The State of Play: why the free market will win the Rugby World Cup

By Sam Packer, Media Campaign Manager

Tomorrow morning England’s rugby players will attempt to be the second of the nation’s major sporting sides to be crowned champions of the world in 2019, following the cricket side’s July triumph.

It is sometimes said in Westminster that sporting success means good news for the poll ratings of politicians, basking in the reflected glory of the winning team. But, in truth, governments have very little claim to any credit. The role of state in these sporting triumphs has been negligible, given the low levels of funding or influence, with the vast bulk of these sports’ money generated commercially. Brilliant World Cup wins don’t usually require subsidy from the taxpayer. But the success of the rugby and cricket sides does lead us to ask: what role should the state play in sport?

Rugby union has a long history of stymying regulation, with professionalism only being made legal in 1995. Extraordinarily, governments and judges permitted this clear restraint of trade, and no one could earn money from playing the sport. Inevitably, the result was an unhappy “shamateruism” as sides made half-hearted efforts to get round the regulations. A century earlier, when a number of northern clubs had openly attempted to challenge the constraint and pay their players for their time, they had been unceremoniously refused and subsequently forced into forming a rival sport – rugby league – the playing of which would result in a lifetime ban from rugby union.

Regulation and protectionism continue to impact the sport. Decrying the rise of twin bogeymen of “money” and “rich clubowners” is a common trope in rugby punditry. Such lazy arguments ignore the great strides the sport has made since the deregulation of professionalism in 1995, largely thanks to the resulting enormous injection of funds from owners, sponsors and newly engaged supporters. This is something that our sports-mad Sports Minister, Nigel Adams, will be well aware of.

The evidence shows that protectionism that constrains the sport’s market is a far greater risk. The clubs in England and France are owned totally independent of their national federations, and, as in football, the domestic leagues are institutions separate from union control. In most other leading rugby nations, the control of rugby is centralised in the national federation and the federations either own (or partially own) the leading domestic sides. The freer markets of England and France dominate in terms of viewership, attendance and finance. The other countries’ domestic leagues compete for scraps, as leading players seek to make the most of their brief careers by playing in England and France.

The other anti-market argument, that national teams are boosted when their interests are prioritised by a central body with the power to decide when players play and how they are paid, can also be dismissed. England’s World Cup squad is made up of players from 10 clubs, each of which are working to different goals. Ireland’s centrally planned system, which prioritises the interests of the national side, resulted in a flop. Argentina have gone backwards since 2015, when their national squad members were compelled to return from English and French clubs to play for an Argentine federation-run club side. South Africa had to abandon restrictions on overseas play when their introduction coincided with their least successful year ever. In 2015 Australia relaxed their regulations governing where players had to play and were rewarded with a spot in the World Cup final. The reality is that protectionism and efforts to centralise control fail to deliver their promised results.

Government attempts to regulate sport can be similarly stymying for fan enjoyment. Top-down, centralised control is ill-judged and unpopular, as shown in the example of the prohibition on standing at Premier League and Championship football grounds. This is a topic which has been excellently and extensively covered by the Adam Smith Institute.

Passed as a response to the terrible Hillsborough disaster in 1989, the restriction is applied to no other sport or any of the UK’s other football leagues, yet it increases (already staggering) ticket prices and frustrates fans. In 2018, the Football Association finally endorsed a return to standing, after years of campaigning by the Football Supporters' Federation and groups like the Adam Smith Institute. Yet the Government have delayed any relaxation until 2021, commissioning a second quango review.

The example which is often pointed to as a case study for the benefits of public funding of sport is the Olympics. There has been a huge and welcome rise in Olympic medals for British athletes. But government support is often justified on the basis of using the Olympics to increase the public’s participation and engagement in sport. Unfortunately, medals won are not a reflection of participation rates or popularity.

The nation’s most attended sport by an enormous distance is football. After some distance, horse racing, rugby union and cricket follow. Olympic sports have the glory of reaching the “other” category in the statisticsTelevision statistics, though varying by year depending on schedules, follow a similar pattern. Participation rates differ, with fitness-based activity rather than team sports leading. However, no number of Olympic medals seems likely to spark a rowing, pole-vaulting or hammer throwing boom. Despite an influx of money to Sport England, four years after the 2012 Olympics activity rates were lower than beforehand. The fact remains that rugby and cricket success, without the same level of subsidy, is likely to reach more people than even an admittedly-impressive Olympic medal run.

Sporting protectionism and restrictions reduce competition and quality, while massive government subsidy doesn’t offer anything like the popularity and participation rates which the free market can offer. Taxpayers can hopefully raise a glass tomorrow to the miracle of capitalism which is the winning England squad.

Come on England!


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