BUSINESS & SPORTS

BATCH C2
 SPORTS INDUSTRY
– Team Operating Expenses ($22.9 Billion)
– Attendance Figures ($26.7 Billion)
– Media Coverage (Broad Cast rights $6.9 Billion)
– Employment Figures (4.5 million jobs)
– Global Markets (Advertising $27.4 Billion)
– Sports Goods ($36.1 Billion)
– Sports Information ($ 2.3 Billion)
– Sponsorships ($6.5 Billion)
 Opportunities in the Sports
Industry
• There are 13 major career areas in sport: event
suppliers, event management and marketing,
sports media, sports sponsorship, athlete
services, sports commissions, sports lawyers,
manufacturers and distribution, facilities and
facility suppliers, teams, leagues, college
athletics, and ,sports marketing.
SPORTS MARKETING
 What Is Sports Marketing?

• Sports marketing—using sports to market

products

• Target market—a specific group of people you

want to reach
 How to Find
a Target Market

• Disposable income—income that can be

spent freely

• Demographics—specific customer information

 Spending Habits of Fans
• Tickets

• Clothing or equipment

• Food

• Travel
 Marketing Strategies
• Sports logos on clothing
Fan loyalty
Increased value
Feeling of success
• New sports, new opportunities
Arena football
Television broadcasts
Sponsorships
• Gross impression
Gross impression—the number of times per
advertisement, game, or show that a product
or service is associated with an athlete, team,
or entertainer

• Timing
 Parameters
• Purchasers
• Adoption
• Promotion & Media
• Distribution channel
• Product
• Pricing
• Exchange
• Facilities
• Employees
• Competition
 PURCHASERS- FANS
• Identify with and follow the behavior of the team and
individual players on that team, on and off the field .
• Purchase licensed merchandise for promoting the
team.
• Donate or pay extra for permanent seat-licenses
(PSLs) in order to buy season tickets.
• Travel to see games of that team outside of his home
country.
• Support tax-based initiatives to pay for a new arena or
stadium for the team.
• Are a supporter of the conference or league in which
the team plays.
• Devote significant social time attending, watching and
discussing about the team.
Fan Value Analysis
 Identification vs. Loyalty
• Loyalty is the repeat
purchasing of a good or
service by a consumer. A
loyal customer is sensitive
to differences in brands .
• Identification is when an
individual reacts to events
that occur to the team or
player as if the events
happened to him or her
(Kagan 1958).
How did you feel when
your team won or
lost in the play-offs
recently?
What exactly did you
do when your
favorite player
succeeded or failed?
Why did you do
that?
 Advertising & Promotion Costs
• The manufacturer and/or retailer of goods and
services pay for the development and
placement of brand advertising and
promotions.
• In contrast, sports teams and individuals (e.g.,
players and drivers) receive indirect and direct
financial support to advertise and promote
themselves.
• Fans indirectly promote the team by buying
and wearing or displaying licensed team
merchandise.
• Sponsors directly promote the team and pay
for advertising and media to do so.
 Who Pays?
Advertising & Promotion Costs
• Much of the actual product, particularly in
terms of revenue, is in the broadcast of the
games or event.
• The fact that sports are broadcast, in and of
itself, differentiates sports from other goods
and services.
• Typical goods and services find it difficult to
entertain using its product as the star of a
broadcast…although some try.
 Who Pays?
Media Costs
• Goods and services marketers typically pay for media
to broadcast or print advertising and promotional
information.
• The media pays sports teams for the right to
broadcast or print team and event information.
– For example, ABC/ESPN & Time-Warner are paying
$4.48 billion for NASCAR (8 years).
– Relatedly, the distribution for sports is increasingly
electronic and not limited to static locations.
 Geographic Distribution: Mobile

• Goods and services are sold in specific

geographic outlets like retail outlets.
• Sporting events and teams, on the other hand,
are basically traveling road shows, moving from
location to location, city to city, nationally and
globally.
– The NFL, for example, is broadcast in 205
countries across 24 time zones for upwards of
4500 hours of weekly programming.
 Truly Global Products
• From an international marketing perspective,
sports such as soccer, basketball, baseball,
tennis, golf and motorsports are global
products.
• Compared to most sports, frequently cited
global products such as Coke and McDonald’s
are not actually standardized global products.
• The content or product of the NFL, Formula1
Racing, Olympics Downhill Racing, or World
Cup Soccer remains the same throughout the
world.
 Two-part pricing
• Customers typically pay one price for a given
product or service.
• Professional sports and major college sports
fans frequently pay a two-part tariff (or price).
• Another aspect of two-part pricing in sports is
the event itself. Fans pay for a ticket to enter
the event (initial payment) and then purchase
other products (food, drink, souvenirs) after
entering.
 Competition:
Cooperation & Monopoly Power
• Branded goods and services have traditionally
not cooperated in their marketing efforts.
• Professional sports leagues have unique anti-
trust exemption & monopoly powers
 Exchange
• Customers pay an economic price for the goods
or services they purchase… while fans make a
social investment in the transaction.

• The sports fan pays a price for the right to

enjoy an emotional experience with others.

• The fan goes to the game to be with others to

share the experience in this social exchange.
 FACILITIES-TAX PAYERS
• Although the subject of much public policy
debate, sports team owners frequently do not
pay for their own stadiums or arenas.
• Even when owners invest private dollars into
the facility it is not necessarily because public
money is unavailable, but is often due to
revenue control issues that will favor the team
owners if they own the facility
 #10

Contractual Power

How can star players command such high

salaries? Why are teams & sponsors willing
to pay? How can they be worth what they
earn?
1. Tiger Woods: $98m
2. Michael Schumacher: $96m
3. Peyton Manning: $67m
4. Michael Jordan: $56m
5. Shaquille O’Neal: $41m
23
 #10

Contractual Power
• Employees (viz., players) of sports teams are
more likely to possess contractual power over
employers.
• Contract concessions, renegotiations and
arbitrations generally favor players.
• The scarcity of superstar talent has shifted the
power to players over owners.
• Union membership in professional sports leagues
have grown relatively strong due to the leverage
held by the players. Consequently, work
stoppages in major sports leagues have become
nearly commonplace in the past decade. 24
 SPORTS MARKETING FIRMS
• DORNA JAPAN
• DELIGHT CORPORATION
• GLOBAL SPORTS MANAGEMENT
• ASDEPORTE
• GMR MARKETING
• IMG
• LATIN SPORTS
 REFERENCE
www.millsport.com
www.imgworld.com
NASCAR- www.nascar.com
THANK YOU