Posts Tagged ‘sports’

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The timing could not have been better, at least for me. It just so happens I’m teaching Thorsten Veblen’s Theory of the Leisure Class this week. It should become quickly obvious to students that, as I have argued before on this blog, we’re now in the midst of a Second Gilded Age.

This is confirmed in a new report by UBS/PwC, according to which, after a brief pause in 2015, the expansion in billionaire wealth around the world has resumed.

Thus, billionaire wealth rose 17 percent in 2016 (up from $5.1 trillion to $6 trillion), far more than the 5.8-percent nominal GDP growth figure and double the rate of the MSCI AC World Index.** There was also a 10-percent rise in the number of billionaires globally to 1,542. Despite a period of heightened geopolitical uncertainty, the world’s ultrawealthy are flourishing.

The United States still has the world’s largest concentration of billionaire wealth. It grew by 15 percent from $2.4 trillion to $2.8 trillion as billionaires prospered, far outstripping the MSCI AC World Index. Thirty-nine Americans entered the billion-dollar plus wealth band and 14 dropped off.

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Europe’s billionaire population was static in 2016. Twenty-four entered this wealth band, while 21 dropped off.*** There were 342 European billionaires at the end of 2016.

The biggest jump occurred in Asia. Three quarters of the newly minted billionaires are from the region’s two biggest economies—China and India. China had by far the highest number, adding a net 67 to total 318. India’s billionaire population climbed 16 to 100. Taken together, the wealth of Asian billionaires grew by almost a third (31 percent) in 2016, up from $1.5 trillion to $2 trillion.

So, what do the world’s billionaires do with their vast wealth? Most of it is used to capture even more income and wealth. Thus, the 1,542 billionaires in the UBS/PwC database own or partly own companies that directly employ at least 27.7 million people worldwide—roughly the same as the UK’s working population. And, via an array of financial instruments and “club deals,” they manage to siphon off a large part of the surplus created by the rest of the global working-class.****

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Apparently, the world’s billionaires are also becoming major patrons of sports, such as football (both global and American), hockey, baseball, and basketball. According to the report, more than 140 of the top sports clubs globally are owned by just 109 billionaires.*****

One European entrepreneur explains why he owns a sports club in the following way. “Sport is my life and my dearest hobby,” he says. “Further, the publicity you get from the broadcasting is global. The business works according to the theme ‘you win on Sunday and sell on Monday.’ People always identify themselves with winners. A er all, I not only sponsor, whatever I do in this eld must be sustainable and needs to make commercial sense.”

It should come as no surprise that Veblen held a quite different view:

Addiction to athletic sports, not only in the way of direct participation, but also in the way of sentiment and moral support, is, in a more or less pronounced degree, a characteristic of the leisure class; and it is a trait which that class shares with the lower-class delinquents, and with such atavistic elements throughout the body of the community as are endowed with a dominant predaceous trend.

Clearly, the Gilded Age today shares with its historical predecessor a “dominant predaceous trend” that enables the world’s billionaires to accumulate more and more wealth and leaves the rest of us behind.

 

*The title of this post is from the collection of short stories by Mark Twain and Charles Dudley Warner, published in 1873. Apparently, the name chosen by Twain and Warner was inspired by William Shakespeare’s The Life and Death of King John (Act 4, Scene 2):

Therefore, to be possess’d with double pomp,
To guard a title that was rich before,
To gild refined gold, to paint the lily,
To throw a perfume on the violet,
To smooth the ice, or add another hue
Unto the rainbow, or with taper-light
To seek the beauteous eye of heaven to garnish,
Is wasteful and ridiculous excess.

**The MSCI AC World Index is a market capitalization weighted index designed to provide a broad measure of equity-market performance throughout the world. It is maintained by Morgan Stanley Capital International, and is comprised of stocks from both developed and emerging markets.

***Germany, Europe’s largest economy, also has the most billionaires, at 117. The United Kingdom comes a distant second, at 55, followed by Italy (42), France (39) and Switzerland (35).

****One high-profile example of clubbing together occurred when Warren Buffett’s Berkshire Hathaway group backed the ill-fated Kraft Heinz $143-billion bid for Unilever in February 2017. Buffett has a record of helping the 3G private equity vehicle behind the bid to finance its deals. 3G is controlled by Jorge Paolo Lemann, Brazil’s richest man, and his partners. Buffett has added his financial firepower to 3G’s acquisitions of doughnut chain Tim Hortons as well as Kraft Heinz.

*****The Glazer family, worth an estimated $4.7 billion in 2015, controls 83 percent of my own favorite sports team.

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Apparently, this is the way to get attention of the administration on college campuses these days: threaten to cut off $1 million football revenues.

A student engaged in a week-long hunger strike wasn’t able to get the university’s president to address the problem of racism on campus. So, black football players, with the support of other players and coaches, have stopped practicing and have threatened not to play in the scheduled games.

In response to mounting racial tensions at the University of Missouri and an administration’s perceived failure to address students’ concerns, members of the school’s football team have threatened to boycott its remaining games, leaving administrators reeling and emboldening student activists who have been demanding a change in leadership.

Like all such protests, there’s a larger context. This is, of course, the state where, fifteen months ago, Michael Brown was killed by a white police officer.

“The demonstrations by these students are a reflection of where things are going nationally in terms of people being fed up with intolerance,” said the Rev. Traci Blackmon, a St. Louis minister heavily involved in the Ferguson protests. “The notion that the administration would not take a very strong no-tolerance policy toward hatred of any kind is just unconscionable. And the response to the absence of that is what you’re seeing now.”

And this is a president who was hired to run the university like a corporation.

University of Missouri curators saw Wolfe as an ideal successor to Gary Foresee, a former Sprint Nextel CEO who had become the first non-academic to run the college system. Even their praise was couched in business jargon.

“He can sell to others the vital importance of our university,” board of curators chair Warren Erdman told the Rolla Daily News. . .

“I’ve had the great fortune to work with a lot of different companies and executives,” he told the St. Louis Business Journal. “There’s a six degrees of separation and we can get access. Even if you don’t have a personal relationship, you can use your LinkedIn network and can typically find a mutual friend who can initiate an introduction.”

It quickly became clear that Wolfe was being brought in to cut costs in a state where legislators were eager to slash taxes, depriving the university of revenue. . .

One of Wolfe’s first acts was to approve a three percent tuition hike, drawing the ire of parents and students.

A few months later, Wolfe stirred anger again by shutting down the university’s highly regarded publishing house in order to save $400,000 a year. After an outcry from professors and authors across the country, however, Wolfe changed course.

The controversy was heightened by the fact that Wolfe was, at the same time, pushing for a $72 million expansion of the university’s football stadium.

Last year, the board of curators voted to extend Wolfe’s contract, praising him for his business-minded approach.

“President Wolfe has thoughtfully transformed our strategic planning process in a way that focuses our limited resources on priorities while reducing or eliminating waste and redundancies,” the board said in a statement.

This semester, however, Wolfe’s corporate cost-cutting appeared to go too far.  Just a few days before the start of the semester, the university announced it was eliminating subsidies that graduate students use to pay for health insurance.

Graduate students revolted. Thousands, including Butler, protested against the cuts. They issued demands and walked out of classes. Ultimately, the university relented and restored the subsidies.

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Anyone who follows world football (or, for American readers, soccer) knows how special the Manchester United class of 1992 was.

Well, as it turns out, that class—including Gary Neville and Ryan Giggs—really does have a lot of class.

When Manchester United footballers Gary Neville and Ryan Giggs got planning permission to turn the historic Manchester stock exchange into a boutique hotel replete with basement gym, spa and rooftop private members’ terrace, they envisaged opening it up to an exclusive and moneyed clientele. Instead, a group of homeless people with little or no money have moved in – with Neville’s blessing.

The hotel, which is undergoing extensive renovations before opening its doors to paying guests, was occupied on Sunday by a group of squatters and housing activists called the Manchester Angels. Instead of the usual response of property owners – rushing to court to obtain an order to get the uninvited new incumbents evicted – the famous ex-footballers who own the building have told them they can stay, not just for a few days, but throughout the coldest months of the winter.

F.C. St. Pauli is “the world’s most left-wing football club.”

It’s also the club that seems most to be in the news these days. In addition to the piece on Shortlist.com, there’s an article from this past weekend article on the Guardian web site.

And then there’s today’s report, in the New York Times:

Ibrahim Ismail had decided to make a placard for each of his five Syrian and Iraqi friends the moment he heard they would receive a free ticket for Tuesday’s soccer match.

“They say, ‘Thank You, Hamburg’, ‘Thank You, St. Pauli’ and “Many Thanks, Germany,’ ” Ismail said, showing off messages he had carefully printed, in German and Arabic, on scraps of cardboard with a black marker.

The six men proudly displayed their homemade signs to thousands of German supporters as they streamed into Hamburg’s Millerntor-Stadion. Almost all of the fans who passed them were wearing black T-shirts with the image of a skull and crossbones on the front, the emblem that is the calling card of F.C. St. Pauli.

A few days earlier, St. Pauli, a team in the second tier of German soccer that has become famous for its punk rock ethos and social conscience, offered 1,000 free tickets for this week’s exhibition against Borussia Dortmund to recently arrived refugees, including Ismail and his friends. The effort was a part of a larger response, sparked by organic gestures by fan groups, that has brought discussion of Europe’s migrant crisis into stadiums across Europe.

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Football (or, if you prefer, soccer) fans and clubs across Europe, particularly in Germany and especially F.C. St. Pauli, are extending a warm welcome and a helping hand to the thousands of refugees currently streaming into Europe.

Many of the refugees invited to St. Pauli’s match with Borussia Dortmund live in camps around the port city, including one that is a few minutes’ walk from the district that gives F.C. St. Pauli its name.

“A chance to meet the neighbors!” joked Christian Prüss, who works for St. Pauli and has been in charge of the club’s response to the refugee crisis.

A few hours before kickoff Tuesday, Prüss was nervously smoking a cigarette inside St. Pauli’s empty stadium as his phone rang constantly. Like others and the club, he views the humanitarian effort as more of a responsibility than an act of charity.

Besides donating the 1,000 tickets, St. Pauli raised 45,000 euros, over $50,000, in 24 hours — enough to help finance a search-and-rescue boat stationed in the Mediterranean.

“Always the club is without money, we are famous for it,” Prüss said of St. Pauli. “But we have credibility.”

The club’s roots are in the working class St. Pauli neighborhood, famed for the Reeperbahn, Hamburg’s red-light district. It was here that the Beatles honed their trade from 1960 and 1962, and where the neighborhood’s social activism and radical politics often bleed into the stands of the Millerntor.

“We think we can provide more than just football,” Prüss said. “Not just about 90 minutes. We have a responsibility for the people around the club.”

Few take that responsibility more seriously than the St. Pauli fans. Since 2004, the Ultras St. Pauli group has been visiting refugee camps around Hamburg, bringing clothes, food and lawyers to help the migrants navigate Germany’s complex asylum applications.

“It is a kind of radical way to support a football club; we are not just supporting a football club but politically, too,” said Lucas, one of the youngest members of the group, which unlike other right-leaning and sometimes violent ultra organizations, campaigns on everything from ending racism to supporting gay rights. As is common with hard-core European supporters groups, Lucas declined to give his full name.

“It’s why I love this club,” Lucas added. “But German society is divided into two parts. One part supports the refugee struggle and wants to help.” The other, he said, believes the opposite. “They think: ‘We don’t need them’, ‘It’s too much’, ‘Go back home,’ ’’ he said. “I can’t imagine how these people think.”

This is an example others—from last year’s St. Louis Cardinals fans to the current politicians in Europe—might want to emulate.

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Is there racism in modern football?

There is according to former Manchester United defender Rio Ferdinand. And not only in football.

There have been a string of incidents over recent seasons, with CSKA Moscow’s European Champions League tie with Bayern Munich on Tuesday held behind closed doors due to a racist incident in last season’s competition.

Brazilian club Gremio was banned from a cup competition in September after an opponent’s goalkeeper was racially abused during a match.

And Ferdinand thinks heftier fines would act as firm deterrent, with stadium bans dished out to repeat offenders.

“If it’s going to be money, then it’s got to be huge amounts,” he explained. “There’s vast amounts of money in the game so it should be reflected in the punishment.

“If you’re going to hand a Federation a £60,000 ($96,000) fine when that Federation’s pulling in millions a year that is not going to hurt. So it’s got to equate to what they generate I think. Or you ban them from playing in their home country.

“If you say to a country ‘Listen you’re not going to play your national games in your country now after what just happened in the stadium,’ I think the fans will start thinking a bit differently.

“And as I said that doesn’t stop racism. It just stops it in a stadium.

“So that’s why I always talk about a bigger idea on racism and a social element rather than just football but it stops it in a stadium and hopefully that can be then hopefully replicated, maybe, in society.”

But not according to Chelsea manager José Mourinho.

Chelsea manager Jose Mourinho says “there is no racism in football”, amid calls to introduce American Football’s ‘Rooney Rule’ to the game in England.

With only two black managers in the Premier League and Football League, such a rule would require at least one black or ethnic minority candidate to be interviewed for each vacancy.

But Mourinho said: “Football is not so stupid to close doors to people.

“If you are good, you get the job. If you are top, you are top.”

Clearly, Mourinho is channeling his inner Milton Friedman.