An increasing number of popular sports clubs, like Manchester United and Real Madrid, have their stocks publicly traded in major stock exchanges around the world. This underlines the view that sport is no longer simply a cultural spectacle. It’s also become big business.
This applies to South Africa, where football, rugby and cricket have become big commercial affairs. Because sport isn’t formally recognised as an economic sector in South Africa, figures are hard to come by. But data from the South African Department of Sports and Recreation estimates that in 2009 sporting activity contributed about 2.1% to the country’s GDP – that’s about R41-billion.
It’s beyond doubt that the contribution of sport as a sector to the country’s economy has increased over the past decade. Not only does sport create paid employment within the game, it also supports other economic sectors such as tourism and infrastructure development.
But, like many other sectors of the South African economy, the business of sport is riddled with unfair practices that probably infringe the Competition Act. Until recently, for the most part these had been allowed to go unchecked by competition authorities.
There are signs that this might be changing. Following an investigation, the country’s competition commission has announced it will be prosecuting football agents, their companies and the South African Football Intermediaries Association for “fixing prices and other trading conditions”.
The case relates to the practice of agents fixing the price or commission that has to be paid when players and coaches change clubs. This is also the case when players and coaches sign or renew corporate sponsorship deals.
The commission’s case against football agents is significant because it brings sport in line with standard rules of business, and recognises the important role that sport plays in the economy. The case relates specifically to football agents, but the principle it’s trying to assert has relevance and will apply to the actions of agencies in other sporting codes as well.
Applying competition law to sport will promote fairness, professionalism, efficient resource allocation and economic development. The case also brings South Africa in line with other countries and regions in the world. In Europe, for example, various sporting activities have already been subjected to the scrutiny of competition law.
Read more here: https://mg.co.za/article/2017-11-14-why-its-time-competition-law-was-applied-to-sport-in-south-africa