Earlier this month I wrote on FreedomWatch about the absurdity of State and Territory governments subsidising AFL matches. Equally absurd is the government funding of friendly soccer matches involving the big European clubs currently touring Australia.
Real Madrid, AS Roma and Manchester City are currently playing in a pre-season tournament in Melbourne. Liverpool played Australian team Brisbane Roar on Friday night and Adelaide United last night. Manchester City played Melbourne City on Saturday night on the Gold Coast whilst Sydney FC played Chelsea in June and Tottenham in May.
According to the Australian Financial Review the Queensland and South Australian governments are understood to be paying Liverpool $10 million in appearance fees. Whilst the organisers of the tournament in Melbourne have received upwards of $8 million from the Victorian government.
Victorian Premier Daniel Andrews demonstrated the real reason why politicians are prepared to spend public cash on elite sport when he was front and centre at Real Madrid training on Friday. It is because elite sport is popular with voters.
As I wrote in The Spectator last year, governments pretty much always overstate the economic benefits of major sporting events when justifying spending their taxpayers’ hard-earned money. Indeed, Victorian Minister for Sport John Eren made the audacious claim that the series would generate between $50 million $80 million for the Victorian economy.
The reason these clubs are in Australia for glorified pre-season training (apart from picking up some free money from our governments) is to build their already enormous global fan bases. Liverpool claims to have almost 600 million fans worldwide. 10,000 people paid $15 each to watch Real Madrid train at the MCG last week.
Clearly, the organisers of these games don’t need government money to make them profitable, it’s just that it makes the undertaking a little bit more profitable, and a little less work. They have identified an opportunity to play state governments off against each other, and state governments have shamefully played ball.
If governments really think they can attract and hold major sporting events more efficiently than the private sector, they should introduce a voluntary major events tax whereby citizens can decide whether they want to contribute to what is essentially a luxury.