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March 18, 2013

Essay Paper on The Subsidization of Professional Sports


To exist, the sport needs multiple equipment, stadiums, swimming pools, gyms etc. The stadiums are thus the structuring element of all sports. These are public institutions that have mostly been responsible for the construction of stadiums and other facilities. Sports organizations have many sources of income, including club fees and ticket sales, advertising and sponsorship, media rights, redistribution of income within the sports federations, merchandising, public aid, etc. Some sports organizations, however, find it significantly easier access to private sector resources than others. In terms of mass sports and amateur sports, equal opportunities and free access to sporting activities cannot be guaranteed by a strong government involvement. The Commission understands the importance of public support for sport and authorizes such aid, provided they are granted in respect of Community law.
This section provides, first, an overview of public financing of sports. It addresses the application of aid to exempt public support for the sports sector and the taxation of sports. It then focuses on aspects of private financing of sport. In this regard, it explores the sporting aspects of patronage and protection of intellectual property rights.
Public support for sport
Public support for sport can be in various forms, including:
    Direct subsidies from public budgets,
    Subsidies from government managed services wholly or partly by the State, or direct revenue from services licensed
    Special rates of taxation
    Loans at lower interest rates,
    Guarantees with lower commissions,
    Public funding of sports facilities,
    The acquisition of a low-cost municipal public facility by an institution or a private club,
    Cheap rental of sports facilities by public agencies,
    Payment for the construction or renovation of sports facilities on the part of the Local Council,
    Public works in private sport facilities,
    The purchase of advertising space in public sports facilities,
    Donations or real estate sales or exchanges of land destined for sports facilities.
Sport is vital to the welfare of a society. The vast majority of sports take place in non-profit structures, many of whom depend on public support to enable all citizens to have access to sport in an environment free of discrimination. Some States are confronted with the problem of how to achieve a more sustainable funding model to provide public subsidies to sports organizations.
To be less dependent on television, clubs are now seeking new sources of income. The observation of the current development financing and the use of stadiums in the United States show that they can generate considerable revenue for the clubs, through adaptation of new strategies.
Control of state aid has set a goal to ensure that government interventions do not affect competition or intra-Community trade. State aid is defined in this context, as a benefit conferred on a selective basis, in any form whatsoever, to the commitment of national governments. Therefore, the government does not cover grants awarded to individuals or general measures open to all businesses, grants or actions that are not state aid per se. (Delaney and Eckstein, 2003)
However, in certain circumstances, government interventions are necessary for the proper functioning of an equitable economy. The treaty also provides a number of objectives with which state aid may be considered compatible.
The modernization of infrastructure should enable optimization of resources and the equipment case, the situation overseas market stages in the world continues to evolve, mainly in Europe and the United States. This new policy around the stage took a turn in recent years: the audience and partners have become the central concern of clubs in order to improve revenues. The English club Manchester United aims to achieve its sales in the match day.
For professional clubs, the situation is similar, but with notable developments today. Indeed, financing of professional sports has changed considerably between 1970 and today. Thus, there are about thirty years, according to the Center for Law and Economics of Sport (CDES) of Limoges, the main source of funding came from the audience (81%) and local authorities (18%). In 2006, the audience represented only 15% and communities 4.1%, leaving room for funding more private, especially through television rights revenue (57%) and sponsors (18%). (Coates, 2000)
Since professional sports clubs are engaged in economic activities, there is no compelling argument for which they should be exempted from state aid rules. The need to ensure a standard playing field for the players, clubs and competitions as well as the need to ensure the uncertainty of the results may in fact be secured more effectively through the application of State aid, aimed at establishing a standard playing field and ensure that states or municipalities that are more willing or more able to provide subsidies to their clubs do not interfere with fair competition.


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