Who owns sporting titles, and what are they worth?

While many aspects of intellectual property rights are clearly defined legally by such devices as patents and trademarks, the situation is not quite so clear with other things that may be defined as intellectual property. Take titles of merit, such as ‘World Champion’.

In team sports, this is not really an issue. For team disciplines can only take place in a regulated environment. For example, in football, the question of which is the strongest club in Europe is one which there is a tournament called the “Champions League” and that is designed to allow such questions to be decided. And it is generally agreed by all and sundry that UEFA are the “fit and proper” people to run this tournament (except perhaps by FIFA, but that is by the by).

For individual sporting disciplines, it is not so easy to regulate these things. Golf, for example, has rarely if ever had any reference to a ‘World Champion’; only recently has it even agreed on a ranking system to determine who is the best player in the world. Indeed, although I do not know much about golf, it seems to me that golf is a sport that seems to discourage this question altogether.

Chess, another individual player sport, is a different kettle of fish. It is also an illuminating example of how sporting titles can gather prestige enough to have a real financial worth to them, in the same way that intellectual property does. Indeed, it can be seen from the example of chess that to be a ‘world champion’ is to have an asset of considerable value. The notion of being a ‘world champion’ of a sport seems to have come into vogue in the mid to late 19th century, and, indeed, chess is a sport which was one of the first to embrace the concept. In chess, it evolved around the person of one Wilhelm Steinitz, whose claim to be the best player in the world was accepted, and the concept of a ‘World Championship’ match as a mechanisim to formalise this claim was introduced.

At this stage, there was no international body – the champion was free to accept or decline challenges and was free to make the rules as he went along. Eventually Steinitz was defeated by Emanuel Lasker, who became champion in 1894. Lasker was the greatest player of his day, but as he grew old a new generation of challengers emerged. Lasker was not keen to meet them. After the First World War, Lasker’s heart was not really in chess and he resigned the title until financial circumstances induced him to play against his strongest challenger, Jose Raul Capablanca. By this stage, Lasker was past his prime, and Capablanca, one of the strongest players in history, won the title with some ease.

There were efforts after this to regulate the World Championship, but they came to naught- the establishment of a global Chess federation (FIDE) in 1924, similarly, made no difference. Champions continued to enjoy the title as their personal property.

However, when Capablanca’s successor, Alexander Alekhine, died undefeated in 1946, FIDE seized its chance, organising a tournament of the leading players of the day to determine who would be the World Championship. This tournament was won by Mikhail Botvinnik, the leading player of the USSR.

Chess, by this time, had become a very big sport in the USSR. By this time, the leading Soviet players were regarded as professionals in the service of the Soviet state, and the leading players of that country were given state salaries. This had two important functions. First, it enabled the leading Soviet players to concentrate on the game on a full-time basis, and secondly, it enabled the state to control directly the incomes of people it considered important to it.

In a subtle, indirect way, the USSR also came to dominate the international Chess federation, FIDE. This was perhaps bound to happen, as the USSR took chess quite a great deal more seriously then any other nation, but it had more sinister overtones because of the high amount of interest that the Soviet Government took in the game.

(As another aside, this is by no means uncommon. In cricket, Pakistan’s government has always had a role in the national cricket board, also this happens in Africa. Zimbabwe’s government controls the game there directly; in South Africa, the cricket authorities are extremely sensitive, and servile, to the government’s wishes. However it is rare that a government will end up controlling an international sporting body. This is because usually there will be other nations of similar size taking an interest in that sport to counteract this. However, in chess, the US government only took an interest when Bobby Fischer seemed likely to give the USSR establishment a bloody nose).

But the authority of FIDE to be the governing body of the sport, and to determine the rules of engagement of the World Championship, became unquestioned. Every three years, the champion would play a match of 24 games against a challenger who had come through a rigorous qualifying system. And if the Champion lost, he had the right to a rematch the next year (although this rule was abolished in 1962.) This cycle became so ingrained into the conciousness of the international chess fraternity that when the eccentric (to say the very least) American Bobby Fischer tried to insist on changing the format of the World Championship match, as champion, in 1975, FIDE stripped him of his title, and awarded it to his challenger, Anatoly Karpov, with general approval of the international chess community, not just in the Eastern bloc, either.

Karpov, by reclaiming the World Championship from the hated American, was the instant ‘golden boy’ of the USSR; he was decorated by Breznev, and enjoyed a high position in Soviet society. So when another Soviet grandmaster qualified to challenge him, Victor Korchnoi, the Soviet government used subtle measures to help Karpov in the 1978 match. The enraged Korchnoi defected to the West, and then qualified once again to challenge in the 1981 World Championship match. Here, the USSR’s influence in FIDE was again shown, and Karpov won in controversial circumstances.

In due course, Karpov lost his title to Garry Kasparov. But when the USSR expired, many of its assets became loose items, like assets to be disposed of with the receiver of a bankrupt estate. And, free from the hand of the Soviet state, Russian grandmasters realised that they no longer had to accept the dictate of FIDE as to where, when, and how they played chess. So in 1993, dissatisfied with the terms of their slated 1993 match, Kasparov and his challenger, Nigel Short, announced a breakaway organisation, and played their match under that banner.

FIDE retaliated by stripping Kasparov of his title, and holding a new match, but the ‘official’ champion did not have real credibility. In the 1990s, FIDE fell into the hands of a Russian provincial politician, Kirsan Ilyumzhinov, who has continued to operate FIDE to this day. FIDE continues to be recognised as the governing body for the sport, except for the World Championship. FIDE continues to hold “World Championship” tournaments, but is having increasing difficulty in doing so, because the dimished prestige of the ‘official’ title makes it hard to generate prize money and the like.

In practice, the ‘World Championship’ has reverted to being the personal property of the holder. Gary Kasparov treated it as such, refusing or accepting challenges on his own (financial) whim, until he was defeated in 2000 by Vladimir Kramnik. Kramnik, in turn, accepted a challenge in 2004 by Peter Leko, and only with difficulty held on; the match was agreed on and conducted privately, with sponsorship by a Swiss tobacco company.

Efforts to ‘re-unify’ the ‘World Championship’ have been intense, but have come to naught. Kramnik is generally recognised as the World Champion, even though he is by no other measure the best player in the world. However, the title has such prestige and aura in the international chess community that his claim is generally recongised, as long as he is willing to defend it. Such efforts to ‘re-unify’ the title under the auspicies of FIDE are bound to fail, at the very least, until FIDE is willing to concede that the title has intangible value, rather like goodwill in an accounting sense, and is willing to compensate the holder accordingly.

What does this long case study say about intellectual property? Well, there is some intellectual property that is really hard to value properly. What is the value of having the control over who challenges you for your title and when, and where, and for how much? We do not know yet, as no one has paid for it, but it is surely a considerable sum.