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 off-season

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=mSzGpC5Xihc&NR=1 http://www.youtube.com/watch?

v=4ltPJvKo7Yk&feature=related And the best for last: http://www.youtube.com/watch?

v=3O85VVZaBHo