How to avoid legal risks in sports events? (part II)

Source: Beijing Docvit Law Firm  Time: 2018-11-01 17:06:08  Author: The Sports Business Team

Abstract: The risk management of sports events is a systematic and complex project. With the increase of sports events held in China, the risk management of sports events is getting more attention from organizers. What measures should be taken to avoid and deal with the risks in the implementation of sports events has become the primary consideration of organizers and managers. The Sports Business Team of Beijing Docvit Law Firm will analyze the legal risks in sports events and make suggestions on how to deal with them.

. Risk transfer strategy of sports events

Risk transfer is an attempt to transfer the outcome of the event risk along with the right to deal with the risk to a third party. Risk transfer itself does not reduce the probability of event risk, nor does it mitigate the risk of event, but only transfers part of the risk to the other party. The main means of risk transfer are contract transfer and sports insurance.

1. Contract transfer

With the increasing number of sports events held in China, the scale and level of sports events have been continuously improved, and the degree of marketization of sports events has gradually deepened. At the same time, the risk coefficient of events is increasing, and the risk control of events is more difficult. Therefore, organizers must take corresponding risk transfer strategy to prevent and avoid risks. The contract transfer method is to enter into contracts with other event participants (sponsors, suppliers, etc.) through the event organizing committee, and specify the risk responsibility of both parties, so as to transfer risks to the other party and reduce the responsibility of the organizing committee for the loss of the other party and the third parties. 

2.Purchase of sports insurance

After risk control and contract transfer, part of the risk is still likely to occur, and may cause great losses to the events. Buying sports insurance is a method of transferring risks to insurance companies. The organizing committee pays a certain amount of insurance premium to the insurance company, and when risks occur and result in losses to the events, the organizing committee can receive compensation from the insurance company. But the purchase of sports insurance is only a part of the risk management technology, and cannot completely replace the risk management of events. Only by means such as risk control and contract transfer mentioned above can the possibility of risks be reduced, and the cost of purchasing sports insurance can be kept within a reasonable range.

.The consequences and measures of risk management in sports events

1.Consequences of risk management in sports events

Event risk monitoring is the fundamental guarantee for the effective operation of risk management. This is because risk management changes over time. The possibility of risk occurrence or change of impact degree will also affect the choice of specific risk response measures. Therefore, the monitoring of event risk can ensure that the risk is identified and properly controlled in time, and ensure the correctness of risk response strategy.

Event risk monitoring is the whole process of dynamic supervision based on the risk management plan during the preparation of the event. It has three functions: (1) to check the occurrence of event risks and the implementation of the risk measures; (2) to check whether the risk response strategy is effective and whether the monitoring mechanism is running; (3) to constantly identify the new event risks and formulate corresponding effective countermeasures. During the whole preparation process of the tournament, as there are a lot of unpredictable situations, the organizers also have to identify the event preparations at any time and estimate the risks that may arise under the new circumstances. And according to the actual situation, the organizers should modify or supplement the event risk management plans.

2.Measures of risk management in sports events

After the event, organizers should objectively evaluate the effectiveness and insufficiency of the risk management work around the goals set in the pre-competition risk management planning. Consultants, experts, event participants and spectators should be invited to make an objective evaluation and make suggestions for improvement if necessary. The summary report should include: basic situation of the risk management, introduction and experience summary of the risk management, financial cost of the risk management work, etc. The main measures to deal with the risks of sports events are as follows:

(1) Measures to deal with organizational management risks

Firstly, the training of volunteers, referees and other key staff should be strengthened and the quality of training should be ensured. Organizers should deeply analyze the major problems in the past competitions, dig out the factors that lead to risks, and sort out the methods of eliminating the risk factors. Secondly, organizers could select a group of experienced experts to fill the position of daily management or professional risk management in order to provide human and technical support for the smooth operation of sports events. Finally, personnel should be organized to rehearse the relevant links of events, summarize the possible risks in each link, and grasp how to resolve risks.

(2) Measures to deal with personnel risks

Organizers should purchase personal accident insurance for the participants, referees and other staff members, and strengthen medical measures such as emergency treatment. Organizers should strengthen the physical and psychological training of participants before competitions, strictly enforce the system of registration and physical examination, and make objective evaluations of the physical conditions of participants.

(3) Measures to deal with the business risks

Firstly, organizers should step up media coverage of sports events to attract more participants and sponsors. Secondly, organizers should pay attention to the protection of intangible assets and strengthen the development of peripheral products. When developing intangible assets and peripheral products, it is necessary to find sponsors that match the positioning of the events in a targeted manner, which can achieve twice the result with half the effort. Finally, organizers should improve the viewing and exciting degree of competitions, and organize other related activities around the events to stimulate consumption, so as to gain more commercial benefits. 

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