In Part 1, I outlined the theoretical understanding and some of the evidence that underlie the economic decision to subsidise a mega-sports event. I concluded that, on balance, subsidising a mega-sport event such as the World Cup is ultimately a poor use of taxpayer money in terms of purely measurable economic indicators. The conventional wisdom that such a big public investment leads to “spill-over” benefits within the economy was dispelled, or at least put into serious doubt.
Every Victorian knows who Lance ‘Buddy’ Franklin is, who Nathan Buckley is, and who James Hird is. Even non-supporters know these names, because AFL is so ingrained in Victorian culture and lifestyle that is almost impossible to avoid them. However if you ask an average Victorian who James Horwill is, there is a good chance that you will be given a blank expression as a response.
On February 19th, the Australian Football League (AFL) handed down the third biggest fine in its history of $500,000 to the Melbourne Football Club. The fine was the result of a seven month investigation into allegations the club took deliberate action to lose matches toward the end of the 2009 season. This was done to guarantee priority draft picks under the draft arrangement that favours poorly-performing teams. Two coaches found to have been complicit were also handed down lengthy suspensions. Deliberately losing games is colloquially called ‘tanking’, and has been a subject of discussion for AFL pundits for nearly a decade. The football community has reacted to these sanctions with bemusement, and rightly so. The club is being heavily penalised for what is ultimately a rational response to the perverse incentive the AFL unwittingly designed.