The geopolitical economy of sport

The pandemic and its economic effects are accelerating the ascent of global sport to a place it has flirted with for some time – the geopolitical arena, Simon Chadwick and Paul Widdop write.

If there is a single phrase that best characterises what has happened across the global sport industry during the pandemic, perhaps it is ‘acceleration and amplification’.

For some, often smaller, sports organisations, ‘acceleration and amplification’ has, in reality, meant that existing financial problems have risen to the surface, challenging their very existence.

For others, the crises induced by the pandemic, combined with changes in the global political and economic order, have created opportunities to adopt a more aggressive stance, aptly illustrated by a growing number of European football club acquisitions by overseas investors.

At the same time, the consumption of sport online (an already prominent global trend) has become often the only means through which fans have been able to engage with competitive sport.

Generally, the environment in which sport functioned during 2020 was dynamic and complex. This resulted in some notable episodes that are now defining a new era for sport, albeit one which the pandemic has accelerated.

The year had begun with the United States’ National Basketball Association (NBA) embroiled in political controversy after Daryl Moray, General Manager of the Houston Rockets franchise, tweeted his support for protestors in Hong Kong.

Amongst an array of different reactions, Chinese state television removed all NBA games from its schedules. Indeed, they didn’t appear again on television in China until towards the end of 2020.

This not only hurt the NBA’s finances, the controversy undermined decades of work it had spent on building fan engagement in China. It also damaged the basketball diplomacy in which the United States had been engaged. Yet it didn’t help that at the same time, President Donald Trump had embarked upon a war of words with Chinese President Xi Jinping.

Another China-related controversy neatly book-ended the year when French international footballer Antoine Griezmann unilaterally withdrew from a personal endorsement deal with China’s Huawei. The player cited the company’s reported development of Uyghur facial recognition software as his reason for doing this.

More on this: Newcastle’s takeover and the politics of sport

In mid-2020, Chinese sports sponsors also found themselves on another frontline of geopolitical conflict, when a border dispute with India escalated into violence. Several Indian soldiers were killed during this confrontation.

Faced with rising political tensions and a looming consumer backlash, Indian Premier League cricket and two of its sponsors, Vivo and Oppo – Chinese telecommunications companies – immediately ended their relationships.

Similarly, a hugely popular mobile phone game – PlayerUnknown’s Battlegrounds, or PUBG – was blocked from use on mobile phones in India. PUBG is owned by Chinese company Tencent.

Matters in 2020 have not, however, simply been set in the context of souring relations between China, the United States, and their respective allies. An apparent bid by Saudi Arabia’s Public Investment Fund for the English Premier League football club Newcastle United revealed a further and an inevitable clash of geography, politics, and economics.

From the outset, Saudi Arabia’s move seemed to be little more than financial opportunism, as the country sought to roll-out its increasingly ambitious sport policy. Critics immediately reacted to the move by labelling the Kingdom’s investments as sport-washing.

By mid-year however, the proposed acquisition had been rebuffed by the Premier League itself, following a World Trade Organization judgement that a Saudi Arabia had been identified as the location of a pirate broadcasting service accused of stealing content from Qatar’s BeIN Sports.

This was the direct result of a bitter regional feud that has been ongoing since 2017, in which the Saudi government ended diplomatic relations with Qatar. Although this was not the result of a sporting matter, nor was there an intention to target sport, it has nevertheless been embroiled in it.

And this has involved some big sums of money. Not only did Newcastle United lose out on a prospective new owner – which had offered to pay $400 million for the club – but Qatar had previously spent nearly $300 million on Neymar through its ownership of French club Paris Saint Germain. It did this to prove its economic strength to near neighbours, including Saudi Arabia.

More on this: Geopolitical trends in East Asia

This mix of sport, business, money, and states was already taking place before the pandemic, though it has been accelerated and amplified during a turbulent period.

This stands in contrast with developments that took place across the world of sport during the last 20 years. Previously, practices typically associated with American sport had become pervasive, notably its commodification and commercialisation.

As such, 21st-century sport has thus far largely been characterised by rights negotiations, sponsorship deals, and revenue generation strategies. The origins of this prevailing ideology have been in neoclassical economics and free markets.

With patterns of global economic and political power now shifting, countries such as China and those in the Gulf region have become important and influential members of both of the global community and the world of sport.

However, these countries are characterised by large state sectors and by governments that actively intervene in the activities of industries such as sport.

This necessitates a new view of world sport, one we call ‘the geopolitical economy of sport’, where connections between geography, politics, and economic activity prevail, especially as they pertain to production, trade, government, and international relations.

The geopolitical economy of sport encapsulates everything from event hosting decisions and the ownership of sports assets, to the use of sport as an instrument of soft power and as a means through which countries access scarce resources.

Accepting the notion that there is now a geopolitical economy of sport helps to address and frame the issues posed by global trends in sport and the transnational flow of money, resources, and assets.

Further illustrations of what it is, and the implications it has, can be found in Abu Dhabi’s ownership of City Football Group, China’s stadium diplomacy in Africa, US-led investments in sport, and even Switzerland’s place as a centre for sports governance.

The new year will bring more of the same, as competing ideologies battle for global dominance. However, with China keen to bid for the right to host football’s World Cup in 2030, and Qatar and Saudi Arabia set to go head-to-head for the 2032 Olympics, old notions of competition are being, at least for now, consigned to history.

As the world moves through the pandemic crisis, the sporting world too is entering a new era, where it will be shaped by economic and geopolitical interests much more than in the past.