41
QUANTIFYING THE COSTS OF INTEGRITY BREACHES
COSTS TO TEAMS
The costs of an integrity breach to the value of a team vary with the nature of
the breach and the specific involvement of the team in the incident. A breach
perceived to be isolated to a single individual may be contained relatively
quickly, especially if the matter appears to have been dealt with promptly and
well. Michael Vick’s conviction, for example, affected the Atlanta Falcons in
the short term as the team performed poorly for a season before the arrivals
of new general manager, coach, and quarterback engineered a turnaround.
Team officials were visible and transparent in dealing with the case and in
distancing the team from Vick’s actions. Neither attendance nor TV ratings
suffered appreciably, and the team’s overall valuation grew in line with other
NFL franchises.
More significant costs accrue when an integrity breach is perceived to result
from deliberate, malfeasance, the misbehaviour of multiple individuals, or
endemic or widespread problems within the team. Because club valua-
tions in sport tend to correlate more closely with revenue than profitability,
breaches that depress revenues appear to have the greatest impact on a
team’s fortunes.
26
This conclusion is evident from analysis of the fate of Juventus F.C., one
of the most successful clubs in the history of Italian football. Turin-based
“Juve” dominated Serie A, Italy’s top league, for decades. Between 1990 and
2006, the club won seven championships, including back-to-back titles in
2005 and 2006. In the latter year, however, Juve found itself at the centre
of a major scandal involving teams at several levels of Italian football.
An investigation revealed two senior club officials had rigged outcomes of
important matches, and hence the league standings, by influencing the as-
signment of partisan referees. When the dust cleared, the club had to forfeit
its 2005 and 2006 league titles and its lucrative place in the European
Champions League. It was relegated to Serie B and forced to play three
home matches without spectators. This punishment exacted a heavy toll on
the club, which subsequently also lost many of its best players to teams still
competing in top-tier European leagues.
© MONITOR QUEST LTD. 2011
GUARDING THE GAME Preserving the Integrity of Sport
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