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INTERNATIONAL SPORT BUSINESS

International Sport Business: Current Issues, Future Directions offers

a contemporary and forward-looking survey of the global sport
industry, introducing the key themes, trends and critical issues that
will impact decision-making and strategy in sport business in the
coming decade and beyond.
Against a background of globalisation, disruption and social
change, the book explores key influences on the development and
commercialisation of the sport industry. It examines themes such as
governance, the social role of sport, value chains and innovation, the
increasing importance of data, digital technology and leadership.
Every chapter includes cutting-edge case studies, commentaries,
examples of best practice and interviews with leading sport business
professionals, encouraging the reader to reflect on the factors that
determine success in international sport business. The book also
looks ahead, imagining potential scenarios for the future of sport.
Thought-provoking, underpinned by research evidence and
intended to generate debate and discussion, this is the perfect
foundation text for any international sport business course, and an
essential guide to the future for sport business practitioners and
policy-makers.
An accompanying eResource provides reflective questions for
each chapter.
Hans Westerbeek is Professor of International Sport Business,
Head of the Sport Business Insights Group and Director of PASI
(Physical Activity & Sport Insights) at Victoria University in
Melbourne, Australia. He also holds Professorial appointments in
Brussels, Beijing and Madrid. He serves on various (Advisory) Boards
including the Dutch Sports Council (NLsportraad) and Sportscloud
International, and as an international consultant he has worked for a
range of professional sport organisations, (inter)national and state
sport associations and local and state governments in multiple
countries. He has widely published in the field of sport business and
sport management, and is a frequent media commentator. He writes
a Sport Business Intelligence blog at www.hanswesterbeek.com.

Adam Karg is Associate Professor and Director of the Sport

Innovation Research Group at Swinburne University in Melbourne,
Australia. He is also President of the Sport Management Association
of Australia and New Zealand (SMAANZ). Adam is engaged in a
range of consulting and research projects, and advisory roles, with
national and state sporting organisations and governing bodies,
charities, sport technology start-ups and professional sport clubs in
Australia and overseas. His research focuses on sport fan equity and
season ticket holder and membership services related to satisfaction,
engagement and loyalty. He also undertakes research in consumer
behaviour, sponsorship, branding, media consumption and
innovation in sport.
INTERNATIONAL SPORT
BUSINESS
Current Issues, Future Directions

Hans Westerbeek, Adam Karg

Cover image: © ALLVISIONN / Getty Images

First published 2022

by Routledge
4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

and by Routledge
605 Third Avenue, New York, NY 10158

Routledge is an imprint of the Taylor & Francis Group, an informa business

© 2022 Hans Westerbeek and Adam Karg

The right of Hans Westerbeek and Adam Karg to be identified as authors of this
work has been asserted in accordance with sections 77 and 78 of the Copyright,
Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced or utilised
in any form or by any electronic, mechanical, or other means, now known or
hereafter invented, including photocopying and recording, or in any information
storage or retrieval system, without permission in writing from the publishers.

Trademark notice: Product or corporate names may be trademarks or registered

trademarks, and are used only for identification and explanation without intent to
infringe.

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data

A catalog record has been requested for this book

ISBN: 978-0-367-31281-7 (hbk)

ISBN: 978-0-367-31282-4 (pbk)
ISBN: 978-0-429-31604-3 (ebk)

DOI: 10.4324/9780429316043
Typeset in Interstate
by codeMantra

Access the Support Material: www.routledge.com/9780367312824

CONTENTS

List of contributors
Preface

1 International sport business: big business

2 Global sport business

3 The social impact of sport business: sport for good

4 Innovation and entrepreneurship in sport business

5 Technology, data and value creation in sport

6 Consumption of sport: the sport product and the buyers of

sport

7 Distribution of sport and the media ecosystem

8 Governance and leadership in sport business

9 The future of international sport business

Index
CONTRIBUTORS

Paul Bowell is a Doctoral Candidate at Swinburne University of

Technology, Australia. Paul’s research focusses on social and
psychological issues linked to technology use, with a focus on
wearable technologies.

Nader Chmait is Business Intelligence Analyst at Tennis Australia.

He holds a PhD in Artificial Intelligence, and his work at Tennis
Australia is focussed on implementing a consumer-​centred
approach that drives business value, increases revenue and
enhances customer satisfaction.

Rochelle Eime is Professor of sport participation at Victoria

University and Federation University, Australia. Her research
focusses on the sport and recreation sectors relating to both
public health and sport management. Rochelle is a Director at
PASI (Physical Activity & Sport Insights), a research group that
specialises in the big data analysis of physical activity, sport and
recreation participation, and the relation to (location of) facilities
and population health.

Jie (Albert) Fei is a Doctoral Candidate at Victoria University,

Australia. Albert’s research seeks to apply a rent seeking lens to
the bidding process for major sporting events, with a specific
focus on the Olympic Games and the FIFA World Cup.
Michael Linley is Senior Research Fellow at Victoria University,
Australia and the Director of Brand Capital. He is also a Doctoral
Candidate at Victoria University, where his research aims to
develop a comparative framework for assessing the impact of
sporting events on the host location.

Sarah Oxford is Senior Research Officer at the Institute for Safety,

Compensation and Recovery Research (ISCRR) at Monash
University, Australia. Her contribution to this book emanates from
her doctoral research which contributed to new knowledge
towards understanding how girls’ participation in sport disrupts
gender relations.

Jonathan Robertson is Senior Lecturer in the Sports Management

Program within the Deakin Business School, Australia. His primary
research interests are in the areas of social responsibility, ethics
and integrity, social change and organisational theory.

Kathleen (Kathy) Wilson is Lecturer in Management, Operations

and Supply Chains at Swinburne University of Technology,
Australia. Kathy’s academic interests include crowdsourcing,
project management, innovation, value creation, qualitative
research, sport innovation, social impact and business models.
PREFACE

Growth of the sport industry continues to outpace GDP growth

internationally, with a need to truly and deeply consider global issues
and drivers of business success. As a response, we seek to provide a
narrative of modern global sport management, marketing and
business and the trends that have and will continue to influence the
development and commercialisation of the industry. These trends
and their implications are applied and discussed in relation to the
structure, stakeholders and direction of the sport industry. As well as
discussing the impact of these trends, we (via discussion of future
projections) challenge our readers by presenting a range of cases
and suggest what might be critical steps to take in order to develop
or even disrupt organisational systems so that they can perform and
thrive in modern sport business settings.
We have written the book as a thought-provoking, evidence
(research)-based text that invites critical reflection, and should be of
interest to those who work in sport business and affiliated industries
and those studying in sport management, marketing and business
and related disciplines. We hope that the way we have written the
book generates energised and inspired debate and discussion in the
University classroom, the Executive Office and in the Boardroom of
sport organisations around the world.
We would like to thank Lynley Ingerson, Tom Benetti-Baker and
Carleigh Yeomans for their work as research assistants, and our
colleagues and peers who have contributed ideas and reflections.
Within the book, we provide a series of research cases,
commentaries and In Practice sections to provide the reader with
different viewpoints from which to look at current issues and future
directions for sport business. Every chapter finishes with a Senior
Sport Business Executive interview. To that end, we would like to
thank Glenn Lovett, Sundar Raman, Johan Olav Koss, Oren
Simanian, Alexandra Willis, Dan Migala, Nick Meacham, David
Sharpe and Michael Syn who provided their thoughts to conclude
each chapter. Their honest reflections and deep expertise has
provided great value in shaping the chapters and has provided real-
world insights around key themes of this book.

Hans Westerbeek, Adam Karg

1 International sport business
Big business
DOI: 10.4324/9780429316043-1

It is a big business alright!

International sport business … the title of this book seems to reflect
the obvious—that sport is big business—but it also reflects two value
explosions in a global industry that is only decades old. The first
value explosion took place when traditional broadcast media
(television) adopted major sport events and competitions as the
battering ram to attract viewership to their free-to-air and pay
television channels. The exponential growth of media revenues for
sport organisations beyond North American professional leagues,
where the media has collected significant revenues since the 1970s,
started in the wake of the 1984 Los Angeles Olympic Games. We are
in the midst of the second value explosion—ignited a few years ago
when sport organisations began taking full advantage of digital
production, data-driven business intelligence and digital reach.
Well-produced smart marketing using sport and sport-related
engagement driven by multimedia and digital media has allowed
even less popular sports to significantly increase their revenue
streams. Kearney (2014) estimated that the size of the global sport
industry in 2014 was US$600–700 billion, which roughly equates to
1% of the global gross domestic product (GDP). Even on applying a
conservative 5% annual growth rate to a figure of US$650 billion,
the value of the sport industry should approach the US$1.5 trillion
mark in the mid-2020s. Notably, the growth of the sport industry
outperforms the GDP growth rates of most nations (Au, 2017). The
sporting goods industry, in particular, outpaces the growth of the
broader consumer sector by a factor of 1.5. In other words, the
explosive chain of revenue-creating activities in sport globally
signifies that sport is seriously big business and will continue this
trajectory for some time. An annual survey of industry professionals
by PricewaterhouseCoopers (PwC) shows that they continue to
expect significant sport industry growth. Of course, the coronavirus
disease (COVID-19) pandemic has interrupted this growth pattern
for a period.

Research case—PwC sport survey: industry

projections
PricewaterhouseCoopers (PwC), like many global consulting businesses, has
expanded its operations by forming specialised sport industry expert
groupings. Its Swiss arm established the Sport Business Advisory team in
2012. In its most recent Sport Surveys, results from about 800 sport
executive respondents in approximately 50 countries have opened a window
into the global sport industry’s progress and future. This industry’s growth, in
real and predicted numbers, outpaces global GDP growth. The bull markets
(i.e. with larger increases in growth rate) for sport are Asia, South America
and Africa—regions for which future industry expectations outpace the
already impressive growth rates of the past few years. Asia was expected to
grow by 5.8% per annum in 2021, Africa by 6.4% and South America by
8.6%. While growth across the next five years is expected to slow down in
Europe, North America and Australasia, all those regions still deliver
significant growth percentages (4.2%, 7.4% and 4.0%, respectively).
In 2021, the biggest contributing sectors across all regions were the sport
marketing agencies (6.2%), the leagues and events (5.9%) and the sport
technology sector (5.4%). The steepest drop (+3.6%) in the growth rate
occurred in mainstream broadcast media (falling from 6.3% growth to 2.7%),
as well as sport teams and clubs (from 6.6% to 5.0%). It is no surprise then
that the highest expected annual revenue growth over the next five years is
for betting-related rights (6.4%) and the lowest is for ticketing and hospitality
(2.5%).
 Three sports stand out, as indicated by the video consumption on
Facebook—football, fighting (which replaced basketball) and cricket. Football
and basketball are predicted to dominate growth potential and they are
joined by Esports, a relatively new contender. Esports:
action/adventure/shooter type games games, followed by Esports: simulated
sports games, have the highest potential to grow revenues. Football is hot on
their heels, followed by basketball. A peloton of seven sports—urban sports,
tennis, rugby, golf, cycling, American football and cricket—follow well behind
the leaders (remember, this ranking relates to their growth rate, and not their
absolute popularity).
What may be threatening these phenomenal growth rates of sport? The
younger generations’ other interests and consumption patterns are
considered the biggest contenders to sport consumption by far. Alternative
entertainment formats, free content expectations and a lack of trust in those
who govern sport are also considered important threats to the success of the
sport industry.

Sources: Adapted from Sports Industry: Lost in Transition? PwC’s Sports

Survey 2018, by PricewaterhouseCoopers (2018); Sports Industry: Time to
Refocus? PwC’s Sports Survey 2019, by PricewaterhouseCoopers (2019);
Sports Industry: Ready for Recovery? PwC’s Sports Survey 2021, by
PricewaterhouseCoopers (2021).

From rituals to warfare to ‘modern’ sport1

The concept of ‘modern sport’ has been well over 200 years in the
making. Each era of modern sport has distinctive social, economic
and governance dimensions that differentiate them from other eras.
However, the precursors to modern sport emerged from the religious
and combative rituals of primitive societies. As Westerbeek and
Smith (2003) explain, the worship of great men (and, unfortunately,
very few women)—hunters, soldiers, leaders and athletes—was
common throughout the ancient world. In Europe, Asia and the
Americas, communities organised festive events to celebrate the
achievements of their heroes as a means of positive reinforcement
and remembrance. For example, the ancient Aztecs ‘played’ a type of
ball game that reflected a 1,000-year-old ritual symbolising the
struggle of light against darkness or life against death. Similar ball
games developed by North American Indians evolved from this
game, and the sport of lacrosse today is an outcome of this game.
Religious adulation underpinned physical competition in ancient
Greece. The Olympic Games reflect these physical contests. The
Olympic Games were hosted in honour of Zeus, the king of the gods
of Mount Olympus. The Games were a perfect example of the social
structure of ancient Greece, where separation between classes was
evident, and the beauty and aspiration of young males having the
perfectly tuned body was publicly celebrated (Anderson, 2009).
Following the fall of the ancient Greek civilisation, the Roman
Empire crafted sport-like activities to prepare men for warfare.
Aggressive expansion and nation-building were the empire’s prime
agenda to achieve which it needed physically fit, disciplined soldiers.
As Westerbeek and Smith (2003) note, battle-like spectacles, such as
gladiatorial fighting and chariot racing, were organised. Arenas were
built to stage the big events. These events also served to provide
distractions in the form of ‘bread and circuses’ for the ever-
increasing masses and to sacrifice the less desirable members
(thieves, rapists, murderers and, later, Christians) of the Roman
community. These undesirables’ reward for victory was a temporary
sparing of life until the next bout. As competitors’ success grew, so
too did their notoriety; further, their incentive to earn rewards
strengthened. This is one of the first examples of sport turning into
a profession.
By the Middle Ages, medieval life appeared to be ‘dark’ and
depressing. Local activity reflected the division between those who
owned the land and those working it. Separation between classes in
society was apparent. The Catholic Church, in particular, manipulated
games and physical contests for the purpose of worship, symbolising
and reinforcing followers’ understanding of good versus evil. Much
like the Roman rulers, the Church leadership understood that
providing people the opportunity to play would make them less likely
to revolt. As Baker (1988) explains, by the 12th century, there were
numerous types of handball, football and stick-and-ball games,
played according to local customs and without formal rules. Such
physical contests were the precursors of many ball games played
today. The ruling class was powerful, and with brute strength and
military-like strategy, forced lower classes into submission by
engaging them in tournaments similar to war games, such as jousts
and melees. In a melee, ‘any number of men fought on each side,
wielding dull-edged swords in hand-to-hand combat’. Jousting was a
legacy of the equestrian activities of Roman times, with combatants
charging ‘on horseback, with lances raised, down either side of a
barrier in an attempt to unseat each other’ (Baker, 1988, p. 50).
The early Renaissance movement, or Enlightenment period,
started in Southern Europe and was instrumental in moving people
out of the Dark Ages. It changed the social, political and spiritual
face of Europe. The suffocating indoctrination of the medieval
Church and the power of the nobility were broken by artists and
intellectuals who reasoned that the individual human being should
be free to think and self-determine. They embraced the ancient
Greek ideal of a united ‘body and soul’, and that being a complete
human being would require working on both the mind and the body.
The Northern European Renaissance was much less exuberant
and maintained stronger ties with the idea of devotion to God. The
Protestant Reformation maintained a focus on the pursuit of
‘godliness’ and considered physical activity and ‘trivial’ games sinful.
Despite some resistance, local activities that facilitated social
gatherings became more popular in England than ever before. The
Northern European Enlightenment period (1700–1800) saw the
further development and popularisation of sport-like activities, such
as the export of early football formats to the colonies. This also led
to a shift from sport activity having functional importance to it
having social value. Thus, sport became a pleasurable pastime to
pursue.
For some time, the concepts of modern sport and civilised society
went hand in hand. Van Bottenburg (1994) explains that although a
few sports, such as football, cricket and rugby, evolved into ‘modern’
sports (with written rules and purpose-marked playing fields) in
parallel with Great Britain’s Industrial Revolution, ‘real’ sports only
started to form through a process of ‘sportisation’ during the mid-
1900s. Sportisation occurs when local sport-like activities evolve into
standardised, internationally recognised games that can be played
between teams or individuals from all corners of the globe. The
origins of popular modern sports and regulated sport forms can
therefore be traced back to Industrial England where a societal
civilising process took place (Elias, 1994). Transport infrastructure
and modernised government allowed for better communication and
travel, facilitating and strengthening social exchange and
connectivity between communities, which previously had been all
too difficult to do.
Westerbeek and Smith (2003) note that the first signs of modern
sport turning into a global commodity can be observed in the
movement towards appointing ‘independent’ match officials in
boxing, rugby and soccer. Like much of the industrialisation of
society at the time, for sport to be delivered internationally, it had to
include a form of standardisation, the separation of power and the
independence of rules overriding local custom and culture. Multiple
modes of transport, increased media exposure and a rapidly growing
population fostered the spread and depth of sport activity in the
Northern Hemisphere.
In his seminal book Global Games, van Bottenburg (2001)
observes that sports spread from a genesis country (centre country)
to neighbouring countries (semi-peripheral countries) with close
cultural links. It then spread wider to far countries (peripheral) that
had cultural similarity with semi-peripheral countries. Obviously, the
sports with an extended international history had a first-mover
advantage as regards their popularity today.
In line with this principle of centre to peripheral spread, De
Jonghe (2001) proposes a typology that best explains the make-up
of the global sport system. He argues that, in principle, when a
peripheral country is passive in its acceptance of an imported sport,
they either embrace the external culture or are not in a position to
fight it. Colonialism in Northwest Africa, in that regard, used sport as
a control tool for social exclusion. Later, it became a means for
selective social integration, before finally, as in Algeria, national
political movements took up sport as a means of social expression
and liberation (Amara, 2012). Arguably, this type of ‘cultural
imperialism’ continues today in regions such as sub-Saharan Africa,
Latin America and the Caribbean, where hegemonic countries like
the United Kingdom and the United States (US) first introduced
sports.
When imported sport is assessed critically in the context of a host
culture as beneficial, neutral or non-threatening, the peripheral
country’s attitude can be termed ‘participative’. Former British
colonies, including South Africa, Canada, New Zealand and Australia,
have embraced sports from the ‘mother country’ England that help
to define them as independent nations. They have rejected other
sports for these did not fit their new-found national identity. Canada,
in particular, developed lacrosse, ice hockey and Canadian football as
‘new’ or hybrid sports that reflected the nation’s unique identity.
Along the same lines, Australia developed Australian rules football as
their own exclusive variety of football. A peripheral country’s
‘conflictuous’ response to imported sport is the result of significant
cultural difference and incompatibility with the centre country’s
orientation. In his typology, De Jonghe (2001) discusses situations in
which countries further nurture their locally important sports (e.g.
darts, speed skating and sepak takraw) in concert with the
development and (non) acceptance of global sports. For example,
the former Soviet Union and its satellite states initially rejected all
forms of sport that were direct expressions of Western society’s
capitalism. However, post-Cold War regimes in this region soon
realised the value of sport as cultural and economic warfare. The
main purpose was to express moral superiority. Further, they chose
to refocus on other forms of sport that were represented at global
competitions, such as the Olympic Games. A high medal tally at
international multi-event games represented an economically and
socially successful nation. For understanding the varying popularity
of sport globally, an appreciation of the passive, participative and
conflictuous typology is sufficient.
 The following commentary examines the more recent rise of
popular sport in China, the world’s fastest growing economy for the
past 20 years. China and, in particular, its approach to growing its
sport industry, provide a window into how national governments can
deliberately fast-track the development of a sport economy via
focused and dedicated strategic action.

Commentary—China’s 13th Five-Year Plan:

the national sport development
plan for the People’s Republic of
China
By Jie Fei and Hans Westerbeek
China sits in a modest 28th position on the World Economic Forum’s 2019 list
of the world’s most competitive economies. Moreover, it has only moved one
place up from its position in 2008. Being modestly competitive in regard to
other nations, as shown when comparing factors such as the enabling
environment (e.g. infrastructure and institutions), human capital (e.g. the
health and skill levels of citizens), market characteristics (e.g. the ease of
access to skilled labour and investment finance) and innovation aptitude (e.g.
the availability of research capacity), has not stopped China from growing
spectacularly. The country, which had a population of 1,336 million people
(1.3 billion) in 2008, increased its GDP per capita from $US3,315 in 2008 to
$US9,608 in 2019 (WEF, 2019). Its share of the global GDP will move from
11% in the early 2010s to an estimated 20% in 2050 (PwC, 2021). Almost
one in every five units of economic value produced on the planet is generated
in China. Throughout the past decade, the country’s average economic
growth measured 7.9%. Compare this growth with that of the most
competitive nation worldwide—the US, whose average economic growth was
1.4% in the same period and whose GDP per capita grew from $US45,845 in
2008 to $US62,605 in 2019 (WEF, 2019)—and one realises the tour de force
that China has managed to sustain. The share of the US in the global GDP
has decreased during the past decade; estimates show that it will fall from
16% in 2016 to 12% in 2050 (PwC, 2021). Of course, it needs to be
acknowledged that China came from a very low base and has more than four
times the human capacity to generate economic activity. Therefore, China
could and can afford to be much less efficient with its human resources to be
productive, and still achieve enormous productivity increases.
 However, China’s spectacular growth has been slowing down recently, a
change also driven by its government’s move to direct its economic growth
from being driven by exports to an economy being driven by domestic
consumption.
Sport, or better, sport, fitness and wellbeing, is an industry that has been
targeted by Chinese leaders as one that deserves focused attention since it
offers internal progress opportunities—improving and sustaining healthy
populations—and global diplomatic and business opportunities.
Never underestimate the determination of a strong central government. In
China, this determination is evident in a series of social and economic
development initiatives that have been implemented every five years since
1953: its Five-Year Plans. According to the 13th Five-Year Plan for Economic
and Social Development of the People’s Republic of China (2016–2020), China
has accelerated the development of sports and fitness. Such development
includes the facilitation of non-governmental capital to maximise the
development of sport as an industry and to increase the quality and efficiency
of the service sector. The central government has also committed to
increasing the supply of non-basic public services in sports. China has
encouraged consumer spending and raised public spending on sports to boost
economic industry growth and economic restructuring.
The General Administration of Sport in China disseminated the 13th Five-
Year Plan for Sport Development (2016–2020). China’s sport leaders set
ambitious goals for developing the sport industry. By 2020, the total size of
this industry exceeded RMB3 trillion (US$470 billion), and its added value is
targeted to grow at an annual rate significantly higher than that of the
economy as a whole during the same four-year period. The added value of
the sports industry should account for at least 1% of the GDP, and the added
value of the sports service industry for more than 30% of the added value of
the entire sports industry. Sport consumption is to account for more than
2.5% of the per capita disposable income. However, in 2014, the gross value
of the sport industry in China was only RMB404 billion (US$63 billion),
accounting for 0.64% of the national economy. It relied heavily on the
manufacturing and sales of sporting goods, which accounted for 75% of the
total sport economy. This industry’s size was still far removed from that in
other nations—for example, in the United Kingdom, the sport-related value
added accounted for 2.6% of GDP in 2011 and 2012. Sport participation
activities accounted for more than half of the total sport economy
(Kokolakakis, 2015). In Germany, the value generated was 2.31% in 2012
(Austria, 2012). The expenditure by Australian households on selected sport,
physical activity and recreational products accounted for 1.5% of the total
amount that they spent on all products (Australian Bureau of Statistics,
2013).
 How then will China accelerate their catch-up with more advanced sporting
nations? The central government aims to remove institutional and structural
barriers for invigorating the market of sport through its ‘Transformation of
Government Functions’. Specific measures in that regard include:

To optimise the industrial structure of sport. To raise the proportion of

sport activities in the sport economy, China plans to reduce operational
costs for sport activities. For instance, China’s sport authority has
simplified the approval process for organising and hosting sport events
since 2014. Thus, more than 400 marathons were held in China in 2017,
up from 22 six years prior.
To optimise capital allocation. China has started to introduce private
capital and foreign capital investment into its sport industry. For
example, the General Administration of Sport established a fund to
initiate the construction costs of sport towns to attract social
investment. Guizhou Province signed an agreement with the Palm Eco-
Town Development Company, a principal sponsor for West Bromwich
Albion FC, to build five or six ‘West Bromwich Albion Sports Towns’.
To increase public spending for promoting public fitness programs and
boost the popularity of community sports. According to the 13th Five-
Year Plan for Sport Development, China aimed to increase the sports
area per capita from 1.4 square metres in 2016 to 1.8 square metres by
2020 and to 2 square metres by 2025. To meet this target, China will
have to add 700 million square metres of sports facilities.
To encourage scientific and technological innovations in sport
manufacturing. China supports enterprises to increase investment in
science and technology and to develop products with high scientific and
technological value and independent intellectual property rights.
According to the 13th Five-Year Plan for Sport Development, China will
support the development and manufacturing of both wearable and
intelligent sports equipment. Meanwhile, according to the state councils
of China, the business income tax for high-tech sport enterprises is
15%, which is 10% lower than the rate for other industries.
To explore the industrialisation of sport through formulating long-term
development strategies for several target/focus sports such as football
(soccer) and ice hockey.

A passionate vision for sport among some of China’s most senior leaders,
combined with a centralised government approach to implementation, will
deliver results. It will lead to China’s sport industry and its underlying sport
economy growing faster than its more mature counterparts and will make
China a hugely important player in the global sport industry at all levels.
As we will show in different parts of this book, sport in a global
context has entered a new phase. As this commentary shows,
advancing economies, such as China, are ignoring traditional
structural and governance methods in sport in an effort to compete
or excel in the wider global space. With the realities of today’s
borderless societies, sport infiltrates the global community on many
levels. To better appreciate sport’s place in the world, it pays to
briefly review the various phases of globalisation in the context of
sport next.

Context of international sport business:

globalisation 1.0 to globalisation 4.0
Has globalisation delivered on the promise of increased prosperity
and opportunities for most people on the planet? We indeed may be
lured into thinking that all is bad in the world and that what initially
was thought to bring economic improvement to all corners of the
globe is benefiting only a few, but challenging billions of people.
However, it should not be forgotten that following World War II, the
international community collaborated to establish institutions and
governance structures intended to prevent global wars from ever
happening again, generating economic progress for most. In general
terms, globalisation is regarded as the international spread,
development and exchange of goods and services, capital, people,
technologies and cultural practices, which transcends geographical
and state boundaries. It aims to increase interactions between
regions and populations around the globe. To be part of a global
community, it is assumed groups of people (or nations) are
connected and interdependent.
Consider a few insights provided by the World Economic Forum
(2019) that show the impact of seven decades of globalisation. In
1950, more than 60% of humans lived in extreme poverty. In 1980,
this figure was down to 42%, and by 2015, about 10% of all
humans lived in extreme poverty, which has reduced further to less
than 10% in 2021. This percentage will increase because of the
COVID-19 pandemic. In the past half century, international aid
organisations have multiplied. The World Bank’s International
Development Association, for example, is responsible for immunising
274 million children, providing health services to 657 million people,
constructing 140,000 kilometres of road, providing 86 million people
with better access to water and training and recruiting 8.5 million
teachers. The share of global GDP by trade between nations (and
breaking down trade barriers and tariffs) has increased from 7% in
the 1950s to 25% in 2021. Even as recently as 1990, child mortality
had halved around the globe since then, by more than 65% in India
and by 83% in China. Further, since 1990, the number of primary-
aged school children dropping out of school has declined by 44%
and child labour has declined by 40% since 2000. There is a
broadening band of middle-class consumers across the globe with
close to 5 billion individuals anticipated to be living very comfortably
and having affordable access to food, housing and other consumer
goods.
So, let us reflect for a moment. As a citizen of the city or town
that you live in, the country that this city or township belongs to and
the continent this country is located on, how do you feel you are
involved in what is happening in the world? Do you feel the
government of your country has a significant role to play in world
politics? What about big companies that operate near you or in your
country? And what about global companies that originated in your
country or region? Do you feel involved personally? Answering those
questions, or indeed, struggling to answer those questions, will give
you a sense of the complexity that is ‘globalisation’, and how it
affects the society we live in.
Before we consider the development and progress of sport and
the sport industry as a whole, it is important that we take some time
projecting and describing the global context in which society
progresses. It will become clear that to define ‘sport’ in this context
is not an easy task and that the sport industry itself is a complex
collection and constellation of (sport) organisations that are
constantly changing in composition. It is therefore less important to
know what exactly constitutes the global sport industry. What is
critically important is to have a better understanding about the role
of sport in an international marketplace, and indeed, about the
impact of globalisation on the progress of sport. Before we consider
the development and progress of sport and the entire sport industry,
it is important that we take some time projecting and describing the
global context in which society progresses. So, what are the
dominant drivers of globalisation in relation to international sport?
The words of the former Secretary General of the United Nations,
Kofi Annan (1999) continue to ring true; he argues that

we have underestimated its [globalisation’s] fragility. The

problem is this. The spread of markets outpaces the ability of
societies and their political systems to adjust to them, let alone
to guide the course they take. History teaches us that such an
imbalance between the economic, social, and political realms
can never be sustained for very long.
(pp. 260–261)

Annan noted that the dynamics of globalisation were dramatically

changing. The evolution of the globalisation concept can be viewed
from various periods of global economic integration. There are
arguably four distinct phases, and these are discussed for the
purpose of this chapter.
The first phase of globalisation was in 1850–1914 (Ruggie, 2002;
World Economic Forum, 2019). Globalisation 1.0 occurred with the
Industrial Revolution as cross-border capital and trade flows, coupled
with a population boom and widespread migration became
significant. Agrarian societies, such as England and the US, were fast
becoming industrial economies. Supporting this growth was the
creation and building of transatlantic cables between London and
New York, which dramatically altered the communication speed.
Accessibility across national and geographic boundaries improved
once the first Alpine Tunnels were opened, and the Suez and
Panama canals led to dramatic improvements in transport
infrastructure in Europe and North America. However, during this
first period of globalisation, government influence on the movement
of people, labour and goods between countries was limited.
The second phase of globalisation occurred between World War II
(1939–1945) and the late 1990s. Globalisation 2.0 saw a substantial
increase in the formation of ‘economic enabling architecture’. The
creation of cross-nation trade agreements, global financial
institutions and global development institutions ensured that a
framework was in place for future universal economic cooperation
and for the development of a more stable and flourishing global
economy. The rise and spread of multinational corporations shifted
the control of trade to big business as they began occupying the
driver’s seat for the moderation, mediation and facilitation of
international trade.
Thomas Friedman (2007) argues that the third phase of
globalisation (Globalisation 3.0)

is shrinking the world from a size small to a size tiny and

flattening the playing field at the same time. And while the
dynamic force in Globalisation 1.0 was countries globalising and
the dynamic force in Globalisation 2.0 was companies
globalising, the dynamic force in Globalisation 3.0…is the
newfound power for individuals to collaborate and compete
globally…Globalisation 3.0 is going to be more and more driven
not only by individuals but also by a much more diverse—non-
Western, non-white—group of individuals.
(p. 16)

The World Economic Forum (2019) also describes Globalisation 3.0

as one where the launch of the internet, the establishment of the
World Trade Organisation and the entry of China into the trading
system led to more regional free trade agreements, more bilateral
investment treaties and critical improvements in (financial)
information and communications technologies.
Most recently, the world has entered the fourth phase of
globalisation—Globalisation 4.0—which is underpinned by dramatic
changes in technology, social relationships, the environment and
geopolitics that, combined, drive the most disruptive, rapid, dramatic
transformation of our world, in the history of humanity. In a White
Paper produced by the World Economic Forum (2019) titled
Globalisation 4.0, Shaping A New Global Architecture in the Age of
the Fourth Industrial Revolution, it is argued that

the interplay of technological progress, business strategy and

international economic policy shaped previous phases of
globalisation and has begun to do so again…. We must begin by
understanding how profoundly the context for governance and
cooperation is changing due to the Fourth Industrial Revolution.
Economies, businesses, societies and politics are being
transformed by technological advances … in such areas as
artificial intelligence and machine learning, the internet of
things, autonomous vehicles, drones, precision medicine and
genomics, advanced materials, smart grids, robotics and big
data. This technological transformation is posing a fundamental
challenge to the way economies and societies organize
themselves in domestic policy and how the international
community cooperates through institutions and arrangements.
New policy models and cooperative arrangements are needed to
help societies maximize the benefits and mitigate the risk of
these advances, which are fuelling the wholesale disruption and
recombination of industries; the dematerialization of value
creation; a shift in the nature of competition in domestic
product, capital and labour markets as well as countries’
international trade and investment strategies; growing questions
about corporate and government stewardship of personal data
as they become ever more central to economic activity and the
exercise of citizenship; and rising concern that all of these
 changes could further exacerbate inequality and generate
worker and community dislocation at a disorderly pace and
scale.
(pp. 4–5)

Further, this disruption facilitated by technological advance is further

complicated by major ecological concerns, summarised under the
banner of global warming; increasing polarisation and complication
of international relations; and increasing community and social
discontent owing to the unequal distribution of economic advance.
The challenges we face related to Globalisation 4.0 are not so much
based on ‘either–or’ decisions for choosing free trade or
protectionism; immigration/multiculturalism or national
identity/nationalism; or even economic growth or social equity. It
has been quite clear that human progress can be made in concert
with globalised approaches to economic progress. We merely need
to ensure that shared global norms and values are supported by a
multidimensional cooperative framework of institutions and
agreements that are modernised to the (largely still unknown)
requirements of Globalisation 4.0. That indeed is one of the most
daunting challenges presented to modern leaders, including those in
the global sport industry.

Globalisation and its effects on the sport

industry
Globalisation has affected more than just economies. Among other
aspects, it has influenced culture. Music, art, literature and language
have all crossed borders and have increasingly done so since long
before globalisation became a fashionable word. They have not been
alone. Sport has a rich and controversial history that has spanned
thousands of years. The definition of sport and who can access or
participate in it has changed with globalisation. For example,
Globalisation 1.0 led to the spread of what are now considered
universally played sports, such as a football (soccer), cricket and
rugby. These sports can be traced to the colonial period when Britain
expanded its reign throughout the world and used sport as a means
to organise populations that were deemed uncivilised. Another
example is the Brazilian sport capoeira. A mixture of dance and
martial arts, capoeira developed as a form of strength and protest by
Brazilian slaves who originated in West Africa. The 19th century
brought the end of slavery and thus the prohibition of the practice of
capoeira, but by the 21st century, the United Nations Educational,
Scientific and Cultural Organization in 2014 labelled it an ‘intelligibly
cultural heritage’ of Brazil because of its contribution to the
intercultural and intercommunity dialogue (BBC, 2014).
With the shift to Globalisation 2.0, sport was disseminated
through the mediums of radio and television, thus resulting in the
rise of sport business and the commercialisation of mega-sporting
events. This mass media dissemination of events also linked sport as
a symbol of nationalism and resulted in political boycotts, as seen in
the 1980 and 1984 Olympics. As sport has become universal,
entrepreneurs have taken a far keener interest in its progress and its
viability. This is especially true in terms of sport’s ability to make
money. The 1980s and 1990s revealed a period of restructuring and
stabilisation in big sporting bodies. With modern communication,
more fans could be reached and players became endorsement
billboards for companies such as Nike and Adidas. The increase in
athletes’ salaries meant that sport was fast becoming an acceptable
profession in society.
As the world modernised and transitioned during Globalisation
3.0, diversity and equality became standout topics of concern.
Sport’s legacy of social exclusion was exposed, facilitating women
and minority groups to utilise the sport platform to advocate for
equality in society. Title IX of the Education Amendments of 1972
legislation about college sport provided an important platform in the
US for women and girls to make the most of equality opportunities in
sport. Mixed-gender formats of previously male-dominated sports,
such as football, basketball and baseball, grew in popularity. The
Sport for Development and Peace movement was created in an
effort to improve the lives of vulnerable citizens through play and
education. Sport is still in transition towards becoming more
accessible and inclusive for all. Globalisation has played a significant
part in increasing the value of sport and its market size in terms of
consumers who crave sport entertainment. The US dominated
distribution to the sport marketplace for much of this period, but
with the transition to the next phase of globalisation approaching,
emerging European and Asian sport economies, including England,
Germany, Spain, China, Japan and South Korea, made significant
challenges for dominance (Nauright & Zipp, 2018).
In the context of Globalisation 4.0, as noted earlier in this chapter,
we have seen an ongoing explosion of value generated and mined in
the global sport industry. Technological advancement has facilitated
digital technologies that allow for all sport businesses to reach more
customers with better targeted messages. Sport is more often used
as a platform to generate ‘other’ value, such as resources generated
through betting on sport, or benefits for corporate partners and
sponsors. Many more digital media platforms, boasting greater scope
for interactivity, have expanded the opportunities to recreate and
identify new sport products and the means to engage sport
consumers in producing sport events and experiences. Improved and
more direct ‘reach’ through new media and social media platforms
have also—to a certain extent—facilitated better access for more
people to sport. This change is evidenced by the recent rise of newly
formed professional sport competitions in developing nations, such
as India, and the establishment of professional leagues for females
in Europe, North America and Australia in particular. However, it can
also be argued that the changing power and governance structures
in sport are leading to a concentration of sport’s wealth with fewer
super-wealthy owners and fewer super-rich athletes. This
concentration of (and move to more private) ownership in sport
further leads to a division of access between cheaper, poorly
organised sport that is insufficiently supported by infrastructure at
the community level, versus access to high-level, elite-level sport
competitions and events that can only be afforded by the upper
middle class at best. Wealthy private owners of sport are also
increasingly using their economic (buying) power for gaining access
to the governance and decision-making structures in national and
international sport federations.
To better understand the place of sport in the context of
globalisation, we now turn to trends and forces that underpin the
globalisation of economies, the global movement of people and the
global rollout of communication networks. We do this in the ‘In
Practice’ case we present in this chapter, by highlighting and
summarising the excellent work of the National Intelligence Council
(NIC), which presents an evidence-based window every five years on
the short, medium- and long-term future of the world.

In Practice—Global trends: paradox of

progress: the National Intelligence
Council’s view of the world of the
future
Global Trends: Paradox of Progress is the sixth release (in 2017) of five-year
assessments about the future of the world. In a two-year process of research
talking to 2,500 people from 35 different countries, the NIC developed
multiple likely scenarios of the future, given key conditions and uncertainties
that humanity faces. The core argument in the report revolves around the
changing nature of power within and between countries. (In the 2012 report,
the key issue was ‘disruptive technologies’.)
The NIC Chair argues in a letter that

long-term thinking is critical to framing strategy. The Global Trends

series pushes us to re-examine key assumptions, expectations, and
uncertainties about the future. In a very messy and interconnected
world, a longer perspective requires us to ask hard questions about
which issues and choices will be most consequential in the decades
ahead–even if they don’t necessarily generate the biggest headlines. A
longer view also is essential because issues like terrorism, cyberattacks,
biotechnology, and climate change invoke high stakes and will require
sustained collaboration to address.
 (NIC, 2017, p. vi)

Of course, in the context of this book, we will specifically apply these insights
to sport and to the progression and development of the sport industry. In
Chapter 9, we will use the 2021 report to speculate about the future of sport
business. The main global trends identified in the 2017 report are as follows:

The rich are ageing, and the poor are not.

The global economy is shifting.
Technology is accelerating progress but causing discontinuities.
Ideas and identities are driving a wave of exclusion.
Governance is becoming more difficult.
The nature of conflict is changing.

Climate change, the environment and health issues will demand attention. It
is understood that health issues, in particular, became a disruptive force in
2020 when the COVID-19 pandemic hit the planet. In many respects, the
pandemic has been the first truly global event to affect all citizens of Planet
Earth.
As regards demographic changes, clearly, the developed nations are
increasingly ageing, and their working populations are shrinking. This is true
even for countries such as Russia and China. African and South Asian
(growing) populations are much younger, but their limited education level
puts pressure on economic growth and employment prospects in those
countries. Economic and humanitarian migration to more developed nations
will continue to increase.
From an economic development perspective, in the aftermath of the
global financial crisis and the recent global pandemic, global growth will
continue to sputter. This is largely the result of high levels of debt and low
consumer confidence in the major powerhouse economies, which, in turn,
confront a shrinking pool of highly educated labour. Developing economies
will struggle to close the poverty gap with developed nations. As noted
earlier, the COVID-19 pandemic will put further pressure on the poorest
people on the planet.
Rapidly advancing technologies will continue to be the most disruptive
force in a range of contexts, including the widening gap between a few
super-rich tech billionaires and literally billions of others. The impact of
artificial intelligence and automation on replacing human labour in
manufacturing but also, increasingly, in service-based industries; and in
regard to biotechnologies—the developments in health care, and of course,
high-performance sport—will be mindboggling and challenge the moral
boundaries of individuals and governments alike.
 In booming economies, communities of people have little to fear or
complain about, but when economies falter, social tensions rise since the
fear of losing out will increase anxieties between different groupings and
nations. Populism and nationalism remain on the rise, and identities, in
particular religious, will be used to pitch people and ideologies against each
other.
In the age of fake news, and endless online and digital opportunities to
build followings and followers for ideas that may be good stories but less
evidence-based and scientifically checked facts, the ability to govern and
decide democratically will diminish. With an explosion of actors or
messengers with a voice, and their increasing sophistication to attract an
audience, it will be harder to reach (global or at least regional) consensus on
essential matters.
Technology has also changed the nature of conflict, enabling terrorism to
thrive and for ‘warfare’ to be taken to communities of real people rather than
being played out on nameless, faceless battlefields. Robots, cybertechnology
and bioweapons could disrupt whole societies rather than limit the fight to
the frontline.
Last, beyond the immediate human execution of mass destruction or
disruption efforts are ecological concerns—the indirect human effects of
climate change, soil degradation, deforestation and pollution. Global travel
has now also proven to dramatically increase the rapid spread of infectious
disease, leading to the partial or complete shutdown of international and
intercontinental travel for periods. Ironically, these shutdowns may reduce
greenhouse gas emissions.
Overall, the changing nature of power will make it harder for nations—
both developed and developing—to agree on fundamental matters and
cooperate strategically. More nation-states, governments, corporations,
interest groups and mega-wealthy entrepreneurs will be able to take
impactful actions—good, bad or indifferent—that can change the course of
history in economic, social or ecological terms.

Globalisation and the sport business landscape

It is fair to argue that ‘disruptive technologies’ have become a game-
changing driver of change in the world as we know it today.
According to the NIC (2004, p. 11), ‘the greatest benefits of
globalisation will accrue to countries and groups that can access and
adopt new technologies’. Therefore, not only will countries that
invest in research to develop new technology contend for leadership
but also those countries that adopt policies to apply globally
available technologies and combine this approach with attracting
high-tech brain power developed at top institutions in countries such
as the US and the United Kingdom. Unsurprisingly, countries such as
China and India positioned themselves well and have become
technology leaders. Gerstein (2009) asserts that ‘the expected next
revolution in high technology involving the convergence of nano-,
bio-, information and materials technology’ (p. 1968) could further
bolster China and India’s prospects. We now know that artificial
intelligence and communications technologies driven by machine
learning increasingly influence and drive news reporting—both fake
and real—and also sport business opportunities. Adopting over-the-
top streaming solutions, for example, is a growing trend in sport
consumption, allowing sport organisations to learn more and
communicate deeper with(in) their existing and emerging
marketplaces. Throughout this book, we therefore consider such
communication and marketing technologies as fundamental and
critical for the (future of) sport business.
So, in that technology-driven perspective and in light of the NIC
(2017) predictions, are we facing the end of globalisation as we
know it? Since the publication of Sport Business in the Global
Marketplace (Westerbeek & Smith, 2003) in which the many
triumphs of globalisation were heralded, the world in which we live
has changed dramatically. Maybe the terrorist attack on the Twin
Towers on 11 September 2001 started an international ‘change of
heart’ about the benefits of global economic and cultural exchanges
and universalism. Maybe the shockwaves of the 2008 Global
Financial Crisis exacerbated this sense of cynicism about global
connectedness and about global markets driving value creation for
more people more rapidly. Most recently, the world has been
confronted with what probably is any human’s biggest fear—to die of
disease. COVID-19 put the world and its progress on hold and has
framed the future of globalisation—how we want to, or can,
collaborate and integrate—as no other disruptive force has done
before. Fear indeed is the worst advisor, and fear for life and
livelihood may well be the Twin Towers of globalisation.
In the past decade—apart from 2020 to 2021, in which most of us
have been forced to ‘self-isolate’ or ‘socially distance’ ourselves from
others—fear for life has driven mass migration. Migration, in turn,
has incited nationalism and political populism, both of which
undermine the trust that citizens have in their political leaders,
fracture identities and open the door to non-state actors and interest
groups generating traction for their splinter ideologies outside the
traditional governance structures. Fear for livelihood resulting from
immigrants consuming jobs and social resources further destabilises
national structures. This situation, in turn, opens the door to
politicians and corporate leaders to advocate protectionism, to close
borders or even build walls, in order to protect wealth in their
developed economies. These economies are facing tough times
because, as noted earlier, they are ageing, their workforces are
declining and their disproportional spending on health services will,
to a certain extent, debilitate their ability to invest and innovate.
In sport and sport business, this scenario seems to produce a
double-edged sword. That is, protectionism and nationalism may
offer growth opportunities for indigenous sports, such as Australian
Rules Football or American Football. These sports speak to ‘the heart
of the nation’, and the latter offers a platform for politicians to ‘make
America great again’. Conversely, can sport continue to serve as a
means to congregate, integrate and bring (new) communities of
people together? In particular, sports that already have a global
footprint will continue to seek opportunities to engage with new
citizens, be it political, economic or opportunity immigrants. The ‘old’
economies offer further opportunities for sport in regard to health-
enhancing physical activity. In the ageing societies, it will be
important to be fit in order to work longer, to decrease the national
health bill and to continue to live happy and relatively healthy lives
at an advanced age. An example of recognising this opportunity is
the 2018 release of ‘Sport 2030’, the strategic plan of the Australian
Sports Commission, now renamed Sport Australia (SA). In their
expanded remit, SA has included ‘More people from cradle to grave
engaged in sport and physical activity’ as one of four key strategic
objectives. The addition of ‘physical activity’ is critical in that it
acknowledges the health effects of physical activity and that physical
activity is foundational to playing sport. During the COVID-19
lockdown times, engaging in exercise and physical activity was one
of only four reasons for which the Australian Government allowed its
citizens to leave their house.
The rapid economic growth of developing economies has
delivered absurd wealth to relatively few, but also built a massive
educated and well-informed middle class. These new members of
the middle class will protect their new-found wealth and want to
continue on the upwardly mobile track. This aspect will challenge the
leaders of nations such as China and India, which have traditionally
not had to deal with a vocal, well-informed and opinionated
populace.
Here, the opportunities for sport are almost limitless because the
consumption of sport—both in regard to participation and spectator
products—remains a preferred spend beyond the basic needs of
food, water and shelter (spending on sport outpaces spending on
consumer goods). In other words, even in times of economic
hardship, people continue to spend on sport. In the developing and
accelerating economies of India and China, the size of the middle
class is such that merely increasing domestic consumption will have
a massive impact on economic growth, and thus, local and
international sport businesses are presented with fertile ground for
business success. That these emerging sport economies have largely
skipped the phase of developing (physical) community sport
structures may turn out to lead to a competitive advantage and
growth through digital means. Building digital sport communities and
mining information about their (preferred) participation, spectating
and engagement behaviours may well lead to a much more efficient
production and construction of sport-related infrastructure and
product portfolios. However, a trend that can already be observed is
that the ownership of sport will increasingly be in the hands of fewer
corporations or individual owners, who build sport assets into their
conglomerated structures. A lurking danger is that access to sport
will increasingly be based on the ‘ability to afford’—both in regard to
accessing elite competitions and participating in commercially driven
competitive amateur sport.
Growing populations in the developing world, including in parts of
Asia, Africa and South America, with a young but poorly educated
workforce will lead to instability when opportunities for these young
people fail to materialise and the few mega rich collect most of the
wealth. Increasingly, intelligent technology will play a big part in this
instability, given that automation will take the jobs that traditionally
have been the drivers of economic growth—low-skill manufacturing.
More often than not, governments in these regions are unstable and
institutions fragile, leading to intrastate political violence and
possible regional conflict.
Population growth always means that there is a growing market.
Any entrepreneur would seek existing markets that are likely to grow
(rapidly). The brisk growth of the youth segment in developing
economies therefore presents an opportunity for sports that are
already popular among younger people in general, and in those
nations’ markets in particular. Global sports, such as football and
basketball, continue to have a first-mover advantage in that they
require little to no explanation about how they are to be played (and
watched). Beyond the size of market though is the precarious socio-
economic position in which most of these young people will find
themselves. With limited job opportunities and no prospects of
access to high-quality education, they are vulnerable to extremism
influences. Physically violent sports, such as cage fighting or boxing,
will be popular as a means to protect and potentially prepare for
violent conflict. The Sport for Peace and the Sport for Development
movements may well find fertile ground for their advancement
among these challenged populations.
Increasingly, State ideologies are suffering—in the West,
democracy is eroding—and fragmented (religiously inspired)
ideologies are thriving. Populists and their foot soldiers, who
capitalise on people’s insecurities and fears about an uncertain
future, are using advanced communications technologies that allow
powerful messaging and almost unlimited reach. Societies are
becoming more complex and more difficult to ‘control’ through
traditional governance and institutional power and principles, and
therefore, social stability is sliding. According to the NIC (2017),
although

liberalism is likely to remain the benchmark model for

economies and politics over the coming decades, … it will face
stronger competition and demands from publics to address its
shortfalls…. Many developing countries will strive for
modernization more or less along Western lines, but the allure
of liberalism has taken some strong hits over the years as
political polarization, financial volatility, and economic inequality
in western countries have stoked populism and caused doubts
about the price of political and economic openness… Publics
fearful of loss of jobs to immigrants or economic hardship, are
likely to be increasingly receptive to more exclusive ideologies
and identities.
(p. 194)

For sport, this will most likely mean that on the back of anti-
immigrant sentiments and xenophobic politics, the national or
indigenous sports will continue to maintain a stronghold in their
home societies. Ongoing—and in some societies, increasing—racism
and xenophobia among spectator crowds are unfortunate but are
likely to be challenges that the governing bodies of sport will
continue to face. Sport will also continue to be a strong platform of
communication regarding political and social issues. The Black Lives
Matter movement and gender equality are two of many more issues
that have been spotlighted by high-profile teams or athletes on the
back of their popularity. Ironically, the only truly borderless sports
will be those that broadly are defined as Esports.
 As for global economic growth, developed economies are slowing
down, and the developing economies (in particular, those in South-
East Asia) continue to accelerate. The often-avoided elephant in the
room (because the issue is too big to handle and control) is the
degradation of our natural environment—and it affects us all. The
Earth’s surface temperature continues to rise, biodiversity is
decreasing and a growing global population continues to put more
stress on scarce natural resources, such as water, food and energy.
Climate change will cause significant ecological and environmental
stresses, including the spread of infectious disease—unfortunately,
COVID-19 may only be the start.
As for the natural environment, there will be clear winners and
losers in the sport industry. Obviously, those sports that depend
highly on (semi)natural sportscapes, such as winter sports and golf,
will have to deal with snow-capped mountains disappearing and
natural rainfall becoming more erratic and unpredictable. Higher
temperatures will pose health and safety challenges to outdoor
sports, and for many sports, the cost of playing will increase because
of the inability of sport organisations to insure themselves for the
risks of participation and also spectatorship. For example, how
community and professional sport organisations are going to
refinance their businesses following the impact of the COVID-19
pandemic remains a transformational challenge that will take years
to achieve. Greening the sports industry has been building
momentum since 2013. In Australia, the Sports Environment Alliance
was formed to provide a voice for sport in managing and caring for
the natural environment. Their mission ‘of leading, educating, and
inspiring our sport community members to learn, share and act for a
more sustainable and regenerative Australasia’ (Sports Environment
Alliance, 2020) is central to the agenda for making change.
In commenting on globalisation and the economics of sport,
Westerbeek (2021) argues that opportunities and threats afforded to
sport in the context of Globalisation 4.0 are largely driven by
financial and power objectives. Thus, how sport can play a role in
moderating moral standards and values may be an uplifting finish to
this chapter. Sport in all its positive and negative aspects reflects the
societies in which it is played and enjoyed. However, it provides a
platform for communication and change that few other global
industries have. Westerbeek (2021) refers to the text in Article 1
(Aims) of the European Sports Charter (1992, revised in 2001),
where, in essence, the natural position, purpose and intent of sport
are defined as inclusive, contributing and value-adding:
Governments, with a view to the promotion of sport as an
important factor in human development, shall take the steps
necessary to apply the provisions of this Charter in accordance with
the principles set out in the Code of Sports Ethics in order:

i. to enable every individual to participate in sport and notably:

a. to ensure that all young people should have the opportunity
to receive physical education instruction and opportunity to
acquire basic sports skills;
b. to ensure that everyone should have the opportunity to
take part in sport and physical recreation in a safe and
healthy environment and in cooperation with the
appropriate sports organisations;
c. to ensure that everyone with the interest and ability should
have the opportunity to improve their standard of
performance in sport and reach levels of personal
achievement and/or publicly recognised levels of
excellence;
ii. to protect and develop the moral and ethical bases of sport and
the human dignity and safety of those involved in sport, by
safeguarding sport, sportsmen and women from exploitation for
political, commercial and financial gain and from practices that
are abusive or debasing including the abuse of drugs and the
sexual harassment and abuse, particularly of children, young
people and women (Council of Europe, 2001).

It is with that broad intent that the future of sport may well be
essentially positive, although we are not naïve enough to believe
that this will come without any significant challenges (Smith &
Westerbeek, 2004).
To obtain a sense of how the future of sport is projected by a
frontline sport business professional, we turn to our chapter-
concluding interview with Glenn Lovett.

International Interview—Glenn Lovett,

former professional football (AFL) player
and senior sport business executive
Glenn Lovett knows the professional sport industry inside out.
Starting his career in sport as a professional athlete himself in
the Australian Football League (AFL), he came to know the
business dealings surrounding athletic talent the hard way. Upon
retiring from football due to injury, he had already joined Nike
Australia before setting up his own company in sport business
consulting in Melbourne, Australia. After successfully growing
and then selling this consultancy, Lovett moved overseas to the
United Kingdom and then to the United States into varying roles
with different companies. These included Booz Allen Hamilton,
Octagon Europe and Repucom. He was a senior member of the
Repucom team when the business was sold to Nielsen. Glenn’s
most recent role has been with Nielsen Sports as the Managing
Director, Global.

The global sport industry is in its most disruptive state ever.

What would you say are the most important drivers of
change at the moment?
If we put the immediate impact of the COVID-19 pandemic to the
side for a moment, then the main difference with how sport was run
a decade ago and now is the way that decision-making is based on
evidence. The ever-growing importance of having access to the most
up-to-date data is driving business leaders to invest in people and
technology that can deliver on this. The commercial success of
companies like Nielsen Sports and its predecessor Repucom signifies
this business refocus. In the past, many leaders in sport would have
to develop their strategies at least partly on the passionate desire of
their governing boards to produce winning results. Although there is
still a fair bit of ‘gut feeling’ decision-making happening, I would
argue that it has become a 50/50 equation—50% on data evidence
and 50% on good old instinct, and that is OK. Sport is, and will
always be, emotional; you cannot take the passion out—that would
be taking the soul out of sport.
Although massive changes are occurring in economies, in politics
and indeed in the natural and social environment, sport has largely
shown to be recession proof, even more so in times of dramatic
uncertainty. For sport businesses, it is of the utmost importance to
continue to invest in, and deepen, their engagement with fans and
consumers. Over-the-top (OTT) technology and social media have
transformed the ability for sport to cut through the clutter of news
and entertainment offerings even more powerfully now. For the
media industry, in particular, it will be critical to strategically
determine whether they are in the content, distribution or
aggregation game or indeed in all of these. How to value and
monetise sport is going through a major restructuring with the
proliferation of content and media platforms. Traditional
broadcasters like News Corp and Disney are feeling the heat from
Facebook and Amazon who are also acquiring rights and developing
their own content. Sport rights holders themselves are exploring new
business models—and that will be accelerated, enforced by the
pandemic. During the next few years when many sporting rights are
up for sale, it will become clear how the new landscape will be
formatted. Some of the major professional sporting bodies, such as
the National Basketball Association in the US or AFL in Australia, in
that regard, have shown that they can quickly pivot by setting up
players’ hubs, or isolated bubbles to safeguard athletes, and hence,
ensure that media production and consumption of sport can
continue.
Do you think that the old players, the traditional media
companies can keep up with the new kids on the block by
setting up OTT and turning themselves into content-
producing data companies?
Well, if nothing else, they had to respond to a declining number of
viewers and seriously consider what might be attractive competitive
offers. Ironically, they have also returned to traditional studio models
where they have increased their production of original content to
load on their platforms. Rather than making this decision on their
own behalf, they have been forced into this by companies such as
Netflix, who have suddenly become serious contenders at all kinds of
content production award shows. In sport, World Wrestling
Entertainment (WWE) is a good example where they make money
from pay TV, but on their WWE platform, they integrate primary
content with social media, studio commentaries, packaged on-
demand content and so on. They are an end-to-end multimedia
company with ongoing growth potential. They offer sportainment,
retain tight control of content and do an excellent job in tiering it.
Other examples are the Ultimate Fighting Championship (UFC) and
the World Surfing League, who offer less mainstream content, but
remain attractive for the niche that they are targeting. Every major
sport is looking at how those examples further develop.
Beyond that are the hundreds or even thousands of self-
producing entrepreneurs, who use platforms such as YouTube to
create an audience. Whenever you hit the content note on the head,
you will rapidly start developing a niche audience with potential for
significant growth. Even the big media companies face this challenge
—how to cut content, how to tier it, how to balance live versus
highlights and so on. Streaming services are offering opportunities to
many more entertainment performers, both in acting and in music,
where they cut out the intermediaries, producers and agency
companies. What has not changed is the challenge of cutting
through the clutter.
What about traditional sport organisations and their events?
Will they stay as they are or do they also rapidly have to
innovate?
Cricket is a good example. They moved from five-day to one-day to
two times 20-over formats. It has to be short, snappy and easy to
consume. If you can’t stay relevant for the younger audiences, then
you will be out of business very soon. However, it is important that
you maintain the integrity of the traditional game; you can’t move
away too fast and too much from this. Some other examples of
historically and culturally significant sports that have moved to more
relevant formats to adapt to the needs of the marketing are mixed
martial arts (MMA) and Kabaddi in India. Social media and digital
platforms have enabled reach to many more people, but in the end,
people only have time to engage in very few offerings more deeply.

With this ultra-commercialisation of sport, will sport

organisers move away from community and participation
sport to solely focus on what makes them money?
I think there is certainly a chance that this will happen. It will first of
all depend on which sports are, or remain, relevant to the younger
generations. And then, it is up to the governors and managers of
that sport to make decisions about taking up the responsibilities,
which are costly, to look after the grassroots of the game. I think
that those sports that are really strategic will realise that their long-
term future will depend on looking after the sport as a whole.
Structures might be different, but sport will still be there. Sport is
too fundamental to our lives.

Note
1. Some of the content in this chapter is derived from Sport
Business in the Global Marketplace, by H. Westerbeek and A.
Smith (2003), Palgrave Macmillan, which is co-authored by an
author of this book.
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Algeria. Mediterranean Politics, 17(1), 41–58.
https://doi.org/10.1080/13629395.2012.655045
Anderson, E. (2009). Inclusive masculinity: The changing nature
of masculinities. Routledge.
Annan, K. (1999, 31 January). Business and the UN: Address
delivered to the World Economic Forum, Davos, Switzerland,
1999. Vital Speeches of the Day, 65(9), 260–261.
Au, T. (2017, 13 October). As remarkable growth of sports
industry continues, exclusive data analysis reveals the key
trademark trends. World Trademark Review, Lexology.com.,
https://www.lexology.com/library/detail.aspx?g=18a78c6e-
4ee9-444c-8889-a039583c54a7
Australian Bureau of Statistics. (2013). Value of Sport Australia
(cat.no. 4156.0.55.002).
http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/4156.0
.55.0022013
Baker, W. J. (1988). Sports in the Western world (Rev. ed.).
University of Illinois Press.
BBC. (2014). Brazil’s capoeira gains UN cultural heritage status.
https://www.bbc.com/news/world-latin-america-30219941
Council of Europe. (2001). The European sports charter
(revised). Author.
De Jonghe, T. (2001). The place of Sub-Sahara Africa in the
Worldsportsystem. Afrika Focus, 17(1–2), 79–111.
https://doi.org/10.1163/2031356X-0170102005
Elias, N. (1994). Reflections on a life. Polity Press.
Friedman, T. (2007). The world is flat 3.0. Farrar, Straus and
Giroux.
Gerstein, D. (2009). Bioterror in the 21st century. Naval
Institute Press.
Kearney. (2014). Winning in the business of sports. Kearney.
Another random document with
no related content on Scribd:
The Project Gutenberg eBook of Border guard
 This ebook is for the use of anyone anywhere in the United
States and most other parts of the world at no cost and with
almost no restrictions whatsoever. You may copy it, give it away
or re-use it under the terms of the Project Gutenberg License
included with this ebook or online at www.gutenberg.org. If you
are not located in the United States, you will have to check the
laws of the country where you are located before using this
eBook.

Title: Border guard

The story of the United States Customs Service

Author: Don Whitehead

Release date: January 12, 2024 [eBook #72689]

Language: English

Original publication: United States: McGraw-Hill Book Company,

Inc, 1963

Credits: Brian Wilson, Tim Lindell and the Online Distributed

Proofreading Team at https://www.pgdp.net (This book
was produced from images made available by the
HathiTrust Digital Library.)

*** START OF THE PROJECT GUTENBERG EBOOK BORDER

GUARD ***
BORDER GUARD
Also by Don Whitehead:
the fbi story
journey into crime
 Don Whitehead

BORDER GUARD
THE STORY OF THE UNITED
STATES CUSTOMS SERVICE
McGraw-Hill Book Company, Inc.
New York Toronto London
 BORDER GUARD
Copyright © 1963 by Don Whitehead. All Rights Reserved.
Printed in the United States of America. This book or parts
thereof may not be reproduced in any form without written
permission of the publishers.
Library of Congress Catalog Card Number: 63-12134
First Edition
69947
For Ruth and Gene Neilsen
 CONTENTS
1. A Slight Case of Conscience 1
2. A Time of Crisis 21
3. A President is Bamboozled 32
4. The Pirates of New Orleans 44
5. The Dark Years 55
6. Booze and Bribes 69
7. The Enforcers 86
8. Test Tube Detectives 96
9. The Informers 107
10. The Violent Border 120
11. A Dirty Business 131
12. The Case of the Crooked Diplomat 147
13. A Strange Little Room 157
14. The Diamond Smugglers 166
15. A Fool’s Dream 184
16. The Chiselers 196
17. The Innocents 213
18. The Stormy World of Art 223
19. Sex and the Censor 234
20. Of Toy Canaries and Pirates 241
21. The Middle Men 255
22. The Restless American 265
 1
A SLIGHT CASE OF CONSCIENCE
One of the most serious problems confronting the Customs Service in
this century is the control of the illegal importation of narcotics. Some
of the difficulties involved in handling dope smuggling can be seen
when it is realized that these drugs are being sent from all over the
world, by every means of international transportation. The
comparatively small number of Customs agents rely on patience,
diligence and intelligence, and they are doing a remarkable job. Since
this problem is so important, and so typical of the job the Service does,
we will begin with the story of one successful case.
On the night of May 17, 1955, seventeen-year-old Truls Arild
Halvorsen sat in an office in the Customs House in Boston,
Massachusetts, blinking back the unmanly tears that threatened to spill
down his face. He kept trying to swallow the dry lump of fear in his
throat, but it wouldn’t go away. And he had to concentrate hard to
remember the answers to all the questions being asked of him by the
men sitting about the room.
He was a tall, handsome youth. His blond hair was cropped in a
crew cut. His eyes were as blue as the waters in the fjords of his native
Norway which he had left for the first time only a little more than a year
before. That was when he had shipped out as a seaman aboard the
MS Fernhill.
He remembered the day he left home his father had said, “We are
very proud of you, son.” His mother had wept as she clung to him. His
friends had gathered to shake his hand and wish him good luck on his
first voyage. He had felt grown up and proud and excited—ready to
cope with anything the future might bring.
 But now ... now he sat, a virtual prisoner, answering questions
about his role in the plot to smuggle narcotics into the United States. It
was a nightmare he wished he could forget, but he knew he never
could. The men around him were members of the U.S. Customs’
Special Racket Squad out of New York City, whose job it was to run
down smugglers.
He heard the big, soft-voiced man sitting across the desk from him
—the agent named Dave Cardoza—say, “Let’s go over the story again,
Halvorsen. This time it’s for the official record. Tell it just as you did
before—exactly what happened.”
Halvorsen swallowed once more and nodded. He didn’t need a
translator to understand what Cardoza was saying because he spoke
excellent English as well as German.
“Will you state your full name?”
The youth replied: “Truls Arild Halvorsen.” And the recording
began.

q—What is your position on the ship?

a—Ordinary seaman.
q—What vessel are you on?
a—The name of the ship is the Fernhill.
q—How long have you been employed aboard the Fernhill?
a—Three trips, about fifteen months.
q—How old are you, Mr. Halvorsen?
a—I am seventeen and a half years old.

Was it possible this had begun only a few weeks ago? It had
begun that day in Hong Kong when he met the Chinese stranger
aboard the Fernhill and, like a fool, he had listened to the man’s talk
about making easy money. That was when he should have walked
away.
 But he hadn’t walked away. And that’s why he was now in this
strange room in Boston with these men who asked so many
questions....

q—Mr. Halvorsen, on the 15th of March, 1955, where was your

ship, the Fernhill?
a—It was in Hong Kong.
q—And did you have any conversation with a visitor to the ship?
a—Yes, I was talking to him.
q—Will you explain what conversation you had and with whom it
was?
a—The man was a tailor and he said to me that he wanted to talk
about some business down in my cabin.
q—Had you ever met him before?
a—No.

Halvorsen recalled that he had talked to the Chinese tailor about

the price of a suit. Several tailors had boarded the Fernhill to solicit
orders as soon as the ship dropped anchor. Most of the ship’s crew
had placed orders for suits, but Halvorsen had decided the price was
more than he could afford. It was after this that the tailor—a well-
dressed man of medium height with a wart on the lobe of his left ear—
whispered to Halvorsen that he would like to talk to him alone in his
cabin.

q—What did he say when he talked about this other business of

smuggling?
a—He asked me if I wanted to make some money.
q—What did you say?
a—Yes, I said.
q—Then what did he say?
 A
a—He said, “I can give you opium if you will take the opium to
San Francisco.” He said that if I would do this for him he would
pay me $1,200 American.
q—What did you say then?
a—I was not sure if I wanted to do it or not, but I did not say no.

A
In the transcript of Halvorsen’s story, the
young seaman referred to the narcotics sometimes
as opium and at other times as cocaine and
heroin. The narcotics in each case was heroin, a
derivative of opium highly favored by drug addicts
in the United States.

The tailor then wrote an address on a slip of paper—No. 54

Cameron Road—and pressed it into Halvorsen’s hand. “If you decide
you want the money, come to this address at seven o’clock tonight.”
By six o’clock that evening, Halvorsen had reached a decision. The
sum of $1,200 sounded like a small fortune to the boy who had never
in his life had more than a few dollars at one time. It was more money
than he could save in many months at sea—enough to buy an interest
in a fishing boat back in Norway.
Halvorsen dressed in his best blue trousers and white shirt for the
trip ashore. When he left the Fernhill he carried a briefcase which the
Chinese had suggested he bring along. He hailed a rickshaw at the
ferry slip near the Peninsula Hotel, and gave the address on Cameron
Road. Then he sat back to enjoy the gaudy, East-meets-West sights of
Kowloon as the coolie trotted through streets swarming with Chinese,
most of them refugees from Red China.
After he stepped from the rickshaw and paid the driver, he stood
uncertainly at the curb looking about for the number 54. A Chinese
came up to him and said, “You looking for Number Fifty-four?”
Halvorsen said he was, and the man said, “You follow me.”...
 q—Where did he take you?
a—He took me inside the house and into a corridor. We turned
right and there was a door. He knocked on the door.
q—Was the house No. 54, Cameron Road, ground floor, Kowloon,
Hong Kong?
a—Yes.
q—Was there any number or anything written on the door of the
corridor?
a—I don’t remember.
q—Then what happened?
a—Somebody opened the door and said, “Please, come in.” He
took my hand as in welcome. He said, “I am glad to see you,”
or something like that and in the room was the Chinese tailor I
saw on the ship and another man....

Halvorsen remembered sitting with the three Chinese at a small,

round table. The room was dimly lit and dingy. One of the men offered
him whiskey but he refused and instead asked for a glass of beer. A
woman padded into the room and placed a bottle of beer on the table.
And then he was aware that a Chinese girl was standing near him. But
when he glanced at her, he was blinded momentarily by a flash of light
and so startled that he started to rise from his chair.
The wart-eared tailor laughed and said, “Don’t worry. It was only a
flash from a camera. We need a photograph to send to our man in San
Francisco so he will be able to recognize you when you arrive with the
packages.”
One of the Chinese, a short, fat man in shirt sleeves, took a slip of
paper from his pocket and scrawled on it the words, “San Francisco.”
He tore the paper in half, handing one part to Halvorsen. “You keep
this half,” he said, “and we will send the other to our man in San
Francisco. When you meet him, you give him your half of the paper
and he can match the two halves to make sure you are the right man.”
“Where will I meet him?” Halvorsen asked.
 The man wrote on another slip of paper “Lew Gar Kung Saw, 854
Clay Street, San Francisco.” He handed it to Halvorsen and said, “You
deliver the packages of heroin to this man at this address. When you
make the delivery, he will pay you twelve hundred dollars. Okay?”
Halvorsen nodded. “I guess it’s okay,” he said. Then he gave them
the itinerary of the Fernhill. He told them the ship was scheduled to
arrive in Boston on May 16. If possible, he would leave the ship there
or in New York and travel by bus to San Francisco to make the
delivery, after which he would return to Norway.
The fat Chinese left the room, and when he returned he was
carrying ten cotton bags filled with heroin, each of them weighing
about half a pound. He placed them in Halvorsen’s briefcase....

q—What happened then?

a—Then he asked me if I saw the bags. I said, “Yes.” He said that
was what I was going to take ashore and he said, “You have to
keep it on your body.” And he showed me a white silk sash.
q—Did he tell you how to use that white silk sash?
a—Yes. He said I was first to fold it double and put it around my
waist and then I could put the white bags down in the folds of
the sash. He said I should keep maybe two bags in front, two
bags in the back and the others strapped to my legs.

After the Chinese put the heroin in the briefcase, Halvorsen left the
house on Cameron Road. He returned to his ship and placed the
briefcase in a ship’s locker. He explained to the officer in charge that it
contained souvenirs.
From Hong Kong, the Fernhill steamed to Djakarta, Indonesia,
where Halvorsen hurried ashore with several crew members for a look
at the city. After a time he wandered away from the others. He was
alone, sipping a glass of beer in a bar near the Hotel Des Indes, when
a Javanese approached and stood beside him.
“Have you got anything you would like to sell?” the Javanese said.
“Any clothes or shoes? I can get you a good price.”
 Halvorsen looked at the man, a middle-aged Javanese with a
jagged scar running from his left eyebrow to his chin. He said stiffly,
“I’m not interested in small stuff.”
The Javanese slid into a chair beside the youth. “You mean you’ve
got something else you would like to sell?” he asked.
Halvorsen nodded, trying to appear casual and matter-of-fact.
“Maybe we can do business,” Scar Face said. “What have you got
to sell?”
Halvorsen said, “What would you pay for a pound of heroin?”
The Javanese was impressed. “You can get heroin? You are not
fooling me?”
“I’m not telling a lie,” Halvorsen said. “How much for a pound?”
Scar Face said, “If it’s pure stuff, I’ll take two pounds and pay you
ten thousand dollars American money.”
$10,000 for two pounds of heroin! Halvorsen was so startled that
he blurted: “That’s too much. Five thousand would be enough. I’ll have
to get the stuff from the ship.”
Scar Face said, “You wait here. I’ll be back.” And he hurried from
the bar.
In less than five minutes he was back with two other men, one of
them dressed in a police uniform. They took Halvorsen to the dock,
where they boarded a police launch which carried them to the Fernhill.
Halvorsen took Scar Face to his cabin and told him to wait there.
Then he went to the ship’s locker and removed two bags of heroin
and brought them back to his quarters. The Javanese opened one of
them. He took a pinch of the white powder and tasted it. “It looks and
tastes like it’s pure stuff, but I don’t know. I’ll have to get a doctor to
make a test.”
This precaution seemed reasonable enough to Halvorsen. He
handed the two bags to the Javanese, who concealed them under his
coat. They returned to the police boat which carried them back to the
pier. And then he and Scar Face got into a car and drove to the
outskirts of the city, where the car swung into a driveway beside a
white frame house.
“This is the doctor’s house,” Scar Face said. “You wait in the car.”
He carried the two bags into the house.
In a few minutes Scar Face came back to the car. “The doctor says
it will take time to test the heroin. I can’t get the money until he makes
the test. I’ll bring it to you tomorrow.”
With appalling innocence, Halvorsen said, “I guess that’s okay.”
And as Scar Face drove him back to the waterfront, they agreed to
meet on the pier the following morning.
The next day Halvorsen went ashore to meet Scar Face. He
waited at the agreed meeting place for more than two hours. Slowly it
dawned on him that he would never see Scar Face again. He had
been duped. It was then that young Halvorsen felt more than chagrin.
He felt enormously ashamed. He wondered why he had ever permitted
himself to become involved in something so dishonorable as
smuggling narcotics.
He felt, too, a growing, bitter anger toward the wart-eared tailor
and his friends in Hong Kong and the scar-faced Javanese. He
wondered how he could atone for this sin. And after a while he decided
the best thing to do was to seek advice from someone older.
When the Fernhill reached Singapore, Halvorsen hurried to the
home of a Norwegian minister whom he had once met in Baltimore.
The youth poured out his story to the churchman. “What shall I do?” he
asked.
“It is a bad business, my son,” the minister said. “Let me go to the
American Consulate and ask their advice. Perhaps they can help us.”
When the minister returned from the Consulate, he shook his head.
“They can do nothing,” he said, “because the matter is out of their
jurisdiction. They said it would be best if you would take your story to
the police agency called the FBI when you reach the United States.”
But when Halvorsen reached his ship, he thought of his friend in
New York City, the Rev. Leif Aagaard, pastor of the Norwegian
Seamen’s Church, 33 First Place, Brooklyn, in whose home he had
spent the previous Christmas. On April 11, 1955, he wrote the
Reverend Aagaard a long letter:

Dear Aagaard:
Let me get right to the matter. When we were in port in Hong
Kong (March 15) I chanced to get in conversation with a tailor who
came aboard to take orders. After the usual talk about everyday
things he asked if he could get a word with me in private in my
cabin. It proved he wanted me to smuggle four pounds of cocaine
from Hong Kong to Frisco. I was to get $1,200 from the man I was
to deliver the goods to in Frisco. I said Yes!
He gave me an address in Hong Kong where I should come
the same evening. There I was to get the necessary information as
well as the cocaine. I arrived at the specified time. There a flash
photo was taken of me in order that the contact in Frisco could
identify me. I also received one half of a letter that was torn in two
parts. The photo and the other half was to be sent to Frisco. The
half which I retained was to serve as my pass in order to get in
contact with these men. I also was given the name and address of
the man I was to deliver the cocaine to in Frisco. Afterwards I
B
received eight small sack-like bags made of cotton, each
containing one-half pound. They were placed in a brief case which
I should bring them aboard in. I did everything they instructed me
to do and locked it in my cabin, later to hide it in a safe place. I
had, at that time, all intention of doing this rotten job. Later,
however, when I had had the time to think more clearly about
these things I cursed myself for having wanted to take part in such
dirty things. I came to the conclusion that I would throw it all
overboard, but at the same time a thought struck me that perhaps
I could be of help to the American authorities by getting these
people jailed in Frisco. When we arrived in Singapore I contacted
Rossebo whom I knew from the time I was ashore in Baltimore. I
told him the whole story and he promised to get in contact with the
American Consulate there, and in a discreet manner try to find out
about same. Now it was found, however, that they could not give
any direct answer as to what the American authorities might do to
 me as a smuggler. They were very much interested, but said that
that type of smuggling was something that came under FBI.
Will you now be so kind as to do me the favor of presenting
the entire matter before the FBI in New York and say that I am
placing myself entirely at their disposal in the case. Let as few as
possible in on this. I am afraid that the persons I am dealing with
on this are no small fry. I will now seal the goods and declare it on
the manifest as four pounds of camphor. This I am doing so as not
to have the ship and the captain mixed up in this affair, if it should
get that bad. Now I ask that you or the authorities who will handle
this matter send me a discreet telegram before May 10, which will
assure me that I can safely count on avoiding any trouble from the
authorities as a result of my smuggling. If I do not receive the
telegram within the specified date, I will throw everything
overboard and remove every trace of everything that might
implicate me. In case you do not want to have anything to do with
the matter, please advise me as soon as possible. Fernhill is
scheduled to arrive in Boston May 16th.
Well, now I hope that you will not judge me too harshly and
that all will be well again.
Warmest regards to you and your family.
Truls Arild Halvorsen

B
Actually, Halvorsen received ten sacks—but he
could not bring himself to admit to Aagaard that he
had been swindled of two of the bags in Djakarta.

When the Reverend Aagaard received the letter, he was shocked

and dismayed. He remembered young Halvorsen well because the
youth had come to his church in Brooklyn when his ship made port
there. Aagaard had become so fond of the boy that he had invited him
to his home the past Christmas for dinner with his family. He knew he
was an intelligent youth and had never before been involved in
wrongdoing.