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Financial Issues in Sports Today

Financial Issues in Sports Today

In our world, many issues arise regarding accounting issues and methods used to present financial statements to the public and to the investors. Federation International Football Association (FIFA) and the National Collegiate Athletic Association has recently been under the microscope of the public in regards the financial statements that have been made available to the public.

The World Cup is a football (soccer) tournament that began in 1930 that is held every four years at a host nation between qualifying countries. The event is by far the most viewed sporting event in the world with a staggering twenty-six million plus estimated viewers in the past events. As one could imagine, the country that is awarded the opportunity to host the World Cup receives an astounding spike in their economic revenue; so, the process of choosing the country is a very calculated drawn out process that is held by twenty or so members of the FIFA executive committee who review presentations by each country representative. To receive the bid a country must receive at least fifty-one percent of the votes; if all the countries are below the fifty-one percent mark the bottom two vote getters are eliminated and the bidding process begins again.

In 2014, there were murmurs of perceived problems in choosing the host country Russia for the next World Cup extravaganza in 2018. Shortly thereafter the Federal Bureau of Investigation (FBI) began to look into the bidding process, and discovered the 2014 bidding process appeared to have been manipulated by one or multiple individuals who could have a connection with FIFA’s internal management. Speculation and other materials of information have been provided to the public that brings questions to the process and the previous voting years. In 1999 Klynveld Peat Marwick Goeredeler (KPMG) was hired as the first external auditor for FIFA to help ensure translucent, and trustworthy practices were being used. An article from the New York Times states, “Having one of the big auditors of course helps to give some credibility to your accounts,”. (Browning, NY Times) A game at its core that is meant for pleasure for the participant and viewer respectively, can also hold a key part in a communities financial standing; The World Cup bid being a perfect example, giving the winning country an anticipated eight to twelve billion dollars in revenue for a three-month event.

Another current financial issue in sports today is if collegiate athletes should receive compensation for their performance. However, the financial reports provided by the U.S Department of Education states that of the hundreds of athletic departments in the NCAA’s Division I classification, that only fourteen programs turned a profit from operations in or stemming from their operations. All the other Division I institutions that have turned a profit have done so with the assistance of the university. If these institutions are using money from the university to simply assist in paying for the athletes to receive an education and athletic training, the money to pay each athlete individually simply is not there. Especially the issues that would also arrive from Title XI, the NCCA is currently completely in a bind in terms of finding compensation for student athletes.

Issues such as the ones stated above are huge topics of conversation in the growing world of sports. Every party involved wants whatever is best for the advancement and evolution of sports, but must tread carefully in the decision-making process that could change the shape of the game.

Source by Ansel Jackson

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