Transcript The Big Business of Sports

The Big Business of
Sports
The Business of Sport
Entertainment

Amateur athletes: derive no financial or material
rewards from the sporting efforts


Compete in the Olympics
Professional athletes: make a living playing
sports (contracts)

Other forms of profit: endorsement deals and the
sale of merchandise and tickets
Money money money
money....money


In the 1960s and 1970s many elite professional
athletes in sports such as hockey, baseball, and
basketball typically were paid so little that many
needed to work at another job during the offseason
Now average salaries (in U.S. Dollars)

NBA: $4.0 million

MLB: $2.3 million

NHL: $1.6 million

NFL: $ 1.2 million
Winning is Everything

In the business sense, winning is everything

Reinforces fan loyalty

Greater attendance at games

More sales of products featuring the team's logo

Can charge higher fees for widely watched
television broadcasts of games

Steady supply of young athletes who want to play
for the team

Increased revenue can lead to teams having more
money available to sign high profile players
The Role of the Media



Television, radio, internet, newspapers,
magazines, and all forms of advertising
In the “old days” if you weren't at the game you
had to wait until the newspaper came out the
next day with the results
In the 1930s radio sports broadcasts began
allowing live coverage of games

Increased the traditional audience size
The Influence of
Television




Similar to radio, provided play-by-play
commentary
Even wider audience – people could watch
games for free from their home
Viewers were subjected to interspersed
advertisements during commercials
Advertisers of every kind of product have lined
up to sell their wares to spectators of both live
and televised sports
Superbowl Advertisements


30 seconds of advertising time during the 2010
telecast is expected to cost US $3 million
http://www.youtube.com/watch?v=CFsKeDAJPak&NR
=1

http://www.youtube.com/watch?v=S382RoO6s8A

http://www.youtube.com/watch?v=79tMMFja-Fw
Endorsements

Athletes often promote products that are
unrelated to their field of work




i.e. Tiger Woods for Buick
“lifestyle marketing”
Companies assume that sports fans will transfer
the admiration they have for these athletes into
a desire to purchase things their heros endorse
http://www.youtube.com/watch?v=IpfzaqIuR34
The Nike Story




The company started in 1964 - “Nike” is the
name of the goddess of victory in Greek
Mythology
Started with running shoes
Now manufacture shoes and apparel for every
sport imaginable
Endorse high profile athletes like Tiger Woods,
Kobe Bryant, Rafael Nadal, Michael Jordan
Just Do It....



These athletes endorse the company's products
in all forms of media – commercials, print ads in
magazines, giant billboards, etc.
Paid Tiger Woods US $40 million
Spent $100 million on advertising at the 1996
Olympics in Atlanta, even though it was not an
official sponsor
However...




Nike has come under scrutiny for its labour
practices
Part of their success is due to the fact that the
manufacturing of their products takes place in
low-wage Third World countries (saves them $)
Sweatshop – unsafe working condition and low
wages
Athletes like Woods and Jordan are reluctant to
comment on their labour practices
Nike Commercials





http://www.youtube.com/watch?v=rHHMaiNyztk
http://www.youtube.com/watch?v=mSzGpC5Xih
c&NR=1
http://www.youtube.com/watch?v=4ltPJvKo7Yk
&feature=related
And the best for last:
http://www.youtube.com/watch?v=3O85VVZaB
Ho