to play not for the game they are able to win. Their paycheck is dependent on the way they play the game and they would still receive the same amount regardless their team would win or not. This system compels them to participate in game fixing in order to increase their paycheck.
Accordingly, these illegal and unethical activities are left unchecked by the top officials of the league. One of the reasons for such negligence and bad governance is that TV ratings are the most important factors for the league. High ratings would mean more sponsors and advertisers. With its TV ratings, fans in the stadium don’t really matter that much. The NFL can still obtain its revenues with less people buying the tickets for a stadium audience. Basically, the TV is the source of income of NFL that leads to its blatant neglect of the corrupt activities by its players, referees and officials (Raney & Bryant, 2009).
Though there is now the NFL Security, the said institution is established to clean the mess but not really to solve the corrupt practices. Actually, the NFL has recruited people from FBI and other local enforcement agencies to cover up the scandals generated by game fixing and other illegal activities in the league. It has been found out that these experts are not really investigating but are trying to sugarcoat the stories in order to preserve the reputation of NFL. It is why illegal gambling continues to proliferate in the league despite the NFL Security (Borghesi, 2008).
Laws on Sports
The NFL is not exempted from the legal framework of the United States. Its players, referees, and top officials have to abide with the laws that would regulate behavior and decisions of the stakeholders just like any organizations in the country. For one thing, the United States has laws on the promotion of fair competition among organizations that include sports entities like the NFL. There is an existing antitrust law that prevents organizations in any industry including sports to engage in anti-competitive activities like game fixing.
Specifically, antitrust law consists of different federal and state government laws that regulates the operation of organizations for the benefits of the consumers. This law is manifested in the following Acts: Sherman Act 1890, the Clayton Act 1914 and the Federal Trade Commission Act 1914. The main objective of these Acts is to hinder the creation of cartels, monopoly, or conspiracy among organizations or certain individuals to prevent competition. They also ensure that fair competition is prevalent by making the merging of organizations for the control of prices. Furthermore, the abuse of power by business entities would be avoided through the implementation of the Acts (Kessler, 2007).
The Sherman Antitrust Act, in particular, discourages conspiracies and agreements among corporations or business entities for the control of price. Monopoly is considered an unethical way according to this Act. Pricing fixing by business organizations is also in violation of this Act since such activity negates fair competition. The Clayton Act 1914 and the Federal Trade Commission Act 1914 also play important roles in ensuring that anti-competitive practices such as price fixing, cartels, and monopoly would not prosper to any industry (Shaw, 2003).
Actually, the anti-trust laws are in consonance with the international law particularly imposed by the World Trade Organization. The WTO forbids any such practices to proliferate in order to protect the interests of the competitors in the global market and the consumers. Every country has to abide with the international trade principles so that fair competition would be promoted in the global perspective (Evans, 2010).
Apparently, NFL in the United States is not exempted from the said laws. The anti-trust laws are applicable in all industries such as media, food, healthcare, education, and sports. Employers like the top officials of the NFL and the players as employees are among the main stakeholders of this industry. As stakeholders of the football industry, they are all covered by the anti-trust laws. For instance, the Clayton Act 1914 allows the players as employees to form union for their own benefit as embedded in the "Bill of Rights." This is not the same with the collusion of corporations to act collectively for their own benefits since employees are vulnerable when they are individually separated. Of course, as professional players, NFL players are protected by the Clayton Act.
However, one legal issue in the professional sports is their exemption from the mergers or joining agreements among leagues. This has been refuted in court in several cases involving sports organizations. For instance, in the case of Federal Baseball Club v. National League, it was argued that the merging of two sport organizations was not done because of certain business interests. Though in the said case, team cross states just to play because of the connivance of the large sports organizations that were involved (Whalley, & Semler, 2000).
In another case, which is the Radovich v. National Football League (NFL), there was a merger between the AFL and NFL. It was clear that the professional football was covered by antitrust laws. In spite of this, these two sport organizations were allowed to merge given the condition that they would compete directly with the college or high leagues. As noted by the ruling in the American Needle Inc. v. NFL football case, the Supreme Court categorized the NFL as a conglomerate of 32 independent business organizations that were covered by the antitrust law (Sarat, 2010).
In other words, there are laws that can be used to totally stop game fixing and other illegal activities in the NFL. These laws would have to be applied to promote fair play in games, which is the fundamental reason for the existence of any sports events. The problem can now be traced back to the way the NFL is governed by its top officials. There should be stricter mechanisms to monitor the activities that relate to NFL games.
Definitely, big sports organizations like the NFL are not shielded from the anti-trust laws. The principles of fair competition applied in the market encompass sports events or leagues. The free enterprise doctrine that regulates businesses around the world should serve as a guide to sports organizations in their daily operations. The integrity of sports is compromised in some cases where corruption and illegal activities are rampant.
This is actually the scenario of the NFL. Its reputation has been damaged by the consistent reports of game fixing and other illegal transactions perpetuated in various games. One of the factors is the way the league is managed by the top management. Incidentally, the issue of governance is attributed to the leadership of its chairman, Goodell. The ineffective managerial skills of the said chairman have been one of the major causes of the damaged reputation of the league.
Another factor is the compensation system on the part of the players and the referees. As mentioned above, the players are being paid regardless the team win or not. They play not in pursuit of higher moral goals but for fame and money. The referees are also being paid on a temporary basis, which makes them easy to temp to engage in illegal activities. The welfare of these two stakeholders should be addressed seriously by the top management. Unfortunately, this issue has been ignored the league.
The third factor is the prioritization of ratings over the integrity of the games. It is a known fact that NFL is dependent on TV ratings because of advertisers. The top management of NFL seems to ignore the spirit of sportsmanship and fair play in exchange for profitability. This has put the league on a bad light for many years. The importance of TV ratings has also neglected the welfare of the referees and players since the league earns a lot even with small number of fans watching on the stadium.
This would boil down into the way the league is being run by the top management. The rampant illegal activities in the league are indications of bad governance. Good governance strictly adheres to the rule of law and fair competition. Corruption and game fixing activities are certainly violations of the principles of good governance.
In this paper, it would be concluded that NFL has become the niche for corrupt activities because of the failure of the top management to execute the laws that regulate the behaviour of the stakeholders such as the players and the referees. The league has attracted syndicates that aim to pursue profit only and negate the value of sportsmanship, integrity, and fair play.
This is quite unfortunate because football players have been admired by millions of fans around the world. One of the solutions is perhaps the change of leadership of the sports organization. Good governance would certainly start at the top. The top officials should show integrity and should become a model of decency in order for the other stakeholders to emulate.