Sports And Entertainment Marketing

Sports and Entertainment Marketing

Unit Topics  Just what is sports and entertainment marketing?  The product is sports and entertainment  Choose the channel  Economic issues  Promoting sports and entertainment  Selling sports and entertainment  Legal issues

So just what is SEM?  It’s a huge industry offering many products and services.  Marketing SEM requires careful ______of consumer demand, competition and financial valuation of the goods and services offered.

Considerations for SEM  Target market’s discretionary income (after bills are paid)  Must price product ______ Distribution must be ______.  Promotion must be informative and creative.  Multiple means must be used

Give an example of how timing is essential to selling related merchandise for a popular sporting event.

Examples of the 4Ps in SEM  The Super Bowl (sports event of the year)  PRODUCT: Game  PRICE: $400 – 600 face value per tix  DISTRIBUTION (Place): selecting host city that has an airport, highways and accommodations. Also involves ticket sales and the TV/radio network  PROMOTION: commercials, advertisements and more.

Sports Marketing  It is defined as using  It capitalizes on the ______by using spending habits of fans to maximize profits on items fans purchase in association with sporting events.  Sports marketers must continually search for new ways to appeal to customers.  Extreme sports, arena football, etc.

Sports Marketing

of 18 Sports and Entertainment Marketing

 monitoring. Gross impression is the number of times per advertisement, game, or show that a product or service is associated with an athlete, team or entertainer. Can be bold or subtle (logo on shoe or uniform, sign on board, scene in movie, athlete talks)  is everything. Fans want to be associated with a winner so you need to catch the team at the top. ACTIVITY: Watch a sporting event of your choice on TV. Select a sports brand represented in association with the event and keep track of how many gross impressions are made during the game (you must watch and track for at least 30 minutes, but a whole game is better)

Game: Product: Gross Impressions:

Entertainment marketing  Influencing how  Multi channels are involved in this (TV, radio, web, print, movies, events etc.)  Has changed immensely over time as has improved.

ACTIVITY: TV networks are desperate for male viewers between 12 and 34 because of their buying power and sports interest. Age and gender are demographics used by researchers to determine the number and make up of a viewing audience. The rate that can be charged for slots is based upon this number. The larger and wider an audience, the more demand for advertising slots and the more than can be chards. The X-Games is a program specifically targets to males between the ages of 12 and 34. WORK WITH A TRIO and identify three additional shows targeted to these sought-after male viewers. Make a list of products that might be advertised on these shows. Discuss why these products’ advertisers would be interested in sponsoring these programs. You will be handing this in.

Economic Concerns  is essential; studios and teams look to cut costs to maximize profit.  distribution is critical for movie profits. Box office revenue increase by up to with international release.  Titanic grossed $600.8 m. in the US and $1,234.6 m overseas.

UnderArmour wants to increase their market share of football cleats. What could it give participants at sports camps to increase brand awareness and sales?

Do you think it is right to charge college students high ticket prices to attend their own team’s football games? Is it ethical for a college to charge admission to scrimmages? Explain your answers.

Entertainment Utility  Form: a dvd formatted movie (better than 16 mm today)  Time: movie theaters show films at several times during the day  Place: movies available for rent and purchase at various locations  Possession: making product available at an affordable price with several options (buy vs rent)

SEM and Ethics  Must seek to present the right image and showing for the community  Using fines to  NBA $13.9M, NFL $3.3 m, MLB $170,725, NASCAR $384,495 (Wall Street Journal)  standards are guidelines used by various groups  Contracts often define

For thought: Why are fans harassing their own team. What can leagues and teams do to end player harassment? Whose responsibility is it to protect the players?

Describe an example of unethical behavior in the sports and entertainment industry that has been reported in the media recently (one year). Explain what impact this behavior had on the person(s) involved.

If your school cannot increase seating capacity for basketball games, describe two other ways it can increase revenue from basketball.

Special marketing tools  Using public figures on the motivational circuit, sports camps and more  Paid personal appearances  Terry Bowden (Former UAuburn FB coach) gets $10 – 20,000 per speech  Pat Summit (Tenn Lady Vols) gets $20 – 30,000 per speech  Write books on sport or other topic  Sports camps and clinics done in

List some examples of things that might cause a celebrity’s appeal to dramatically change in a positive or negative way.

How can cyber crime impact the use of the internet for marketing? What are some ideas for preventing cyber crime?

Destination Marketing  Theme parks  Cities with huge tourism budgets  Eco  Halls  Well coordinated plan results in large direct and indirect economic impacts

SEM Going Worldwide  Expanding into – athletes are now coming here to play, events are exported to capture new fans  New locations for familiar companies and events  FIFA, Adidas vs Nike, MLB Tokyo Office  NASCAR racing in Japan  Disney Joint Venture in Hong Kong

Marketing Information Management  Teams and venues must frequently evaluate their customers’ needs and wants.  Must use  Acquire it from many sources  Change and

You want to increase the sales of your CD and you know that 5,000 people visited your website. From those visits, you sold only 75 CDs. What else do you need to know and how would you use this information to increase sales.

Game Plan  Companies must decide which tactic (the way a product or service is differentiated in the minds of customers from competing items) to use  Once tactics are determined, must be created.  Research competition – internet, observations, trade shows, customers  Fans Rule – . Fans only have so much money to spend and if you saturate a market, your team or event could fail  C – when Sony Pictures decided to make a movie of the DaVinci Code it knew it was a controversy. They deflected religious concerns with a website, took a quiet stand on pre-release promotion and avoided overexposure. This created mystery and $462 m in sales in 14 days.  Prices – have grown exponentially in recent years (100% from 1995 – 2006). Indoor events are cheaper to produce. 70% of live events are controlled by Clear Channel Communications who has little competition. Causing venues to look at price of convenience fees, processing fees and facility fees on top of ticket price.  A little music with your coffee? – Starbucks now sells music, books and films with its pricey coffee. In 2005, it sold more than 3.5 million CDs.

Think of two radio stations in Syracuse/CNY. How do they different themselves from each other? What are their tactics and strategies?

The Product is Sports and Entertainment  are features added to the basic product to improve benefits for the customer.  Stadiums and arenas now often include backs on seats, individual seats instead of bleachers, sky boxes and more.  Licensing  Teams names and mascots for products, allows use of images on another product/item

Brand Recognition Levels  Nonrecognition stage –

 Rejection –  Recognition stage –  Preference stage –  Insistence stage –

Which SEM brands are you loyal to?

Recruiting  Athletic team at college and pro level must continue to attract blue chip athletes to grow. Winning teams  NCAA regulates recruiting process to ensure integrity.  Must also retain solid coaches and offer high salaries (many universities pay over $1 m)  must recruit for concerts (top acts charge up to $100K per performance)

Star players and schools have run into trouble with the NCAA in cases where players and their families were influenced by agents while still playing in college. The NCAA vacated 1996 tournament records of UMass and UConn after Marcus Camby, Ricky Moore and Kirk King were ruled ineligible because of the dealings with agents. UMass forfeited 4 wins that took them to the Final Four. They were ordered to return $151,617 (45% of tourney earnings). UConn forfeited its two wins leading to the Sweet 16 and ordered to return $90,970. Questions surround Cam Newton’s father and payments….

USC hired Pete Carroll to help fulfill the dream of building a mighty football powerhouse. While the team has exceeded all expectations, allegations of NCAA violations involving two of its biggest stars and a shocking sexual assault arrest have taken away from the luster of their success.

What might cause star athletes to have a lapse in judgment resulting in penalties for the team? What steps can teams take to reduce the likelihood of such incidents occurring?

Do you think universities should pay their athletes? Explain your answer.

Activity: You are the coach of one of the top 10 teams in the country (you pick the sport and the school). Draft a letter to the recruit you feel you must land. You want to persuade this person to come to your school and play for you. Convince them that they must do this.

RESEARCH: Research salaries for 5 successful college football or basketball coaches. List the salaries and fringe benefits for each coach. How can the colleges economically justify their coaches’ salaries and benefits? Do you feel this is justified? Present your information in a one page paper; include your sources.

Women’s sports  Sports marketing has neglected women’s sports until just recently.  In 1991 when US Women won the world cup, it was not even in the paper; nine years later the championship was on TV.  Events are becoming popular but women’s salaries are grossly inequitable. WNBA averages $50K  Venues need to look at women seriously as the female is becoming an active consumer of sports and entertainment.

Entertainment as product  TV – little left; often national networks focusing on big issues and shows  Children’s TV – used to be just local coverage – now whole networks avail.  Sports Programming – used to be – now with national coverage – viewership is up and costs have  Public TV/Radio – much is local and tailored to the audience

Why is different programming sown in different cities or regions of the United States?

Product Marketing Strategies  Lifecycle considerations  I  G  M  D

Introduction  New items brought to market  pricing – price it low to get lots of interest and market share but less profit  pricing – introduce at high price to capture early adopters and higher profits  Beanie babies were HUGE and used skimming. Sport venues gave them away to help ______.

Growth  Second stage. Sales of a product and profits increase. Target market is

 During growth stage of American Idol, similar shows popped up like America’s Got Talent. Success of one makes others want to do it.

Maturity  Third stage – sales level off and might slow down. increase as promotions (sales and ads) are now necessary to keep market share.  Mall of America started running ads that compared its amusement park to traditional parks. It played upon the benefit of also being able to shop and not have to worry about weather.

Decline  Final stage – sales decrease and my not generate enough revenue to justify marketing it. May need to modify, sell it out, discount the product or drop it.  Clothing designer Mossimo opted to license his line to Target.  New stadiums are built to try to recreate interest in the team (product)  Sports drinks now promoted to the fan.

Why would a company choose to license the marketing of a product in the decline stage to another company?

Select four sports and entertainment products and indicate the stage of the product life cycle for each product. Give a marketing strategy you would consider for each product. Explain your answers. (Individually; to be handed in)

Choose the channel  Properly distributing  Global differences can present challenges. Laws vary and can be barriers.

Channels for SEM  Live Events  Via Media (radio, TV, net)  DVD/recorded media

Sports Participation  Fitness and fun  Health, leisure time and money all drive recreation growth.  Facilities vs. wilderness  Must have facilities available where they are necessary due to location or climate.  Hiking

 Getting access  Participation is related to income; Title IX has increase school participation for girls.

ACTIVITY: Write a paragraph about the positive impact of recreational sports on the economy using your own perspective. (100 words) Collegiate Sports  Colleges benefit from successful programs. Must get  NCAA has created the NCAA Postseason Football Handbook.  It determines how postseason bowl games are played through the BCS. Big games land schools between $14.8 and 18.3 M.  When a team wants to sponsor a game, it agrees to pay both teams’ travel and participation expenses at a minimum.  NCAA Final Four televised  Four levels of colleges DI, II, III and Juco.

Professional Sports  Seek worldwide coverage.  More US cities want teams than there are teams available.  Leagues  Each team in independently owned pricing, and marketing. There is a league agreement that includes distribution of games.  It takes . You must have a large audience to pull from and money for the team.  Expansion team fee for Houston to join the NFL was $700 million.  Reliant Energy paid $300M in 2002 to put its name on the stadium.  Cable

Entertainment Distribution  Movies  Are made with the demographics in mind.  Release  Timing is key  Production costs must be monitored.  Low budget <250K to make.  Costs up to $3K per reel to distribute  On-demand TV and web services reduce distribution costs

Entertainment Distribution  Music  From vinyl to iPod  Initially  Music on  50 million iPods sold in the first four years

 Online streaming

With a partner, discuss how technology has changed the distribution of music. Why is illegal downloading of music a concern to musicians and the music industry? One of you should be the recorder and one the reporter. Be prepared to share in 6 minutes.

Entertainment Distribution  Cable TV  Has changed distribution forever  Hundreds of sub networks available all the time  HDTV opening new markets   Satellite TV  Mega distribution  Vertical integration (one company controls several different areas of the same industry - think Disney)  Internet music – file sharing

Discuss with a partner (same criteria as above) how to keep a balance between making entertainment available in digital formats to mass markets while protecting it from illegal use.

Questions: 1. Why do you think there are rules governing the distribution of college sports? How are the rules affecting the marketing of the sport? 2. How do professional teams differ from other businesses that compete in a free market system? What keeps businesses from using the same system as sports teams? 3. Why are college rankings so important to universities? 4. You are a retailer who wants to target boys and girls ages 10 – 13. You sell video games, movies, CDs and other forms of entertainment technology. You are considering using cable, satellite and the internet for product distribution. State where most of your distribution dollars will go and why. 5. What impact would the attention of two world leaders have on the distribution of an entertainer’s products?

Supply and demand  Concerts  Sell out quickly for many popular acts   Pro championships   Commercialization and marketing driving this

Based upon the law of supply and demand, why does a baseball signed by Babe Ruth command a high price? Would a ball signed by Tom Brady command the same price? Why?

Impact of consumer trends  Retro TV   Game shows   Audience ratings speak   Socio-culture issues  Attitudes and beliefs –

QUESTIONS: Why must SEM pay careful attention to consumer trends?

Why are stores willing to lose money on loss-leader items?

How can small towns in the US take advantage of rising gas prices to increase revenue from sporting events, travel and tourism?

How have prices charged for tickets to sports and entertainment events been influenced by the free enterprise system?

Promoting Sports and Entertainment  Promotional Goals  Gain new fans  USTA did it successfully in the early 90’s by setting up learning centers and offering lessons  Advertising  Product placement  Publicity – unpaid attention from the media  Sales promotions – incentives, give aways  Personal selling- face to face, vendors, booths

Advertising  Coordinated with sponsors before a game or event.  Must be within budget and be cost effective.  Must be creative and avoid wear out.  Critical to success.  New shows are pitched to advertisers in the spring. Firms buy slots based upon their target markets.  Super Bowl advertising is some of the most expensive ever.

How has technology changed advertising? Predict how technology will change advertising in the future.

Product Placement  (Paid) placement of products in shows and at events.  Can be direct payment or  An agreement to promote the event in exchange for the placement of product  E.T and Reese’s Pieces (paid for advertising of the movie)  You’ve Got Mail  NASCAR, Hockey, other sporting events

Compare and contrast advertising and product placement in a 150 – 300 word essay. What the major differences and similarities.

Publicity  Is free but can be both positive and negative.  Brittany is getting more publicity than wanted  Crunch having Ludden and WG on the ice  Can create (businesses make donations to events like walks and HS teams)  may be needed for negative items when athletes and celebrities are involved.  New area is marketing (You Tube, Google)

Authors Michael Baigent, Richard Leigh, and Henry Lincoln wrote the nonfiction book Holy Blood, Holy Grail in 1982. In 2005, they sued author Dan Brown on the basis that he copied them for his book The Da Vinci Code from their book. Publicity surrounding the trial increased the sales of both books, which were published by the same publisher. Many saw the very expensive, unsuccessful lawsuit as a publicity stunt, since the movie based on Brown’s book was coming out within a month of the start of the trial.

Do you think the lawsuit was a publicity stunt, even though its costs likely exceeded the increased sales of the books? Is such a tactic to increase publicity ethical? Why or why not? Who would benefit form the lawsuit?

Public Relations  An offshoot of publicity that tries to create favorable public opinions.  Creates the right image  Spokespeople do the talking  Athletes  Try to keep clean image, do public good (charity work or create foundations)

 Become spokespeople for various organizations (CMN, Spec Oly, etc.)

Sponsorships and Endorsements  Important in college athletics  TV revenue due to advertising, naming rights to stadiums, programs and more  Key for athlete income in the pros  Tiger Woods - Nike

College Sponsorships  Sponsorship of college athletics is mostly about revenue for college programs. Help to keep costs lower for consumers.  Most are long-term – ABC/ESPN has 10 years to broadcast Big 10 Football and other events. HOST Communications signed a contract for $83.4M in cash and improvements to the Univ. of Tenn for multimedia rights to their athletics.

Pro Endorsements  FTC does oversee advertising.  Celebrity endorsements must be within certain guidelines:  Truthful opinions and beliefs expressed  Endorser must have experience with prod.  May not be deceptive or misleading.  May not be shown out of context or change the words.  Endorser must use, continue to use and believe in the product as long as they are shown in ads.  Company must notify endorser of any changes.

Celebrity Endorsements  US companies pay more than $1Billion to athletes for endorsements.  Celebrities get another large chunk.  Consumers will buy products endorsed by celebs more than those that are not.  Endorsements are expensive to the company.  LeBron James has endorsed Powerade, NIKE, UpperDeck and Bubblicious. Could be viewed negatively – too many products – may not be sincere.  Negative actions can hurt sales.

To promote your new women’s sportswear line, what female athlete would you ask to endorse your clothing line and why? Explain the advantages and disadvantages of the celebrity endorsement (minimum of 200 words).

Promotional Events  Awards shows  The Oscars  Grammy Awards  Emmy Awards  Tony Awards

 CMA, VMA, etc.  All star events

Write a one paragraph press release (publicity) about a popular brand of sports equipment. Remember that publicity is free. Then, change the press release into an advertisement that you pay a magazine to publish. Explain how the two promotions differ.

With a partner, make a list of at least 12 companies that might want to sponsor the VMAs. Explain why you choose each business.

SEM Sales Process  PreApproach – salespeople learn about the product and service.  The Approach – first contact  Demonstration – presents the product  Answering questions – objections overcome  Closing the sale – get agreement and do suggestion selling.  Follow up.

SEM Ticket Sales  Ticket Brokers – operate legal ticket businesses that have contracts with promoters and vendors to get the “best seats”.  Ticket Scalpers – sell tickets to events at inflated prices.  Ticket Frenzy – those once in a lifetime events that just keep coming.

What is the difference between a ticket broker and a ticket scalper?

Ticket System  Most transactions now occur online.  Ticketmaster suggests registering for an account and storing a credit card for faster transactions.  Some events use lottery system for some seats. Others give each team so many seats to sell (often to season ticket holders).

Group Sales  Give promotional discounts to businesses and groups to help sell out the stadium or event.  Baseball teams often offer groups seats to weekday day games to boost attendance.  These discounts help expand the customer base.  Colleges offer alumni that make big contributions special perks.  Luxury boxes and suites  Club seats

A major amusement park wants to increase sales of two-day passes, season passes and family ticket sales. Who are the target markets for each category? How can suggestion selling be used to increase ticket sales?

A major university wants to sell more basketball tickets. They have a new 14,200 seat arena, a new coach and top recruits. Early wins are sparking interest. What types of promotions and sales strategies would you suggest to increase ticket sales?

You work for the MLB stadium in your community. Sparked by fan complaints, you would like to discourage ticket scalping. What strategies would you suggest to ensure fans have a fair chance to buy tickets at face value? How could you work with the police department to prevent scalping?

Legal Issues  Broadcast issues covered by FCC  Sherman Antitrust Act – price fixing  Clayton Act – right to sue monopolies  National Labor Relations Board – collective bargaining  Copyright laws – not always enforceable outside the US (RIAA sues under this)  Royalty fees

What should happen to companies that violate the laws that protect consumers? Should large companies be allowed to prevent smaller companies from competing?

Labor Unions  Collective bargaining agreements  Salary caps  Player issues  Revenue splits  Writers Guild, Screen Actors Guild

How do players’ salaries influence financing of professional sports? How are fans partly responsible for the high salaries of owners and players? Can these salaries ever be reduced? Is there really a ceiling for salaries? Explain your answer in three paragraphs (250 – 300 words)

Fans do not want to choose between the owners and the players during prolonged major league sports strikes. The fans enjoy the games as a source of entertainment. They do not like to think that their favorite professional sport as a business with problems. Fan loyalty can quickly disappear when a sport is shut down due to a players’ strike or an owners’ lockout.

Form 3 even teams. One team will develop an argument for the players to receive an additional percentage of the revenue received from ticket sales. Ticket prices for fans may increase as a result. A second team will take the owners’ position. The third team

of 18 Sports and Entertainment Marketing will represent the fans. Make lists of reasons to support your team’s view, and then discuss as a group.

Agents and more  Athletes and celebs retain agents to negotiate and act on their behalf.  Legal representative (think of movie Jerry Maguire)  Negotiate and shop them to sponsors  Handlers could be hired to work with the athlete (celeb) to ensure they behave  Advisors are financial and business counselors who give help when needed.

High school athletes seeking to participate in collegiate sports must register with the NCAA Initial-Eligibility Clearinghouse. Likewise, sports agents must all be registered with the NCAA and leagues where they are recruiting players. The Uniform Athlete Agents Act is a model law adopted by the 35 states that regulate athlete agents. Failure to follow NCAA rules results in legal trouble for the agent, as well as the represented player and the college team. Teams whose players fail to follow the rules can lose their bowl game eligibility or forfeit funds received for playing in bowl games. NCAA rules prohibit a collegiate player from reaching an oral or written agreement with an agent. Failure to follow the rules can cost the player his or her eligibility to play college sports beginning at the time of the agreement.

Find a partner; discuss why the NCAA would support a uniform law that regulates athlete agents. Why would the NCAA be concerned about eligibility of player? One of you should be recorder and one reporter.

Extra Innings

You have been hired by the NFL to develop a marketing campaign to increase the interest of males aged 12 – 18. The NFL wants to capture this market to assure attendance at games in the future. You have been asked to choose NFL players who will be good spokespersons to promote the NFL to young males. You must decide upon a MAJOR national retailer to distribute the NFL sports gear to young males. The NFL has asked you to plan activities for males ages 12-18 to get them more involved with the NFL. The NFL will hold sports camps in major cities throughout the US, and professional football will make guest appearances at the camps. You must organize the campaign that allows 500 young males to attend each NFL game throughout the nation during the next football season. Work with no more than 3 others to complete the following:

1. Which NFL players would you use for your spokespeople for the campaign? Why? 2. Create a brochure that advertises the summer NFL camps in a major city for males ages 12 – 18. Make sure to include all details. 3. Each participant at the camp hosted by the NFL will receive a sports bag with NFL merchandise. What merchandise would you include? Who are the sponsors of this merchandise? Why? 4. Outline the guidelines for the distribution of 500 tickets to males ages 12 – 18 for every NFL game during the next season. Be specific about who receives the tickets and why.

5. Design an advertisement and contest that will encourage males ages 12 – 18 to get more involved with the NFL.

Extra Innings

Major entertainment events are concerned with rising gas prices and the elevated terrorism alert. Promoters for state fairs, vacation destinations, professional and college sports and concerts are concerned that consumer demand will decline due to less discretionary income and safety concerns.

With a group of less than four,

1. How will rising gas prices and an elevated terrorism alert affect the number of fans watching sports on TV? 2. Visit the NYS Fair website, a website for a popular tourism destination, and your favorite college team. What special promotions are being advertised by these entertainment venues to attract attention? 3. Why should college and professional football teams, some of which are building new stadiums, be concerned about declining interest and demand of young people? Describe in detail five promotional strategies to attract a younger target market to college and professional football teams. 4. Why is it important for new stadiums to serve as a venue for multiple entertainment venues. 5. Explain the concept of inflation when considering ticket prices for the Super Bowl or the BCS Championship game. 6. Why must the sports and entertainment industries be sensitive to the economic conditions when setting ticket prices?

Extra Innings

You are in charge of the post-prom party (12 am – 5 am) to keep students entertained and out of trouble. The key to success of the post-prom party is to acquire sponsorships from local businesses and parents. You must sell the party to juniors and seniors.

Work with a group of 3,

1. What will you do to get a better idea of customer entertainment needs (for example consumer surveys of juniors and seniors)? 2. What activities will you include during the five hour event to keep students entertained? 3. What is your sales strategy for getting businesses and parents to sponsor the event? 4. Create an advertisement and promotional incentives to increase attendance. 5. Why is this event beneficial to the community and school? 6. Why is it a good idea to get parents involved with the event? 7. What businesses would make a good local sponsor for this event?

Extra Innings

You have been hired by MLB to research the pros and cons of a salary cap for MLB teams. You are being paid by both the players association and the league so

you are open to listening to both sides. You are being asked to decide whether or not a salary cap should be implemented and to defend your decision.

What is the history behind the lack of salary cap in MLB? Why do other major leagues have salary caps, but not baseball? What teams would be affected most by implementation of a cap? How would they be affected? How would salary caps affect individual players? How might the decision affect fans? Choose a position on the issue of salary caps and defend your position to the class. You should outline your position in a short position paper.