Sports Marketing

5th edition

Now in a fully revised and updated 5th edition, Sports Marketing: A Strategic Perspective
is the most authoritative, comprehensive and engaging introduction to sports marketing
currently available. It is the only introductory textbook to adopt a strategic approach,
explaining clearly how every element of the marketing process should be designed and
managed, from goal-setting and planning to implementation and control.
Covering all the key topics in the sports marketing curriculum, including consumer
behavior, market research, promotions, products, pricing, sponsorship, business ethics,
technology and e-marketing, the book introduces core theory and concepts, explains best
practice, and surveys the rapidly-changing, international sports business environment.
Every chapter contains extensive real-world case studies and biographies of key industry
figures and challenging review exercises which encourage the reader to reflect critically
on their own knowledge and professional practice. The book’s companion website offers
additional resources for instructors and students, including an instructors’ guide, test bank,
presentation slides and useful weblinks.
Sports Marketing: A Strategic Perspective is an essential foundation for any sports
marketing or sports business course, and an invaluable reference for any sports marketing
practitioner looking to improve their professional practice.
Ancillary materials are available online at www.routledge.com/cw/shank.
Matthew D. Shank is a Professor of Marketing and took office in July 2011 as the
President of Marymount University in Arlington, Virginia, USA. Prior to Marymount, he
served as Dean of the University of Dayton School of Business Administration. He came
to UD from the College of Business at Northern Kentucky University, where he spent
seventeen years as a faculty member and chair of the Department of Management and
Marketing. Prior to his tenure at NKU, Shank spent a year as a visiting professor at the
University of Mississippi and two years as a marketing research manager with Maritz
Inc. In 2003–04, he was an American Council for Education (ACE) Fellow at Vanderbilt
University. Shank’s teaching and research interests include consumer behavior, marketing
research and sports marketing. He recently served as editor of Sport Marketing Quarterly
and has published in numerous journals and conference proceedings.
Mark R. Lyberger is an Associate Professor at Kent State University in the United States,
where he serves as the undergraduate coordinator of Sport Administration and graduate
coordinator of Sport & Recreation Management. His research interests have focused
on consumer consumption behavior, sponsorship, marketing, marketing analytics, and
leadership. He currently serves as the Editor of The Journal of Sport, has published and
reviewed in numerous journals, and presented his works both nationally and internationally.
In addition, Lyberger resides on the board of a number of non-profit and for profit
organizations and currently serves as the Director for the Center of Sport, Recreation,
& Tourism Development. He has worked collaboratively with a variety of community,
educational and business organizations to enhance market and leadership development
and to conduct market, market analytics, consumer behavior and facility usage/impact
feasibility studies.
Sports Marketing
A Strategic Perspective
5th edition

Matthew D. Shank and Mark R. Lyberger

First published 2015
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

and by Routledge
711 Third Avenue, New York, NY 10017

Routledge is an imprint of the Taylor & Francis Group, an

informa business

© 2015 Matthew D. Shank and Mark R. Lyberger

The right of Matthew D. Shank and Mark R. Lyberger to be

identified as the authors of this work has been asserted by
them in accordance with sections 77 and 78 of the Copyright,
Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted

or reproduced or utilised in any form or by any electronic,
mechanical, or other means, now known or hereafter
invented, including photocopying and recording, or in any
information storage or retrieval system, without permission in
writing from the publishers.

Trademark notice: Product or corporate names may be

trademarks or registered trademarks, and are used only for
identification and explanation without intent to infringe.

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British
Library

Library of Congress Cataloging-in-Publication Data

Shank, Matthew D.
Sports marketing : a strategic perspective / Matthew D.
Shank, Mark R. Lyberger. -- Fifth edition. pages cm
Includes bibliographical references and index.

1. Sports--United States--Marketing. 2. Sports--Economic

aspects--United States. I. Lyberger, Mark R. II. Title.
GV716.S42 2014
796.068’8--dc23
2014020521

ISBN: 978-1-138-01595-1 (hbk)

ISBN: 978-1-138-01596-8 (pbk)
ISBN: 978-1-315-79408-2 (ebk)

Typeset in Univers LT by
Servis Filmsetting Ltd, Stockport, Cheshire

Additional materials are available on the companion website at https://routledgetextbooks.com/textbooks/9781138015968/

Shank: To Robert Ilseman and Donald Welling, for their dedication to youth sports
Lyberger: To all those who have supported my sporting endeavors, foremost, my
father, wife, son and daughter
 Brief Contents
Preface xix
Acronyms xxvi
List of figures and tables xxviii

PART I: CONTINGENCY FRAMEWORK FOR STRATEGIC SPORTS

MARKETING
Chapter 1 Emergence of sports marketing 3
Chapter 2 Contingency framework for strategic sports
marketing 46

PART II: PLANNING FOR MARKET SELECTION DECISIONS

Chapter 3 Research tools for understanding sports consumers 93
Chapter 4 Understanding participants as consumers 134
Chapter 5 Understanding spectators as consumers 175
Chapter 6 Segmentation, targeting, and positioning 209

PART III: PLANNING THE SPORTS MARKETING MIX

Chapter 7 Sports product concepts 261
Chapter 8 Managing sports products 302
Chapter 9 Promotion concepts 343
Chapter 10 Promotion mix elements 375
Chapter 11 Sponsorship programs 432
Chapter 12 Pricing concepts and strategies 497

PART IV: IMPLEMENTING AND CONTROLLING THE STRATEGIC SPORTS

MARKETING PROCESS
Chapter 13 Implementing and controlling the strategic sports
marketing process 541

Appendix A: Career opportunities in sports marketing 591

Appendix B: Some sports marketing sites of interest on the Internet 603
Glossary 607
Illustration credits 625
Index 650

vii
 Contents
Preface xix
Acronyms xxvi
List of figures and tables xxviii

PART I: CONTINGENCY FRAMEWORK FOR STRATEGIC SPORTS

MARKETING

CHAPTER 1 Emergence of sports marketing 3

What is sports marketing? 5
Understanding the sports industry 6
Historical development of sports marketing in (North) America 6
Sport as entertainment 10
A marketing orientation 11
Growth of the sports industry 12
The structure of the sports industry 17
The consumers of sport 18
The sports product 22
Career spotlight: Chris Ferris 23
Different types of sports products 24
The multidimensional nature of the sports product 31
Producers and intermediaries 32
Sports marketing hall of fame: Mark McCormack 35
Basic marketing principles and processes applied to sport 36
The sports marketing mix 36
The exchange process 37
The strategic sports marketing process 39
Girls get their game on – with great gear: sports teams
cater to women fans with new lines of feminine fashion 39

Summary 40
Key terms 42
Review questions 42
Exercises 42
Internet exercises 43
viii Endnotes 43
 Contents
CHAPTER 2 Contingency framework for strategic sports marketing 46
NBA Releases 2011–2012 Regular Season Schedule 47
Contingency framework for strategic sports marketing 50
Contingency approaches 50
Internal and external contingencies 53
Internal contingencies 53
Vision and mission 54
Organizational objectives and marketing goals 55
Organizational strategies 57
Organizational culture 62
External contingencies 63
Competition 63
Technology 64
On the industry’s radar 66
Cultural and social trends 72
Physical environment 74
Political, legal, and regulatory environment 75
Big-time college sports is an out-of control monster 77
Demographics 78
Ethnic studies: MLB forms diversity comittee 80
The economy 81
Monitoring the external contingencies 83
Assessing the internal and external contingencies: SWOT analysis 84

Summary 86
Key terms 87
Review questions 88
Exercises 88
Internet exercises 89
Endnotes 89

PART II: PLANNING FOR MARKET SELECTION DECISIONS

CHAPTER 3 Research tools for understanding sports consumers 93

Marketing research in action: the Gary Southshore RailCats 94
Hitting a home run with the digital generation 96
The marketing research process 99
Defining the problem or opportunity 99
Case study: a sponsorship measurement solution 101
Choosing the research design type 105
Identifying data collection techniques 107
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 Contents
Secondary data 108
Primary data 112
Drivers should take a spin online, study shows – sports
business journal 116
Designing data collection instruments 118
Designing the sample 122
Data analysis 124
Preparing a final report 126

Case study: ESPN; survey shows split on racial opportunity 126

Summary 130
Key terms 132
Review questions 132
Exercises 132
Internet exercises 133
Endnotes 133

CHAPTER 4 Understanding participants as consumers 134

Model of participant consumption behavior 137
Participant decision-making process 137
Types of consumer decisions 143
Psychological or internal factors 144
Personality 144
Motivation 146
Perception 151
Learning 153
Attitudes 155
Sociological or external factors 156
Culture 156
Spotlight on international sports marketing: Sport England 157
Social class 160
Reference groups 160
Sports marketing hall of fame: The Babe: Babe Didrikson
Zaharias 162
Family 162
High school sports participation tops 7.6 million, sets record 164
Situational Factors 166
P90X vs. insanity: which is the best for you? 168

Summary 170

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 Contents
Key terms 171
Review questions 172
Exercises 172
Internet exercises 173
Endnotes 173

CHAPTER 5 Understanding spectators as consumers 175

Factors influencing attendance 180
Fan motivation factors 181
Baseball suffers drop in attendance 184
Sports marketing hall of fame: David Stern 187
Sports wagering 188
Game attractiveness 189
Economic factors 189
Competitive factors 189
Demographic factors 190
Stadium factors 192
Value of sport to the community 197
Career spotlight: Marc Reeves 198
Sports involvement 199
Spotlight on international sports marketing: a comparative
analysis of spectator involvement: United States vs.
United Kingdom 200
Fan identification 201
Summary 203
Key terms 204
Review questions 205
Exercises 205
Internet exercises 206
Endnotes 206

CHAPTER 6 Segmentation, targeting, and positioning 209

Segmentation 210
Bases for segmentation 210
Technical report – Sport England Market Segmentation 211
Generation M2: media in the lives of 8- to 18-year-olds 218
espnW: a brand for female athletes 222
The IWFL and the history of women’s tackle football 225
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 Contents
NFL may be hitting stride with female fans 226
Move over Fútbol. The NFL scores big with Latinos 228
Spotlight on international sports marketing: NBA
continues to grow internationally 236
Choosing more than one segment 240
Target markets 241
Evaluation of target markets 242
Positioning 245
Repositioning 248
Baseball continues to assist storm relief efforts 249
Summary 253
Key terms 253
Review questions 254
Exercises 254
Internet exercises 255
Endnotes 256

PART III: PLANNING THE SPORTS MARKETING MIX

CHAPTER 7 Sports product concepts 261

Defining sports products 262
Goods and services as sports products 263
Career Spotlight: Rodger Collins, President Packaged
Beverages, Dr. Pepper Snapple Group 264
Classifying sports products 268
Product characteristics 270
Spotlight on international sports marketing: the 5 worst
athlete-endorsed products of all time 271
Branding 272
Spotlight on sports marketing ethics: NCAA Native
American mascot controversy 274
Miami Marlins attendance reverts to old Sun Life Stadium
levels 278
Sports Marketing Hall of Fame: Phil Knight 282
Licensing 284
Quality 289
Product design 293

Summary 296
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 Contents
Key terms 298
Review questions 299
Exercises 299
Internet exercises 299
Endnotes 299

CHAPTER 8 Managing sports products 302

Nike announces new Nike+ FuelBand – measuring movement to
make life a sport 303
New sports products 304
Sports Marketing Hall of Fame: Bill Rasmussen 305
Types of new products 305
Spotlight on Sports Marketing Ethics: college sports have
become too commercialized 308
The new product development process 311
Idea generation 312
Idea screening 312
Analysis of the sports product concept or potential 312
Developing the sports product 313
Test marketing 315
Commercialization 315
New product success factors 315
Product life cycle 317
Introduction 319
Growth 319
Fantasy sports becoming big business as popularity
continues to rise 320
Maturity 327
John McEnroe's bold move to revive US tennis 327
Decline 329
Other life cycle considerations 329
Spotlight on International Sports Marketing: X Games
global expansion continues with TV deals in new host markets,
syndication deals in multiple other countries 333
Diffusion of innovations 336
Types of adopters 337
Summary 338
Key terms 340
Review questions 340
Exercises 340
Internet exercises 341
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 Contents
Endnotes 341

CHAPTER 9 Promotion concepts 343

Communications process 345
Sports Marketing Hall of Fame: Bill Veeck 345
Source 346
Encoding 348
Spotlight on Sports Marketing Ethics: endorsements
remain buyers’ market 349
Message 352
Medium 353
Decoding 354
Spotlight on Sports Marketing Ethics: how impact of
“Tiger Recession” changed athlete marketability 355
Receiver 357
Feedback 357
Noise 358
Promotion planning 359
Target market considerations 359
Push strategy 359
Pull strategy 359
Promotional objectives 360
The hierarchy of effects 360
Establishing promotional budgets 362
Choosing an integrated promotional mix 368
Summary 369
Key terms 371
Review questions 371
Exercises 371
Internet exercises 372
Endnotes 372

CHAPTER 10 Promotion mix elements 375

Advertising 377
Advertising objectives 378
Advertising budgeting 380
Creative decisions 380
Spotlight on Sports Marketing Ethics: Sex sells? Trend
may be changing 383

Spotlight on Sports Marketing Ethics: Lance Armstrong’s

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fall from athletic grace doesn’t diminish his greatest
triumph 390
Armstrong faces $200 million salary loss with reputation hit 393
Media strategy 396
Big 4 jersey rights value put at $370M 401
Media scheduling 408
Personal selling 409
Career Spotlight: Kevin Rochlitz, Vice President, National
Partnerships and Sales, Baltimore Ravens 410
The strategic selling process 411
Sales promotions 415
Public relations 421
NBA cares evolving after 5 years of service 424
Summary 427
Key terms 428
Review questions 429
Exercises 429
Internet exercises 429
Endnotes 429

CHAPTER 11 Sponsorship programs 432

Scheuring Speed Sports announces partnership with Ford Motor
Company 433
Growth of sponsorship 433
Cleveland Cavaliers 2013–2014 promotional schedule 437
Adelaide United energised by new sponsorship 440
Designing a sports sponsorship program 441
Understanding why sponsorship continues to grow 442
Sponsorship objectives 448
Awareness 448
Competition 448
London 2012 sponsors and ambush – and the lessons for
Rio 2016 450
Beats by Dre gives headphones to British athletes,
angering IOC 453
Spotlight on Sports Marketing Ethics: BRAZIL: Congress
adopts legislation to curb ambush marketing during 2016
summer Olympics 454

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 Contents
Behind the scenes at the 2013 Waste Management Open 461
Lance Armstrong Nike contract terminated 463
Sponsorship budgeting 465
Choosing the sponsorship opportunity 466
Fenton High School looking at boosting corporate
sponsorship of athletics 479
Hot Seahawks add Boeing, Starbucks deals 481
Spotlight on Sports Marketing Ethics – Nike won't drop Penn
State's Paterno, so we should drop Nike 487
Sponsorship implementation and evaluation 488
Career Spotlight: Lesa Ukman and IEG 489
Summary 490
Key terms 492
Review questions 492
Exercises 492
Internet exercises 493
Endnotes 493

CHAPTER 12 Pricing concepts and strategies 497

What is price? 498
Deal to end lockout reached 500
The determinants of pricing 503
Sports Marketing Hall of Fame: Pete Rozelle 504
Internal factors 504
Spotlight on Sports Marketing Ethics: astronomical athlete
salaries: are they worth it? 509
External factors 516
Consumer demand 516
Estimating demand 517
Economy 522
Competition 523
Legal issues 523
The NFL vs. ticket scalpers: Super Bowl edition 524
Technology 524
New Era Tickets uses iovation to keep scalpers and
fraudsters out of the arena 525
Price adjustments 528

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 Contents
Orioles raise season-ticket prices slightly, expand variable-
pricing system 529
Price increases and reductions 530
Price discounts 532
Summary 533
Key terms 534
Review questions 535
Exercises 535
Internet exercises 536
Endnotes 536

PART IV: IMPLEMENTING AND CONTROLLING THE STRATEGIC

SPORTS MARKETING PROCESS

CHAPTER 13 Implementing and controlling the strategic sports

marketing process 541
Dew action sports tour 542
Implementation 543
Busy offseason ahead for Arena Football League: fan take 544
Communication 546
Sports Marketing Hall of Fame: Gary Davidson 550
Staffing and skills 551
Coordination 553
Career Spotlight: Megan Dotson, Director of Marketing,
Greenville Road Warriors (hockey) 554
Rewards 556
Information 558
Creativity 559
The 100 worst things in sports 560
Budgeting 573
Control 574
Planning assumptions control 575
Process control 576
How athletes are fighting for endorsement dollars 577
Contingency control 584
Summary 586
Key terms 587
Review questions 587

xvii
 Contents
Exercises 588
Internet exercises 588
Endnotes 588
Appendix A: Career opportunities in sports marketing 591
Job opportunities in sports marketing 592
Cover letters and resumés 596
Interviewing 598
Where to look for additional information 601
Appendix B: Some sports marketing sites of interest on the Internet 603
Glossary 607
Illustration credits 625
Index 650

xviii
 Preface
Overview
One of the greatest challenges for sports marketers is trying to keep pace with the
ever-changing, fast-paced environment of the sports world. For example, since the
first edition of this text was published in 1999, amazing changes have taken place
and challenges to sports marketers emerge daily. First, costs and valuations have
been rising quickly. For example, Merrill Lynch estimated Qatar will spend over $65
billion to prepare for the 2022 world soccer competition while Brazil’s projected
budget for hosting the World Cup is $13.3 billion and $18 billion for the Olympics, not
counting projected public and private expenditures needed before the competitions.
Furthermore, valuations of sport franchises have skyrocketed, Steve Ballmer’s recent
$2 billion offer for the Los Angeles Clippers, a bid nearly four times that of the last
record sale, underscores the logical tendency and nonchalance in which sports brands
are valued.
Athletes’ salaries continue to escalate; for example, even though the Philadelphia
Phillies have accumulated player salaries that encompass three of the top ten highest
paid players in MLB, $25 million for Ryan Howard and Cliff Lee and $23.5 million
for Cole Hamels, they rank third behind the N.Y. Yankees and L.A. Dodgers in total
team expenditures. For the first time since 1998, the Yankees no longer can claim
baseball’s spending crown, that honor goes to the Dodgers in a runaway – with an
estimated payroll of more than $235 million while the Yankees estimated payroll was
just shy of $204 million.
To offset these costs leagues and teams alike are procuring lucrative television and
media contracts and continue to expand and amend facilities. For example, the NFL
recently secured extension deals with ESPN, CBS and FOX. ESPN recently agreed to
expend $1.9 billion per year for the rights to broadcast Monday Night Football. CBS,
which has aired NFL broadcast since 1956, recently agreed to pay $1 billion per year
for the rights to broadcast the AFC Conference games while Fox Sports agreed to a
$1.1 billion per year expenditure for NFC Conference broadcast starting in 2014. These
expenditures top the SkySport’s agreement, which amounted to €760 million ($1.22
billion) per year for broadcasting the Premier League.
To remain attuned to market demand sport teams are constantly on the lookout for
ways to improve the sporting landscape, often through the use of public subsidies.
Stadium new builds and/or retrofits continue to occur at a rapid pace with escalated
costs. The Sochi Winter Olympics recently became the most expensive Olympics in
history, with an estimated expenditure of $51 billion. The newest US pro stadiums
have cost estimates of $975 million (Minnesota Viking Stadium), $1.15 billion
(Cowboys Stadium) and $1.6 billion (Metlife Stadium). Furthermore, on the collegiate
landscape, college sports organizations continue to build bigger, nicer, state of the art

xix
 Preface
facilities to compete in the “competitive” arms race. Industry experts estimate that
more than $17 billion have been spent on stadium upgrades in the last decade.
Each ticketholder will also pay more to attend the games in these plush new facilities.
Ticket prices continue to increase and to drive the common fan out of the sport arena.
For instance, the average seat price at an NBA game more than doubled from $22.52
in 1991 to $51 in 2014. But this may not be the largest problem in sports, as scandals
emerge daily. For example, Donald Sterling’s racial transgressions, the Penn State
child sexual abuse scandal, Tiger Woods and his marital woes, Rick Pitino’s extortion
trial, the Ohio State football team tattoos-for-memorabilia, and the list goes on and on.
The one constant in this sea of change is the incredible appetite of consumers for
sports. We get sports information on the Webwatch, sports in high definition on
network and cable TV, read about sports in the newspaper and sports magazines,
talk to friends about sports, purchase sports merchandise, participate in sports (both
fantasy and real), and attend sporting events in record numbers. The sports industry
has experienced tremendous growth and is estimated by AT Kearney to be a $480-
$620 billion industry worldwide. Moreover, the sports industry is flourishing around
the globe. The expansion of the sports industry has triggered a number of important
outcomes: more sports-related jobs being created, and more students interested in
careers in the sports industry. As student interest grows, demand for programs in
sports administration and classes in sports marketing have also heightened.
In this book, we will discover the complex and diverse nature of sports marketing.
Moreover, a framework will be presented to help explain and organize the strategic
sports marketing process. Even if you are not a sports enthusiast, you should become
excited about the unique application of marketing principles and processes that pertain
to the sports industry.

Why this book?

Programs and courses in sports marketing have emerged at many universities across
the country. Surprisingly, few sports marketing textbooks exist and not one is written
from a strategic marketing perspective. In the first edition of this book, Dr. Shank
sought to fill this void. The second edition represented an effort to improve the first
edition and capitalize on its strengths. The third edition attempted to continuously
improve the content and focus on the current relevant issues in sports marketing. The
fourth edition provided more focus on the important issues in sports marketing theory
and practice. Our goals for the fifth edition are to provide:
X A framework or conceptual model of the strategic marketing process that can be
applied to the sports industry. The contingency framework is presented as a tool
for organizing the many elements that influence the strategic sports marketing
process and recognizes the unpredictable nature of the sports industry. In addition,
the contingency framework allows us to explore complex relationships between
the elements of sports marketing.
X A more concise and focused approach describing the internet and social media and
their relationship to understanding strategic sports marketing. Advances in internet
and social networking platforms, though constantly changing and often considered
evolutionary, continue to have an impact on organizational strategy. They have
had a dramatic impact on the delivery and use of market strategies. The continued
emergence of social media as a viable platform has generated new and innovative
ways to create dialog and receive feedback, as well as further enhance methods of
xx engaging the consumer.
 Preface
X An appreciation for the growing emphasis on the globalization of sport. As
such, international sport topics are integrated throughout the text, and are also
highlighted in chapters in the “Spotlight on International Sports Marketing.”
X An examination of current research in the area of sports marketing. The study of
sports marketing is still in its relative infancy and academic research of interest
to sports marketers (e.g., sports sponsorships, using athletes as endorsers, and
segmenting the sports market) has grown exponentially since the first edition of
this text. It is important that students learn how academic research is applied to
the “real world” of sports marketing.
X An awareness of the many job opportunities available in the sports industry. The
one common denominator for all sports business students is the desire to secure
their first job after graduation and start their careers. In this edition, we focus on
several successful sports marketers who provide perspective about how and why
they got started in the industry. Also, this edition retains an appendix devoted to
careers in sports marketing.
X A balanced treatment of all aspects of sports marketing at all levels. This book
attempts to capture the diverse and rich nature of sports marketing by covering the
marketing of athletes, teams, leagues, and special events. Although it is tempting
to discuss only “major league” sports because of their intense media coverage,
the book explores different sports (e.g., cricket and women’s football) and various
levels of competition (e.g., collegiate and recreational). Moreover, the book
discusses the activities involved in marketing to participants of sports – another
area of interest to sports marketers.
X An introduction of the concepts and theories unique to sports marketing and
a review of the basic principles of marketing in the context of sports. Even
though many of the terms and core concepts are repetitive, they often take on
different meanings in the context of sports marketing. Consider the term sports
involvement. Although you probably recognize the term product involvement
from your principles of marketing and/or consumer behavior class, what is sports
involvement? Is involvement with sports based on participation or watching
sports? Is involvement with sports deeper and more enduring than it is for other
products that we consume? How can sports marketers apply sports involvement
to develop a strategic marketing plan? As you can see, the core marketing concept
of involvement in the context of sports presents a whole new set of interesting
questions and a more comprehensive understanding of sports marketing.
X Comprehensive coverage of the functions of sports marketing. While some texts
focus on specialized activities in sports marketing, such as sports media, this
book seeks to cover all the relevant issues in designing an integrated marketing
strategy. Extensive treatment is given to understanding consumers as spectators
and participants. In addition to planning the sports marketing mix (product, price,
promotion, and place), we will examine the execution and evaluation of the
planning process.

Ground rules
This text is organized into four distinct but interrelated parts. Each part represents an
important component in the strategic sports marketing process.

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 Preface

Part I: Contingency Framework for Strategic Sports Marketing

In Chapter 1, we introduce sports marketing and illustrate the breadth of the field.
In addition, we will take a look at the unique nature of sports products and the
sports marketing mix. Chapter 2 presents the contingency framework for strategic
sports marketing. This chapter also highlights the impact of the internal and external
contingencies on the strategic sports marketing process. Internal contingencies such
as the sports organization’s mission and organizational culture are considered, as are
external contingencies like competition, the economy, and technology.

Part II: Planning for Market Selection Decisions

Chapter 3 presents an overview of the tools used to understand sports consumers
– both participants and spectators. Each step in the marketing research process is
discussed, illustrating how information can be gathered to aid in strategic decision-
making. In Chapters 4 and 5, respectively, participants and consumers of sport are
studied. Chapter 4 examines the psychological and sociological factors that influence
our participation in sport, while Chapter 5 looks at spectator issues such as fan
motivation. In addition, we will discuss the relationship between the participant
and spectator markets. Chapter 6 explores the market selection decisions of
segmentation, targeting, and positioning in the context of sport.

Part III: Planning the Sports Marketing Mix

Chapters 7 through 12 explain the sports marketing mix, the core of the strategic
marketing process. Chapters 7 and 8 cover sports product issues such as
brand loyalty, licensing, and the new product development process. Chapter
9 introduces the basic promotion concepts, and Chapter 10 gives a detailed
description of the promotion mix elements of advertising, public relations, personal
selling, and sales promotions. Chapter 11, the final chapter on promotion, is devoted
to designing a sports sponsorship program. Chapter 12 tackles the basic concepts
of pricing.

Part IV: Implementing and Controlling the Strategic Sports

Marketing Process
While the previous sections have focused on the planning efforts of the strategic
marketing process, Part IV focuses on the implementation and control phases of
the strategic marketing process. Chapter 13 begins with a discussion of how sports
organizations implement their marketing plans. In this chapter, we see how factors
such as communication, motivation, and budgeting all play a role in executing the
strategic plan. We also examine how sports marketers monitor and evaluate the
strategic plans after they have been implemented. Specifically, three forms of control
(process, planning assumption, and contingency) are considered.

Pedagogical advantages of sports marketing

To help students learn about sports marketing and make this book more enjoyable
to read, the following features have been retained from previous editions of Sports
Marketing: A Strategic Perspective.

xxii
 Preface
X Text organized and written around the contingency framework for strategic sports
marketing
X Chapters incorporating global issues in sport and how they affect sports marketing
X Sports Marketing Hall of Fame boxes featuring pioneers in the field integrated
throughout the text
X Text incorporating up-to-date research in the field of sports marketing
X Internet exercises at the end of each chapter
X Experiential exercises at the end of each chapter that ask you to apply the basic
sports marketing concepts and perform mini-research projects
X Vignettes throughout the text to illustrate core concepts and make the material
come to life
X Detailed glossary of sports marketing terms
X Use of ads, internet screen captures, and photos to illustrate core concepts of
sports marketing
X Appendix describing careers in sports marketing
X Appendix presenting Internet addresses of interest to sports marketers

Enhancements to the fifth edition

While we have attempted to retain the strengths of the previous editions of Sports
Marketing: A Strategic Perspective, we also hoped to improve the fifth edition
based on the comments of reviewers, faculty who adopted the text, and most
importantly, students who have used the book. This edition includes the following
features:
X Up-to-date examples illustrate the core sports marketing concepts in the text. As
mentioned previously, the sports industry is rapidly changing and nearly 80 percent
of the examples introduced in the previous editions are now obsolete. It was our
goal to find new, relevant examples to illustrate key points in every chapter of the
text. These new examples are meant to keep the book fresh and keep students
engaged.
X New advertisements, web captures and illustrations have been incorporated into
each chapter to highlight key sports marketing concepts and make the material
more relevant for students. These ads and photos are examples of sports
marketing principles that have been put into practice and bring the material in the
text “to life.”
X New spotlights on careers in sports marketing introduce students to successful
sports marketers and their jobs.
X The spotlights on international sports marketing have been revised and updated for
the fifth edition to highlight this key area of growth in the sports industry.
X New screen captures of relevant web sites illustrate key concepts. Because social
media is now playing such a large role in sports marketing, screen captures from
various web sites have been incorporated throughout the text to bring the material
to life for students. In addition, social media/internet exercises appear at the end
of each chapter, and discussions of these items as an emerging tool for sports
marketers appear throughout.
X New exercises have been created that afford instructors the opportunity to further
integrate real life up-to-date information utilizing auxiliary materials such as Sport
Business Journal, Sport Business Daily, Sport Business and Bleacher Report.
X New spotlights on ethical issues are integrated throughout the text. Hopefully, this

xxiii
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will generate lively discussion in the classroom and make students more aware of
the ethical issues that they will confront in the workplace.

Instructional support
Various teaching supplements are available to accompany this textbook. They consist
of an Instructor’s Manual, Test Item File, and PowerPoint presentation. These items
may be found online only at www.routledge.com/cw/shank.

Acknowledgments
The new edition of any textbook is a challenge. In fact, much more of a challenge than
people think. Typically colleagues joke that a new edition just means changing dates
and examples. Nothing could be farther from the truth, and the fifth edition posed
significant professional hurdles and opportunities. On the professional side, the fifth
edition of Sports Marketing: A Strategic Perspective is the most significant revision
of the text since its inception. Most importantly, I have added a co-author, Dr. Mark
Lyberger, who adds a wealth of expertise and brings a fresh new perspective to the
text. We also welcome our new publisher, Routledge. In addition, during the fifth
edition, I moved from my position as Dean of the Business School at the University
of Dayton to President of Marymount University. Obviously, a significant professional
commitment. Before going any further, I have to thank my wife Lynne for her patience
and support. The project could never have been completed without the expertise and
encouragement of many others. Although there are countless people to thank, I was
greatly assisted by the thoughtful reviews that undoubtedly improved all the editions
of this text. These reviewers include:
Ketra Armstrong, The Ohio State University
Robert E. Baker, Ashland University
Ronald Borrieci, University of Central Florida
Chris Cakebread, Boston University
James Cannon, University of South Alabama
Joseph Cronin, Florida State University
Kathleen Davis, Florida Atlantic University
Eddie Easley, Wake Forest University
Renee Florsheim, Loyola Marymount University
Pat Gavin, New Mexico State University
Lynn Kahle, University of Oregon
Patricia Kennedy, University of Nebraska, Lincoln
Jerry Lee Goen, Oklahoma Baptist University
Deborah Lester, Kennesaw State University
Mark Lyberger, Kent State University
Ann Mayo, Seton Hall University
Mark McDonald, University of Massachusetts, Amherst
Stephen McKelvey, J.D., University of Massachusetts, Amherst

xxiv
 Preface
David Moore, University of Michigan
Susan Logan Nelson, University of North Dakota
Gregory Pickett, Clemson University
Michael Smucker, Texas Tech University
Joseph Terrian, Marquette University
Lou Turley, Western Kentucky University
In addition to the formal reviews, we are especially grateful to the graduate students
and staff who have contributed their time and efforts to enhance the delivery and
completion of the fifth edition, in particular Tami Gingerich, Katie Goldring, Kelly
Leacoma, Danielle Novotny, Nick Pangio, Taryn Schmidt, Jennifer Schultz, and Josh
Selden. We received informal comments from many of you who adopted the first
four editions; we thank you for your feedback. We have tried to incorporate all of
your suggestions and comments. We are very grateful to our colleagues both old
and new at the University of Dayton, Kent State University, Marymount University,
and Northern Kentucky University (NKU) who have supported us throughout this
process. Additionally, thanks go out to all of our students who have helped fuel our
interest in sports marketing. We would like to thank all of those sports business and
management students who have used the book (and other universities) and pointed
out their likes and dislikes.
One of the greatest challenges facing authors and publishers is the procurement
and protection of intellectual work. Special thanks to Emma Davis for her assistance
with securing copyright permissions for the text. In a world where technology and
dissemination continue to precede copyright law this undertaking is no easy task,
therefore, for her perseverance, we are forever grateful. Furthermore, a number of
organizations have been very helpful in providing permission to use ads and articles
throughout the text. Special thanks to all the individuals within these organizations
who have made this book more meaningful and readable for students.
We would also like to thank Alison Jones for without her meticulous reading, due
diligence, and expedient editing this edition would not have become a reality. We
are grateful for her helpful suggestions, advice and constructive comments which
ultimately enhanced the final presentation of materials within the fifth edition. Finally,
we are indebted to the entire Routledge team for their encouragement and making
the fifth edition a reality. Special thanks go to William Bailey, and Hannah Champney.
Last, but certainly not least, thank you to Simon Whitmore for his superb project
management.

xxv
 Acronyms
Sports-related acronym list for Sports Marketing
ABA American Basketball Association
ACC Atlantic Coast Conference
ATP Association of Tennis Professionals
BCS Bowl Championship Series
CAPS Coalition to Advance the Protection of Sports Logos
CSTV College Sports TV
FBS Football Bowl Subdivision
FCI Fan Cost Index
FIFA Fédération Internationale de Football Association
IBF International Boxing Federation
IOC International Olympic Committee
IPO Initial Player Offerings
LPGA Ladies Professional Golf Association
MAC Mid-American Conference
MLB Major Baseball League
MLBAM MLB Advanced Media
MLS Major League Soccer
MWC Mountain West Conference
NAIA National Association of Intercollegiate Athletics
NASCAR National Association for Stock Car Auto Racing
NBA National Basketball Association
NBDL National Basketball Development League
NCAA National Collegiate Athletic Association
NFL National Football League
NFLP NFL Properties
NFLPA National Football League Players Association
NHL National Hockey League
NHL-ICE NHL-Interactive Cyber Enterprises
NJCAA National Junior Collegiate Athletic Association
NLL National Lacrosse League
NSGA National Sporting Goods Association
PCT Psychological Commitment to the Team
PGA Professional Golf Association
PRCA Pro Rodeo Cowboys Association
PSL Personal Seat Licenses
SEC South Eastern Conference
SFIA Sports & Fitness Industry Association
SGMA Sporting Goods Manufacturers Association

xxvi
 Acronyms
SMRI Sports Marketing Research Institute
UFC Ultimate Fighting Championship
USBA U.S. Bungee Association
USOC United States Olympic Committee
WAC Western Athletic Conference
WBA World Boxing Association
WBC World Boxing Council
WBO World Boxing Organization
WHA World Hockey Association
WNBA Women’s National Basketball Association
WWE World Wrestling Entertainment
YFF Youth Football Fund

General acronym list

AARP American Association of Retired People
AIO Activities, Interests, and Opinions
BIRGing Basking In Reflected Glory
BLS Bureau of Labor Statistics
CIM Chartered Institute of Marketing
CORFing Cutting Off Reflective Failure
CORSing Cutting Off Reflected Success
FIU Florida International University
FSI Free Standing Insert
GNP Gross National Product
IMG International Management Group
IPR Institute for Public Relations
JND Just Noticeable Difference
PLC Product Life Cycle
POP Point of Purchase
PPV Pay-Per-View
PRIZM Geodemographic segment set for the USA (62 segments)
PRIZM NE New Evolution – updated version of PRIZM (66 segments)
ROI Return on Investment
SMART Specific, Measurable, Attainable, Reachable, Timely
SMSA Standard Metropolitan Statistical Area
SMU Southern Methodist University
STP Segmenting, Targeting, Positioning
SRS Sponsorship Research and Strategy
SWOT Strengths, Weaknesses, Opportunities, Threats
TQM Total Quality Marketing
UAB University of Alabama at Birmingham
UCF University of California – Florida
UTEP University of Texas at El Paso
UTSA University of Texas at San Antonio
VALS Values and Lifestyles

xxvii
 List of illustrations
Figures
1.1 Simplified model of the consumer–supplier relationship in the sports
industry 18
1.2 Individual vs. corporate consumer 19
1.3 Top sports Web sites 29
1.4 The multidimensional nature of sports products using two dimensions 31
1.5 Model of the sports marketing exchange process 38
2.1 Contingency framework for strategic sports marketing 52
2.2 Strategic sports marketing process 53
2.3 Relationship between levels of strategy 57
3.1 Marketing research process 99
3.2 Descriptive research designs 106
3.4 Designing a questionnaire 119
3.5 New Year’s resolution survey 120
4.1 Model of participant consumption behavior 138
4.2 Maslow’s hierarchy of needs 148
4.3 Modal of operant conditioning 153
4.4 Model of cognitive learning 154
4.5 Model of attitude formation 155
4.6 Model of consumer socialization 158
4.7 The structure of social class 161
5.1 Relationship between spectator and participant markets 177
5.2 Model of sportscape 193
5.3 Model for fan identification 201
6.1 Pro-sports that appeal to teenagers 216
6.2 Modern family life cycle 231
6.3 One-dimensional perceptual map of sports 247
6.4 Two-dimensional perceptual map of sports 248
7.1 The goods–services continuum 266
7.2 Product characteristics 271
7.3 The branding process 276
7.4 The conceptual model for assessing brand equity 277
7.5 Relationship among product design, technology, and product quality 294
8.1 Product life cycle 317
8.2 Selected product life cycle patterns 330
8.3 Model of the rate of diffusion 337
9.1 Communication process 346
9.2 Hierarchy of effects 361
10.1 Designing an advertising campaign 377

xxviii
 List of illustrations
11.1 The sponsorship process 442
11.2
11.3
12.1
Sponsorship match-up
Sports sponsorship acquisition model
Internal and external influences on pricing
463
475
503
1
12.2 Price elasticity of demand 516
12.3 Consumer pricing evaluation process 519
13.1 Implementation phase of the strategic sports marketing process 544
13.2 Control phase of the strategic sports marketing process 574

Tables
1.1 The power ranking – 25 coolest minor league stadiums 12
1.2 NFL media rights 20
1.3 Most popular sports and fitness activities based on core participation 20
2.1 College sports TV: the main players 63
2.2 Top 10 sports video games 73
2.3 Assessing external contingencies 85
3.1 Issues addressed at initial research meeting 100
3.2 Marketing research proposal outline 105
3.3 North American Golf Report table of contents 110
3.4 Standardized sports marketing information studies 110
3.5 Planning and implementing focus groups 115
3.6 Comparison of methods of administration 120
3.7 Frequency distribution or one-way table 125
3.8 Two-way table of cross-tabulation 125
4.1 Sport participation changes from 2013 135
4.2 Golfer’s self-reported traits and personality characteristics 146
4.3 Why people participate in sports 147
4.4 Segmentation of runners by motives 147
4.5 Core American values 159
4.6 Household incomes for selected sports and activities 161
5.1 Differences between spectators and participants 180
5.2 Who’s a sports fan? 191
5.3 Eight value dimensions of sport to the community 198
5.4 Favorite sports to watch by interest in sports news 199
6.1 Common bases for segmentation of consumer markets 211
6.2 Most popular sports/athletic/fitness activities for ages 55+ 220
6.3 AIO dimensions 234
6.4 Lifestyle Analysis Report: Lifestyle Ranking Index 235
6.5 Five market segments for golf participants 240
6.6 PRIZM cluster categories and descriptions 242
6.7 Market segment vs. market niches 243
6.8 Six dimensions or attributes of sports 248
7.1 Wilson Sporting Goods product mix 269
7.2 Psychological commitment to team scale 283
7.3 Importance weights allocated to the five TEAMQUAL dimensions 291
7.4 Quality dimensions of goods 292
8.1 New product screening checklist 313
8.2 Concept test for the Beach Soccer World Wide Tour 314
8.3 Critical success factors for new products 316
xxix
 List of illustrations
8.4 Extending the product life cycle 327
9.1 Creating a more effective message 353
9.2 Making media decisions 354
9.3 Most watched programs in U.S. television history 354
9.4 Top 50 sports advertisers 364
9.5 Evaluating the promotional mix elements 368
10.1 The creative brief and the client’s role in it 381
10.2 50 most marketable active athletes 388
10.3 Guidelines for using sports celebrities as endorsers 393
10.4 Profiles of major media types 397
10.5 World regions by Internet penetration 404
10.6 Benefits of personal selling 409
11.1 Official sponsors of NASCAR 436
11.2 Castrol North America – sponsorship criteria requirements 445
11.3 Sponsorship opportunities for the Wyndham Championship sponsorship
levels 446
11.4 NCAA women’s sports sponsorship growth 458
11.5 Importance of corporate sports sponsorship objectives by sports
sponsorship type 459
11.6 Importance of sponsorship objectives 465
11.7 Wegmans LPGA Championship sponsorship levels 467
11.8 University merchandise sales leaders in 2013 483
11.9 Why sponsorships fail 489
12.1 Top professional sports franchise values 500
12.2 An example of the Fan Cost Index (FCI) for the MLB 513
12.3 2013 sport/recreational activity participation 518
12.4 Laws influencing the price of sports products 523
13.1 Stadium experience rankings of professional sports teams 550
13.2 Most important skills for sports marketing managers 553
13.3 Guidelines for designing reward systems 557
13.4A Rich Creek Rockers income statement 582
13.4B Rich Creek Rockers balance sheet 582
13.5 Summary of selected key financial ratios 583
13.6 Examples of key financial ratios 583
13.7 Top ten sports scandals 585

Photos
1.1 Fans in grandstand 17
1.2 The sports collector’s dream – the Baseball Hall of Fame 26
2.1 After the lockout, the NBA is still thriving 49
2.2 The mature market: staying young and having fun in record numbers 74
3.1 The growing number of women’s sport participants is being monitored
through secondary market research 109
3.2 Focus groups and observers 113
4.1 Two lifelong sports participants in training 137
4.2 Many consumers see a discrepancy between the “ideal”
and “actual” body 139
4.3 A growing number of consumers participate in high-risk sports 145
4.4 Sports participants fulfilling the need for self-actualization 149
xxx
 List of illustrations
4.5 The high involvement cyclist 151
4.6
4.7
5.1
Girls’ sport participation in eroding traditional gender roles
Marathon
Soccer crowd
163
167
176
1
5.2 Bullfighting 179
6.1 Professional sports are realizing the importance of the kids’
market to their long-term success 215
6.2 Polo is a sport that has typically appealed to the upper class 233
7.1 A baseball, glove, and bat representing pure goods 262
7.2 Competition representing a pure service 263
7.3 Future Redbirds in their St. Louis Cardinals licensed baby gear 285
7.4 Bike manufacturers must stress the importance of product design and
technology 295
8.1 Concept testing is used to understand consumer reactions to sports
such as white water rafting 314
8.2 Extending the product life cycle of the waterbike 318
9.1 Having greater knowledge of sports such as hockey moves consumers
through the hierarchy of effects 361
10.1 Stadium signage – one of the first forms of promotion 376
10.2 Coca-Cola creates a positive association with baseball by using stadium
signage 398
10.3 These runners all exemplify the human billboard 401
10.4 Athlete signing autographs 417
11.1 Little League (Youth Baseball League) 477
12.1 To some, golf lessons may be priceless 498
13.1 Sports organizations often utilize creative marketing strategies to target
consumers 547
13.2 Sponsors such as M&M must design controls to evaluate sponsorship
effectiveness 581

Web captures
1.1 The growth of sports information on the Web 16
1.2 Ski.com provides information for ski enthusiasts 29
1.3 NCAA: One of the most powerful sanctioning bodies 33
2.1 Myrtle Beach Pelicans using a low-cost market niche strategy 61
2.2 ESPN.com providing sports information via the Internet 65
2.3 C-12 Lacrosse showing its latest advances in lacrosse technology 70
3.1 Sport Business Research is an excellent source of primary and
secondary data 112
4.1 Online information source 140
5.1 Richard Petty driving experience 178
5.2 New sports facilities such as the Cowboys Stadium in Dallas influence
attendance 193
6.1 A wide array of youth football programs exist that target participation in
youth football and cheerleading 214
6.2 Reaching women’s soccer fans on the Web 244
7.1 TaylorMade-Adidas Golf extends their product line with Adidas golf
footwear and apparel 270
7.2 Sports logos gallery on the Web 275
xxxi
 List of illustrations
7.3 Licensed merchandise on the Web 287
8.1 The new sport of Bossaball combines volleyball, football, gymnastics
and capoeira 304
10.1 Cobra Golf using direct objective 378
10.2 Sales promotion advertised on the Web 379
10.3 Easton stresses its competitive advantage 386
10.4 New Ashworth screenshots 389
10.5 The Internet has become a popular medium for all forms of online
purchasing 406
10.6 The Golf Channel, PGA, and LPGA team up for online contests 406
10.7 Social media continue to emerge as an interactive Web strategy 407
10.8 Philadelphia Eagles reach out to the community 418
11.1 Disabled athletes compete in Paralympic games 457
11.2 University of Texas’ Corporate partner program 484
12.1 Loveland Ski may use seasonal discounting 532
13.1 Sports careers on the Web 552
13.2 Sponsorship ROI evaluation 579

Ads
1.1 Concept of sports marketing 4
1.2 Fantasy sports blurring the line between spectator and participant 18
2.1 Cobra stresses and improved performance based on their technological
product improvements 71
2.2 NCAA capitalizes on the new opportunities based on the growth in
women’s sports 85
4.1 Wrangler ® & Brett Farve 152
6.1 Hodgman is capitalizing on the growing mature market 221
6.2 Pygmy is segmentation on the basis of the family life cycle 232
6.3 47 Brand positions itself as the official licensee of the National
Basketball Association 246
9.1 Arnold Palmer: one of the most credible endorsers ever 348

xxxii
PART 1
Contingency
Framework for
Strategic Sports
Marketing
 CHAPTER 1
Emergence of
sports marketing
After completing this chapter, you should be able to:
• Define sports marketing and discuss how the sports industry is
related to the entertainment industry.
• Describe a marketing orientation and how the sports industry can
use a marketing orientation.
• Examine the growth of the sports industry.
• Discuss the simplified model of the consumer–supplier relationship
in the sports industry.
• Explain the different types of sports consumers.
• Identify historical trends and significant impacts of sport marketing
practices.
• Define sports products and discuss the various types of sports
products.
• Understand the different producers and intermediaries in the
simplified model of the consumer–supplier relationship in the
sports industry.
• Discuss the elements in the sports marketing mix.
• Explain the exchange process and why it is important to sports
marketers.
• Outline the elements of the strategic sports marketing process.
 1 Emergence of sports marketing
Mary is a typical “soccer mom.” At the moment, she is trying to determine how to
persuade the local dry cleaner to provide uniforms for her daughter’s Catholic Youth
Organization soccer team.
George is the president of the local Chamber of Commerce. The 10-year plan for the
metropolitan area calls for developing four new sporting events that will draw local
support while providing national visibility for this growing metropolitan area.
Sam is an events coordinator for the local 10k road race, which is an annual fund raiser
for fighting lung disease. He is faced with the difficult task of trying to determine how
much to charge for the event to maximize participation and proceeds for charity.
Ramiz is the Athletic Director for State University. In recent years, the men’s
basketball team has done well in postseason play; therefore, ESPN has offered to
broadcast several games this season. Unfortunately, three of the games will have to
be played at 10 P.M. local time to accommodate the broadcaster’s schedule. Ramiz is
concerned about the effect this will have on season ticket holders because two of the
games are on weeknights. He knows that the last athletic director was fired because
the local fans and boosters believed that he was not sensitive to their concerns.

"My fan focus groups indicate

that I should show more o f my legs."
Ad 1.1 Concept of sports marketing
Source: Reprinted with permission. www.cartoonstock.com
4
 1 Emergence of sports marketing
Susie works for a sports marketing agency that is representing a professional sport
franchise. The franchise is planning to expand its international market presence. She
is challenged with establishing relationships in a foreign environment which hosts a
unique set of cultural values and customs.
1
What is sports marketing?
The American Marketing Association defines marketing as the activity, set of
institutions, and processes for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners, and society at large.1
Sport and entertainment have been defined in a variety of ways, nonetheless, most
definitions inclusively included terms such as: indulgement, divergence, and/or
engagement; for valued outcomes of enjoyment, pleasure or amusement. Although
sport may often consist of a more competitve nature, both are inclusive of retaining
diverse exchange platforms. These diverse platforms provide a variety of engagement
opportunities and yet, uniquely, are comprised of an array of outcomes that are
distinctly similar.
Sports marketing is “the specific application of marketing principles and processes
to sport products and to the marketing of non-sports products through association
with sport.” The sports industry is experiencing tremendous growth and sports
marketing plays an important role in this dynamic industry. Many people mistakenly
think of sports marketing as promotions or sports agents saying, “Show me the
money.” As the previous examples illustrate, sports marketing is more complex
and dynamic. The study and practice of sports marketing is complex, yet interesting
because of the unique nature of the sports industry.
Mary, the soccer mom, is trying to secure a sponsorship; that is, she needs to
convince the local dry cleaner that they will enjoy a benefit by associating their service
(dry cleaning) with a kids’ soccer team.
As president of the Chamber of Commerce, George needs to determine which sports
products will best satisfy his local customers’ needs for sports entertainment while
marketing the city to a larger and remote audience.
In marketing terms, Sam is trying to decide on the best pricing strategy for his
sporting event; Ramiz is faced with the challenge of balancing the needs of two
market segments for his team’s products; and Susie, the sport marketer, is seeking
to persuade international populations of the relevance of diversifying their sport
culture. As you can see, each marketing challenge is complex and requires careful
planning.
To succeed in sports marketing one needs to understand both the sports industry
and the specific application of marketing principles and processes to sports contexts.
In the next section, we introduce you to the sports industry. Throughout this book,
we continue to elaborate on ways in which the unique characteristics of this industry
complicate strategic marketing decisions. After discussing the sports industry, we
review basic marketing principles and processes with an emphasis on how these
principles and processes must be adapted to the sports context.

5
 1 Emergence of sports marketing

Understanding the sports industry

Historical development of sports marketing in (North)
America
The evolution of sports marketing strategies to meet the needs and wants of the
consumer continues to be a priority of practitioners worldwide. Today’s realm of
sports marketing and sponsorship, though a more dramatically effective and a much
more diverse platform, is vaguely similar to what many identify as its origin, 776 BC,
when the Olympic Games began. Marketers for the Ancient Olympic Games were
no amateurs; these perceptive businessmen realized early on that an affiliation with
a popular athlete could produce a potentially lucrative relationship.2 Throughout its
history, sport in some form has existed and, though the common-day term of sports
marketing had not yet emerged, the process of utilizing marketing and promotion
strategies to enhance delivery and production has been evident.
The roots of sports marketing in North America can be traced back to the 1850s and
1860s when many businesses, recognizing the popularity of sport, attempted to
create linkages to enhance commercial opportunities by marketing through sport. Two
events of this era in particular, one collegiate and one professional, illustrate the use of
marketing through sport and helped lay a foundation for utilization of sport as a service
medium in North America.
In 1852, a railroad official together with a group of local businessmen believed
that they could garner enough interest in the marketing and staging of the event
to produce economic and commercial profits. The end result was the first inter-
collegiate match between Harvard University and Yale University – a two-mile rowing
contest. This event took place at a quiet summer resort called Center Harbor on Lake
Winnipesaukee, New Hampshire. The result demonstrated that the entrepreneurs
were able to create a positive economic impact on the region, enhancing rail traffic,
hotels occupancy, and revenue for the host city.
The second event is tied to the late 1850s and early 1860s and the commercialization
of the new sport of baseball. Tobacco companies partnered with professional baseball
leagues and began using photographs of the teams to help sell their products and
services. These companies made baseball cards with pictures of the teams and
players and then inserted them in cigarette packets to boost and enhance brand
loyalties. Though the strategies of distribution have been altered over the years –
that is, transition from the use of cigarettes, to bubblegum, to today’s independent
packages – these strategies laid the foundation for a new industry; the memorabilia
and card collecting/trading market that exists today.
North American sport experienced a variety of popularity struggles in the late 1800s
and early 1900s. A demand for reform arose and threatened sport at a variety
of levels. In 1906, with the assistance of President Theodore Roosevelt, efforts
were made to transform the image of sport. Strategies and regulations were
implemented to enhance the safety and appeal of the game. Rules, regulations,
and the control of lurking controversies, such as the controversy distinguishing the
amateur and professional status of athletes, became a primary emphasis of sport
organizations.
Although the early 1920s were a period of relative calm in American society, the
country was intrigued by the newest technology of the day, the radio. Marketers,
sports administrators, and broadcasters alike sought to integrate sports utilizing
this medium; a medium at the time that many believed symbolized a coming age of
6
 1 Emergence of sports marketing
enlightenment. For, as Beville noted, no other medium has changed the everyday lives
of Americans as quickly and irrevocably as radio.3 In 1921, the first American baseball
broadcast occurred from Forbes Field. Though this broadcast was deemed a success,
marketers of the era struggled to transcend executive opinions for some believed that
1
the broadcast would have a negative impact upon attendance and demand.
In the 1930s and 1940s sports organizations utilized radio to enhance team revenue
streams. Innovative marketers began relying on the radio to get their message across
to the common man. In 1936, this same forum was used as a marketing and public
relations campaign to pronounce the success of Jessie Owens and his Olympic debut.
Radio provided the impetus to solidify the era of patronage; however, the invention
that soon followed remains to this day the most significant communication
medium that has influenced and aided the development of sports. Who knew what
sportscaster Bill Stern questioned and introduced in 1939 would enhance the growth
and development of sports marketing practices for decades? The display platform,
the television, though airing two mediocre baseball teams battling for fourth place,
provided an incredibly formidable and profitable union between sport and the
American public. The television provided a means for sports organizations to expand
their market presence and a unique opportunity for marketers to engage their publics.
The notion of a “picture being worth a thousand words” became a reality with the
invention and its intervention and presentation of sports.
In 1946, radio and television broadcasting revenues together contributed only 3.0
percent of MLB revenues, but that rose to 16.8 percent by 1956. Executives such
as Bill Veeck became innovators of sports marketing, utilizing radio and in-game
promotional strategies to further market their teams. Owners, players, broadcasters,
and fans recognized the variety of impacts television would have on the presentation
of sports. In fact, television giant CBS dropped its Sunday afternoon public service
emphasis to provide for a 12-week professional football broadcast.
An American consumer in the 1950s loved and demanded sports. Participation trends
and fan demand steadily increased. Sports became a symbol of changing times in
the United States. In 1957, Jackie Robinson broke the color barrier in baseball. The
importance of this event in helping the Civil Rights Movement in the United States
is evident, but it also proved the social power of sports in American culture and the
impact that could be made utilizing sports as a communication medium. By including
minorities in sports, the market grew. Cultural acceptance, along with media presence,
provided the American public with a means to link personalities and audiences.
This prominence led to the identity era of the 1960s. Chuck Taylor/Converse,
Muhammad Ali/Adidas/Champion, Jim Brown/NFL, Mickey Mantle/Major League
Baseball, Arnold Palmer/PGA and Arnie’s Army, to name a few, all became marketable
entities. Marketers began to utilize sport to establish linkages with consumer publics.
Endorsements and sponsorships evolved. Representation through agents became the
norm for those who had prominence. For example, sport marketing giant International
Management Group (IMG) founder Mark McCormack and golf great Arnold Palmer
instituted a legendary handshake deal which lasted more than 40 years.
The 1970s included several evolutionary events in sports marketing. Consumer
demand for sport continued to rise, while existing and emerging commercial
entities such as Nike, Adidas, Puma, and others fought to snatch up endorsement
opportunities. Sponsorships of products by athletes continued to emerge as a trend
of the decade. In fact, the first corporate sponsorship of a stadium venue occurred

7
 1 Emergence of sports marketing
in Buffalo in 1973 – Rich Stadium. Buffalo-based Rich Products agreed to pay $37.5
million, $1.5 million per year over 25 years.4
In the 1970s athletes too began to make a presence. Athletes such as Joe Nammath
became sex symbols while advertisers began to realize that athletes could add a
unique element to any product in the context of an endorsement campaign; e.g.,
Jack Nicolas, Muhammad Ali, Mario Andretti to name a few. This was further
demonstrated at the end of the decade when Coke utilized Pittsburgh Steelers tackle,
“Mean Joe Green,” to star in one of the most acclaimed Coke advertisements ever.
Throughout the 1970s mergers, acquisitions, and governmental ramifications were
prominent. Title IX entitled rights for women to have further access to participate in
sports. Advertising laws, that forced the tobacco industry off the TV airways, freed
funding for alternative marketing and advertising strategies. These tobacco companies
could avert the law by developing sponsorship arrangements, thus affording the
growth of events such as Virginia Slims Tennis and NASCAR Winston Cup.
Television markets were further expanded due to cable offerings and afforded
network growth. Television began bringing teams from across the country into
the spotlight. A health craze swept the nation further complementing commercial
and consumer ties to sport. Entrepreneurs like Ted Turner, in 1976, were afforded
an opportunity to develop and market a superstation, while ESPN’s founder Bill
Rasmussen, in 1979, was able to introduce the first true 24-hour sports broadcasting
network.
In the 1980s salaries skyrocketed and leagues saw a need to remain competitive.
Increased competition created a variety of economic and financial issues. Emphasis
on television revenues became a priority. The money from media contracts became
important to the team’s bottom line and its ability to recruit and pay top players.
Miracle workers such as NFL Commissioner, Pete Rozelle, and Olympics marketing
and television guru, Richard Pound, continued to develop and enhance sponsorship
and media contracts as they related to sport. Professionals such as Rozelle of the
NFL, Peter Ueberroth of NBC, and Pound of the IOC had a significant impact on the
explosion of so-called strategic alliances as a result of external competitive pressures
such as globalism of economies and constantly advancing technologies.5
The 1980s represented the “me” decade in sports. Sporting goods were tailored
to be aligned with specific sports. With the likes of Larry Bird, Magic Johnson,
Joe Montana, and the introduction to Michael Jordan, fans continued through the
turnstiles, disregarding the negative influences and impacts of the sky rocketing
salaries, agents, greed among teams and players, drug use by athletes, and free
agency. Despite or because of the greed, sports grew in popularity and became a
more desirable marketing platform.
Sport sponsorship began to see double-digit growth. Sponsor dollars were abundant
and even mediocre athletes began signing contracts to endorse or wear their
products.6 The expansion of sponsorship as a communication medium was greatly
influenced by the emergence of sports leagues and corporate involvement during the
1970s and 1980s. However, this growth did not come without resistance. Resistance
by broadcasters, event managers, and consumers alike focused on the intrusion of
corporate America into this restricted arena.
Many corporate CEOs became involved with sponsorship for unsubstantiated reasons;
i.e., they favored a sports activity or they chose to intermingle with famous sports
celebrities. Exposure through affiliation was achieved, but without justification of the
8
 1 Emergence of sports marketing
return on investment. Marketing strategies varied considerably due to the limited
channels of exposure, but objectives were to align corporate endorsers to enhance
the linkages and exposure of the events. This growth created a corporate reliance that
would create many future marketing implications.
1
During the Michael Jordan era of the 1990s, television had become the driving force
behind almost every league, including the NFL, NBA, NHL, MLB, NCAA, and NASCAR. In
fact, the majority of teams and sport organizations became reliant upon these television
revenues. Increased revenue streams offered opportunities for expansion. Organizations,
such as the NHL, expanded to regions of the south while others such as the NBA began
to focus beyond the Americas. Sponsorship continued to enhance the dollar pool and
rose at a double-digit pace. Salaries continued to skyrocket, and leagues expanded to take
advantage of untapped markets. Most fans wanted to be loyal; however, struggles such
as the 1993 baseball strike had a severe impact on its popularity and adversely impacted
consumer loyalty. Strategies became more focused and began to emphasize the transfer
of unique connotations inherent in the property and brand image.
Although the modern world of mega-million dollar sponsorships had begun, marketers
questioned the cluttered environment. The driving force behind the game and its
growth had become clouded. Prior to the 1990s, management’s use of sponsorship
was often criticized for the cavalier and often frivolous approaches undertaken.7
During this era sponsorship became entrenched as a legitimate corporate marketing
tool. It saw an unprecedented double-digit growth and that had a significant impact on
image, value, recognition, and method of delivery.
In recent years, sport marketing has continued to grow, but at a more moderate
pace and not without restriction or limitations. In this era of social media, listening,
networking, and enhancing relationships has become a priority, whereas selling is
secondary. The continued advent of technology has created a much more audience-
centered universe, thus, creating a paradigm that continues to evolve and innately
requires sport marketers to develop a more audience-dictated framework to overcome
a host of cybermarketing issues.
Demand through technology has created an international platform, a platform
encompassing numerous cultural variances. Today’s athletes are a global commodity.
In today’s sports marketing environment much more is at stake than free agency and
escalated player salaries. Today, organizations seek to provision resources directly to
an individual, authority, or body to enable the latter to pursue some activity in return
for benefits contemplated in terms of the sports market strategy, and which can be
expressed in terms of corporate, marketing, or media objectives.8
Organizations such as NFL, MLB, NASCAR, and the NBA have expanded scheduled
exhibitions and displays. However, the unprecedented growth of these organizations
and their popularity at the international level is not without increased marketing
challenges. Technology has had a significant impact on the delivery of the product.
The versatility and opportunities surrounding the use of technology enables
organizations the opportunity to exploit a variety of platform delivery mediums to
fulfill many of the basic functions of the marketing communications mix. In this era,
the demand and usage of second screen platforms prevail. Therefore, interactive
positioning of a product is a key to its marketing success.
For every Winston Cup or Jordan success there are at least as many ineffective sports
marketing campaigns. Many athletes today capitalize on their image more than their
athletic prowess. From athletes in their primes to athletes who have made lasting

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 1 Emergence of sports marketing
impressions, endorsement deals do not necessarily end when a professional career
is over. Professional athletes are aware of the effect their image has on endorsement
dollars, and most are not willing, nor ready, to give up a share of endorsements. If
today’s players had Babe Ruth’s devil-may-care attitude, they would likely never see the
kinds of endorsement dollars the more polished, public images today are garnering.9
Today’s sport marketer recognizes that image influences the bottom line. The most
prolific athletes are not always the most celebrated, and the most celebrated are often
not the most gifted. However, in today’s environment all are under the microscope
of media attention. Because of today’s growing media and social network influences,
it is crucial for sports marketers to recognize need and define the ‘why’ as it relates
to sports marketing applications. Defining the ‘why’ is crucial to its successful
interpretation.
In today’s sports marketing environment there is a threshold for clutter; however,
scrutiny and integrity are the demanding forces that will impact its future. Consumers
will continue to demand variety in the presentation of the sports product, but they will
not overlook the overcommercialized tactics often employed by sports marketers that
impact the integrity and presentation of its environment.

Sport as entertainment
Webster’s defines sport as “a source of diversion or a physical activity engaged in
for pleasure.”10 Sport takes us away from our daily routine and gives us pleasure.
Interestingly, “entertainment” is also defined as something diverting or engaging.
Regardless of whether we are watching a new movie, listening to a concert, or
attending an equally stirring performance by Dwayne Wade, we are being entertained.
Most consumers view movies, plays, theater, opera, or concerts as closely related
forms of entertainment. Yet, for many of us, sport is different. One important way
in which sport differs from other common entertainment forms is that sport is
spontaneous. A play has a script and a concert has a program, but the action that
entertains us in sport is spontaneous and uncontrolled by those who participate in
the event. When we go to a comedic movie, we expect to laugh, and when we go to
a horror movie, we expect nail biting entertainment. But the emotions we may feel
when watching a sporting event are hard to determine. If it is a close contest and
our team wins, we may feel excitement and joy. But if it is a boring event and our
team loses, the entertainment benefit we receive is quite different. Because of its
spontaneous nature, sport producers face a host of challenges that are different than
those faced by most entertainment providers.
Nonetheless, successful sports organizations realize the threat of competition from
other forms of entertainment. They have broadened the scope of their businesses,
seeing themselves as providing “entertainment.” The emphasis on promotional
events and stadium attractions that surround athletic events is evidence of this
emerging entertainment orientation. Consider the NBA All-Star Game. What used
to be a simple competition between the best players of the Western Conference
and the best players of the Eastern Conference has turned into an entertainment
extravaganza. The event (not just a game anymore) lasts for days and includes slam-
dunk contests, a celebrity and rookie game, concerts, 3-point shooting competition
and plenty of other events designed to promote the NBA.11 In 1982, the league
created a separate division, NBA Entertainment, to focus on NBA-centered TV
and movie programming. NBA TV has created original programming featuring

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 1 Emergence of sports marketing
shows like All-Access, Basketball International, Fantasy Hoops, NBA Roundtable
. . . and Hardwood Classics. As Alan Brew, a principal at RiechesBaird (now
BrandingBusiness), a brand strategy firm states, “The line between sport and
entertainment has become nearly nonexistent.”12
1
Of course, one of the most highly visible examples of “sporttainment” is the WWE
or World Wrestling Entertainment. For the past few decades, the WWE has managed
to build a billion dollar empire and according to WWE.com the WWE posted revenue
of $508 million in the fiscal year 2013. Live and televized entertainment accounted for
75 percent of those sales, followed by consumer products (15 percent), digital media
(8 percent), and a new brand extension called WWE Studios at 2 percent.13 Vince
McMahon, the founder and chairman, has been called the P. T. Barnum of our time.
The sports entertainment phenomenon is also sweeping the globe as the
following Forbes Inc. narrative and video link suggests: www.forbes.com/sites/
mikeozanian/2012/02/26/nfl-expansion-could-include-London/. As organizations begin
to recognize the value of sport as emtertainment in this global environment it is
important for sports marketers to understand why consumers are attracted. Defining
what consumer needs are and how those needs relate to the global environment will
further complement the marketing exchange process.
Organizations that have not recognized how sport and entertainment relate are said
to suffer from marketing myopia. Coined by Theodore Levitt, marketing myopia is
described as the practice of defining a business in terms of goods and services rather
than in terms of the benefits sought by customers. Sports organizations can eliminate
marketing myopia by focusing on meeting the needs of consumers rather than on
producing and selling sports products.

A marketing orientation
The emphasis on satisfying consumers’ wants and needs is everywhere in today’s
marketplace. Most successful organizations concentrate on understanding the
consumer and providing a sports product that meets consumers’ needs while
achieving the organization’s objectives. This way of doing business is called a
marketing orientation.
Marketing-oriented organizations practice the marketing concept that organizational
goals and objectives will be reached if customer needs are satisfied. Organizations
employing a marketing orientation focus on understanding customer preferences and
meeting these preferences through the coordinated use of marketing. An organization
is marketing oriented when it engages in the following activities.14
X Intelligence generation – analyzing and anticipating consumer demand,
monitoring the external environment, and coordinating the data collected;
X Intelligence dissemination – sharing the information gathered in the intelligence
stage;
X Responsiveness – acting on the information gathered to make market decisions
such as designing new products and services and developing promotions that
appeal to consumers.
Using the previous criteria (intelligence gathering, intelligence dissemination, and
responsiveness), one study examined the marketing orientation of minor league
baseball franchises.15 Results of the study indicate that minor league baseball
franchises do not have a marketing orientation and that they need to become more
consumer focused. Although the study suggests that minor league baseball franchises
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 1 Emergence of sports marketing
Table 1.1 The power ranking – 25 coolest minor league stadiums

Power ranking Stadium Team

1 Richmond Country Bank Ballpark Staten Island Yankees
2 Metro Bank Ballpark Harrisburg Senators
3 AT&T Field Chattanooga Lookouts
4 Canal Park Akron Aeros
5 Whitaker Bank Ballpark Lexington Legends
6 Fieldcrest Cannon Stadium Kannapolis Intimidators
7 Whataburger Field Corpus Christi Hooks
8 Isotopes Park Albuquerque Isotopes
9 Victory Field Indianapolis Indians
10 Bright House Field Clearwater Phillies
11 NewBridge Bank Park Greensboro Grasshoppers
12 Dr. Pepper Ballpark Frisco RoughRiders
13 First Energy Stadium Reading Phillies
14 RedHawks Field at Bricktown Oklahoma City RedHawks
15 Louisville Slugger Field Louisville Bats
16 Coca-Cola Field Buffalo Bisons
17 Modern Woodmen Park Quad Cities River Bandits
18 MCU Park Brooklyn Cyclones
19 AutoZone Park Memphis Redbirds
20 Raley Field Sacramento River Cats
21 Fifth Third Field Dayton Dragons
22 Dell Diamond Round Rock Express
23 Ripken Stadium Aberdeen IronBirds
24 LeLacheur Park Lowell Spinners
25 McCoy Stadium Pawtucket Red Sox
Source: http://bleacherreport.com/articles/842135-power-ranking-the-25-coolest-minor-league-
stadiums.

have not moved toward a marketing orientation, more and more organizations are
seeing the virtue of this philosophy.

Growth of the sports industry

Sport has become one of the most important and universal institutions in our
society. It is estimated that the sports industry generates between $480–620 billion
each year, according to a recent A. T. Kearney study of sports teams, leagues, and
federations.16 This includes infrastructure construction, licensed products, and live
sporting events. According to Plunkett Research,17 the sports industry is twice the
size of the U.S. auto industry and seven times the size of the movie industry. The
industry is becoming increasingly global with respect to conventional and new media
distribution fronts. This total is based on a number of diverse areas within the industry
including gambling, advertising, sponsorships, etc. 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.”18 For better or worse,
sports are everywhere. The size of sport and the sports industry can be measured in
different ways. Let us look at the industry in terms of attendance, media coverage,
employment, and the global market.
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 1 Emergence of sports marketing

Attendance
Not only does sport spawn legions of “soccer moms and dads” who faithfully attend
youth sport events, but also for the past several years, fans have been flocking to 1
major league sports in record numbers. The NFL achieved peak attendance in 2007,
averaging 68,702 fans per game and a 99.9 percent capacity. Although the League
experienced a slight decline from 2008 to 2011, the League has been able to retain
a 95 percent plus capacity. The 2013 season reflected a 96.5 percent capacity and
an average game attendance of 68,373. The NFL continues to experience what
many would call another prosperous year, with paid attendance of 17,304,523 fans
attending. In addition, the NFL extended its television contracts through 2022,
embarking on deals that will generate upwards of $3 billion a year.19
The NFL, both on and off the field, continues to strengthen the very foundation of
the game. The League strives to make changes that are having a positive impact
on the delivery of the game, both to consumers in person and via media outlets.
According to NFL Commissioner Roger Goodell, NFL numbers are up; up in overall fan
engagement, in most cases, dramatically, and interest in the NFL is expanding as they
continue to grow internationally.20 In fact, for the 2014 season, the NFL announced
that two games would be played in London, both games sold out months in advance.
The NBA also had strong attendance in recent years. In the 2012–2013 season over
17 million fans turned out to see the action and arenas averaged 17,274 per game.
This was complementary to the 2011 season where the NBA noted that its three
national TV partners all had their highest viewer ratings ever. According to the League,
TNT saw a 42 percent increase, while ABC was up 38 percent and ESPN saw a 28
percent jump. Turner Sports noted its 1.6 rating was its highest in 27 years of NBA
coverage and that it televised three of the five most-watched NBA regular-season
games ever on cable this season. Despite fears of a labor stoppage after the season,
the NBA reported success across many platforms. Arena capacity was 90.3 percent,
its seventh straight year of 90 percent or better. Merchandise sales jumped more than
20 percent and NBA.com saw an increase of more than 140 percent in video views.21
After procuring four years of record attendance through 2008, Major League Baseball
had multiple years of attendance declines; however, in the 2011 season, the League
was able to overcome a very slow start, endured inclement weather, a slowed
economy, and even the influx of high definition TVs to achieve the fifth highest
attendance mark ever. A total of 74,859,268 fans attended Major League Baseball
games in the 2012 regular season, representing a 1.9 percent increase from 2011.
Sports Illustrated writer Tom Verducci noted “baseball is consumed in so many ways
that hardly existed, if at all, in its pre-strike popularity era: fantasy leagues, web apps,
satellite radio, websites and the plethora of television viewing options on fantastic-
looking displays,”22 all impact the game. Attendance remains a vital revenue stream
and measure of interest, but now it is part of a much more diverse picture of how
baseball is consumed.
Street & Smith’s Sports Business Daily reported that the National Hockey League
averaged 17,445 fans per game for the 2012 season, up 1.8 percent from 2011 and up
2.8 percent from 2010. The Canadiens secured the highest league attendance totals
including totals that were at 100 percent capacity. A total of 872,193 patrons attended
in 2012 equating to a 21,273 per game average.23

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 1 Emergence of sports marketing

Media coverage
Although millions of Americans attend sporting events each year, even more of us
watch sports on network and cable television or listen to sports on the radio. For
example, the 2014 Super Bowl XLVII featuring the Seattle Seahawks and Denver
Broncos was watched by an estimated 111.5 million viewers and had an estimated
26.1 million tweets, exceeding the 2013 numbers where the New York Giants victory
over the New England Patriots was watched by more than 111.3 million people. These
2013 and 2014 numbers surpass the 2011 Super Bowl and 1983 finale of “M-A-S-H”
to become the most-watched program in U.S. television history.
Today, in the U.S. 290 million people own at least one TV, while worldwide more
than 35 percent of consumers own an HD TV. According to Nielsen’s television data
collected from 38 key markets around the world (including the host nation China,
the United States, Brazil, South Africa, Italy, and Australia), just more than 4.4 billion
viewers worldwide – almost 70 percent of the world’s population – watched some
part of the 2008 Olympics.24 In fact, an estimated audience of 2 billion watched
the Beijing Olympics Opening Ceremony. Viewing levels varied across regions and
markets, impacted by factors such as time zone and broadcast time differences. In
contrast to the Beijing Summer Olympics, the Sochi Games only drew an average of
21.4 million viewers in primetime. In comparison, NBC’s coverage of the Vancouver
Winter Olympic Games drew a total viewing population of 32.6 million, 56 percent
female versus 44 percent male. This secured an average audience of roughly three
times the size of its nearest rival, Fox, and, according to the Nielsen company in 2012,
the coverage held seven of the eight top stops for the week.
During the most recent Summer Olympic Games, Nielsen reported that NBC’s
coverage of the London Olympic Games drew more than 219 million American
viewers over the span of 5,535 hours of broadcasting. These figures eclipse those of
the 2008 Beijing Olympics (also on NBC), which were watched by a mere 215 million
American viewers.
ESPN, the original sports-only network launched in 1979, was highlighted by record
consumption of ESPN’s core television business in 2011 and 2012. On television and
across digital platforms, ESPN was able to secure a series of value-rich agreements with
the NFL, NCAA, Wimbledon, Pac-12, and Indy 500. With its long-term and wide-ranging
pact with its largest distributor, Comcast, ESPN was able to marry compelling content
with evolving technology, i.e., notably the WatchESPN. In addition, they aired a
significantly higher number of regular season and college bowl games. The array of
ESPN programs serves the sports fan of today on the move in the USA and around
the world. ESPN’s results demonstrated that sports fans’ need for the latest and best
information – wherever they are – remains unabated. In the most recent survey across
ESPN media platforms, which includes all ESPN networks, 113 million people interacted
with ESPN during the average week in 2013,25 an average of 675,000 viewers.
However, ESPN is facing more competition than ever. In 2013, ESPN saw a significant
decrease in primetime ratings, 32 percent. Competitors such as Fox Sports and NBC
Sports are strengthening their position in the marketplace. In addition, broadcasts
such as those presented on Golf Channel, NFL Network, Fox Soccer, and NBCSN
have experienced increases in viewership.26 According to The Media Audit report
(2009), a number of sports events including professional football, baseball, and hockey
are on the upswing, and it suggests that while many Americans are uncertain about
jobs and the economy, their interest in following sports remains strong.27

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 1 Emergence of sports marketing
Among the report’s findings, 61 percent of U.S. adults regularly follow professional
football on radio or TV, a figure that is up from 57.9 percent four years ago. Among
professional baseball fans, 51.2 percent regularly follow the sport, compared with 49.5
percent in 2005. Professional ice hockey experienced the most significant increase
1
among sports fans. Among U.S. adults, 22.7 percent frequently follow the sport
on TV or radio today, compared with 14.4 percent in 2005. The figure represents a
58 percent increase over four years. The study further reveals that the higher their
income, the more likely adults are to follow sports. For example, 71.6 percent of
adults earning $100,000 or more in household income regularly follow professional
football, a figure that is 18 percent higher when compared with all U.S. adults.
Similarly, 61.6 percent of high-income-earning individuals regularly follow professional
baseball on TV or radio, a figure that is 20 percent higher than for all U.S. adults.
Furthermore, 29.3 percent of affluent adults follow professional ice hockey compared
with 22.7 percent of the general U.S. population.
In college sports, the percent of adults who regularly follow college football on radio
or TV increased from 44.6 percent in 2005 to 45.9 percent today. However, the
same study revealed that while only 22.1 percent of U.S. adults frequently attend
college or professional sporting events, the figure remains flat from 22 percent
in 2005. Traditional networks are trying to keep pace with the demand for sports
programming. The four major networks devote in excess of 2,000 hours to sports
programming annually and a family with cable has access to 86,000 hours of sports
TV. Sports fees paid by cable, satellite, and telco companies reached 17.2 billion in
2012.28
In addition, according to a Kantar’s Global Sports Media Consumption Report (2013),
about 170 million adults (71 percent of the U.S. population) label themselves sports
fans, and 97 percent of them watched sports on TV in 2012.29 The majority (97
percent) of these TV sporting events are watched live and therefore the race is on
between networks to secure prominent sporting events. In 2011, NBC spent a record
$4.38 billion to secure the broadcast and cable rights for the Olympic Games through
2020. NBC extended its stronghold on the Olympics by winning the broadcast rights
over rivals Fox and ESPN. Fox bid $3.4 billion for four Games and $1.5 billion for two,
while ESPN offered $1.4 billion for two. Add to this deal the NCAA’s $10.8 billion
dollar basketball tournament deal, the NCAA conferences multiplying their old deals
times four, a $4.4 billion NASCAR deal with NBC, the NHL tripling their previous
contract, and the astronomical procurement of the NFL, where networks will provide
over $3 billion per year, and you can see the value of sports to the league and the
networks.
These numbers show no signs of slowing down in the future. The huge demand for
sports broadcasting has led to the introduction of more sport-specific channels. New
sports networks such as the Sky Sports F1, College Sports Television (www.cstv.
com), Fox Sports 1, Blackbelt TV, the Tennis Channel, and the NFL Network have
emerged because of consumer demand. In fact even the WWE is contemplating the
release of its own network. Presently, worldwide there are in excess of 300 sport
channels. This practice of “narrowcasting,” reaching very specific audiences, seems
to be the future of sports media.

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 1 Emergence of sports marketing

Web 1.1 The growth of sports information on the Web

Source: www.espn.go.com.

In addition to traditional sports media, pay-per-view cable television is growing in

popularity. Satellite stations, such as DIRECTV, allow spectators to subscribe to a
series of sporting events and play a more active role in customizing the programming
they want to see. For example, DIRECTV offers NFL Sunday Ticket, Willow Cricket,
NASCAR HotPass, NBA League Pass, or the NHL Center Ice to afford consumers
instant viewing gratification. Packages such as NHL Center Ice allow subscribers to
choose from 40 out-of-market (i.e., not local) regular season NHL games per week for
an additional fee.

Employment
Another way to explore the size of the sports industry is to look at the number of
people the industry employs. The Sports Market Place Directory, an industry directory,
has more than 15,600 listings, 80,000 contact names, and 9 indexes for sports
people and organizations.30 A USA Today report estimates that there are upward of
4.5 million sports-related jobs in sales, marketing, entrepreneurship, administration,
representation, and media.31 Some estimates range as high as 6 million jobs. In
addition to the United States, the United Kingdom employs some 400,000 people in
their $6 billion a year sports industry.32 Consider all the jobs that are created because
of sports-related activities such as building and staffing a new stadium. Sports jobs
are plentiful and include but are not limited to event suppliers, event management
and marketing, sports media, sport sales, sports sponsorship, athlete services, sports
commissions, sports lawyers, manufacturers and distribution, facilities and facility
suppliers, teams, leagues, college athletics, and finance.

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 1 Emergence of sports marketing
The number of people working directly and indirectly in sports will continue to grow
as sports marketing grows. Sports marketing creates a diverse workforce from the
players who create the competition, to the photographers who shoot the competition
(see Appendix A for a discussion of careers in sports marketing).
1
Global markets
Not only is the sports industry growing in the United States, but it is also growing
globally. As the following hyperlink on international sports marketing discusses, the
NBA is a premier example of a powerful global sports organization that continues to
grow in emerging markets: http://www.nba.com/global/nba_global_regular_season_
games_london_mexico_city_2013_06_24.html.

The structure of the sports industry

There are many ways to discuss the structure of the sports industry. We can look at
the industry from an organizational perspective. In other words, we can understand
some things about the sports industry by studying the different types of organizations
that populate the sports industry such as local recreation commissions, national youth
sports leagues, intercollegiate athletic programs, professional teams, and sanctioning
bodies. These organizations use sports marketing to help them achieve their various
organizational goals. For example, agencies such as the United States Olympic
Committee (USOC) use marketing to secure the funding necessary to train and enter
American athletes into the Olympic Games and Pan American games.

Photo 1.1 Fans in grandstand.

Source: Shutterstock.com.

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 1 Emergence of sports marketing

Consumers Products Producers and intermediaries

Spectators Events Ownership
Participants Sporting goods Sanctioning bodies
Corporate or Business personal training Sponsors
for sports Media
sports information Agents
Equipment manfacturers

Figure 1.1 Simplified model of the consumer–supplier relationship in the sports

industry

Ad 1.2 Fantasy sports blurring the line between spectator and participant
Source: Sporting News

The traditional organizational perspective, however, is not as helpful to potential

sports marketers as a consumer perspective. When we examine the structure of
the sports industry from a consumer perspective, the complexity of this industry
and challenge to sports marketers becomes obvious. Figure 1.1 shows a simplified
model of the consumer–supplier relationship. The sports industry consists of three
major elements: consumers of sport, the sports products that they consume, and
the suppliers of the sports product. In the next sections, we explore each of these
elements in greater detail.

The consumers of sport

The sports industry exists to satisfy the needs of three distinct types of consumers:
spectators, participants, and sponsors.

The spectator as consumer

If the sporting event is the heart of the sports industry, then the spectator is the blood
that keeps it pumping. Spectators are consumers who derive their benefit from the
observation of the event. The sports industry, as we know it, would not exist without
spectators. Spectators observe the sporting event in two broad ways: they attend
the event, or they experience the event via media chosen media outlet, i.e., radio,
television, Internet.
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 1 Emergence of sports marketing
As Figure 1.2 illustrates, there are two broad types of consumers: individual
consumers and corporate consumers. Collectively, this creates four distinct consumer
groups. Individuals can attend events in person by purchasing single event tickets
or series (season) tickets. Not only do individuals attend sporting events, but so too
1
do corporations. Today, stadium luxury boxes and conference rooms are designed
specifically with the corporate consumer in mind. Many corporate consumers can
purchase special blocks of tickets to sporting events. At times, there may be a tension
between the needs of corporate consumers and individual consumers. Many believe
that corporate consumers, able to pay large sums of money for their tickets, are
pushing out the individual consumer and raising ticket prices.
Both individual spectators and corporations can also watch the event via a media
source. The corporate consumer in this case is not purchasing the event for its own
viewing, but, rather, acting as an intermediary to bring the spectacle to the end user
groups or audience. For example, CBS (the corporate consumer) purchases the right
to televise the Masters Golf Tournament. CBS then controls how and when the
event is experienced by millions of individual spectators who comprise the television
audience.
Historically, the focus of the sports industry and sports marketers was on the
spectator attending the event. The needs of the consumer at the event were catered
to first, with little emphasis on the viewing or listening audience. Due to the growth
of media influence and the power of the corporate consumer, the focus has changed
to pleasing the media broadcasting the sporting event to spectators in remote
locations. Many season ticket holders are dismayed each year when they discover
that the starting time for events has been altered to fit the ESPN schedule. In fact,
the recent NFL deals provide networks with the opportunity to interchange delivery
schedules across conferences. Because high ratings for broadcasted sporting events
translate into breathtaking deals for the rights to collegiate and professional sports,
those who present sporting events are increasingly willing to accommodate the

In Person Mediated

Individual

Corporate

Figure 1.2 Individual vs corporate consumer

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 1 Emergence of sports marketing
needs of the media at the expense of the on-site fan. The money associated with
satisfying the needs of the media is breathtaking. For example, in 2011, the NFL
agreements secured from the terrestrial networks, FOX, NBC, CBS, and ESPN,
combined for a total of $20.4 billion per year. The 2014–2022 totals equate to the
same networks paying $39.6 billion per year.33 That number is continuing to grow,
as seen in Table 1.2. Identifying and understanding the different types of spectator
consumption is a key consideration for sports marketers when designing a marketing
strategy.

The participant as consumer

In addition to watching sports, more people are becoming active participants
in a variety of sports at a variety of competitive levels. Table 1.3 shows “core”
participation in sports and fitness activities. As the number of participants grows, the
need for sports marketing expertise in these areas also increases.
As you can see, there are two broad classifications of sports participants: those that
participate in unorganized sports and those that participate in organized sports.

Table 1.2 NFL media rights

CBS (AFC) 2014–2022 $1.08B

DirecTV (Sunday Ticket) 2011–2014 $1B
ESPN (Monday Night) 2014–2022 $1.9B
FOX (NFC) 2014–2022 $720.3M
NBC (Sunday Night) 2014–2022 $1.05B
TOTAL $5.75B
Source: http://espn.go.com/nfl/story/_/id/7353238/nfl-re-ups-tv-pacts-expand-thursday-schedule

Table 1.3 Most popular sports and fitness activities based on core participation (age 6 and above; U.S.
residents)

Rank Activity # Of Participants

1 Walking for Fitness 114.1 million
2 Bowling 55.9 million
3 Treadmill 53.1 million
4 Running/Jogging 49.4 million
5 Hand Weights 45.9 million
6 Billiards/Pool 39.4 million
7 Bicycling 39.3 million
8 Freshwater Fishing 38.9 million
9 Weight/Resistance Machines 38.6 million
10 Dumbells 37.4 million
Source: Sports & Fitness Industry Association, www.sfia.org

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 1 Emergence of sports marketing

Unorganized sport participants/organized sport participants

Amateur
Youth recreational instructional
1
Youth recreational elite
Schools
Intercollegiate
Professional
Minor/secondary
Major
Unorganized sports are the sporting activities people engage in that are not
sanctioned or controlled by some external authority. Kids playing a pick-up game
of basketball, teenagers skateboarding, or people playing street roller hockey, as
well as fitness runners, joggers, and walkers are only a few of the types of sporting
activities that millions of people participate in each day. The number of people who
participate in unorganized sports is difficult to estimate. We can see how large this
market is by looking at the unorganized sport of home fitness. According to a survey
published by the National Endowment for the Arts, American households spend $130
annually on sports or exercise equipment. In addition, the average purchase price of a
multi-purpose home gym station was $640 while the average cost of a treadmill was
$2000.34
We can see that the size of the market for unorganized sports is huge, and there are
many opportunities for sports marketers to serve the needs of these consumers.
Organized sporting events refer to sporting competitions that are sanctioned and
controlled by an authority such as a league, association, or sanctioning body. There are
two types of participants in organized events: amateur and professional.
Amateur sporting events refer to sporting competitions for athletes who do not
receive compensation for playing the sport. Amateur competitions include recreational
youth sports at the instructional and elite (also known as “select”) levels, high school
sports controlled at the state level through leagues, intercollegiate sports (NCAA
Division I–III, NAIA, and NJCAA), Olympics, and adult community-based recreational
sports. Professional sports are also commonly classified by minor league or major
league status.

Sponsors as consumer
Other equally important consumers in sports marketing are the many business
organizations that choose to sponsor sports. In sports sponsorship, the consumer (in
most cases, a business) is exchanging money or product for the right to associate its
name or product with a sporting event, creating a commercial competitive advantage
for both parties. The decision to sponsor a sport is complex. The sponsor must
not only decide on what sport(s) to sponsor, but must also consider what level of
competition (recreational through professional) to sponsor. They must choose whether
to sponsor events, teams, leagues, or individual athletes.
Although sponsorship decisions are difficult, sponsorship is growing in popularity
for a variety of reasons. As Pope discusses in his excellent review of current
sponsorship thought and practices,35 sponsorship can help achieve corporate

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 1 Emergence of sports marketing
objectives (e.g., public awareness, corporate image building, and community
involvement), marketing objectives (e.g., reaching target markets, brand positioning,
and increasing sales), media objectives (e.g., generate awareness, enhance ad
campaigns, and generate publicity), and personal objectives (management interest).
According to IEG, lingering effects of scattered economic crises throughout the
world and a yet-to-stabilize recovery in the U.S. have impeded sponsorship spending
worldwide. However, despite these adverse impacts, a growth of 4.1 percent globally
and 4.5 percent in North America was estimated in 2014. Sponsorship spending
continued to reach a new plateau, $20.6 billion being spent in the U.S. and an
estimated $55.3 billion worldwide. Projections for future growth are highly dependent
upon the unprecedented recognition at the highest levels of corporations that
sponsorship is a potent answer to the challenge of how to build attention, support,
and loyalty for brands in an environment that is otherwise hostile to marketing
communications.36

The sports product

Perhaps the most difficult conceptual issue for sports marketers is trying to
understand the nature of the sports product. Just what is the sports product that
participants, spectators, and sponsors consume? A sports product is a good, a
service, or any combination of the two that is designed to provide benefits to a sports
spectator, participant, or sponsor.

Goods and services

Goods are defined as tangible, physical products that offer benefits to consumers.
Sporting goods include equipment, apparel, and shoes. We expect sporting goods
retailers to sell tangible products such as tennis balls, racquets, hockey equipment,
exercise equipment, and so on. By contrast, services are defined as intangible,
nonphysical products. A competitive sporting event (i.e., the game itself) and an ice-
skating lesson are examples of sport services.
Sports marketers sell their products based on the benefits the products offer to
consumers. In fact, products can be described as “bundles of benefits.” Whether
as participants, spectators, or sponsors, sports products are purchased based on the
benefits consumers derive. Ski Industry America, a trade association interested in
marketing the sport of snowshoeing, understands the benefit idea and suggests that
the benefits offered to sports participants by this sports product include great exercise,
little athletic skill, and low cost (compared with skiing). It is no wonder snowshoeing
has recently emerged as one of the nation’s fastest growing winter sports.37
Spectators are also purchasing benefits when they attend or watch sporting events.
For example, the 2014 Super Bowl was the most watched event in U.S. television
history, attracting 111.5 million viewers. The game provides consumers with benefits
such as entertainment, ability to socialize, and feelings of identification with their
country’s teams and athletes.
Moreover, organizations such as Federal Express, which paid $205 million over 27
years for the naming rights to the Washington Redskins sports complex that opened
in 1999, believe the association with sports and the subsequent benefits will be
worth far more than the investment.38 The benefits that organizations receive from
naming rights include enhanced image, increased awareness, and increased sales of
their products.
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 1 Emergence of sports marketing

CAREER SPOTLIGHT
Chris Ferris, Associate Athletic Director for Marketing & Promotions
University of Pittsburgh
1
Mr. Ferris joined the Pittsburgh b. Advertising and ticket sales
Athletic Department in 1994 when c. Corporate ticket sales, group
he served as a student equipment ticket sales, and promotions
manager. The following year, d. Game presentation
he worked as an undergraduate e. Internet services
intern with the media relations and f. PantherVision production
marketing departments. He is also a g. Pitt Panthers television
1998 graduate of Pittsburgh with a Additionally, I work very closely
Bachelor’s degree in business and with our multi-media rights holder
communications and earned his and our ticket operations team
Master’s Degree at the University of
3. Why did you choose the
Pittsburgh’s Katz Graduate School of
University of Pittsburgh, for
Business.
both academic as well as your
1. What is your career background? career path? The University
How did you get to where you of Pittsburgh is an amazing
are today? I started in athletics as place. Our leadership at the
a football equipment manager. University and in our Athletic
Afterwards, I volunteered and department are both committed
interned with both the Media to being the best and providing
Relations and Marketing the best experience for our
Departments. Volunteering students and student-athletes. I
and interning were key. The believe in our leaders and people
opportunities allowed me to and I believe in our leaders and
learn about the industry, meet professions.
some terrific people, and give
4. What made you get into
people in our organization see
marketing? What do you like
me work. Once given my first
about it best? Volunteering and
opportunity as assistant director
interning exposed me to many
of marketing, I continued to work
different areas of Intercollegiate
as enthusiastically as possible
Athletics. Marketing gives me
while continuing to volunteer for
an opportunity to work with
any additional projects within
people both internally within the
the department. Once again,
university and externally. I really
this enabled me to grow as a
enjoyed having what I believe is
professional.
the best of both worlds; dealing
2. What is your role as Associate with students, faculty, and staff
A.D. for Marketing & while also having the opportunity
Promotions? Our marketing to work with external sponsors
department and Pitt manages and partners.
and oversees:
5. How large is your full-time
a. Licensing and
marketing staff? Seven people.
merchandising

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 1 Emergence of sports marketing

6. What are the main marketing 7. What is your ultimate goal for
challenges facing Pitt Athletics? your career? First, make positive
These can be sport specific. Our impacts on our teams, coaches,
goals are to sell-out all of our and fans. Second, serve as an
venues for all of our teams. athletic director.

Different types of sports products

Sports products can be classified into four categories. These include sporting events,
sporting goods, sports training, and sports information. Let us take a more in-depth
look at each of these sports products.

Sporting events
The primary or core product of the sports industry is the sporting event. By primary
product we are referring to the competition, which is needed to produce all the
related products in the sports industry. Without the game there would be no licensed
merchandise, collectibles, stadium concessions, and so on. You may have thought
of sports marketing as being important for only professional sporting events, but, as
is evident by the increased number of media outlets and broadcasts, the marketing
of collegiate sporting events and even high school sporting events is becoming more
common.
Historically, a large distinction was made between amateur and professional sporting
events. Today, that line is becoming more blurred. For example, the Olympic Games,
once considered the bastion of amateur sports, is now allowing professional athletes
to participate for their countries. Most notably, the rosters of the Dream Teams of
U.S. Basketball fame and the U.S. Hockey team are almost exclusively professional
athletes. This has been met with some criticism. Critics say that they would rather
give the true amateur athletes their chance to “go for the gold.”

Athletes
Athletes are participants who engage in organized training to develop skills in
particular sports. Athletes who perform in competition or exhibitions can also be
thought of as sports products. David Beckham, Chamique Holdsclaw, and Phil
Mickelson are thought of as “bundles of benefits” that can satisfy consumers of sport
both on and off the court.
One athlete to achieve this “superproduct” status is the multimillion dollar
phenomenon named Eldrick “Tiger” Woods. Tiger seemed to have it all. He was
handsome, charming, young, multiethnic, and most important – talented. Tiger’s
sponsors certainly think he was worth the money. However, poor choices and
inappropriate behavior attracted controversy. Controversy has required the likes
of Nike, Buick, NetJets, and American Express to rethink their level of affiliation,
impacting Tiger’s multimillion dollar sponsorship deals.
Sports marketers must realize that the “bundle of benefits” that accompanies an
athlete varies from person to person and has affiliated risk. The benefits associated
with Allen Iverson are different from those associated with Kevin Garnett or golfer
Michelle Wei. Regardless of the nature of the benefits, today’s athletes are not
thinking of themselves as athletes but as entertainers.
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 1 Emergence of sports marketing
Arena
A final sports product that is associated with the sporting event is the site of the
event – typically an arena or stadium. Today, the stadium is much more than a place 1
to go watch the game. It is an entertainment complex that may include restaurants,
bars, picnic areas, and luxury boxes. Today’s teams are not only trying to create more
visually appealing buildings, but they’re interested in making attending the game an
all-encompassing entertainment experience. In fact, stadium seating is becoming a
“product” of its own.
For example, some of the following changes already seen at today’s venues will soon
become the norm. Things such as free Wi-Fi, mobile apps, fantasy stats on video
boards, TVs in seats and bathrooms, customizable instant replays, bars overlooking
fields, holograms on the fields instead of players, and improved access are the wave
of the future. Companies like Cisco offer Stadium Wi-Fi packages made specifically
for sports arenas that have an immense amount of internet usage in a confined
area. Cisco plans on placing antennas in specific places in the stadium for optimal
performance for people to use their smart phones with optimal speeds.39
In another example, it might seem like a stretch to think that a roller coaster will pop
up over a baseball field’s outfield fence, but some type of amusement park ride –
Detroit’s Comerica Park already has a Ferris wheel – that provides unique views of the
game (and can keep the kids entertained) seems inevitable.40

Sporting goods
Sporting goods represent tangible products that are manufactured, distributed, and
marketed within the sports industry. The sporting goods and recreation industry was
a $79.1 billion industry in 2013.41 The segments and their relative contribution to the
industry sales figure include sports equipment ($21.5 billion), exercise equipment
($4.7 billion), sports apparel ($31.8 billion), athletic footwear ($13.6 billion), and
licensed merchandise ($7.5 billion). The largest product category, in terms of sales,
was firearms and hunting (10 percent), industrial exercise equipment (9 percent),
running footwear (6 percent), and fishing (5 percent).42 Although sporting goods are
usually thought of as sports equipment, apparel, and shoes, there are a number of
other goods that exist for consumers of sport. Sporting goods also include licensed
merchandise, collectibles, and memorabilia.

Licensed merchandise
Another type of sporting goods that is growing in sales is licensed merchandise.
Licensing is a practice whereby a sports marketer contracts with other companies to
use a brand name, logo, symbol, or characters. In this case, the brand name may be a
professional sports franchise, college sports franchise, or a sporting event. Licensed
sports products usually are some form of apparel such as team hats, jackets, or
jerseys. Licensed sports apparel accounts for 60 percent of all sales. Other licensed
sports products such as novelties, sports memorabilia, trading cards, and even home
goods are also popular.
The Licensing Letter reports that sales of all licensed sports products reached $17.5
billion worldwide in 2012. In fact, sport licensing generates $800–$900 million in
royalty revenue annually. Growth is expected to continue based on research from the
National Sporting Goods Manufacturers Association and the Sports Licensing Report.
U.S. retail sales of licensed products for the four major professional sports leagues
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 1 Emergence of sports marketing
(NBA, NFL, MLB, and NHL) has more than doubled since the 1990s, from $5.35 billion
in 1990 to $13.5 billion in 2012.43
Through this period, the various major professional sports leagues developed a
sprawling network of licensing arrangements with more than 600 companies. Another
2,000 companies have arrangements with the various college and university licensing
groups. As far as the retail distribution of product, a network of “fan shops” grew to
more than 450 in number and licensed products found their way into sporting goods
stores, department stores, and eventually, the mass merchants. To compete, most
of the major sporting goods chains and many department stores developed separate
areas devoted exclusively to licensed goods.44 Sales of licensed sports products will
continue to grow as other “big league” sports gain popularity. For example, NASCAR
has seen the sale of licensed goods increase from $60 million in 1990 to $500 million
in 1994 and to an estimated $1.2 billion in 2013 (see NASCAR.com).

Collectibles and memorabilia

One of the earliest examples of sports marketing can be traced to the 1880s when
baseball cards were introduced. Consider life before the automobile and the television.
For most baseball fans, the player’s picture on the card may have been the only
chance to see that player. Interestingly, the cards were featured as a promotion in
cigarette packages rather than bubble gum. Can you imagine the ethical backlash that
this practice would have produced today?
Although the sports trading card industry reached $1.2 billion in 1991, industry wide
yearly sales plummeted to $700 million in 1995 and are now stable at between

Photo 1.2 The sports collector’s dream – the Baseball Hall of Fame. The Baseball Hall
of Fame’s plaque gallery, housing plaques for all Hall of Famers, November 26, 2011
in Cooperstown, NY.
Source: Shutterstock.com
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 1 Emergence of sports marketing
$400 and $500 million.45 What caused this collapse? One answer is too much
competition. David Leibowitz, an industry analyst, commented that “With the channel
of distribution backed up and with too much inventory, it was hard to sustain prices,
let alone have them continue to rise.” At the beginning of the 1980s there were only
1
a few major card companies (Topps, Donruss, and Fleer) but by the early ’90s there
were sets of cards produced by six different companies, more in the market than ever
before. This flooded market and the cartoon fad cards have hurt the sports trading
card industry. Other problems include labor problems in sports, escalating card prices,
and kids with competing interests.
There is, however, some evidence that the industry will rebound. Citing a glut in the
marketplace and the desire to regain some control over the baseball card industry,
Major League Baseball declined to renew Donruss’ license, leaving Topps and Upper
Deck as the only producers. Perhaps the biggest boost will be selling and trading
cards on the Internet.46 The first major company in this market was the industry
leader, Topps. Each week on etopps.com the company promotes three new limited
edition cards or IPOs (Initial Player Offerings). The buyer can then purchase the card
and takes physical possession, sell the card in an auction, or hold the card until it
appreciates in value. The new product has been a huge success for Topps and could
be the future of the card industry.

Personal training for sports

Another growing category of sports is referred to as personal training. According to the
United States Bureau of Labor Statistics (BLS), employment opportunities for fitness
workers are expected to increase more than 29 percent over the 2008 to 2018 decade.47
Much of this growth is attributed to increasing awareness of the health benefits of
regular exercise. However, these products are produced to benefit participants in sports
at all levels and include fitness centers, health services, sports camps, and instruction.

Fitness centers and health services

When the New York Athletic Club was opened in 1886, it became the first facility
opened specifically for athletic training. From its humble beginning in New York, the
fitness industry has seen an incredible boom. “Pumping iron” was a common phrase
in the 1970s and early 1980s. Moreover, the 1970s aerobics craze started by Dr. Ken
Cooper added to the growth of health clubs across the United States.
It is no secret that a physically fit body is becoming more important to society. The
growth of the fitness industry follows a national trend for people to care more about
their health. In 1993, there were 11,655 clubs in the United States billed as “health
and fitness” centers. In 2012, this number had grown to a record high of 29,960
clubs. Moreover, health club membership climbed to a record high 51.4 million
people.48 Why are people joining health clubs in record numbers? According to a
study conducted by the International Health, Racquet, and Sportsclub Association,
the factors that will continue to support the growth of health club membership in the
United States include the following:
1. The growing number of health clubs that make it more convenient for consumers.
2. The continued and increased promotion of the benefits of exercise by
organizations like the U.S. Surgeon General.
3. More Americans are concerned about the adverse effects of poor exercise and
eating habits.49
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Sports camps and instruction
Sports camps are organized training sessions designed to provide instruction in a
specific sport (e.g., basketball or soccer). Camps are usually associated with instructing
children; however, the “fantasy sports camp” for aging athletes has received
considerable attention in the past few years. Fantasy sports camps typically feature
current or ex-professional athletes, and the focus is more on having fun than actual
instruction. Nearly every major league baseball team now offers some type of fantasy
camp for adults. For example, Chicago White Sox Fantasy Baseball Camp allows you
(if you’re over 21 years old) to be a major leaguer for a week. The experience consists
of social activities, games, and instruction with former major league players, but this
does not come cheap. The price for participating is roughly $4,200 per person.
Along with camps, another lucrative sports service is providing personal or group
instruction in sports. The difference between instruction and camps is the ongoing
nature of the instruction versus the finite period and intense experience of the camp.
For example, taking golf or tennis lessons from a professional typically involves a
series of half-hour lessons over the course of months or sometimes years. Contrast
this with the camp that provides intense instruction over a week-long period.

Sports information
The final type of sports product that we discuss is sports information. Sports
information products provide consumers with news, statistics, schedules, and stories
about sports. In addition, sports information can provide participants with instructional
materials. Sports-specific newspapers (e.g., The Sporting News), magazines (e.g.,
Sports Illustrated), Internet sites (e.g., cnnsi.com), television (e.g., The Golf Channel),
and radio (e.g., WFAN) can all be considered sports information products. All these
forms of media are experiencing growth both in terms of products and audience.
Consider the following examples of new sports information media. ESPN launched
its new magazine in March 1998 to compete with Sports Illustrated, which leads all
sports magazines with a circulation of more than 3.2 million. The current circulation for
ESPN The Magazine is 2.1 million, but all indications are that there is room at the top
for two sports magazine powerhouses.50
The fastest growing source of sports information is on the World Wide Web, through
use of computers, tablets, and smartphones. A look at the top sports Web sites is
shown in Figure 1.3. Today, consumers are more connected than ever, with more
access and deeper engagement, thanks to the proliferation of devices and platforms.
The playing field for the distribution of sports content has never been deeper or wider.
In fact, social media exchanges are now standard practice in our daily lives. Not only
do consumers have more devices to choose from, but they own more devices than
ever. Connected devices such as smartphones and tablets have become constant
companions to consumers on the go and in the home. The rapid adoption of second
screen alternatives has revolutionized shopping and viewing experiences. Sports-
related content publishers and advertisers seeking to reach sports enthusiasts have
more options than ever to connect with fans as they consume all things sports.
Case in point: it’s likely that at least one billion sports fans worldwide viewed events,
got updates, and checked results of the 2012 London Olympics on digital devices,
including PCs, mobile phones, and tablets.51
A study conducted by Burstmedia (2012) revealed sports fans use tablets and/or
smartphones to access online sports-related content while engaged in a number
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 1 Emergence of sports marketing

Unit is million

19.5
19
18
9.2
7
Yahoo Sports

ESPN
1
125.2
Bleacher Report
20
CBS Sports
28 SI.com

NBC Sports
38
SBNation
75.5
Fox Sports

RantSports

ThePostGame

Figure 1.3 Top sports Web sites

Source: Adapted from: http://www.ebizmba.com/articles/sports-websites. Please
note this is a snapshot of the current information at the time.

Web 1.2 Ski.com provides information for ski enthusiasts

Source: Courtesy ski.com

of activities, ranging from watching sports content on television (35.7 percent) to

browsing web content on a desktop/laptop computer (19.4 percent), and/or attending
a live sporting event in person (7.4 percent).52 Tablets and smartphones are emerging
as sports content consumption platforms. The study revealed that among all sports
fans, 31.6 percent use tablets (e.g., an iPad) and 42.9 percent use smartphones (e.g.,
an iPhone) to access online sports content and video at least occasionally. In addition,
17.1 percent use tablets and 23.8 percent use smartphones to watch a live sporting
event or game. Furthermore, Nielsen’s 2011 study on consumer usage identified
31 percent of tablet and smartphone users who downloaded an app in the past 30
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 1 Emergence of sports marketing
days, downloaded a sports-related app.53 Sports fans have been leading the charge
and finding new ways to share information and socialize, using the Web as a daily
source of information. Due to the tremendous amount of information that sports fans
desire (e.g., team stats, player stats, and league stats) and the ability of the Web to
supply such information, Web portals and sports marketing make a perfect fit. Sports
fans are the biggest consumers of media via cross-platform devices. According to
ESPN’s Glenn Enoch, sport consumers have an urgent need to stay connected to
sports all day, whether it is game-casting or managing fantasy leagues, or just keeping
up with headlines; that’s what makes sports fans different, the demand to access
information.54 One example of the success of providing sports information via the
World Wide Web is www.ESPN.com (ESPN’s Web site).
ESPN’s multilayered Web portal affords consumer access and tracks consumer
behavior across the growing list of media and Web platforms. According to Julie
Roper, ESPN Director of Advertising Analytics, “It used to be just about high ratings
and reach, and that was enough, now, there’s a lot more accountability, so we have
gotten much more granular.” Considering the global nature of sport, looking across
the multiplatform universe is essential. That is why ESPN developed the following
seven cross media principles to further solidify and integrate multimedia and Web
platform usage and analysis.

ESPN’s seven cross-media principles

1. New media create new strata of users: When a technology is introduced, some
will adopt it but most do not. There is no foreseeable future when every person
has and uses every available device.
2. No new metrics: Measuring new media does not require new metrics – it
requires metrics that unite behavior across different platforms. They may be
called different things in different media, but they have the same meaning: How
many, how often and how long.
3. Users and usage: “How many” is not the same as “How long.” Both users and
usage are valuable metrics in analyzing cross-media behavior, but mean different
things and must be considered separately.
4. A heavy user is a heavy user: The heavier user of one medium tends to be a
heavier user of other media as well.
5. Cross-media usage is not zero-sum: Doing one behavior more does not mean
doing another behavior less. Media usage is no longer constrained to limited
locations and opportunities – people can consume media throughout the day,
wherever they are. We call this “new markets of time.” TV viewing continues to
grow because the media pie is getting larger.
6. Simultaneous usage is widespread but limited: While people do consume
multiple media at the same time, it represents only a small amount of total media
usage – just minutes per day.
7. Best available screen: People are using different platforms at different times
and in different places for different purposes. Cross-media behavior isn’t about
convergence – it is about the opportunity to follow the consumer throughout the
day, fulfilling specific needs and building touch points.
Source: Article author: Mike Reynolds. Rightshold: ESPN.
http://www.multichannel.com/technology/
espn-espouses-seven-principles-cross-media-research/124879.

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 1 Emergence of sports marketing

The multidimensional nature of the sports product

As you can see from our previous discussion, there are a wide variety of sports
products. Our earlier definition of the sports product incorporated the distinction 1
between goods and services. Although this is a traditional approach to categorizing
consumer products, the complexity of the sports product makes the goods–services
classification inadequate. Consider the rich diversity of the sports products that we
have just considered. Everything from a hockey puck to the NCAA championship
game of the Final Four in basketball is included in our definition. Because of this
diversity and complexity, we have added an additional dimension to the sports product
known as the body mind continuum. The body mind continuum is based on the
notion that some sports products benefit consumers’ minds, while other products
act on consumers’ bodies. Figure 1.4 illustrates the multidimensional nature of sports
products using two dimensions: goods services and body mind. These dimensions
make up the sports product map.
As you can see, we have positioned some sports products on this map. Exercise
equipment is shown as a good that works on the body of the consumer. At the other
end of the map, attending or watching a sporting event is considered a service that acts
on the mind of consumers. Perhaps we can best describe the differences based on the
mind–body and goods–services dimension by exploring sports camps. Sports camps
for children are primarily instructional in nature. The primary product being sold is the
opportunity for kids to practice their physical skills. However, the fantasy camp targeting
adults is a product that acts more on the mind than body. The adults are purchasing the
“fantasy” to interact with professional athletes rather than the physical training.
Understanding where sports products fall on this map is critical for sports marketers.
Marketers must understand how they want their sports product to be perceived
by consumers so they can understand what benefits to stress. For example, the
marketers of a sporting event may want to sell the intangible excitement or the
tangible features of the arena. This strategic decision is based on a number of factors
that will be considered in detail throughout this text.

Body Mediated

Exercise equipment Fitness center

Sports camps membership
for kids

Fantasy sports camps

for adults
Goods Services

Consuming the
Sports information event as spectator
products
Mind

Figure 1.4 The multidimensional nature of sports products using two dimensions:
Goods–Services and Body–Mind
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 1 Emergence of sports marketing

Producers and intermediaries

Producers and intermediaries represent the manufacturers of sports products or
the organizations that perform some function in the marketing of sports products.
Organizations or individuals that perform the function of producer or intermediary
include team owners, sanctioning bodies, agents, corporate sponsors, media, and
sporting goods manufacturers. In the following paragraphs, we take a look at each of
these producers and intermediaries as they relate to the various sports products.

Sports labor
Owners of professional sports franchises, partnerships that own sporting events and
universities that “own” their athletic teams all represent producers of sporting events.
One of the unique aspects of the sports industry is that oftentimes business people
purchase a team because they always dreamed of becoming involved in sports.
Typically, sports owners are entrepreneurs who have made their riches in other
businesses before deciding to get involved in the business of sports. All too often
these owners may be realizing a dream, but fail to realize a profit. Just think of the
risks in owning your own team. Pro sports teams have seasonal revenue streams, few
chances to expand, and frequent labor problems, and are dependent on the health of
just a select few employees.
Many sports-related financial ownership deals – be it racehorses, minor league baseball
teams, or indoor soccer franchises – score high on appeal and low on profits, unless
the team spigot is affiliated with one of the premiere teams or leagues. J. W. Stealey,
former owner of the Baltimore Spirit (now Blast) professional indoor soccer team,
exemplifies the typical sports owner. He says, “Sports has always been my life.
Owning a team is, to be honest, an ego kind of a deal, with all the attention from the
media and involvement with the players.” However, there is just one catch. “Although
I keep expecting us to turn a profit, we never have.”55 However, on the opposite end
of the spectrum are teams like Real Madrid, which generated $650 million in revenues
during the 2011–2012 season and was identified as the world’s most valuable sports
team worth $3.3 billion.56
As Mark Cuban, who bought the majority share of the Dallas Mavericks for $285
million has openly admitted, “having paid $200 million plus for my franchise, I want,
and need, the NBA running on all cylinders in order to maximize the return on my
investment.”57 Even though many franchises struggle to generate profitable year to
year revenues, astonishlngly, valuation numbers of the high demand sport ogranization
often see double-digit increases.
Most professional sports teams are owned by individual investors who have staked
their personal fortunes to buy their franchises, which they often operate as a public
trust. The Washington Redskins, Wizards, and Capitals are owned by individuals and
their investment teams. Corporate ownership of a major league sports team is rare,
but exists. The Chicago Cubs are owned by the Tribune Company and the Atlanta
Braves are owned by Time Warner. However, several recent corporate ownerships
of professional sports teams have fizzled, including the Disney Company’s ownership
of the then-Anaheim Angels and the Mighty Ducks. The Los Angeles Dodgers were
owned for several years by News Corp., before the company sold the team to an
investor group from Boston, who recently sold the team to Guggenheim Baseball
Management which includes former Los Angeles Laker Magic Johnson. Interestingly,
the NFL forbids corporate ownership of franchises.
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 1 Emergence of sports marketing
Sanctioning bodies
Sanctioning bodies are organizations that not only market sports products, but also,
more importantly, delineate and enforce rules and regulations, determine the time 1
and place of sporting events, and provide athletes with the structure necessary
to compete. Examples of sanctioning bodies include the NCAA, NFL, NHL, IOC
(International Olympic Committee), and MLB. Sanctioning bodies can be powerful
forces in the sports industry by regulating the rules and organizing the structure of the
leagues and sporting events.
The PGA (Professional Golf Association) of America is one of the largest sanctioning
bodies in the world. It is comprised of more than 22,000 members that promote
the game of golf to “everyone, everywhere.” In addition to marketing the game of
golf, the PGA organizes tournaments for amateurs and professional golfers, holds
instructional clinics, and hosts trade shows.58 Although the PGA has a long history of
advancing golf, other sport sanctioning bodies are surrounded by controversy. Kevin
Iole of the Las Vegas Review Journal describes boxing’s woes as follows. “Imagine
convicted mob boss John Gotti at the helm of the Internal Revenue Service and you
have a sense of what it’s like in boxing with the WBA, WBC, WBO and IBF controlling
world titles. A surgeon general’s warning should be slapped on the side of every one
of their title belts: Sanctioning bodies are hazardous to boxing’s health.”59
NASCAR is another of the most influential and powerful sanctioning bodies in sport.
Ever since NASCAR began sanctioning stock car races, there have been cries of
foul play and that NASCAR has somehow influenced the outcome of a race. One
of NASCAR’s roles is the car inspection process prior to races and this has always
raised questions. Allegations of wrongdoing go all the way back to the early days
of the sport. For example, legendary Junior Johnson’s so-called banana car in 1966, a
Ford that NASCAR said was legal but others say was given a free pass through
inspection because the series was trying to bring the manufacturer back into racing.
On the track, skeptics say NASCAR deliberately uses yellow flags to close up the field
for a tight finish. True or false, there is no doubt of the clout of NASCAR.

Web 1.3 NCAA: One of the most powerful sanctioning bodies

Source: http://www.ncaa.com/
33
 1 Emergence of sports marketing
Sponsors
Sponsors represent a sport intermediary. As we discussed, corporations can serve as
a consumer of sport. However, corporations also supply sporting events with products
or money in exchange for association with the event. The relationship between the
event, the audience, and the sponsor is referred to as the event triangle.60
The basis of the event triangle is that the event, the audience, and the sponsor
are all interdependent or depend on each other to be successful. All three groups
work in concert to maximize the sport’s exposure. The events showcase talented
athletes and attract the audience who watch the event in-person or through some
medium. The audience, in turn, attracts the sponsor who pays the event to provide
them with access to the audience. In addition, the sponsor promotes the event to
the audience, which helps the event reach its attendance goals. It is safe to say that
sponsors represent an important intermediary or link between the event and the final
consumers of sports – the audience.

Media
Earlier in this chapter, we commented on the growth of media in bringing sporting
events to consumers. In fact, the media, which is considered an intermediary, may
be the most powerful force in sports today and is getting stronger. The primary
revenue generator for these networks is selling prime advertising time. As the price
of advertising time rises, so does the cost of securing broadcast rights; however, the
networks are willing to pay.
Sports organizations cannot survive without the mass exposure of the media, and
the media needs sports to satisfy the growing consumer demand for this type
of entertainment. As the demand for sports programming increases, innovations
in media will emerge. For example, the growing number of consumers utilizing
smartphones, tablet computers as well as other digital platforms to augment
the spectator experience has created new activation platforms for properties
and sponsors.61 Today’s consumers want to be engaged, demanding up-to-the-
minute platforms that provide exclusive content, statistics, and interactive forums
based upon live, on the field, action. Engagement not only extends brand support
but also provides consumers with the opportunity to have real-time interaction
enabling the procurement of exclusive content and an aforementioned sense
of belonging.62 All the while, professional and collegiate leagues, teams, and
sponsors struggle to stay abreast of these “second screen” alternatives. Whether
consumers are spectating in person or live at the event, they are using digital
platforms to deepen their level of engagement and drive value for sponsors.

Agents
Another important intermediary in bringing the athlete to the consumer is the sports
agent. From a sports marketing perspective, sports agents are intermediaries whose
primary responsibility is leveraging athletes’ worth or determining their bargaining
power. The first “super-agent” in sports was Mark McCormack (see box, Sports
Marketing Hall of Fame). Prior to his emergence, agents had never received the
exposure and recognition that they enjoy today. Interestingly, it is not the agents
themselves who have provoked their current rise to prominence, but rather the
increased bargaining power of their clients.

34
 1 Emergence of sports marketing
The bargaining power of the athletes can be traced to two factors. First, the formation
of new leagues in the 1970s, such as the American Basketball Association (ABA) and
the World Hockey Association (WHA), resulted in increased competition to sign the
best athletes. This competition drove the salaries to higher levels than ever before
1
and made agents more critical. Second, free agency and arbitration have given
players a chance to shop their talents on the open market and question the final offer of
owners. In addition, owners are now able to pay players the higher salaries because of
the multibillion dollar national television contracts and cable television revenues.
Although most people associate agents with contract negotiations, agents do much
more. Here are some of the other responsibilities of the agent:63
X Determines the value of the player’s services
X Convinces a club to pay the player the aforementioned value
X Develops the package of compensation to suit the player’s needs
X Protects the player’s rights under contract (and within the guidelines set by the
collective bargaining agreement)
X Counsels the player about post-career security, both financial and occupational
X Finds a new club upon player free agency
X Assists the player in earning extra income from endorsements, speeches,
appearances, and commercials
X Advises an athlete on the effect their personal conduct has on their career

SPORTS MARKETING HALL OF FAME

Mark McCormack

Many people trace the beginnings of World International. TWI is the largest
modern sports marketing to one man independent producer of sports
– Mark McCormack. In 1960, Mark programming in the world. One of its
McCormack, a Cleveland lawyer, shows, Trans World Sports, is viewed
signed an agreement to represent in more than 325 million homes
Arnold Palmer. With this star client in over 76 countries. Along with
in hand, McCormack began the representing athletes and producing
International Management Group, sports programming, IMG runs
better known as IMG. Today, IMG several sports academies that serve
is a multinational sports marketing as training facilities for elite athletes.
organization that employs over 3,000 Additionally, IMG manages and
people, has sales of over $1 billion, creates sporting events such as the
and represents some of the finest Skins Game, Superstars Competition,
professional athletes in the world. and CART races. Unfortunately for
In addition to his contribution to the sports world, Mr. McCormack
sports marketing in the United States, died in May 2003 at the age of 72.
McCormack has globalized sports
marketing. He opened an Asian office Source: Susan Vinella, “Sports
of IMG in Tokyo in 1969, led in the Marketing Pioneer Dead at 72”;
sponsorship of events in Europe, and “IMG’s McCormack Hailed as
Visionary,” Plain Dealer, May 17,
continues to expand into the Middle
2003, a1; Eric Fisher, “IMG Founder
Eastern markets. One example of
McCormack Spiced Up the Sports
McCormack’s enormous reach into
World,” The Washington Times, May 18,
international markets is IMG’s Trans 2003, c3.
35
 1 Emergence of sports marketing
Sports equipment manufacturers
Sports equipment manufacturers are responsible for producing and sometimes
marketing sports equipment used by consumers who are participating in sports at
all different levels of competition. Some sporting equipment manufacturers are still
associated with a single product line, whereas others carry a multitude of sports
products. For example, Platypus Sporting Goods only manufactures cricket balls.
However, Wilson manufactures football, volleyball, basketball, golf, tennis, baseball,
softball, racquetball or squash, and youth sports equipment.
Although it is obvious that equipment manufacturers are necessary to supply the
equipment needed to produce the competition, they also play an important role in
sports sponsorship. Sports equipment manufacturers become sponsors because of
the natural relationship they have with sports. For instance, Rawlings, one of the best
known baseball glove manufacturers, sponsors the American and National League
Golden Glove Award, which is given to the best defensive players in their position.
Molten sponsors the NCAA Volleyball Championship by supplying the official game
balls. In addition, Spalding is the official game ball of the WNBA.

Basic marketing principles and processes applied to sport

The sports marketing mix
Sports marketing is commonly associated with promotional activities such as
advertising, sponsorships, public relations, and personal selling. Although this is true,
sports marketers are also involved in product and service strategies, pricing decisions,
and distribution issues. These activities are referred to as the sports marketing mix,
which is defined as the coordinated set of elements that sports organizations use to
meet their marketing objectives and satisfy consumers’ needs.
The basic marketing mix elements are the sports product, price, promotion, and
distribution. When coordinated and integrated, the combination of the basic marketing
mix elements is known as the marketing program. The marketing mix or program
elements are controllable factors because sports marketing managers have control
over each element. In the following sections, we take a closer look at the four
marketing mix elements as they apply to the sports industry.

Product strategies
One of the basic sports marketing activities is developing product and service
strategies. In designing product strategies, decisions regarding licensing,
merchandising, branding, and packaging are addressed. In addition, sports marketing
managers are responsible for new product development, maintaining existing
products, and eliminating weak products. For instance, the Anaheim Ducks recently
changed their name from the Mighty Ducks and also sported new uniforms with
different colors and a redesigned logo. This product decision was a result of cutting
the ties with former owner, The Walt Disney Co. The team kept Ducks in its nickname
after a poll of season ticketholders provided research to support the retention of the
name. “A brand image is so hard to build,” new owner Henry Samueli said. “If you
have to change the name, then you’re wiping out 13 years of brand history, not only in
Orange County but in the whole country.”64
Because so much of sports marketing is based on services rather than goods,
understanding the nature of services marketing is critical for the sports marketing
36
 1 Emergence of sports marketing
manager. Services planning entails pricing of services, managing demand for services,
and evaluating service quality. For instance, sports marketing managers want to know
fans’ perceptions of ticket ushers, concessions, parking, and stadium comfort. These
service issues are especially important in today’s sports marketing environment
1
because fans equate value with high levels of customer service.

Distribution strategies
Traditionally, the role of distribution is finding the most efficient and effective way to get
the products into the hands of the consumers. Issues such as inventory management,
transportation, warehousing, wholesaling, and retailing, are all under the control of
distribution managers. The advent of sporting goods superstores such as Dick’s Sporting
Goods or the Sports Authority, offering sports memorabilia on the Home Shopping
Network, and marketing sports products on the Internet (e.g., finishline.com) are
examples of the traditional distribution function at work. Sports marketing managers
are also concerned with how to deliver sports to spectators in the most effective and
efficient way. Questions such as where to build a new stadium, where to locate a
recreational softball complex, or how to distribute tickets most effectively are potential
distribution issues facing sports marketers.

Pricing strategies
One of the most critical and sensitive issues facing sports marketing managers today
is pricing. Pricing strategies include setting pricing objectives, choosing a pricing
technique, and making adjustments to prices over time.
The price of tickets for sporting events; fees for personal seat licenses, pay-per-view,
and television sports programming; and the rising costs of participating in recreational
sports such as golf, are all examples of how the pricing function affects sports
marketing.

Promotion strategies
Just ask someone what comes to mind when they think of sports marketing,
and the likely response is advertising. They may think of athletes such as Maria
Sharapova or Peyton Manning endorsing a product or service. Although advertising
is an element of promotion, it is by no means the only one. In addition to advertising,
promotional elements include communicating with the various sports publics through
sponsorships, public relations, personal selling, or sales promotions. Together these
promotional elements are called the promotion mix. When designing promotional
strategies, sports marketers must consider integrating their promotions and using all
aspects of the promotion mix.

The exchange process

Understanding the exchange process is central to any successful marketing strategy.
As generally defined, an exchange is a marketing transaction in which the buyer gives
something of value to the seller in return for goods and services. For an exchange to
occur, several conditions must be satisfied:
X There must be at least two parties.
X Each party must have something of value to offer the other.
X There must be a means for communication between the two or more parties.

37
 1 Emergence of sports marketing
X Each party must be free to accept or decline the offer.
X Each party must believe it is desirable to deal with the other(s).
Traditionally, a marketing exchange consists of a consumer giving money to receive a
product or service that meets their needs. Other exchanges, not involving money, are
also possible. For example, trading a Pedro Martinez rookie baseball card for a Derek
Jeter card represents a marketing exchange between two collectors.
Examples of elements that make up other exchanges appear in Figure 1.5. The two
parties in the exchange process are called exchange players. These two participants
are consumers of sport (e.g., spectators, participants, or sponsors) or producers and
intermediaries of sport. Sports spectators exchange their time, money, and personal
energy with sports teams in exchange for the entertainment and enjoyment of
watching the contest. Sports participants exchange their time, energy, and money
for the joy of sport and the better quality of life that participating in sports brings. In
sponsorships, organizations exchange money or products for the right to associate
with a sporting event, player, team, or other sports entity.
Although these are rather elementary examples of the exchange process, one of the
things that makes sports marketing so unique is the complex nature of the exchange
process. Within one sporting event, multiple exchanges will occur. Consider a
Sprint Cup NASCAR event. There are exchanges between spectators and the track
ownership (i.e., money for entertainment); spectators and product vendors who are
licensed by NASCAR (i.e., money for goods associated with racing); track owner and
NASCAR sanctioning body (i.e., money for organizing the event and providing other
event services); media and NASCAR (i.e., event broadcast coverage for money);
product sponsors and driving team owner (i.e., promotional benefits for money); and
track owner and driving team owner (i.e., producer of the competition for money).
As you may imagine, trying to sort out all these exchanges, much less determine the
various marketing strategies involved in each exchange, is a complicated puzzle that
can only be solved by having a full understanding of the industry within each sport.
Although the nature of each sporting event and industry is slightly different, designing
a marketing strategy incorporates some fundamental processes that span the sports
industry.

Something of Value
Money
Time
Personal energy

Exchange Players Exchange Players

Sports spectators Sporting events
Sports participants Sports good manufacturers
Organizations Teams

Something of Value
Entertainment
Better quality of life
Enhanced image

Figure 1.5 Model of the sports marketing exchange process

38
 1 Emergence of sports marketing

The strategic sports marketing process

Sports marketers manage the complex and unique exchange processes in the
sports industry by using the strategic sports marketing process. The strategic 1
sports marketing process is the process of planning, implementing, and controlling
marketing efforts to meet organizational goals and satisfy consumers’ needs.
To meet these organizational goals and marketing objectives, sports marketers
must first anticipate consumer demand. Sports marketers want to know what
motivates consumers to purchase, how they perceive sports products or services,
how they learn about a sports product, and how they choose certain products over
others.
One way sports marketers anticipate demand is by conducting marketing research
to gather information about the sports consumer. Another way that sports marketers
anticipate demand is by monitoring the external environment. For instance, marketing
research was used to determine the feasibility of locating a new NASCAR speedway
in Northern Kentucky. According to developer, Jerry Carroll, “The report was two
volumes and it not only said a major racetrack would work in this area, but it would
be a grand slam.” In addition, Carroll anticipated demand by examining the external
environment. He found out that there are about 51 million people within a 300-mile
radius of the proposed track and that “NASCAR fans and other racing fans, don’t think
anything of driving 300 miles for a race.”65 Thus far, the research has proven to be
true as the Kentucky Speedway has been a huge success since opening its door for
the 2000 season.
Next, sports marketers examine different groups of consumers, choose the group
of consumers in which to direct the organization’s marketing efforts, and then
determine how to position the product or service to that group of consumers. These
market selection decisions are referred to as segmentation, targeting, and position.
The final aspect of the planning phase is to offer products that are promoted, priced,
and distributed in ways that appeal to the targeted consumers. The following article
illustrates how many of the professional sports leagues have recently attempted to
target women and design products that will appeal to the female fan.

GIRLS GET THEIR GAME ON – WITH GREAT GEAR: SPORTS TEAMS

CATER TO WOMEN FANS WITH NEW LINES OF FEMININE
FASHION

Pink it and shrink it. Just a few years As Super Bowl Sunday approaches,
ago, that was the idea. That’s the football’s women fans will have the
amount of thought professional widest choice ever of fashion forward
sports leagues put into the products clothes to support their teams in
they offered their women fans. trendy fits and fabrics.
They’d just take the popular men’s If you haven’t been shopping lately
stuff – the boxy t-shirts, player for team fashions, be aware: There’s
jerseys, boodies and such – make been a revolution.
them smaller and turn them out Pro sports leagues have been
in quintessential girlie color. How madly licensing stylish clothes and
quaint. new accessories to grab more of

39
 1 Emergence of sports marketing

the multi-billion dollar team fashion says MLB spokesman Matt Bourne,
market. and “all the sports leagues have
All of the big four professional recognized there’s an opportunity
leagues – baseball, football, hockey there” to sell them feminine
and basketball – have seen growth in merchandise to support their teams.
their fem fan base in recent years. Judging from the items on this
This explains the availability of nail page, these include rhinestones,
polish in authorized Major League fitted Ts, jewelry, totes and, yes, even
Baseball team colors, maternity team logo’d Mediterranean Sea bath
tops with “future fan” printed over salts to calm you after a particularly
the baby bump and a footwear plan painful loss by the team whose logo
under development by the National is emblazoned on your chest, cap,
Football League to license stilettos ponytail holder and wristband.
in the same shades as team football “They are a fan and it doesn’t make
jerseys. them less of a fan to wear something
“Our women’s business has with some sequins or a little more
grown twelvefold since 2001 and fitted . . . a little more glitz and glam,”
doubled since 2004,” says Tracey says the National Hockey League’s
Bleczinski, the NFL’s apparel vice marketing executive vice president
president. Brian Jennings.
“For women, shopping is a pastime “Overall, our women viewers
and an activity. They’re constantly are up 45 percent this season over
looking for what’s new. What’s last,” says Lisa Piken, the National
trending,” she says. Hence the Basketball Association’s senior
planned entry into team high heels director of apparel licensing.
(and wedges and boots). She says
44 percent of NFL fans today are Source: Ellen Warren; Courtesy
women. of Chicago Tribune; http://articles.
Major League Baseball has the chicagotribune.com/2011–01–28/
lifestyle/sc-cons-0127-warren-shopping-
largest percentage of women fans
super-bo20110127_1_women-fans-sports-
(45.5 percent) of all pro sports,
leagues-team-colors.

Summary Today sports organizations define their

businesses as entertainment providers.
The sports industry is experiencing
In addition, sports organizations know
tremendous growth, and sports
that to be successful in the competitive
marketing is playing an important role
environment of sports, they must
in this emerging industry. Chapter 1
practice a marketing orientation. An
provided a basic understanding of sports
organization with a marketing orientation
marketing and the sports industry. Sports
concentrates on understanding
marketing is “the specific application of
consumers and providing sports products
marketing principles and processes to
that satisfy consumers’ needs.
sport products and to the marketing of
non-sports products through association Sports marketing will continue to grow
with sport.” The study and practice in importance as sports become more
of sports marketing is complex and pervasive in the U.S. culture and around
interesting because of the unique nature the globe. This phenomenal growth of the
of the sports industry. sports industry can be seen and measured

40
 1 Emergence of sports marketing
in a number of ways. We can identify those organizations or individuals that
growth by looking at the increasing
numbers of sport spectators, the growth
of media coverage, the increase in
help “manufacture” the sporting event,
such as owners, sanctioning bodies,
and sports equipment manufacturers.
1
sports participation, rising employment Intermediaries are also critical to the
opportunities, and the growth in sports sports industry because they bring
internationally. To better understand the sport to the end user of the sports
this growing and complex industry, a product. Sponsors, the media, and agents
simplified model of the consumer–supplier are the three intermediaries presented in
relationship was presented. this chapter.
The simplified model of the consumer– Although sports marketers must have
supplier relationship in the sports industry a thorough understanding of the sports
consists of three major elements: industry to be successful, the tool of their
consumers of sport, sports products, trade is the sports marketing mix. The
and producers and intermediaries. Three sports marketing mix is defined as the
distinct types of sports consumers are coordinated set of elements that sports
identified in the model. These consumers organizations use to meet their marketing
of sport include spectators who observe mix objectives and satisfy consumers’
sporting events, participants who take needs. The elements of the marketing
part in sporting events, and sponsors mix are sports products, distribution or
who exchange money or product for the place, pricing, and promotion.
right to be associated with a sporting In addition to the marketing mix, another
event. The spectators, participants, and central element of marketing is the
sponsors use sports products. exchange process. The exchange process
A sports product is a good, service, is defined as a marketing transaction
or any combination of the two that is in which the buyer gives something of
designed to provide benefits to a sports value to the seller in return for goods and
consumer. The primary sports product services. One of the things that makes
consumed by sponsors and spectators the sports industry so unique is the
is the sporting event. Products related complex nature of the exchange process
to the event are athletes such as Derek and the many exchanges that take place
Jeter and arenas such as the Staples within a single sporting event.
Center, which both provide their own To manage the complexities of the
unique benefits. Other categories sports industry and achieve organizational
of sports products common to the objectives, sports marketers use the
sports industry include sporting goods strategic sports marketing process.
(e.g., equipment, apparel and shoes, The strategic sports marketing
licensed merchandise, collectibles, and process consists of three major
memorabilia), personal training services parts: planning, implementation, and
for sports (e.g., fitness centers and sports control. The planning process begins
camps), and sports information (e.g., by understanding consumers’ needs,
news and magazines). Because there are selecting a group of consumers with
a variety of sports products, it is useful similar needs, and positioning the sports
to categorize these products using the product within this group of consumers.
sports product map. The final step of the planning phase is to
Producers and intermediaries represent develop a marketing mix that will appeal
the third element of the simplified model to the targeted group of consumers and
of the consumer–supplier relationship in carry out the desired positioning. The
the sports industry. Producers include second major part of the strategic sports
41
 1 Emergence of sports marketing
marketing process is putting the plans goals are being met. This third, and final,
into action or implementation. Finally, the part of the strategic sports marketing
plans are evaluated to determine whether process is called control.
organizational objectives and marketing

Key terms X personal training X sports equipment

X producers and manufacturers
X agent intermediaries X sports information
X amateur sporting event X professional sports X sports marketing
X benefits X sanctioning X sports marketing mix
X exchange X services X sports product
X goods X simplified model of X sports product map
X licensing the consumer–supplier X sports sponsorship
X marketing myopia relationship X strategic sports
X marketing orientation X spectators marketing process
X organized sporting X sport X unorganized sports
events X sporting event
X participants X sporting goods

Review questions 9. What is the marketing exchange

process, and why is the exchange
1. Define sports marketing and process critical for sports marketers?
discuss how sports are related to 10. Define the strategic sports marketing
entertainment. process, and discuss the various
2. What is a marketing orientation, and elements in the strategic sports
how do sports organizations practice marketing process.
a marketing orientation?
3. Discuss some of the ways that Exercises
the sports marketing industry is
growing? 1. Provide five recent examples of
4. Outline the simplified model of the sports marketing that have been in
consumer–supplier relationship in the news and describe how each
the sports industry. relates to our definition of sports
5. What are the three distinct types marketing.
of sports consumers? What are 2. How does sport differ from other
the different types of spectators? forms of entertainment?
How are sports participants 3. Provide an example of a sports
categorized? organization that suffers from
6. Define sports products. What are the marketing myopia and another sports
different types of sports products organization that defines its business
discussed in the simplified model of as entertainment. Justify your choices.
the consumer–supplier relationship 4. Attend a high school, college,
in the sports industry? and professional sporting event
7. Describe the different producers and comment on the marketing
and intermediaries in the simplified orientation of the event at each level
model of the consumer–supplier of competition.
relationship in the sports industry. 5. Provide three examples of how you
8. What are the basic elements of the would measure growth in the sports
sports marketing mix? marketing industry. What evidence
42
 1 Emergence of sports marketing
do you have that the number of

6.
people participating in sports is
growing?
Discuss the disadvantages and
1
advantages of attending sporting
events versus consuming a sporting
event through the media (e.g.,
television or radio).
7. Develop a list of all the sports
products produced by your college
or university. Which are goods and
which are services? Identify ways in
which the marketing of the goods
differs from the services.
8. Choose any professional sports
team and describe how it puts the
basic sports marketing functions into
practice.

Internet exercises
1. Using Internet sites, support the
growth of the sporting goods
industry.
2. Compare and contrast the Internet
sites of three professional sports
teams. Which site has the strongest
marketing orientation? Why?

43
Notes
1 American Marketing Association, http://www.marketingpower.com/AboutAMA/Pages/DefinitionofMarketing.aspx, accessed May
10, 2014.
2 Kristi Lee Covington-Baker, 2007, A History of Sports Marketing and the Media, UMI Microform 1450380, Proquest Information
and Learning Company.
3 Ibid.
4 David Biderman, “The Stadium-Naming Game,” The Wall Street Journal (February 3, 2010).
5 Kristie McCook, Douglas Turco, and Roger Riley, “A Look at the Corporate Sponsorship Decision Making Process,” Cyber-
Journal of Sport Marketing [Online], vol. 1, no. 2 (1997).
6 Colby Weikel, 1998, Sports Marketing: A Take on the History and the Future, manuscript, UNC. Available
from: http://www.unc.edu./~andrewsr/ints092/weikel.html.
7 David Arthur, Garry Dolan, and Michael Cole, “The Benefits of Sponsoring Success: An Analysis of the Relationship between
Television Exposure and the Position of the Motorcycle Rider,” Cyber-Journal of Sport Marketing [Online], vol. 2, no. 2 (1998).
Available from: http://fulltext.ausport.gov.au/fulltext/1998/cjsm/v2n2/arthur22.htm.
8 Nigel Pope, “Overview of Current Sponsorship Thought,” Cyber-Journal of Sport Marketing [Online], vol. 2 (1998). Available
from: www.cjsm.com/vol2/pope21.htm.
9 Kristi Lee Covington-Baker, 2007, A History of Sports Marketing and the Media, UMI Microform 1450380, Proquest Information
and Learning Company.
10 http://www.merriam-webster.com/dictionary/ sport, accessed May 10, 2014.
11 John Mossman, “Denver to Host 2005 NBA All-Star Game,” The Associated Press [Online], (June 17, 2003).
12 David Barboza, 2000, “Michael Jordan Movie Is Sports Marketing in New and Thinner Air,” The New York Times (May 1, C16).
13 WWE 2013 Annual Report, 2013, W Then W Now W Forever. Available
from: http://ir.corporate.wwe.com/Cache/1001184723.PDF?Y=&O=PDF&D=&FID=1001184723&T=&IID=4121687, accessed
June 19, 2014.
14 Ajay K. Kohli and Bernard Jaworski, “Marketing Orientation: The Construct, Research Propositions, and Managerial
Implications,” Journal of Marketing, vol. 54, no. 2 (1990), pp. 1–18.
15 Jeffery Derrick, “Marketing Orientation in Minor League Baseball,” Cyber-Journal of Sport Marketing [Online], vol. 1, no. 3
(1997). Available from: http://fulltext.ausport.gov.au/fulltext/1997/cjsm/v1n3/derrick.htm.
16 Hervé Collignon, Nicolas Sultan, and Clément Santander, The Sports Market: Major Trends and Challenges in an Industry Full
of Passion. [Homepage of A.T. Kearney, Inc., 2011], [Online]. Available
from: http://www.atkearney.com/documents/10192/6f46b880-f8d1–4909–9960-cc605bb1ff34.
17 Plunkett’s Sports Industry Almanac, 2013, Plunkett Research Ltd. Available from: http://www.plunkettresearch.com/.
18 Michele Himmelberg, “The Sporting Life; Long Hours, Low Pay, Starting at the Bottom, What Fun!,” Orange County
Register (June 14, 1999), c1; Don Walker, “Money Game: Sports Becoming Big Business,” Journal Sentinel (2000). Available
from: www.jsonline.com/news/gen/jan00/csports23012200.asp.
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3 Ibid.
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35 Daniel L. Wann, “Preliminary Validation of the Sport Fan Motivation Scale,” Journal of Sport & Social Issues (November 1995),
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36 Richard Kolbe and Jeffrey James, “An Identification and Examination of Influences That Shape the Creation of Professional
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37 Robert A. Baade and Laura J. Tiechen, “An Analysis of Major League Baseball Attendance, 1969–1987,” Journal of Sport &
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38 Brad Edmondson, “When Athletes Turn Traitor,” American Demographics (September, 1997).
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40 Ibid.
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47 Jillian Kasky, “The Best Ticket Buys for Sports Fans Today,” Money, vol. 24, no. 10 (October 1995), 146.
48 Kirk L. Wakefield, Jeffrey G. Blodgett, and Hugh J. Sloan, “Measurement and Management of the Sportscape,” Journal of Sport
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53 Andy Hemmer, “Gardens Gets Skyboxes in Makeover,” Cincinnati Business Courier Inc., vol. 11, no. 48 (April 10, 1995), 1.
54 Kirk L. Wakefield, Jeffrey G. Blodgett, and Hugh J. Sloan, “Measurement and Management of the Sportscape,” Journal of Sport
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55 Pew Research Study, “Americans to the Rest of the World: Soccer Not Really Our Thing” (June 14, 2006).
56 Deborah L. Kerstetter and Georgia M. Kovich, “An Involvement Profile of Division I Women’s Basketball Spectators,” Journal
of Sport Management, vol. 11 (1997), 234–249; Dana-Nicoleta Lascu, Thomas D. Giese, Cathy Toolan, Brian Guehring, and
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57 Geoff Hobson, “Just Another Sunday,” The Cincinnati Enquirer (December 7, 1996).
58 William A. Sutton, Mark A. McDonald, George R. Milne, and John Cimperman, “Creating and Fostering Fan Identification in
Professional Sports,” Sport Marketing Quarterly, vol. 6, no. 1 (1997), 15–22.
59 Ibid.
60 Ibid.
61 Ibid.
62 Ibid.
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23 Ibid.
24 Steve Sleight, Sponsorship: What Is It and How to Use It (London: McGraw-Hill, 1989).
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27 Ibid.
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36 Ibid.
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20 Ibid.
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25 Ibid.
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34 Ibid.
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2 Ibid.
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27 Ibid.
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34 Joe Layden, “Human Billboards,” in Mark McCormack’s Guide to Sports Marketing, International Sports Marketing Group
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38 Ibid.
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54 Ibid.
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3 Ibid.
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6 Ibid.
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9 Ibid.
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16 Ibid.
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72 Ibid.
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41 Ibid.
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