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Sport Risk Management

NRL Sexual Misconduct Claims – Another example of Reputation Risk in Sport

More allegations of serious sexual misconduct have once again the potential to seriously damage the NRL's reputation. In a difficult economic environment, allegations of group sex and sexual assault, as made in last night's ABC TV program, Four Corners, may have serious implications for the game's brand and de-tract from the value proposition offered to sponsors of the sport.  Managing such crisis and events that seriously threaten one's reputation is always difficult. Reputation is usually gained over time but can be dashed very quickly.  Great care will now be needed to minimize the consequential loss resulting from the crisis.  Reputational risk management is an area growing in significance in the sport, venues and events industries.  When crisis management is poorly executed it can cripple an organization and its goodwill. An organisation's reputation is arguably its most valuable asset and needs careful nurturing and effective risk management.

The Ben Cousins Saga - A perfect example of Risk versus Reward in Sport

If risk is the chance of receiving a benefit but potentially a loss, then the Ben Cousins saga is a classic example of risk and reward. The challenge for AFL club Richmond, is to balance the chance of loss with the chance of achieving a gain.

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As Cousin's options for clubs in the AFL have dwindled throughout 2008, Richmond now appears to be offering the Brownlow medallist a lifeline; but the risks are high.

What is the chance of the reformed drug addict reoffending and the potential damage to the club's brand, reputation and balance sheet through loss of ticket sales, membership and sponsorships? It was only 2005 when the Victorian Transport Accident Commission ended a long standing relationship and sponsorship with the Richmond Club following a drink driving incident involving a Richmond player. It was reported to have cost the club in excess of $500,000 per year.

The opportunities that Ben brings to the club are however considerable. A Brownlow medalist, seasoned midfielder and big potential crowd draw card are obvious. He could add considerable financial value to the club and its brand, if he remains ‘clean'. Onerous drug testing procedures imposed by the AFL and the club may be tolerable depending upon the club's risk appetite and effectiveness of these control measures.

A risk-based approach to decision-making can help sporting clubs make decisions about alternative courses of action. Managing risk is not just about compliance with standards and the law, but is about minimising threats and capitalising on opportunities within an agreed framework.

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