The Social and Economic Relevance of Sports in Italy

The social and economic relevance of sports in Italy

Roundtable The social and economic relevance of sports in Italy Rome, May 7, 2008

With the collaboration of the Italian Olympic Committee (CONI - Comitato Olimpico Nazionale Italiano)

Sport in Italy: achievements of the organizational model and the principle of autonomy Sport has always played an important social and economic role in Italy. This is thanks to generally good public-private cooperation, and to CONI working together well with some 45 sports federations. This free forming of partnerships and those partnerships’ capacity for self-governance has led to success in sports at both the grassroots level and in major competitions where Italian athletes – not least women – excel. After years of stability and quiet, the period 1999 to 2004 saw many organizational changes at CONI and the privatization of many sports federations. Administratively, CONI’s contribution almost completely cleared its previous € 450 million euro deficit. Finances, however, remain a problem. Previously guaranteed by the Football Pool proceeds, CONI’s financing is now subject to the inevitable changes in public financing laws. Last year’s European Commission White Book pointed up the need for sustainable financing with long-term development prospects. Sport needs a system of state financing that is stable and guaranteed, less subject to the trammels of bureaucracy and politics and perhaps more bound to the betting system (this has proved more efficient in recent years). Independence depends on the reliability of financing. The Treaty of Lisbon is an essential step in the history of European sport. It recognizes, for the first time, the importance of sport and the need for its institutions to be independent and protected by the principle of subsidy. The fact that sport is embedded in the new European Union treaty makes this reference to its independence from legal systems of member states all the more important. Once the Treaty has been ratified, these principles cannot be disregarded.

Problems of infrastructure The number of people doing some form of sport has increased significantly in recent years, involving more than 60% of the physically active population. According to recent estimates, some 15 million do so constantly and systematically. There are approximately 90,000 organizations with a club for every 808 inhabitants, making sports clubs the country’s most widespread system, and the ratio greater than schools, parishes, newsagents, bars or restaurants. In spite of this, Italy still falls behind the European average, particularly if we look at the elderly, children, or the disabled. This is partly due to physical education not being developed in schools as in other European countries, even though health and education are the cornerstones of a society that puts a premium on the well-being of its citizens. The educational system needs to recognize the importance of sport, as a means of promoting health and in the fight against obesity (Italy has the highest child obesity levels in Europe and is increasing at the rate of 1% per year). Families currently fill this gap by spending

1 © Document to be used exclusively for Aspen Institute Italia institutional purposes The social and economic relevance of sports in Italy

€1400 on sports activities for their children. However, the economic climate means they may no longer be able to afford it. Sports also need facilities. In the last ten years facilities in Italy have more than doubled from 45 to 150 thousand. Local councils, despite their straitened circumstances, spent 1.5 billion euros in the sector. Meanwhile, 10% of these facilities are unfit for use. The planning and building of new facilities are plagued by constraints and delays (partly due to the lack of an infrastructure strategy) particularly when compared with countries such as France, Germany, France, Holland or Denmark. Sometimes impressive facilities built for major sporting events are immediately abandoned, partly because of the excessive maintenance costs. This raises the problem of the stadiums: they need to be privatized so that clubs can be competitive and redress the balance regarding their source of income. At the same time they need to play an active role in the community.

The economic perspective The sports sector amounts to some 3% of the GDP. In terms of turnover, it is one of Italy’s top ten businesses, employing more than a million people, professional and amateur. There are 170 weekly or monthly publications apart from the sports dailies which lead the circulation and readership tables. To build on this, we need to rethink and update professionalism, and guarantee increased Italian club competitiveness in Europe, through fiscal systems which do not penalize those clubs. How are we to achieve a more equitable distribution of earnings between the large and small organizations, between the professionals and the amateurs? This issue is most keenly felt by listed companies held accountable to shareholders and the market. If the aim is to make profits – as evident since 1996, with the quoting of football clubs on the stock exchange – then regulations need to help the process along rather than generate inappropriate acts of state subsidy. At that point we may as well rid the organizations of this objective altogether. We can see this in the question of proceeds from TV rights, when an important match will get a bigger slice. However, by evenly distributing proceeds, we risk undermining clubs that shine thanks to their prestige and their own investments. In short, too much state subsidy could distort the very nature of the professional club. If we truly want to help clubs balance their books, clubs need to be allowed to buy their own stadium, perhaps through credit from sports funds or tax benefits. Market forces must, nevertheless, apply across the board. Direct state contribution to the construction of facilities or services in the professional sector would be difficult. Sport and business need to join forces and play a role in economic growth. Sport is an important international visiting card for Italy. Some of our best sports personalities could make a significant contribution in promoting Italian brands. What actually happens today is that many are used by foreign companies, American or German, to promote products designed in Italy, made abroad, branded in a third country and then resold in Italy.

The value of sport and the fight against doping and violence Sport embodies and feeds strong values. For 35% of adults sport is an important part of education for both individuals and groups. This is another reason for its promotion in schools as part of an overall general education. “Games” have important ethical and social values, helping us to cope with luck, chance and risk or deal with defeat. While the “game” itself is the starting point, the economic and social value of sport demands we take a more complex and ethical view. Responsible behavior is not taught, but is learned by example. Sporting heroes, educators, directors and coaches thus have a

2 © Document to be used exclusively for Aspen Institute Italia institutional purposes The social and economic relevance of sports in Italy tremendous responsibility as influential role models. Sport also promotes a culture of reward through merit, transparency and equal opportunity so meagerly represented elsewhere. The greatest concerns perceived by Italians are, however, the problems of doping (66%) and violence amongst supporters (62%). The worry that the sporting world gives too much importance to economic interests would appear less marked (28%). Italy, alongside the United States and other nations, with 12,000 annual checks, is also involved in the fight against doping. Presently, the system focuses on and punishes the athlete alone, yet the athlete is often just the weakest link in a chain that includes trainers and managers and even doctors, who encourage the athlete to improve his or her performance illicitly. As regards violence in sport, the last few years have seen some terrible examples. Violence in sport is, of course, just one face of the general violence we see throughout Europe in recent years. In fact, violence in and around stadiums has actually decreased in the last year thanks largely to new laws, policing, and the football association Federcalcio working more closely with the clubs. The clubs have made significant sacrifices to this end, including notable economic ones. Injuries resulting from fights are down by 35% and those during a match itself by 60%. However, these measures need to go hand in hand with prevention. One approach would be to work on governance in individual clubs. Elsewhere in society, offences are prevented through clear, tried-and-tested rules. Since the world of sport works by the same rules, clubs could adopt appropriate self-regulatory codes to prevent doping and violence. At the moment, we see control from the outside, managed by the federations and CONI. Were the anti-doping checks to become an integral part of the regulations of the organization, preventive measures could be taken earlier. This is also true for violence: regulations need to sift through those with access to the hot-spots for outbreaks of disorder. The media also has a role to play in cultivating the culture of defeat and respect for the opponent. The promotion of the so-called “minor” sports such as basketball or volleyball (but also swimming, gymnastics and skiing, for example) would help, not least for the contribution these sports are making in terms of a positive image and values.