Was just musing on the relationships between sport and politics in general after the Sochi games (and the upcoming Sochi Grand Prix), and I was interested in the historical aspects. I have a few wonderings on the theme if you'll indulge me...
The earliest examples I can think of of sporting events being leveraged by politicians for political ends are the 1934 World Cup in Italy and the 1936 Olympics in Berlin and Garmisch-Partenkirchen. Any other earlier examples?
In Europe, club football (soccer) teams have sometimes been supported semi-officially by dictatorial governments to various extents including "encouraging" the best players to sign, leaning on referees and financial support (eg Franco's Real Madrid, the Stasi's support for Dynamo Berlin and Steaua Bucharest under Ceaucescu). How well-known was this at the time, and what did fans of the team in question think? Did they resent being "leveraged", or was it OK since they were winning?
Auto racing in 1930s Germany enjoyed Hitler's personal blessing. Not only would racing bring glory to the Reich it also acted as a land based proving ground for advanced technologies like lightweight high power engines and aerodynamics especially important in aviation development.
The Mercedes and Auto Union Silberpfeil (silver arrows) racing cars were hugely successful at the hands of drivers like Hermann Lang, Manfred von Brauchitsch (nephew of Field Marshall Walter Von Brauchitish C-in-C of the German Army of the first years of WWII) and Hans Stuck.
Hiter was introduced to Stuck in 1925 by Julius Schreck, the first commander of the SS. This meeting started a cozy relationship which greased this skids for Stuck's pet project--breaking the land speed record. The Mercedes Benz T-80 was the fruit of this effort. Designed by Ferdinand Porsche and powered by a Daimler Benz 603 inverted V12 engine derived from one used in the Bf-109 fighter plane, the engine was sourced through another personal connection: Ernst Udet. Udet was a WWI war hero, a barnstormer, and a personal friend of Hans Stuck. Udet's position as head of the Reichsluftfahrtministerium (Reich Ministry of Aviation) ensured the engine would be available. In any event however, WWII started and the land speed record attempt was abandoned.
In conclusion, huge sums of money and the personal intervention of high ranking Nazis, going all the way up to Hitler personally, played a huge role in advancing auto racing in 1930s Germany.
Sources: Karl Ludvigsen, Mercedes-Bens Quicksilver Century 1995