Bidding for international sport events: how government supports and undermines national governing bodies of sport

Abstract

Over the last 20 years bidding for the rights to host sport events has become increasingly competitive. While a range of factors underpin successful bids, political support, particularly in the context of bidding for mega sport events such as the Olympics or the FIFA World Cup, is essential. This has resulted in an increasingly politicized bidding process. The role of government policy and the impact on sport-event bidding therefore plays a key role in determining whether a national governing body of sport (NGB) is competitive during the bid process. Two central issues are considered within this article. First, it considers the ways in which the UK government is supportive of NGBs during the bidding process. Second, it focuses specifically on government taxation policy and discusses how the tax environment in the UK has the potential to undermine the competitiveness of UK NGBs when bidding to host sport events. Drawing on semi-structured interview data from 10 individuals representing nine national governing bodies of sport and six other stakeholders involved in the bidding process, the article illustrates that NGBs receive bid support from central government through the Department for Culture, Media and Sport, from local government, in addition to non-departmental public bodies including regional development agencies and UK Sport. The interview analysis also illustrates that this support is offset by the adverse impact of income tax and VAT policy of HM Treasury. The article concludes with the identification of four key issues which require further research. First, should HM Treasury introduce legislation to relinquish the right to tax a percentage of worldwide endorsement income from overseas sports people? Second, when bidding for one-off sport events, should HM Treasury provide exemptions from player tax and HMRC guarantee that they will not pursue the tax liability? Third, is there a need for HM Treasury to create a specialist sports events unit, and fourth, should a reduced VAT rate of 5% on spectator entry fees be introduced.

Notes

¹ Emery, ‘Bidding to Host a Major Sports Event: The Local Organising Committee’; Westerbeek, Turner and Ingesson, ‘Key Success Factors’.

² Roche, ‘Putting the London 2012 Olympics into Perspective’, 287.

³ Masterman, Strategic Sports Event Management: Olympic Edition.

⁴ DCMS, Staging International Sport Events; DCMS, Game Plan; DCMS, Unpicking the Lock.

⁵ Kasimati, ‘Economic Aspects’.

⁶ Gratton, Dobson and Shibli, ‘Economic Importance’.

⁷ Ibid.

⁸ Blake, Economic Impact.

⁹ Crompton, ‘Economic Impact Analysis’; Kirkup and Major, ‘Reliability of Economic Impact Studies’.

¹⁰ Baade and Matheson, ‘Quest for the Cup’.

¹¹ Ibid.

¹² Emery, ‘Bidding to Host: Strategic Investment’.

¹³ Baade and Matheson, ‘Quest for the Cup’; Baade, Baumann and Matheson, ‘Selling the Game’.

¹⁴ Gratton and Henry, Sport in the City.

¹⁵ Gold and Gold, ‘Olympic Cities’.

¹⁶ Hall, ‘Imaging, Tourism and Sports’.

¹⁷ Gratton, Shibli and Coleman, ‘Sport and Economic Regeneration’.

¹⁸ MacRury, ‘Re-thinking the Legacy 2012’.

¹⁹ Masterman, Strategic Sports Event Management: An International Approach.

²⁰ Essex and Chalkley, ‘Olympic Games’.

²¹ Cochrane, Peck and Tickell, ‘Manchester Plays Games’.

²² Horne, ‘Four “Knowns” of Sport’.

²³ Westerbeek, Turner and Ingesson, ‘Key Success Factors’.

²⁴ Gratton, Shibli and Coleman, ‘Sport and Economic Regeneration’.

²⁵ Swart and Urmilla, ‘Seductive Discourse of Development’.

²⁶ Brown and Massey, Sports Development Impact.

²⁷ Masterman, Strategic Sports Event Management: An International Approach.

²⁸ Long and Sanderson, ‘Social Benefits of Sport’.

²⁹ Sekaran, Research Methods for Business.

³⁰ Fetterman, Ethnography.

³¹ HM Treasury, Hosting the World Cup.

³² Ibid.

³³ Hall, ‘Imaging, Tourism and Sports’.

³⁴ Director, non-Olympic development sport NGB.

³⁵ Competition Manager, Olympic NGB, 25 April 2008.

³⁶ Gratton, Shibli and Coleman, ‘Sport and Economic Regeneration’.

³⁷ Northwest Development Agency, A Strategy for Major Events.

³⁸ Sports Events South East, Major Sports Events Strategy.

³⁹ Competition Manager, Olympic NGB, 25 April 2008.

⁴⁰ Chief Executive, Olympic NGB, 25 June 2008.

⁴¹ Chief Executive, Olympic NGB, 25 June 2008.

⁴² Chair, Olympic NGB, 13 May 2008.

⁴³ Chief Executive, Olympic NGB, 13 May 2008.

⁴⁴ Tax consultant, major accountancy firm, 8 April 2008.

⁴⁵ Tax consultant, major accountancy firm, 8 April 2008.

⁴⁶ Tax consultant, major accountancy firm, 8 April 2008.

⁴⁷ Tax consultant, major accountancy firm, 8 April 2008.

⁴⁸ Tax consultant, major accountancy firm, 8 April 2008.

⁴⁹ Director of operations, Olympic NGB, 15 April 2008.

⁵⁰ Competition Manager, Olympic Sport NGB, 25 April 2008.

⁵¹ Treasurer, Olympic Sport NGB, 13 May 2008.

⁵² European Union, Council Directive 2006/112/EC, 28 November 2006, on the common system of VAT.

⁵³ Commission of the European Communities, White Paper on Sport.

⁵⁴ Ibid.