• Corruption Allegations Highlight Increasing Risks in Sport
  • June 27, 2012
  • Law Firm: Norton Rose Canada LLP - Montreal Office
  • On 16 May 2012, the Board of Control for Cricket in India (BCCI) provisionally suspended five players following a sting by the India TV news channel. The sting involved players agreeing to bowl no-balls in return for cash and also uncovered evidence that some IPL teams offer more money to players than they are allowed to under IPL regulations. It is the latest scandal to rock the sport, following the conviction of three Pakistani international cricketers by UK courts on criminal corruption charges in November 2011.

    Cricket is not the only sport to witness corruption issues in recent weeks. On May 10, it was reported that an anti-corruption unit of the Portuguese police was looking to question Manchester United over the £7.4 million transfer of Portuguese striker Bébé to the Premier League club. Bébé’s only prior experience in football was one season in Portugal’s third division yet was bought by Manchester United five weeks after signing for Portuguese first division side Vitoria. Bébé’s agent, Jorge Mendes, secured the client shortly before the transfer and was paid £2.89 million from the transfer fee after securing 30 per cent of the player’s “economic rights”. Mendes became Bébé’s agent only days before the transfer and was known to Manchester United as the agent of its players Anderson and Nani, as well as former star Cristiano Ronaldo. Gonçalo Reis, Bébé’s former agent, has claimed that Dutch side PSV Eindhoven had declined an offer to sign the player on a free transfer only three months earlier.

    As investment pours into popular sports, the threat of corruption continues to increase as clubs and athletes attempt to compete both commercially and in sporting terms. Even sports’ governing bodies are susceptible to corruption risks. FIFA recently announced the development of a new code of conduct that included anti-bribery provisions, following allegations of corruption within the organisation’s executive and questions over the bidding process for the hosting of the 2018 and 2022 World Cups.

    While the world’s top athletes earn millions from their sporting contracts and commercial activities, those playing at a lower level often earn modest salaries and have a limited career span. The temptation to accept bribes in return for altering their performance can be strong. Likewise, as sport becomes increasingly commercial, clubs and institutions are under greater pressure to compete. The 2006 Calciopoli scandal in Italy’s Serie A demonstrated that even the most high-profile clubs can be susceptible to corruption threats. Italy’s most successful club, Juventus, was relegated and a number of senior directors were suspended from football following an investigation in which a number of clubs were alleged to have been engaging in match fixing and influencing the player transfer market. More recently, 61 individuals and 22 clubs have been implicated in a betting scandal in Italy’s lower leagues, with some reports linking this to the financial problems smaller clubs are encountering.

    It is clear that even sporting organisations must be able to identify and monitor their corruption risks in an environment where finance is in danger of overtaking sport as their major concern. With so many recent issues, it has become evident that sport is susceptible to corruption, compromising the principles of integrity that underpin their practice. Club executives in major sports must implement strong controls on their transfer dealings and their relationships with middlemen, while they must also ensure that their playing staff are aware of codes of ethics and will perform with integrity. The commercial implications of corruption allegations can be catastrophic in a sector where fairness and ethical values are paramount.