Edward Hadas: FIFA and the root of all evil

June 3, 2015

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

“The love of money is the root of all evils.” The words of St Paul may be a rhetorical exaggeration – surely lust, pride and gluttony create their fair share of problems – but the troubles at FIFA show the remarkable damage that the combination of abundant money and weak institutions can cause in today’s affluent societies.

FIFA was totally unprepared for wealth. For the first seven decades of its existence, it was much more of a global club for soccer enthusiasts than a business. As long as the monetary stakes were low, lovers of the beautiful game were the right people to coordinate and promote the sport.

Revenue was just starting to pour in by 1974, when Joao Havelange became FIFA president. The Brazilian may well have been more interested in sport than in money, but the millions of dollars’ worth of fees and bribes he accepted show how far the lure of lucre pulled him from what used to be called good sportsmanship.

In the subsequent decades, football has become a substantial global business, worth $35 billion in 2013 according to consultants A.T. Kearney. Sponsors and broadcasters pay billions of dollars to be associated with the sport, and players and coaches receive millions for their efforts.

The people connected with FIFA are key cogs in this cash-spewing machine, but they can take no credit for the main sources of the money. World GDP has more than doubled in the last three decades after adjusting for inflation, by U.S. government calculations. Enough of the new wealth has gone to soccer to allow, for example, a 16-fold real increase in average pay for English top-tier players, as calculated by sportingintelligence.com

Ideally, these employees would recognise that their contributions are modest and technical, and would refuse anything more than appropriately restrained compensation. Dream on. Such restraint requires either a strong institutional tradition of integrity, backed by actively enforced rules, or staff with exceptional moral fortitude. FIFA had neither.

The appeal of money is hardly limited to professional sports. As St Paul pointed out two millennia ago, the love of money can distract, distort and destroy. Passion, whether pecuniary or romantic, is often more powerful than law, custom or commonsense. And the monetary temptations have probably increased along with global affluence.

Consider drug crime. Ross Ulbricht was just sentenced to life in prison for organising Silk Road, a more efficient way to do illegal business. He seems to have been motivated by libertarian ideology, not greed, but he is the exception. For most growers and dealers, the hope of making a fortune drives them to damage users’ lives while risking prison and death.

But it is not only potential criminal gains which lead to bad behaviour. The moral drama of the perfectly legal sport of pushing up executive compensation is quite similar to the deadly crimes of Latin American drug cartels and the legal and illegal excesses at FIFA. Corporate bosses and financial traders play pay-leapfrog with each other, aided by complacent boards of directors and supine shareholders. Compensation consultants provide spurious economic justification for what any rational observer would call greed.

The increasing distance between pay for the business elite and for the rest of the population is unjust, since corporate chiefs are merely senior members of large bureaucracies, not sports stars. The pay gap is probably also bad for the economy, because the desire for higher pay leads bosses to think more about their bank accounts than the good of customers, workers or the community. A moralist would add that the monetary craving is bad for the soul of anyone who is already well supplied with comforts and luxuries.

What can be done to counter the dangerous appeal of riches? At FIFA, the replacement of Sepp Blatter, the longstanding president who announced his resignation on June 2, could start a moral and regulatory renewal. The new person will be supported by the increasing global intolerance of tax evasion, bribes and kickbacks. For FIFA officials, the fear of fines, prison and public shame may soon outweigh the appeal of cash.

It is likely to be harder to restrain the greed of drug dealers and corporate executives. Neither shame nor law have much effect on either group. The former are content to be criminals and can often pay for immunity from prosecution. The latter generally see no evil in their desire for ever larger rewards, and the consultants ensure that their packages are not only legal but respectable.

Campaigners against excessive pay should take note of St Paul’s precise words. He did not criticise money, but the love of it. Institutions will only be strengthened when the ardour for gain is restrained by some stronger force. Laws are important, but the battle must ultimately be fought in the turbulent fields of love, people’s hearts and minds.

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