Sports Marketing: A Strategic Perspective

Third Edition

Matthew D. Shank

CHAPTER 1EMERGENCE OF SPORTS

MARKETING

Understanding the Sports Industry

• What is sport?• Sport - Source of diversion or physical

activity engaged in for pleasure• Sports as Entertainment - Reebok

president Robert Meers, “We’ve recognized for several years that sport is part of entertainment. The market now is really sports, fashion and music. We can’t expect to ignore reality and survive.”

Growth of the Sports Industry• 11th largest of all U.S. industry groups

• Nation’s output for sports goods and services estimated at $213-350 billion annually

• How do we measure growth in the sports industry?

• Growth measured in…..– Attendance Figures– Media Coverage– Employment Figures (4.5 million jobs)– Global Markets– Sports Goods– Sports Information

Growth of the Sports Industry• The sports industry generates estimates of 213 to 350 billion dollars

per year in revenues. As ESPN founder Bill Rasmussen points out, “The games are better, and well the athletes are just amazing and it all happens 24 hours a day. America’s sports fans are insatiable.”

• Attendance is increasing:– The NFL experienced a record number of fans in the 2003 season

(regular-season total paid attendance of 16,913,584 and the average of 66,328 per game were both all-time records)

– The NBA 2003-2004 season also produced a record increase– MLB down 0.4%– NHL continues to decline slighty in attendance (16,591 to 16,533)

and popularity– NASCAR continues to increase

• Sports Sponsorship Spending Exceeds $9 Billion Mark• New Leagues (AF2, NWFL, NLL, WHA)

Growth of Sports Industry• Sporting Good Industry

– Sports Equipment (17.5 billion)• Exercise equipment• Golf• Guns and Hunting

– Recreational Vehicle and Water Scooters (17.9)– Sports Apparel (22.3)– Footwear (9.3)

• Collectibles and Memorabilia– 1.2 billion at height in 1991 and now stable at 500 million

• Sports Information– 3.2 circulation of SI– 34% use Internet for sports Info– ESPN.com reaches 15 million unique users

Growth of Sports Industry

• Media Coverage is Increasing– 200 million people watched NBC coverage of the Summer Olympic

Games and 3.7 billion people watched worldwide– ESPN, the original sports-only network launched in 1979, reaches

some 76 million homes with its 4900 hours of sports programming

and, remarkably, ESPN2 reaches 65 million viewers.– $2.3 billion to secure the broadcast and cable rights for the Olympic

Games in 2004, 2006, and 2008 and additional $2.2 billion for 2010 and 2012

– Overall for the week, NBC averaged 26.7 million viewers in primetime, more than three times the 7.2 million for second-place CBS. ABC was third with 4.5 million, followed by Fox with 4.4 million.

– $2.64 billion paid by NBC and Turner Sports to televise NBA contests, $18 billion paid by the networks for the NFL, $2.5 billion for post season MLB

– New sports networks, such as the College Sports Television, Tennis Channel, Blackbelt TV, and the Women’s Sports Network

– Internet, satellite stations, and pay-per-view cable television are growing in popularity

Opportunities in the Sports Industry: Academics

• Over 200 Academic Programs in Sports Administration

• NKU – 120 Majors and growing

Opportunities in the Sports Industry: Careers

• Upwards of 4.5 million sports-related jobs in sports administration

• 13 career areas in sport. These include: 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 finance

• Marketing & Public RelationsProfessional Sports Intercollegiate Sports

Youth Sports Olympic Sports OrganizationsRegional and National Sport Commissions

Amateur Sports Corporate Sports Marketing Sports Marketing Firms Licensing Firms

What is Sports Marketing?

• Sports Marketing - The specific application of marketing principles and processes to sports products and to the marketing of non-sports products through association with sport.

Simplified Model of the Consumer-Supplier Relationship in the Sports

Industry

Consumers

Spectators

Participants

Corporations

Products

Events

Sporting Goods

Personal Training

Sports Information

Producers/Intermediaries

Sports Labor

Sanctioning Bodies

Sponsors

Media

Agents

Equipment Manufacturers

Classification of Sports Spectators

Individuals

Corporate

In-Person Mediated

Classification of Sports Participants

• Unorganized Sports Participants• Organized Sports Participants Amateur

Youth Recreational Instructional

Youth Recreational EliteSchoolsIntercollegiate

Professional Minor/SecondaryMajor

The Sports Product

• Sports Product - A good, service, or any combination of the two that is designed to provide benefits to a sports spectator, participant, or sponsor.

Types of Sports Products• Sporting Events

– Athletes– Arenas/Stadia

• Sporting Goods– $60.2 billion industry comprised of four segments (equipment,

transportation, apparel, and footwear)– Collectibles and Memorabilia

• Sports Training– Fitness and Health Services– Sports Camps and Instruction

• Sports Information– Newspapers, Internet, Magazines, Radio, etc.

The Sports Product Map

The Sports Marketing Exchange ProcessSomething of

Value

Something of Value

Exchange Players

Exchange Players