Introduction
In recent years, governance has gained increased research interest among scholars in various areas of social science, such as public administration, business, social work, and sports. The origin of the word āgovernanceā can be traced back to the Greek word kubernanan, then Latin word Gubernare, both of which mean āto steerā (Abubakar et al., 2020). Although the term governance is widely used in numerous ways, no universally agreed definition of governance exists. Bevir (2012) suggested that the process of governing is the core concept of governance that is based on rules and practices in which accountability, fairness, and transparency have to be embedded, whether a sovereign state governs its citizen, a corporation does to its employees, or an organization manages its members. Studies of corporate governance initially began with a series of failures among corporations in the United Kingdom in the early 1980s; thereafter, similar failures were witnessed in other regions of the globe, making scholars and practitioners rethink the meaning, role, and importance of governance, its process, and its influence on the success of a corporation (Bevir, 2012; Clifford & Evans, 1996). To respond to these inquires, one of the main areas of research in corporate governance has been focused on conformance of management and board members, and their influence on the enhancement of organizational performance (Hoye & Cuskelly, 2007).
There are generally two schools of defining and conceptualizing the term āgovernanceā. Traditionally, this term is used to describe policies, regulations, directions, and control and evaluation. Thus, governance is the way rules, norms, and actions are structured, sustained, regulated, and held accountable (Kooiman, 2003). The traditional view of governance is focused on the governing body and policies, regulations, and structures set by the governing body. More contemporary application of the term also includes governing actions, namely the operational process of organizing resources, implementing standing policies and plans, achieving goals, and sustaining the organization. Governance encompasses the system by which an organization is both controlled and operated. It is a theoretical concept referring to the actions and processes by which stable practices and organizations arise and persist (Empter & Janning, 2009; Governance Institute of Australia, 2021).
In a similar fashion, traditionally the most common factors that constitute the concept of sport governance include directions, policies, regulations, and control (Hoye & Cuskelly, 2007). More recent conceptualizations and practice of sport governance also emphasize the process of effective carrying out of set directions and enforcement of stated policies (Hums & MacLean, 2018). Setting a clear direction for a sport organization, controlling activities of organization including staff members to align with strategies, and establishing rules and policies that regulate members in an organization are critical elements of good sport governance, which would enhance performance of sport organizations while effectively supervising organizational activities. In other words, main responsibilities of sport governance include overseeing the setting up of overall directions of an organization and ensuring proper organizational functions (Kikulis, 2000). Therefore, governance is an essential element that should be institutionalized in all sport organizations, from small sport clubs to international sport organizations, in order to achieve the best interests of an organization and all its related stakeholders (Hoye & Cuskelly, 2007; Hums & MacLean, 2018).
Sport governance at different levels (e.g. local, national, and international organizations) would focus on different agendas. For instance, while the leading topics of National Collegiate Athletic Association (NCAA), the governing organization of college sports in the U.S., deal with sport rules, championships, health and safety, and matters impacting women in athletics and opportunities for minorities (NCAA, 2020), the main focus of sport governance among international sport organizations such as the International Olympic Committee is to come up with the most effective sport policy among diverse alternatives by analyzing three major issues: ideology, political risk, and stakeholders (Thoma & Chalip, 1996). Moreover, although similarities in the structure of sport governance across borders exist within the same level (e.g., professional sport league organizations), many differences exist. A good example could be found in the governance structure of soccer. While the administrative structures of soccer leagues in almost all countries employ a promotion and relegation system, the same system is not applicable to the Major League Soccer (MLS) in North America, making it the only first-division professional soccer league in the globe without movement between divisions (Galarcep, 2019).
External and internal environments influence sport organizations to a great extent as they belong to the greater society; therefore, one of the important roles of sport governance is to react properly to the expected environmental changes (Hums & MacLean, 2018). For instance, sport participation of female athletes in American colleges has increased sharply with the establishment of Title IX in 1972, which legally forces federally funded institutions to provide equitable sport participation opportunities between men and women (WSF, 2016). This external environmental change has brought significant policy changes among athletic departments in the U.S. Another example is the governing board of the NCAA, which has been dealing with potential changes of its bylaws and policies to allow student athletes to gain financial compensation on commercial use of their name, image, and likeness (NIL) (Osburn, 2019). The proposed policy change is the result of a series of lawsuits against NCAA from student athletes on NIL compensation, which was initially brought up by OāBannon who filed a lawsuit in 2009 and followed by several other student athletes later on (Berkowitz, 2020). This example shows how internal members of an organization, namely student athletes, in this case could affect rules and policy changes of sport organizations.
Common practices of governance in sport industry
Having regulatory power over its members would be one of the most influential aspects of sport governance. By setting up rules and regulations, sport organizations are able to enforce members to follow these rules necessary to ensure effective work process, while imposing punishments for those who break these regulations (Hoye & Cuskelly, 2007; Hums & MacLean, 2018). For instance, a salary cap is a regulation that limits the amount of overall payroll of a team, which is adopted by all four major professional sport leagues in the U.S. However, specific rules differ from sport to sport. In case of National Football League (NFL), the organization imposes a hard salary cap, meaning every team in the NFL cannot exceed the salary cap on any occasion. On the other hand, the National Basketball Association (NBA) and the Major League Baseball (MLB) employ a soft cap that allows each team to exceed the cap; however, when the aggregate payroll of any team exceeds the cap amount, a luxury tax is going to be imposed. While the MLS also imposes salary cap, the organization employs a ādesignated player ruleā, which allows each MLS team to recruit up to three exceptional players (i.e., designated players) whose payrolls and transfer fees are not counted toward the salary cap for the team (MLS, 2017). By setting up this unique rule, teams in MLS are able to sign star players of football clubs in other continents to the league, such as David Beckham, Ricardo Kaka, and Zlatan IbrahimoviÄ. Different governing organizations would have different rules. In the case of European soccer leagues, they have to follow the Union of European Football Associationsā (UEFA) financial fair play principle, which limits the total amount of spending by each club based on their revenue; otherwise, teams will be suspended during the transfer period (UEFA, 2015).
Analyzing the external and internal environments that a sport organization faces and making a decision on governance issues that is based on the long-term goal of an organization are other crucial tasks of a governing body in order to be competitive and successful (Kim et al., 2021). For example, various football clubs within UEFA Leagues would have different goals to achieve. Big clubs such as Liverpool FC in the English Premier League (EPL) are going after winning league championship and UEFA Champions League, whereas the priority of small clubs that are at the bottom of league standings is not to be relegated to the English Football League (EFL), which is the second division in the English football league system. It is obvious that the decisions of governing bodies on club operations would differ among clubs.
In professional sport leagues in the U.S., one of the strategies that some teams have taken to was tanking; instead of competing to win, these teams would choose to lose in order to get a better draft position to recruit a highly talented young player for the future of the team as well as to save operating costs by having less expensive players on the roster (Calcaterra, 2019). There have been a few success stories for this strategy, such as the Houston Rockets that won the NBA title twice by drafting Hakeem Olajuwon, and the Chicago Cubs and the Houston Astros in the MLB winning the World Series. Although it is debatable whether the unsportsmanlike strategy of tanking should be adopted by giving up the present performance, it is the decision of the governing body that has considered diverse elements of a team such as its financial status and talent pool.
Governance of sport in globalized market place
Globalization has significantly impacted the sport industry. Development of technology in broadcasting and transportation has contributed to the popularization, production, and dissemination of sports in a global scale (Zhang et al., 2017). There are several issues that the governing body of a sport organization has to deal with in the era of globalization, including freer movement of athletes across boarder and increased competitions among sport teams and leagues. Recruiting international talent has become a common practice for sport organizations in both advanced and emerging economies. Several benefits are expected by signing on international athletes. Not only can these players enhance on-pitch performance, they also attract foreign fans and media from the countries of these athletes (Zhang et al., 2018). For instance, quite a few football clubs in European leagues actively recruit players from Asian countries, which are markets with huge growth potential. While most of the recruited soccer players from Asia make significant contribution in terms of performance and promotion of a team, some are doubted to have been recruited only for marketing purposes. Benefits of having āmarketing playersā as a member of a team exceed the cost in many cases.
However, recruiting talented international athletes may not always bring positive outcomes. In case of the Ladies Professional Golf Association (LPGA), the organization had to deal with the superb perfor...
