Sports retailers abuse of their workers is something we cannot ignore



JD Sports, Birmigham
Photo Credit: ReissOmari

By Neil Patrick

This week has seen the humiliation of JD sports following an undercover investigation by Channel 4 into working conditions at its Rochdale warehouse. Conditions it described as ‘worse than prison'. Iain Wright MP, Chair of the Business Select Committee didn't mince his words either. He said the workers there were 'treated like scum'.

Unsurprisingly, both companies have been enthusiastic users of zero-hours contracts; a device excused by those who advocate flexible working policies, but which in practice is often a cruel instrument of low pay torture.

Only a couple of weeks ago, JD Sports was crowing about how its main competitor, Sports Direct, had seen a collapse in its share price following a similar exposé of appalling working conditions at its warehouse in Mansfield.

Some call this the unacceptable face of capitalism. Yet for all the hand-wringing and condemnation by everyone from trade unions and politicians to the media, this situation is not just caused by exploitative business owners.

Yes, the owners of these businesses, ranked amongst the UK super-rich are easy targets for criticism. This in no way condones their actions, but they are doing what business moguls do; building their businesses and their wealth (more or less) within the law. (Although I suspect that they will have to spend a lot more on lawyers and advisors in the coming months and years than they ever have before).

But almost everyone can play a part in changing things for the better.

In this particular sector of employment, this problem is enabled by the participation of five diverse groups with heavily vested interests. It's a chain of stakeholders. Each link in the chain is critical. Yet they share out the benefits between each other very unevenly.

Power determines who gets what…

So when we look at this dispassionately, there are many who are accessories to this situation. But what if instead of distancing themselves, these people decided to take some ownership and actually do something about this?

They have the power and it's time to use that power responsibly.


 1. Sportswear brands

There's a (mostly) cozy co-operation between brands who spend millions creating image and glamour for their products and retail chains who enable their distribution on a massive scale. Each needs the other. Brand investments essentially massively inflate the price that any item can be sold for relative to its cost.

Vested interest: The building of brand halos which enable goods to be sold at prices totally unjustified by their true value or utility. Yet brand owners can choose where their goods are sold...

2. Sports stars

These people take millions every year from sponsors in exchange for doing just what they do - pursue their sporting ambitions. They just have to display their sponsors' logos at every possible opportunity – particularly when they are competing. Their role is to help create the halo effect of the brands willing and able to pay what their agents demand.

Vested interest: Maximising their income when they may have a relatively short working life when they can earn money. Yet sports stars can choose to reject sponsorships - there will always be others...

Why would anyone want to top this list? Or need to?



3. Mainstream media

Without the mass appeal of sports events on TV and other media, the exposure of the sports stars in their branded garments is diminished. So big media companies are the last link in the brand value chain. And for them, televising sport is easy stuff. Much less difficult than say a costume drama or wildlife documentary.

Vested Interest: Access to hugely popular events which guarantee big audiences in exchange for relatively simple broadcasting and cheap production costs. Yet the media can make choices about which events and players it covers...

4. Consumers

There’s a paradox that most sales by these retailers are not made to active sports people. They are sold as leisure wear to the young and the poor. This is a group who are in love with the mythology of brands. Put a Nike tick on a garment and suddenly they will pay three or four times more for it.

Vested Interest: Easy access to fashion which they believe confers some of the brand’s status and value upon them. Yet consumers can choose to switch from one retailer for another...

5. Shareholders and investors

Investors seek profits. Only ethical investors concern themselves about how fairly those profits are achieved. But when something occurs like this which potentially causes long term reputational damage, almost all investors are quick to flee elsewhere. And sure enough, JD Sports share price has fallen off a cliff:





This time last year, JD sports traded at around £10.25 a share. Today, that figure is £3.16. So this group of stakeholders (ironcically the most financially self-interested) have already voted with their feet.
 


This is not a free market where value is exchanged at a fair price. It’s a distorted market, where the powerful commercial players, exploit those with less power.

But critically none of this could happen if even one link in the chain was broken.

Think about it if apart from investors voting against this, the other stakeholders did too:

Consumers refused on ethical grounds to buy branded sports wear? Thousands were quick to criticise Barclays in the 1980's over its willingness to operate in apartheid South Africa. A student boycott of the bank led to a drop in its share of the UK student market from 27% to 15% by the time it pulled out in 1986.

The media refused to televise any sport where advertising by unethical firms was displayed.  All television commercials for cigarettes were banned on the UK way back on 1 August 1965. Yet today, bailed out banks continue without challenge to print their names all over sportsmen and women.

Sports stars turned down sponsorship contracts? Or imposed ethical trading requirements on all sponsors? Footballers have been quick to support the outcry against child abuse by football coaches. Now all professional sports people have the opportunity to show they have some ethics too.


You might shrug and think none of this will happen. There are too many vested interests and there's too much money at stake.

But that sort of resignation gets us nowhere. Sure you can come up with a pile of reasons such changes cannot happen. But if you belong to one of the groups above, you have the power and the obligation I think to make a stand.

Whilst the media and politicians will doubtless continue to wag accusing fingers at the owners of these businesses, the truth is there are many more of us who are unconscious accessories. And we have a lot more power to change things than we might think. Especially if we vote with our wallets.




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