International Journal of Sociology and Social Policy

International Journal of Sociology and Social Policy Emerald Article: Municipal subsidiary policy toward professional sports teams: A democratic deficit in the local government Yair Galily, Fany Yuval, Michael Bar-Eli

Article information: To cite this document: Yair Galily, Fany Yuval, Michael Bar-Eli, (2012),"Municipal subsidiary policy toward professional sports teams: A democratic deficit in the local government", International Journal of Sociology and Social Policy, Vol. 32 Iss: 7 pp. 431 - 447 Permanent link to this document: http://dx.doi.org/10.1108/01443331211249066 Downloaded on: 23-07-2012 References: This document contains references to 59 other documents To copy this document: [email protected]

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Municipal subsidiary policy toward professional sports teams

Municipal subsidiary policy

A democratic deficit in the local government Yair Galily Zinman College of Physical Education and Sports Sciences, Wingate Institute, Israel

Fany Yuval

431 Received 6 January 2012 Revised 27 February 2012 Accepted 10 March 2012

Guilford Glazer School of Business and Management, Ben-Gurion University of the Negev, Israel, and

Michael Bar-Eli Zinman College of Physical Education and Sports Sciences, Wingate Institute, Israel and Guilford Glazer School of Business and Management, Ben-Gurion University of the Negev, Israel Abstract Purpose – Local authorities around the world provide different forms and different amounts of direct and/or indirect assistance to professional sport teams, which in most cases are owned by private business entrepreneurs. Findings from various studies indicate that professional sports teams do not make a significant contribution to a city in terms of its economy, tourism or even image. The purpose of this paper is to explore and question, from a local public policy standpoint, the justification for financial assistance from the local authority to privately owned professional sports teams that provide a public service or a public good. Design/methodology/approach – In order to shed light on the process, a two-staged study was used: an examination of the financial subsidies of ten cities in Israel, focusing in particular on Herzliya, an affluent community north of Tel Aviv. In the second stage, a representative sample of Herzliya’s adult residents (18 years old and above) was surveyed with regard to the city’s current policy on sports and the policy they would like to see enacted. Findings – The findings show that both public officials and professional sports officials place subsidizing popular sports rather than professional sports higher on their priorities. The study concludes that the combination of a number of processes has brought about a democratic deficit. Originality/value – Lack of transparency and the exclusion of the public in decision making processes has led to a democratic deficit in the local authorities. Once it was armed with empirical information and included in the decision making process, the public was able to reallocate the budget to meet its needs. Keywords Local authorities, Democratic deficit, Sport policy, Israel, Sports, Local government Paper type Case study

Introduction Local authorities around the world provide different forms and different amounts of direct and/or indirect assistance to professional sports teams that are composed of salaried athletes. In most cases, these teams are owned by private business entrepreneurs. In some cases, however, teams are non-profit organizations that are owned by a local authority or by fans. From a local public policy standpoint, the justification for financial assistance

International Journal of Sociology and Social Policy Vol. 32 No. 7/8, 2012 pp. 431-447 q Emerald Group Publishing Limited 0144-333X DOI 10.1108/01443331211249066

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from the local authority to privately owned professional sports teams that provide a public service or a public good should be questioned. The findings in this study clearly show that the public, its elected officials and the professional administrators would prefer a significant reduction in financial assistance to professional sports teams. Despite this preference, professional clubs continue to receive generous direct and indirect subsidies, a fact that raises many questions which this paper will seek to answer. Many studies have explored the benefits gained by local authorities from subsidizing professional sports teams. Numerous local authorities provide assistance to teams as part of the central government’s prescribed policy. This policy arises out of an ideological conception that social policy is designed to shape identity and social integration, or that it seeks to promote social functions such as health and education (Heinemann, 2003; Coakley, 2007; Mizrahi et al., 2008). However, the supposed benefits for the local authority and its residents should be carefully considered. For example, professional sports teams are perceived as a springboard for economic development, a means of encouraging tourism and enhancing the city’s image, and a way of benefiting of the sports-going public (Stevens and Wootton, 1997; Siegfried and Zimbalist, 2000; Smith, 2005). Nevertheless, as will be expanded upon later in this paper, many studies conducted in various places around the world clearly indicate that the benefits these professional teams bring to the municipalities and their residents are for the most part marginal. Why do local authorities transfer tax funds to affluent market leaders and highly paid players? What benefits do the authorities gain that can justify financial assistance to a team privately owned by a tycoon intent on making a profit? Israel provides a unique case for exploring these questions, as this country has never had an official government policy enforcing or encouraging local authorities to assist professional sports teams (Mizrahi et al., 2008; Galily, 2009), as do some other countries. Additionally, in recent decades sports teams in Israel have undergone a transformation from control by national institutions, on a political party basis, to control and management by private bodies financially supported by local authorities (Ben-Porat, 2002). In Israel, as in most of the Western world, the majority of the professional teams are in private hands. Although the majority of the local authorities do not receive any of the benefits listed earlier (as will be explored later), they are still inclined to provide significant assistance to professional sports teams. Indeed, the amount of funding they receive would rank the sports teams as a leading public service in the municipality. Hence, the question of benefits to be gained by the local authority and its residents from the professional sport teams becomes even more critical. In order to answer this question, we have gathered empirical data regarding the process of public policy making in selected local authorities in Israel. This study contends that the situation described above is an anomaly, resulting from ongoing policy-making patterns in what is considered a marginal and trivial field – professional sports. For years this arena has been ignored by three relevant interest groups: policy makers (elected officials), bureaucratic professionals (directors of sport departments) and residents. It is precisely the lack of interest in and lack of attention to this policy that permits the ongoing disproportional budgeting and the disproportional strengthening of a small group of interested individuals. Furthermore, while both municipal residents and professional administrators have stated a definite preference for developing popular sports (e.g. volleyball, judo, table tennis and swimming) at the expense of budgetary assistance to the professional sports, empirical evidence indicates that

the opposite has occurred. In other words, when there is no interest in a given policy issue, no demands are made of it. This lack of demand sends a misleading signal to the authorities that the current situation is acceptable, leading to the continuation of a policy without examining whether the policy is still relevant to the situation. The findings of this study may shed light on the importance of transparency and responsiveness to public policy, when the needs and wishes of the residents are taken into account in order to provide an appropriate local policy. Therefore, the issue under investigation in this work may be seen as part of the well-known phenomenon of democratic deficit. Democratic deficit in the local government The term democratic deficit was originally used to criticize the operation of the European Union’s institutions. The term expresses objection to the legitimacy of the Union’s institutions on the grounds that they have little public support and are disengaged from the public. Lack of transparency in decision-making processes, exclusion of the public from the processes, and overall dissatisfaction with the Union’s institutions that make decisions and design policies independent of social interests and national institutions, as well as the failure to provide accountability to the public, have all contributed to this overall dissatisfaction (Lodge, 1994; Weiler et al., 1995; Moravcsik, 2004; Follesdal and Hix, 2006). This is an exemplary case in which a democratic institution operates in a democratic society in a way that does not fully correlate with democratic principles (Hasson, 2006). In recent years this term has been expanded to apply to international organizations, at national and local levels. Hasson (2006) defines the term democratic deficit on the local level in similar terms: disengagement from the public expressed by a lack of transparency and accountability, and a low level of active participation and involvement of the residents. In Israel this problem is particularly vexing, considering the change in policy that took place in 1978 allowing for the direct election of the heads of local authorities. This move was meant to encourage heads of municipalities to work closely with the professional administration, thus empowering the professional administration on the one hand while reducing the effective value of the elected delegates on the other. This problem is exacerbated by the fact that elected officials in local authorities in Israel do not receive wages for their work in the municipality, and their positions have no formal description. Finally, as a consequence of these issues, as well as of the growing trend of dissatisfaction with public services in the local authorities and their management (Hasson, 2006), we have witnessed a continual sharp decline in voting participation for local authorities, from 73 percent in 1973 and by 2003 plummeting to 40 percent (The Central Bureau of Statistics, 2003). These factors have dissociated the public from the local authority, creating a sense of alienation among residents, and are a testament to the ever increasing level of democratic deficit. The phenomenon of democratic deficit at the local level may explain the large number of anomalies in decision making by the authorities. Lack of transparency, alienation and detachment from the residents may make the provision of services for residents more difficult in marginal matters than in significant ones. For example, there is a research-based consensus that politics take up a relatively little part of the daily agenda of residents, who are more occupied with personal everyday issues. Elected officials exhibit varying levels of political participation and behaviour, and interest levels in politics vary (Berelson et al., 1954; Campbell et al., 1960; Almond and Verba, 1963; Verba et al., 1978;

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Miller and Shanks, 1996). Therefore, when an issue is considered significant in the eyes of a group of citizens, this may cause them to act on it (Almond and Verba, 1963). An issue becomes part of the public agenda when a group with a problem seeks and demands government action to solve it (Eyestone, 1978). However, since the public is not involved in making governmental decisions, the authorities are not likely to recognize, respond or react to the needs of residents, especially regarding issues that they do not consider to be of great importance. Thus, changes in residents’ needs and wishes are not necessarily expressed in terms of changes in policy, unless decision makers in the municipality are aware that a change concerning the residents has occurred. This phenomenon is particularly apparent when an area that had been the focus of great interest in the past, and therefore funded on that basis, ceases to be of primary concern to the public. Unbeknownst to all, the field continues to be funded at the same level. As a result of residents’ lack of interest in the field, no demands are made by them, but at the same time no attention is paid to the fact that the field continues to receive a significant budget. Without public demand for policy changes and without any interest in doing so on a political level, indifference towards the budget granted to sports allows it to grow incrementally and uninterruptedly. It can be assumed that if a resident’s central area of interest were under discussion, budgeting would be a vital matter in the discussion, and decisions regarding it would not be given automatic approval. While significant issues drive residents to action, insignificant ones do not, so demands to stop funding them are never made. Such indifference leaves the field open for interested parties to continue on with business as usual. The justification for financial assistance from the local authority to privately owned professional sports teams, in terms of a public service and public good, ought to be questioned by policy makers. Answers should be provided to questions such as: why is the local authority assisting a sports team? How can subsidies to private sports teams be justified? To what extent does a sports organization provide these supposed benefits? What do residents think about the authorities’ policy of assisting sports and the authorities’ role in this area? What are the residents’ needs and preferences and which will serve them best? Answers to these questions could help policy makers rectify the democratic deficit on which such funding is based. Benefits for municipalities promoting local professional sports teams Those supporting the promotion of professional sports teams argue that local authorities may reap a number of benefits from such a relationship. First, such promotion can serve as a stimulus for economic development, leading to an increase in sports-related jobs and the opening of businesses in the city as a result of the city’s sports-friendly image (Siegfried and Zimbalist, 2000). Second, it may serve as an advertisement for the city, boosting tourism and allowing for the building of impressive stadiums that will become touristic attractions (Stevens and Wootton, 1997). Third, professional teams become a public commodity, providing entertainment and leisure-time activities in the stadiums and at home, as well as a topic of social discussion. Finally, the teams may enhance the city’s image or even aid in the re-imaging of the city (Smith, 2005). Despite these claims, there is no empirical evidence that any of these benefits actually materialize. Numerous empirical studies from a variety of places show that no statistically significant positive correlation exists between developing sports facilities for professional teams and economic development (Baim, 1992; Rosentraub, 1994;

Baade, 1996; Baade and Sanderson, 1997; Noll and Zimbalist, 1997; Walden, 1997). On the contrary, such subsidies often weigh heavily on the local authority’s budget (Walden, 1997). Sports do not seem to affect tourism (Whitson and Macintosh, 1993; Mossberg and Hallberg, 1999; Whitelegg, 2000) and an increase in actual tourism has not been proven (Ritchie and Smith, 1991; Chalip et al., 2003). Studies do indicate, however, that choosing a policy of promoting sports as a central motif in changing a city’s image may eventually achieve this purpose in the eyes of tourists (Karp and Yoels, 1990; Smith, 2005). Obviously, professional sports teams’ managements are interested in receiving as much assistance as possible. Nevertheless, the findings presented later clearly indicate that for the most part the three central agents in the process of municipal policy making – the policy decision makers, the professional ranks and the public – have little interest in the existence of professional sports, and no interest in providing the level of assistance that currently exists. How, then, did municipal assistance reach such high levels in the absence of any interest? A number of studies have addressed this question, but their findings do not provide a complete solution. In their study, Siegfried and Zimbalist (2000) offered several answers. First, the phenomenon of subsidy supporters selling illusions and deceiving the public by arguing in favour of financial benefits for the city is widespread, despite the above-mentioned research findings that negate this. Second, only a small number of spectators has a great deal of interest in sports team competitions. The concrete benefits this vociferous minority stands to gain generate intensive political activity in an attempt to recruit assistance from public subsidies for the team. Team owners and players are a well-organized interest group, and they receive public exposure at a relatively low cost in their efforts to increase subsidies. This issue, however, is complicated, and it is quite difficult to fully estimate the extent of the indirect subsidies granted. Moreover, subsidy opponents are neither funded nor organized, and they do not possess the information required to become more active. Funding strategies for professional sports teams around the world In democratic nations around the world, there is an identifiable pattern of financial assistance to professional sports teams. In most cases the central government allocates a budget for sports. Alongside this budget there is an institutionalized system of income derived from sports gambling, and the majority of the profits is allocated for the support of sports. In many countries sports clubs are even given a national or local tax exemption. Nevertheless, the local/regional government or the local authorities are the main sources of assistance for sports organizations in most of the Western world, and they generally assume responsibility for sports facilities and infrastructure. The form and amount of local assistance granted to professional sports teams vary greatly in terms of the type and extent of the assistance granted. Funding may entail direct assistance through the transfer of funds, or indirect help through the development of infrastructure, the construction of gymnasiums and facilities and tax exemptions. Assistance may be offered to one sports branch or to many. In the USA there are four different major leagues in four professional branches of sports; all are privately owned by business tycoons. The major league in each branch controls the geographic mobility of the teams, and grants them a monopoly in choosing the location of the sports teams in the league. This control amplifies the power of the teams in negotiations with the local authorities, and allows only the bigger cities to


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compete for professional sports teams. Municipal assistance granted to professional sports teams is indirect in terms of construction and maintenance of stadiums, fields and state-of-the art sports facilities for free use by the team, while virtually all the profits from these assets go to the teams. Since the 1990s, the USA has witnessed an increase in the amount of money invested by local authorities for such expenses (Siegfried and Zimbalist, 2000). According to Coakley (2007) and Lavoie (2000), professional sports teams receive help from the local authorities because of the belief that they create jobs, infuse money into the local economy, increase economic activity, draw new visitors to the city, attract media attention (and therefore more tourism and regional economic development; see, for example, Solberg and Preuss, 2007) and increase civic pride and social solidarity. At the same time, however, both Coakley and Lavoie admit that the jobs created are usually low paying and part-time. Further, construction contracts for building new arenas are sometimes awarded to specialist firms from outside the local community. Moreover, other businesses that come in are usually franchises that drive out already established local businesses. According to Coakley (2007), many taxpayers cannot afford to buy tickets to see games in the stadiums that their money has built. Coates and Humphreys (2008) found that although the intuitive arguments do not deny the possibility of certain local economic benefits from sports subsidies, the empirical findings strongly reject sports subsidies on the grounds of the lack of economic benefits. The large and growing peer-reviewed economics literature on the economic impact of stadiums, arenas, sports franchises and sport mega-events has consistently found no substantial evidence of an increase in jobs, income or tax revenues for the communities associated with any of these. Focusing their attention on research done by economists, as opposed to that of scholars from public policy or urban development and planning departments, Coates and Humphreys find near consensus in the conclusion that stadiums, arenas and sports franchises have no consistent, positive impact on jobs, income or tax revenues. A similar pattern is evident in Europe. Large cities or city unions on a regional level adopt leading professional teams in various branches of sports; here too the majority of the teams are privately owned. A minority is publicly owned by fans or the community of a specific region or locale[1]. The local/regional government and the local authorities are the main sources of public financial assistance to sports organizations, and are responsible for the construction of sports facilities and infrastructure. The main income from sports goes to the local authorities. For example, in Britain the local government and authorities are responsible for assisting sports by means of monetary funding and construction of infrastructure and sports facilities, as well as funding their upkeep[2]. The extent of assistance varies from one local authority to another (Dopson and Waddington, 2003; Henry, 2008), and large cities are identified with the leading sports teams (Smith, 2005). In Germany, responsibility for promoting sports is secured in the constitution, and lies with the local and regional government (Puig, 1996). Assistance to sports is not limited to direct financial assistance, but also includes tax exemptions, tax exempt contributions, infrastructure, and use of sports facilities free of charge or for a small fee. In order to obtain assistance, local, regional or national sports unions and associations conduct independent negotiations for financial assistance with the local government on an annual basis (Heinemann, 1996). Sports policy and funding in Israel Sports policy at the national level has been examined in various countries, such as by Heinemann (1996) in Germany, Michel (1996) in France, Dopson and Waddington (2003)

in Britain, Chalip (1996) and Sam and Jackson (2004) in New Zealand, Harvey (2002) in Canada and Mizrahi et al. (2008) in Israel. Houlihan (1997) conducted a comparison between Australia, Canada, Ireland, England and the USA. The common denominator of all these studies is the view of the central authorities towards sports. In 1990, for coalition reasons, the Israeli Government decided to appoint a Vice Minister of Education, who would be responsible for the field of sports in Israel, and in 1999 a Minister of Science, Culture and Sports was appointed to take on this role. Neither ministry managed to secure a reasonable budget for sports (Galily, 2007). Between 1993 and 1999, four different government committees (the Maliniak Committee, Ben Dor Committee, Levin Committee and Fogel Committee) were convened to examine the position of sports in Israel. While a majority of their recommendations have yet to be implemented (Mizrahi et al., 2008), a significant consensus was reached for a sports policy. In their study, Mizrahi and colleagues (2008) explore the development of sport policy in Israel between 1948 and 2006. They point to the low priority that the public has given to sports, combined with the relatively negligible importance that the government attributes to it, making sports a marginal issue. For example, in 2008 the sports budget was a mere 8.17 percent of the total budget of the Ministry of Science, Culture and Sport; this number clearly reflects these views. For historical reasons, a unique organizational pattern has developed in Israeli sports. While in most of the world professional sports organizations have functioned on a local or regional-geographic basis, in Israel, prior to the establishment of the state in 1948, political movements and parties founded their own sports organizations and owned the teams (Ben-Porat, 2002; Kaufman and Bar-Eli, 2005), and this system continued until the 1990s. In 1993, at the height of the privatization process of the Israeli market, sports centres began privatizing teams. They lost the majority of their government assistance and shifted to private owners and other business sources. Few of the teams were owned by local authorities, which regarded municipal unions as an asset to the community (Galily, 2007). Today the majority of soccer teams in the first league are indeed privately owned. Israeli soccer underwent three additional major changes during the 1990s. First, the (limited) integration of Israeli soccer into the European Champions’ League (1991-1992); the expansion of competition in the branch made it possible for a number of Israeli players to reach senior European Leagues (Galily, 2007). Second, the communications revolution led to multiple television channels in Israel, providing live game coverage (1993-1994). Finally, in 1989 the Super League, formerly the National League, was inaugurated, which allowed the entry of foreign players. These changes in Israeli sports both reflected and were influenced by global processes parallel to the individualization process of Israeli society (Ben-Porat and Ben-Porat, 2004). Notwithstanding, the privatization of soccer has yet to realize its full potential. Ticket sales, which in Europe and in Latin America are considered one of the main sources of earnings for teams, are on the decline in Israel as a result of an increase in prices and the diminishing identification with teams. Israeli teams have no choice but to rely on capital infused by team owners, selling players’ league cards, advertising, sponsorship, trademark sales, television broadcasts, an annual allocation from the Israel Sport Betting Board (Sportoto) and assistance from local authorities. Local authorities in Israel offer monetary assistance via the authorities’ sports department by means of assistance funds, which are provided to various organizations,


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including sports. In addition, the authorities construct and maintain gymnasiums, stadiums and sports facilities for use by clubs, free of charge or for a small fee (often partially paid for by the Israel Sport Betting Board). Although local authorities have significantly reduced their level of funding, the money from them still accounts for a significant source of income for Premier League teams (Levy and Galily, 2009). From the centre to the periphery Israel’s historical relationship with sports teams differs from that of other countries. Unlike most other countries in the world, where professional sports associations operate on a local regional or geographical basis, in Israel, even prior to the establishment of the state, the political parties founded their own sports associations. This practice continued until the 1990s (Nevo, 2000; Ben-Porat, 1998, 2002). Despite the fact that political parties controlled sports clubs, teams in Israel played within a geographic and municipal framework, and the name of each team was composed of two parts – the name of the club (e.g. Maccabi, Beitar, Hapoel) and the name of the local authority where the team was active (e.g. Hapoel Tel Aviv, Maccabi Haifa, Beitar Jerusalem). Therefore, the teams were part and parcel of the political, municipal or neighborhood community and the local community intensely identified with the teams and the players, who for the most part were locals as well. Leagues in the different branches of sports were managed in cooperation with the local population, and thus the environment and the community generated interest in sports, giving its spectators a sense of belonging and enjoyment (Kaufman and Bar-Eli, 2005; Galily, 2007). In spite of the privatization of the sports centres, the names of the teams according to geographic locations have been maintained, and they continue to play on the same municipal home fields. Public interest in the existence of teams at the local level appears obvious and natural. It is also natural that the municipalities would consider providing assistance to these teams as serving a public interest. The cultivation of youth sports teams as part of the clubs, with the goal of fostering and recruiting talented players for local adult teams, has further contributed to this trend. Obviously, the municipality considers youth sports as a means for improving fitness and health, instilling the values of sportsmanship, and attracting youngsters to make positive use of their free time. Over time, however, violence on the field and the hooligan image of fans have tainted local sports. Going on a family outing to a sports event has become less attractive for many people (Horesh, 2007). In addition, the number of local players has declined, as they have been replaced by foreigners. Players move more rapidly from one team to another and have no emotional commitment to any one club (Fejgin and Hanegby, 2001). In addition, a few individual teams in Israel enjoy financial resources that attract the best talent, leaving other teams at a disadvantage. This inequality causes fans to lose interest in a competition whose outcome is mostly predetermined (Szymanski, 2001; Ben-Porat, 2002). Most teams have no option but to rely on the market of players, rather than on local youngsters. The child is no longer regarded as a potential player for the future, but rather as a source for funding adult teams. Unlike in the past, the professional link between youth and adult divisions has dissipated (Fejgin and Hanegby, 2001). This process may explain why local authorities adopted the sports clubs, yet it is not clear why, when these teams lost their communal and social value, local authorities actually increased their assistance instead of disengaging from the sport teams. Budget allocations should reflect the blatant disinterest shared by the three most

influential agents – the policy decision makers, the professional ranks and the public – in the process of municipal policy making. A democratic deficit at the municipal level may explain this contradiction. Methods To test this hypothesis, we developed a two-staged study. First, we examined the financial subsidies of ten cities in Israel, focusing in particular on Herzliya[3], an affluent community north of Tel Aviv. We compared Herzliya’s policies with those of nine other cities with similar characteristics[4], all located near Tel Aviv in the centre of the country. In particular, we examined the range of strategies employed by local authorities in assisting professional sports teams. In the second stage of the study, a representative sample of Herzliya’s adult residents (18 years old and above) was surveyed with regard to the city’s current policy on sports and the policy they would like to see enacted. The population of each of the ten cities ranges between 31,000 and 222,000 (according to the Central Bureau Statistics, Herzliya had a population of 84,000 residents at the end of 2006). Most of the residents of these cities are in the middle to upper socio-economic class (The Central Bureau of Statistics, 2004). All of the cities have sports departments and a professional sports team for at least soccer and basketball. All have professional men’s teams, and most, but not all, have corresponding women’s teams. The pattern of financial assistance provided by the local authorities to professional sports teams was examined using personal interviews with sports department directors. Interviews lasted between one and two hours each. A core of 47 questions was pre-prepared, leaving an option for alternative questions during the interview according to the responses given by the interviewee. Some questions were closed-ended (including a choice of answers), but most were open-ended questions allowing unlimited answers. Our subjects (ten) were all male, ages 42-62, and all (excluding one) had a university or college education. Although each municipality has a different form of management (i.e. work regulations and policies) and team levels, a number of common themes emerged from the responses to our questions. Based on the data gathered in the first stage we designed a public opinion phone survey, which was conducted in January 2008 among a random sample of 507 adult residents of Herzliya (18-84 years old) by Haifa University’s Institute of Statistics. Of the participants, 54 percent were women and 46 percent men; the average age was 47.5. With regard to demographics, 68 percent of the participants were married and 45 percent had one to three children under the age of 18. With regard to education, 35 percent possessed a high-school education, 21 percent had a post high-school education (degree studies), 41 percent had a university or college degree and the rest had no education beyond grade school. It must be noted that the response rate was very low (623 refused to participate initially[5]), and quite a few (51 percent) stopped the interview in the middle, claiming lack of interest or difficulty in responding (324). The low response rate might indicate disinterest in the subject. However, participants’ responses must be examined with the understanding that the percentage of supporters of professional sports teams was not high. The findings of each stage will be presented next. Findings In the ten municipalities examined in this study, the average budget invested in the Sports Department in 2007 stood at New Israeli Shekel (NIS) 13,605,067 (as opposed


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to NIS 21 million in Herzliya); the budget allocated to sports departments ranged from 0.5 to 7.7 percent of the total budget for the municipality. This amount includes the average budget given to sports from the municipality assistance committee, which was an average of NIS 4,719,000. The assistance budget for sports from the total assistance allocated by the city ranged between 1.0 and 2.5 percent of the municipality’s total budget. Assistance was divided into assistance for professional adult sports (67 percent) and youth sports (29 percent). Only one city provided proportionately more assistance to youth sports than it did to professional adult teams. The majority of municipalities turn over the assistance budget over directly to the sports unions, who then distribute the budget to sports programs for youngsters and adults (except for one municipality where youth and adult sports are separate bodies, and another where union management is conducted via the department itself). In the absence of transparency on the part of the unions – it is not required as a term of negotiation for financial assistance, in most cases department directors were unable to describe precisely how funds were internally distributed within the unions and exactly how assistance funds were utilized. The current study asserts that the public both understands that it gains little benefit from these teams and is not deceived by claims to the contrary. Even among senior officers and elected officials in the coalition as well as in the opposition, we found very few who were familiar with the field who fully supported subsidizing professional teams. Subsidy supporters have no political power, and cannot serve as a decisive force against the rest of the coalition members, namely, the mayor, elected officials in the opposition, the professional administrators or large sectors of the public. Nevertheless, it is clear that the effort of this minority, which so enthusiastically supports professional sports, has an effect beyond its relative influence in the division of power within the process of policy making in the city. We contend that the marginal nature of this issue in the eyes of the central policy makers in the local authorities, combined with elements demonstrative of a democratic deficit, led to the continuation of these budgetary allocations to professional sports teams. Among sports department directors, the priority was to cut assistance to professional sports teams and transfer funds to sports activities for children and young adults and to adult popular sports. We asked our participants an open question concerning their professional attitude on the justification of providing public support to professional sports. The most popular answers were in the following direction: “in my opinion, the sports teams are suitable to be supported by the local taxes”, or “no doubt, the sports teams deserve to get support from local taxes”. However, the end of these sentences was almost always: [. . .] but these teams have to supply their needs mostly from private sponsors and patronage, and not to rely too heavily on the public budget [. . .]. the public budget ought to be invested to the benefit of the public, kids and adults public sport [. . .].

Another director said: “[. . .] but in a different proportions. We must insist on different allocation of the money in which most of it will invest in kids and adults in public sports [. . .]”; and “it is important to insist on a more reasonable proportion of allocations. It is most needed to invest more in educating aspects of sports for kids [. . .]”. The majority position was clear: professional teams should not be supported by local authorities. The contribution of the teams to the city was insignificant, and at most meant pride for specific sectors of the public. Even the claim that teams promote popular sports

activities for the public in general, and to youth in particular (a common argument), was unsubstantiated. The department directors were all in complete agreement that assistance for professional sports teams depended on the cost. Most believed that only a very limited amount of direct assistance to these teams should be maintained, in order to encourage their owners to seek support from private and independent funds, and that only indirect assistance should be continued. They preferred that the greater part of the assistance budget be transferred to what they considered more important activities, such as promoting sports for children and young adults and popular sports for adults. Sports department directors pointed out that their city lacked accessible, challenging, high quality facilities which would encourage the public to engage in sports of any form. According to sports department directors, those are the residents’ true needs. It should be emphasized that even those directors who supported providing assistance to sports teams recommended that it be given in a more limited fashion, with a greater investment going to popular sports and programs for children and young adults. It is interesting to note that one of the clearest positions in this study centered on the question regarding the desired source of funds for professional teams. A clear majority of the interviewees believed that professional sports should be funded by private funds, not residents’ taxes. Only one director disagreed with this statement, and another neither agreed nor disagreed, while all the rest agreed or strongly agreed. Interviewees’ responses revealed conflicting interests. On the one hand, as directors of the sports department they have an informal commitment to develop sports in their city. Therefore, most had difficulty claiming that professional teams were unnecessary. On the other hand, in most cases the directors clearly expressed that on their list of priorities, other more important needs take preference. Consequently, the fact that sports department directors do not in effect control assistance funds that are transferred to professional sports teams creates a conflict of interest between the desire to increase their budget and their position as sports representatives. Although they have a clear interest in increasing their portion of the budget via the professional teams, it is clear to them that if the budget were cut the funds would not be transferred to other sports activities, so they should go to the professional sports teams instead of another group. Therefore, in the absence of a conflict of budgetary interests, they find it difficult not to support sports activities in the city. In other words, if the budget were allocated for sports activities, they would support cutting assistance to professional teams. If that were not the case, they support maintaining the current budget for professional teams. Thus, there appears to be a gap between the desired state and the actual one. In our opinion, this gap is a result of the fact that considerations dictating the extent of assistance to professional sports are mainly political, rather than professional. The two trends described above – support for cutting assistance to professional teams, along with the recognition that the contribution of professional teams is relatively small when compared to the contribution of other sports activities, as well as the political nature of this issue, should be examined in light of the public’s position concerning its needs and its opinions about financial assistance to professional sports teams. Among residents, the responses clearly indicate that the issue of professional sports raises very little interest among most of the city’s residents. In stark contrast, there is a great deal of interest in and a craving for popular sports for all ages, with a distinct emphasis on developing channels for involving the youth of the city in sports.


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Respondents voiced limited agreement with municipal assistance to professional sports teams. In contrast, respondents overwhelmingly agreed that it is more important to transfer budgets, partially or completely, to sports activities for children and young adults. This finding recurred constantly, regardless of how the issue was presented, and matched those findings that emerged from the professional ranks. Respondents pointed to the need to reinforce sports activities for youngsters both in and out of school. No significant differences were found in answers from different socio-economic levels or geographic sections of the city. According to our investigation, none of the local authorities participating in this study had examined the subject of financial assistance, even though within the framework of designing a prototype plan in the field of sports, all the authorities except for one had conducted a survey of residents’ needs in terms of sports. The majority of authorities consistently found that residents feel there is a lack of gymnasiums, fields and parks, with facilities accessible for public use close to their homes. The need for a significant investment in popular sports in general and for youth in particular was salient. These clearly expressed needs all led to a similar conclusion. According to most residents, assistance money (or other funds, if available) should be transferred to a more crucial and desirable program: popular sports for all ages. It should be noted that Herzliya is a highly active city in terms of sports activities, with 71 percent of the residents engaging in some form of physical activity for two to four hours a week (Yuval, 2011). These active residents can clearly identify unmet needs in terms of sports services offered in the city. As for the position of respondents regarding Herzliya’s budgetary policy for professional sports teams, we asked “what in your opinion should be done with the city budget provided today to professional teams (approximately NIS 6 million a year)?” We presented the option to maintain the current budget for professional teams as the first possible answer, in order to catch the respondents’ attention. Despite the placement of this choice, only 23 percent of the respondents selected this alternative. Others (50 percent) preferred cutting the budget and transferring it to other sports purposes, such as popular activities, facilities and infrastructure, programs for children and young adults, and physical education enrichment. An additional 13 percent demanded that professional team assistance be stopped and that the entire budget be transferred to other sports purposes. Table I, which focuses on the city of Herzliya, shows another interesting finding supporting this clear assessment of assistance for professional teams as an excessive and

Question: 1 – very much against; 5 – strongly agree

Table I. Attitudes towards supporting professional sport teams in Herzliya

Supporting professional sport teams is a waste of my local tax money Professional sports should be funded by private entrepreneurs or the state, not local tax money Professional sports bring honor and prestige to Herzliya Professional sports is a national matter rather than a local issue Professional sports bring nothing to the city I follow Herzliya’s soccer, handball and basketball teams regularly on TV I watch pro-sports regularly at the stadiums

Directors’ average (SD)

Survey average (SD)

2.3 (1.70)

2.83 (1.53)

3.8 4.3 2.9 1.7

3.61 3.57 3.17 2.30

(1.60) (0.95) (1.37) (0.95)

3.5 (1.51) 3 (3.99)

(1.36) (1.38) (1.41) (1.33)

2.01 (1.42) 1.32 (0.82)

misdirected use of residents’ taxes. Here again, the picture that emerges from the public survey is not essentially different from that found among the directors. While both the public and the directors verbally expressed more positive attitudes towards sport teams, when it came to actual allocations, both groups opposed financing the professional sports teams. Obviously, the directors expressed stronger views than the public. The average agreement with the sentence “professional sports should be financed by private funds, not local or national taxes” was relatively higher among directors than among the public. The relatively low average greed given by the public, and slightly less by the directors, to another question, worded: “supporting professional sport teams is a waste of my local tax money”, together with the answer for the question: “professional sports is a national matter rather than a local issue”, provide supporting evidence for this trend – professional teams should be funded mostly by private money, and other support should be provided by national roots and only minor or moderate support should come from local taxes. Declarative statements about issues relating to the value and place of professional sports, however, were conflicting. When asked whether the teams brought prestige to the city or whether they thought the number of residents who watched professional teams from the city was increasing, professional bureaucrats responded more positively than did the general public. The gap between belief and practice is clearly expressed in these findings. Discussion In an attempt to clarify the processes described thus far, one could offer an explanation in terms of policy inertia, particularly given that the actual distribution of the funds is in the hands of the sports administrations themselves. However, we felt that such an explanation, of slowing or redirecting the trajectory of change, would be an over-simplification (especially due to the mechanism that eventually led to a full investigation of the issue). Consequently, we opted to explain the process in terms of democratic deficit. As elucidated earlier, the term democratic deficit expresses an objection to the legitimacy of the authorities on the grounds that they garner little public support, and that a disengagement exists between institutions and the public: lack of transparency in decision-making processes, exclusion of the public from the processes, overall dissatisfaction with the authorities that make decisions and design policies independent of social interests and national institutions, and the failure to provide accountability to the public all contributed to the public’s dissatisfaction. As argued, a combination of a number of processes has brought about the democratic deficit, leading to the ongoing funding of an activity that actually ranks rather low on the public’s list of priorities. First, the team adoption process by local authorities in Israel, as described above, has been gradually and consistently assimilated over the past few decades, and no formal policy has been formulated by the central government. Second, the lack of a policy on and budgeting for professional sports by the central government, demonstrates how insignificant this area is to the central government. Thus, a review of the issue, which might lead to a change in the level of funding, has seemed unwarranted. Third, for a variety of reasons, the local population’s earlier great interest in and emotional ties with its home team have given way to indifference. Fourth, sports clubs are highly organized and capable of lobbying to make sure their current funding levels remain constant. Finally, lack of transparency and the exclusion of the public in decision-making processes has led to a democratic deficit in the local authorities. As we can see from the example of Herzliya, when these deficiencies were rectified the budget


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was realigned in accordance with the wishes of the public and the local officials. Ironically, it was precisely the lack of interest in the issue, combined with this democratic deficit, which allowed the status quo to remain in place for so long. Once it was armed with empirical information and included in the decision-making process, the public was able to reallocate the budget to meet its needs.

444

Aftermath The decision of the Herzliya council to set up a committee which, with the assistance of independent research groups, would formulate operative recommendations for deciding policy in this area changed the sporting reality in the city. We presented the results of our study to the mayor and elected officials of Herzliya, explaining that the findings supported our hypothesis about a democratic deficit being a central component in the gap between the policy desired by most stakeholders and the reality. Immediately following the municipal election of November 2008, steps were taken to change the situation in Herzliya, including a 18.4 percent (NIS 900,000) reduction in financial support for professional sports teams and a reallocation of funding to areas better suited to the needs of the municipal authority. The 900,000 shekels were invested in sports activities for children and youth, as well as for popular sports for adults (26 April 2009, decision no. 14226). A new committee was appointed to prioritize preferences for activities in which to invest the new revised budget for the sports department. Notes 1. For example, Barcelona’s soccer team, one of the five biggest clubs in the world, is owned not privately but by its fans. Its membership numbers in the tens of thousands, and together with ticket and subscription sales, contributions, sponsorships and other monetary sources, it is an extremely profitable club. Very few teams in the world are similarly managed (Margalit, 2009). 2. This assistance in Britain is not generally given to professional sports teams, but primarily to amateur and community clubs. 3. The Herzliya City Council, like many municipal authorities in Israel, has been supporting professional sport teams for many years, both directly and indirectly. Every year intensive discussions about the allocation of the municipal grants budget are held in the subsidy committee, and the final decisions are submitted for approval to the city council plenum, where their endorsement is normally just a formality. The year 2007 heralded a change, when the chairperson of the subsidy committee raised objections to the amount of support given to these teams (totaling 6 million shekels out of a total budget of 21 million shekels allocated to the sports department) compared to other subsidies for the next season that were submitted for approval to the plenum. The minutes of this meeting (May 2007) reveal the surprise expressed by the participants at the very idea of raising objections to a budget item that traditionally aroused no interest, and up to that point had been automatically approved. However, after a heated debate among the council members, the group agreed that more information was needed before a decision could be made. The council decided to set up a committee, which, with the assistance of independent research groups, would formulate operative recommendations for deciding policy in this area (Yuval, 2011). 4. The cities included were Holon, Kfar Saba, Hod Hasharon, Ramat Hasharon, Raanana, Nes Ziona, Rehovot, Rishon Lezion and Ramat Gan. 5. We have encountered all who have been approached and asked to participate.

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