Sport industry contribution to progress of national sports

Dr. of Law, Professor V.N. Sinelnikova1
Dr. of Law, Professor А.Б. Zelentsov2
Dr. of Law, Professor I.V. Ponkin3
1Higher School of Economics, Moscow
2Peoples' Friendship University of Russia, Moscow
3Russian Academy of National Economy and Public Administration under the President of the Russian Federation, Moscow

Keywords: sports, sport laws, sport industry, sport legislation and regulations, lex sportiva, copyright.

Background. Modern sport industry is very successful in engaging millions of people around the world, with most of the global population either competing in or supporting the sport events – that means that the professional sports have evolved into a fully-fledged and growing economic sector rather than purely entertainment service [4, p.3–8]. Sport industry is now considered an integral part of a sport world. Loquin E. underlines that ‘sports may be described as the growing global business’ [5] since the total income of the global sport industry in 2015 was estimated at USD145.3 million [1, p. 11], and we believe the figure is very conservative in fact.

It should be mentioned, however, that the growing value and benefits of the national sport industry are still largely underestimated by the decision-makers in Russia as manifested, among other things, by the stagnation of the national sport outfits, footwear, equipment, apparatuses, sport vehicles, water vessels, aircraft etc. production industries. It is the excessive commercialization that may be blamed to a degree for the regress of the national competitive sports with their fair-play agendas. In an ideally balanced economic system, a sport industry shall propel the national sports in many aspects acting among their key progress drivers. It is, therefore, highly topical for the national sport science today to analyze the role and potential of the national sport industry in the multiple phenomena and processes of importance for progress of the national sports, with the topic being particularly important in the context of the top-ranking competitive events in the country, particularly the 2018 FIFA World Cup in Russia.

Objective of the study was to analyze every aspect of the modern sport industry with its essense, priorites, progress vectors, and the role and place in the multiple phenomena and processes of importance for progress of the national sports.

Study findings and discussion. Sports as an integral part of the modern socio-cultural process are geared to both advance the physical and intellectual health as provided by the definition of sports in Article 2 of Federal Law #329-ФЗ of 04.12.2007 ‘On Physical Culture and Sports in the Russian Federation’. Modern sports are based on the economical foundation with the relevant material and technical provisions for the competitive process design, logistics and management, with the competitions viewed as the core product of the sport industry [3, p.57–78]. Modern sports encompass a few sectors of social activity, and their mission is to secure physical progress for the competitors and demonstrate high physical standards, with the competitive and training environments ensuring due comfort and safety for the competitors and spectators to stimulate public interests in modern sports, including the consumer ones. High-ranking sport competitions attract big crowds of supporters that need to be served by foods and drinks, sport signage, attributes, sport garments, souvenirs and other goods and services.

Modern sports may be described as the multidimensional social service sector designed to cater for rather specific social needs – that should be regulated by the relevant legal and regulatory framework to secure legitimate interests of the competitors, coaching teams, event organizers and other parties including the sport service businesses. This means that the modern sport competitions cannot but go with multiple ‘overheads’ of sports-related social services that may be collectively referred to as the sport industry driven by multiple business interests. These business activities on the national turf are currently regulated by a rather loose system of legal and regulatory provisions that are often poorly harmonized and even conflicting in some cases; with this regulatory inconsistency largely hampering progress of the national sport industry [2].

As provided by the PricewaterhouseCoopers analysts, modern sport industry or sport market includes the following components: (1) sponsorships, with commercial applications of copyrights including the brand names, trademarks etc.; (2) proceeds from direct commercial activities like sales of tickets to the sport events; (3) proceeds from sales of the broadcasting rights to mass media companies willing to broadcast the events via TV networks, Internet, local/ satellite systems etc.; (4) proceeds from the other relevant activities including the merchandizing/ sales of the team logos, images of sport celebrities under the copyright contracts etc. It should be noted that presently proceeds from the foodstuffs/ nutrients trade contracts are excluded from the sport market revenues [1, p.2].

The efforts to encourage progress of the modern sport industry in the context of its role and place in in the multiple phenomena and processes of importance for the national sports, with a special priority to the regulatory system – are largely hampered by a variety of factors including the following: (1) Disharmony (imbalances) of the Russian sport industry due to its excessive dependence on the imports of foreign sport goods/ services including the sport outfits, footwear, equipment, accessories and apparatuses for the sport trainings, physical education and competitive events; sports-related souvenirs, special foodstuffs and drinks; rehabilitation/ test and other equipment including the systems applied by the modern sport medicine; parts and units for the sport technologies and sport facilities/ infrastructure; sport vehicles, water vessels and aircraft and the relevant service parts, inputs, elements, units and accessories; sports-related (or otherwise advertised in connection with sports) foodstuffs, nutrients and drinks including those marketable at the sport events to improve the service quality and comfort; (2) Certain inertia and thinking stereotypes that tend to interpret the sport commercializing initiatives in negative terms to further aggravate the global and local corruptive tendencies in and perceptions of sports; and restrain the efforts to promote the national sport industry in the governmental agencies to have the industrial interests duly addressed by the governmental policies with concern to the national sports sector; 3) Serious limitations of the valid legal and regulatory framework for the sport industry that effectively restricts the relevant governmental agencies in their attempts to support the professional sports by financial and other provisions on a sound legal basis; and 4) Imbalances and underdevelopments in the national legal system on the whole and in its application to the modern sport industry in particular, with poor if any considerations for the institutional and operational specifics of the sport industry in the modern social contexts.

Conclusion. The national legal and regulatory framework in its application to the sport industry, its actors and shareholders is still rather inconsistent and underdeveloped, albeit some positive regulatory steps prior to the 2014 Olympic Games in Sochi and 2018 FIFA World Cup secured some regulatory progress – albeit still fragmented and limited. These legal inconsistencies need to be removed as they are of constraining effect on the modern sport industry development policies and practical initiatives.

References

  1. Menyaem pravila igry. Perspektivy razvitiya mirovoy industrii sporta do 2015 goda [Changing the Game: outlook for the global sports market, 2015]. PricewaterhouseCoopers, Moscow, 2011, 39 p.
  2. Ponkina A.I. Avtonomnost sporta: Teoretiko-pravovoe issledovanie [Autonomy of sport: Theoretical and legal research]. Sport Law Commission of ARL; NUSL RF. Moscow, 2013, 102 p.
  3. Shevchenko O.A. Osobennosti regulirovaniya truda v sfere professionalnogo sporta [Features of labor regulation in professional sports sector]. IASL. Moscow, 2014, pp. 57–78.
  4. Hoye R., Smith A., Nicholson M., Stewart B., Westerbeek H. Sport Management: Principles and Applications. Second edition. Oxford: Elsevier, 2009. xx; 318 p.
  5. Loquin E. Sport et droit international privé. Lamy Droit sportif économique, 2003, no. 186.

Corresponding author: valents1@rambler.ru

Abstract

The study analyzes the professional sports sector as a specific industry contributing to the mass sports progress in the country, with a special attention to the key aspects of the sport industry in its modern definitions including the following: investments/ sponsorships; commercial applications of copyrights including brand names, trademarks etc.; direct commercial activities like sales of tickets to the sport events, their broadcasting rights etc.; and other relevant activities including the merchandizing ones. It is underlined that no legal protection of the national sport industry can guarantee its high profitability. The industry development initiatives, therefore, will be geared to create and maintain a reasonable balance of interests of the sport industry and mass sports; with this balance secured by a special legal platform setting forth the frame legal fields for activity of every actor in the sector.