Sporting Espionage

The sports pages these days are atwitter with concern about the NFL's New England Patriots getting caught videotaping the opposing team's coaches during a game two weeks ago in a attempt to steal the other teams play calls and signals. The sports world is shocked -- shocked! -- that a professional sports team would go to such lengths to achieve a competitive advantage. The NFL struck back, swiftly and decisively. The coach has been personally fined $500,000, and the team loses its first round draft pick next year if it makes the playoffs this year (which it certainly will), or its second and third round picks if it does not make the playoffs.

Although the use of recording devices makes the offense more repugnant by its obvious premeditation, relatively benign forms of "cheating" are a part of competitive sports. Baseball teams try to decipher coaches' signs, basketball players lean on each other in ways that go unseen by referees, golfers use clubs built from exotic materials that are beyond the scope of the game's rules. The essence of sport is competition, and the more fierce the competition, the more motivated the practitioners will be to probe the limits of the rules. It has always been thus, and will always be so. As long as the "cheating" derives from the spirit of competition within the lines, rather than an external influence designed to take the fate of the contest out of the hands of the participants (i.e., gambling), it will not irreparably harm the league in which it occurs.

While the American press frets about one team videotaping another coach who stands in full view of thousands of spectators, and millions more on television, it has largely missed a much more dramatic story affecting one of the most glamorous and wide-followed world sports.

A $500,000 fine? Small potatoes. Try $100,000,000 on for size.

That is the fine imposed against the McLaren Mercedes Formula One team last week. The team also lost all points it had accumulated over the course of the 2007, dropping it from the lead and sure championship to dead last. McLaren did not commit so prosaic an offense as spying on its competitors at a race. Every team in Formula One spies on every other team as a matter of course; the cars are out there for everyone to see. The effects of this conventional spying are obvious. Whenever a leading team comes up with a new aerodynamic device, it is usually pops up on other cars in the field within weeks.

McLaren's sin was considerably more sinister. The essence of Formula One is that each team is required, by the regulations that govern the sport, to design and build its own cars. This sets it apart from nearly every other racing series anywhere in the world, in which teams typically buy cars from a limited number of race car manufacturers. Because the teams must design and build their own cars, the intellectual know-how possessed by key engineers is crucial to the very existence of the series and jealously guarded. Earlier this year, however, Ferrari's designer gave McLaren's designer a 780-page Ferrari technical manual. This is espionage on a grand scale, no different that large companies stealing intellectual property from each other (which is precisely what happened).

When the disclosure was discovered, Ferrari fired its man, and McLaren suspended theirs. The governing body initially cleared McLaren of any wrongdoing, believing that the team had not made use of the information. In a twist that revealed just how deeply a rift between the team's lead driver and his bosses had become (a different story I should have blogged about before, full of intrigue, petulance, revenge and doubletalk), it was eventually revealed that two of the team's three drivers had communicated with their engineers about the technical data contained in the Ferrari documents, and sought to make use of the information during tests and simulations. The World Council of Motorsport convened a hearing last week and imposed the astounding penalty.

The fallout from these developments are manifold. McLaren will likely lose its lead driver, two time defending world champion Fernando Alonso, as he is expected to find another team next year that will treat him like the prima donna he has become. McLaren may still be barred from earning championship points next year if it is determined that the use of the Ferrari information was more widespread that already revealed. Teams throughout Formula One are more concerned about the movement of engineers between teams, heretofore a common occurrence; if one team acquires an engineer from another team, will the old team accuse the new one of stealing trade secrets? And McLaren, second only to Ferrari in success and sheer glamour, has taken an enormous public relations hit from which it may take a very long time to recover, which may manifest itself in fewer sponsorship dollars. In a sport in which the leading teams such as McLaren spend close to a billion dollars for a single season, these considerations carry serious weight.

See what you miss when you don't get up at four in the morning every few weekends to watch a bunch of Euros you've never heard of parade around in bright, noisy race cars?