SEAN ENNIS Sports Marketing Sean Ennis

SPORTS MARKETING

A Global Approach to Theory and Practice

Sports Marketing

A Global Approach to Theory and Practice Sean Ennis Department of Marketing University of Strathclyde Glasgow, UK

ISBN 978-3-030-53739-5 ISBN 978-3-030-53740-1 (eBook) https://doi.org/10.1007/978-3-030-53740-1

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I dedicate this book to my long suffering wife Liz for putting up with me during the development of this text. I would also like to dedicate it to some of my friends who support Huddersfield Town. They include: Richard and Finola Siddall; Robert, Paul and Ross Ewart; Clive Cheney, Alison and Laura; and “Uncle” Jim Prendergast. We have reached the heights of ecstasy and the lows of depression over the years. Acknowledgements

I would like to thank Vicki Watson for the professional and committed way in which she organised the content into something that closely resembles a book. Without her contribution it is unlikely that it would have seen the light of day. My thanks also to Liz Barlow and Sophia Siegler for helping with the editing of the text. VII

Contents

1 Introduction: The Sports Sector in a Global Context �� 1

2 Sport and Its Role and Contribution to Society and Economic Development �� 9

3 Sports Governance �� 39

4 Understanding Fans and Their Consumption of Sport �� 75

5 Sports Distribution and Media Rights �� 101

6 Formulating and Implementing Sports Marketing Strategy �� 129

7 Ticketing Strategies in the Sports Sector �� 153

8 The Sports Product and Brand-Building Decisions �� 187

9 Globalisation of the Sports Product �� 213

10 Managing the Sports Sponsorship Process �� 245

11 Sports Marketing in an Era of Radical Uncertainty �� 283

Supplementary Information Index...... 303 1 1

Introduction: The Sports Sector in a Global Context

Contents

1.1 Introduction – 2 1.2 Sport in the “New Normal” – 2 1.3 The Global Sports Sector in Context – 3 1.4 Structure of the Book – 4 1.5 Chapter by Chapter – 5 1.5.1 Chapter Summaries – 5 1.5.2 Case Studies – 7

Electronic Supplementary Material The online version of this chapter (https://doi.org/10.1007/978-3- 030-53740-1_1 ) contains supplementary material, which is available to authorized users.

1.1 Introduction lar blogs to stimulate discussion and provide 1 opinion on the latest concepts and theories. Welcome to this text book on the subject of sports marketing. I hope that you enjoy the content and more importantly gain a deep 1.2 Sport in the “New Normal” understanding of the issues and challenges that face sports marketers working in this The term “new normal” has featured promi- exciting industry sector. nently throughout 2020. The message behind I use the word “exciting” because sport it indicates that business and society will need engenders a number of different feelings and to grapple with new challenges and problems, emotions among many people world-wide. post-Coronavirus. Passion, enthusiasm, fanaticism, euphoria The sports sector is no exception. Prior to and despair all feature to a greater or lesser 2020, many sports exhibited varying degrees extent in the typical sports fan’s lifestyle. of success. These ranged from increasing It is also a sector of industry that is grow- revenue streams and more global popularity, ing in terms of employment opportunities. through to more modern stadia. Generally, Increasingly, sports administrators and sports within the context of the most popular sports property owners seek out suitably qualified such as football, rugby and cricket, sports individuals to work directly in this industry. property owners invested in enhancing the Hopefully, this text will inspire you to take quality of the fan experience and engagement. any such opportunities. Increasing revenues led to higher salaries. Many of you may eventually end up work- Some critics have argued that ultimately this ing as brand managers, digital marketing is not good for the overall sport. As we shall executives, advertising executives, media mar- see later in the text, many sports organisations keters or in the area of data analytics. While and clubs engaged in practices that defied the you may not be employed directly by sports conventions of prudent business management. clubs, bodies and sports organisation, you While the sport may have generated extremely could find yourself playing a significant role large amounts of cash that flowed into the in terms of working with sports bodies. organisation, salaries, transfers and agents’ fees This initial chapter attempts to place the have led to even more cash going out. sports sector in a global context. We begin by Such a business model is not sustainable in considering some of the key trends that have the longer-term. taken place over the past 15–20 years or so. The coronavirus crisis brought immediate We then consider the key themes and problems that challenged the efficacy of exist- dimensions that we address in the subsequent ing business models. Within weeks, sports chapters in this text book. property owners were pleading for support As you work your way through these top- from respective governments. While the top ics, I would like to add a cautionary note. clubs were in a better position, the cancella- The sports sector, as we shall see, is a vibrant, tion and postponement of games, tourna- dynamic and at times, an unpredictable indus- ments and events, created a cash crisis. try. As I write these introductory notes, we are Will sport recover? I have no doubt that it currently in the middle of the Coronavirus cri- will. However, it may take a number of years sis. Sport, in tandem with all areas of business before we get back to a situation that existed and society in general is undergoing change. before the crisis. By the time you read this text, hopefully, we As of June 2020, sports such as football, will have emerged from the worst aspects of horse racing and snooker made tentative steps its influence. to re-start operations. Working with govern- We should also note that it is critical for ments, the “new normal” featured games us to keep up with the latest developments being played behind closed doors, with no and research in the sports sector. As part of fans allowed in, due to restrictions such as the support for this text, I will generate regu- social distancing. 3 1 1.3 · The Global Sports Sector in Context

The media, who bought the rights to show China has invested heavily in devel- such games, in many cases refused to make oping domestic football and increasingly the original agreed payments, if the events many major football teams in Europe have did not take place. Even when they did, they been bought out by Chinese, Thai and paid a reduced fee to take account of the fact Indian conglomerates. that they were getting a “diminished” sports Who would have suggested 15 years product. ago that Qatar would be awarded the Does this raise the prospect of reduced rights to stage the 2022 World Cup? media rights payments in the future? Who 55 The emergence of eSports knows? eSports has grown exponentially over Overall, some commentators suggested the past 15 years or so. We examine this that global sports revenues could decrease by sport in more detail later in the book. as much as fifty per cent. The major European Technology has played a significant part football teams, between them, could lose over in its growth. Among young people, par- £3 billion. ticularly those in the fifteen to twenty-five The reality suggests that many sports had bracket, it has changed the concept of to face up to the unpalatable fact that their sports participation and consumption. original business models might no longer The notion of physical exercise has, to work in a post-Coronavirus environment. The some extent, been overtaken by the seden- “new reality” began to bite, and bit hard. tary engagement with electronic games. 55 Social media and digital platforms We have witnessed other transforma- 1.3 The Global Sports Sector tive developments, particularly in terms in Context of how fans engage with their favourite sports, teams and players. Social media, In this section, we identify the main devel- in particular, has veered away from tra- opments in the sports sector. They are by no ditional methods such as TV, Press and means exhaustive, but such trends and drivers Radio. Many fans consume their sport via have transformed the way in which the sector social media platforms such as Facebook, has evolved and provide us with a background Twitter, Instagram, to name but a few. to the way in which sports marketers will have Twitch has recently appeared on the scene to function in the coming 15–20 years or so. and appears to be eminently suitable for 55 Geographic shifts fans as a mechanism for enhancing the fan The last two decades has witnessed a re- experience. focus in terms of the nexus for sports Digital platforms, in many guises have events. Traditionally, major sports and also revolutionised the way in which we events evolved in the North American and watch sport. Arguably, fans have much Western European regions. Across most greater choice in terms of the devices they of the popular sports, these regions staged use to engage with their favourite sports. the major events. However, regions such The days of linear TV are numbered. as Eastern Europe, The Gulf Region, and 55 Sustainability particular key countries from Asia, have In line with other business sectors, the sports moved “centre stage”. industry has been grappling with the chal- Formula One has widened its base for lenges of addressing the issue of sustainabil- staging Grand Prix events. Over the past ity and its impact on the environment. New number of years, it has located an increas- stadia, in particular, have to reflect such ing number of such events in countries issues as energy conservation, recycling, use as far apart as Vietnam, Bahrain and of appropriate materials and so on. Singapore. 55 The commercial imperative In the sport of cricket, the nexus has The sports sector, particularly at the top moved from the United Kingdom to India. end of the pyramid, has fully embraced 4 Chapter 1 · Introduction: The Sports Sector in a Global Context

the commercial focus on the way in which sumed by fans. Increasingly, fans are mov- 1 its operations are run. Instead of relying away from relying on linear TV coverage ing on well-meaning amateurs to run the (scheduled programmes at fix times, with no sport, property owners have recruited (at opportunity to target individual viewers). senior management level) successful indi- Fans increasingly watch sport as and when viduals who have performed effectively in they want to and are more likely to favour traditional sectors such as financial ser- personalised content and packages. vices and retail. 55 Technology 55 The ethical dilemma The role of technologies such as Aug- While the commercial focus may create mented Reality (AR) and Virtual Reality much more significant revenue streams, (VR) have made a relatively slow intro- many sports have been afflicted by the twin duction to the way in which fans consume problems of doping and match-fixing. sport. As we will discuss later in the book, Sport is a results business. Success, in many such tools are likely to grow in both use cases, is not defined by how efficiently the and popularity as we move forward. club or association is financially man- Developments in both Internet speed aged. For many stakeholders, particularly and latency, such as 5G, will facilitate the fans, it is defined by success on the pitch. use of such technologies and will revolu- Some individual athletes, in the quest for tionise the way in which we engage with improvement and success, make use of sport. Much of this is in the embryo stage, illegal drugs to achieve their objective. as I write this section. Sports such as athletics and cycling have experienced many scandals as a result. The These developments provide us with an problem is compounded by the inability of early indication as to how the sports sector the drug testers to “catch out” the offend- has evolved and changed over the past two ers, particularly in cases where the technol- decades. ogy is not sufficiently developed to identify In summary, the sports sector is virtually “state-of-the-art” drugs. unrecognisable from the way it operated a Match-fixing is another negative aspect couple of decades ago. In this text, we exam- of sport that has increased dramatically ine and assess the main concepts, theories and over the past 20 years, particularly in practices in sport. Asian countries. 55 Growth in female sports We have witnessed a significant growth 1.4 Structure of the Book in the area of female sports in the past decade. Football, cricket and rugby, in par- The focus of this book is on theory and prac- ticular, have established leagues and com- tice from a global perspective. To address that petitions that are increasingly played at a focus, I have structured the book around two professional and semi-professional level sections: chapters and cases. The latter can be by female players and athletes. This has used in a class setting by your lecturer or in an been made possible by effective market- out-of-class section for individual reflection ing. In this case, such sports have attracted and analysis. the interest of broadcasters. In turn, this Cases can quickly become dated. To address improves the opportunities to attract that problem, I will introduce new cases on sponsors. All of this is driven by widening a regular basis that reflect the latest thinking and increasing the number of viewers and and practice by sports clubs, organisations and attendances at such games and events. other key stakeholders in the industry.

55 The decline in terrestrial broadcasting cov- 7 Section 1.5 contains ten chapters which erage and linear TV address the key topic areas that impact on the The sale of media rights has transformed the role of sports marketing in detail, as well as a way in which sport is distributed to and con- number of cases (that are linked to each chapter). 5 1 1.5 · Chapter by Chapter

1.5 Chapter by Chapter unit of analysis: the fan. This is no different from other business and non-business sectors. 1.5.1 Chapter Summaries Without such knowledge, particularly in a volatile and fast-moving sector such as sport, In this section, we consider the main issues to it is unlikely that they can devise and imple- be addressed in each chapter. ment appropriate and relevant strategies. In this chapter, we examine the concept of fandom. In particular we assess the ways in zz 7 Chapter 2: Sport and Its Role and Contribution to Society and Economic which fan’s consumption of sport has changed Development over the past couple of decades. We note the In this chapter we consider the broader issues influence that social media platforms, technol- surrounding sports and where it fits into peo- ogy and data analytics play in this process. ple’s general life within society. We consider We also address the issue of how fans this from a health and social perspective and engage with their favourite teams and athletes also focus on the relationship between sports and the consequent challenges and opportu- administrators, sports property owners and nities facing sports marketers. other key stakeholders and the government. In the latter case, we assess the different roles zz 7 Chapter 5: Sports Distribution and and contributions of political leaders in rela- Media Rights tion to the development of sport. At the top end of the sports pyramid, sports We also review the process involved in bid- organisations and clubs have been the recipi- ding for and staging hallmark (mega/major) ents of a major income stream from the sale sports competitions and events. In particu- of media rights to broadcasters for the right lar we review the different benefits that can to cover leagues and competitions. Over accrue to the host country/city and the impact the past 20 years or so, successive renewals on its citizens. We ask the related questions. of contracts have increased exponentially. Why bother? Is it worth the effort? Sports entity owners, arguably belatedly, have realised the value and power of their respective properties. This has led to significant rises zz 7 Chapter 3: Sports Governance This chapter examines an increasingly impor- in salaries (some would say to obscene levels) tant topic within the general framework of along with increased transfer and agents’ fees. the sports sector: how are individual sports In this chapter we trace the emergence and organisations governed? We live in an of media rights as a critical tool in the over- age where all profit and non-profit organisa- all business and marketing strategy of sports tions are increasingly held to account for their organisations. We address the emergence of behaviour and general performance in society. powerful Pay-Per-View (PPV) broadcasters The sports sector is no exception. We assess and consider their business models. the key principles of sports governance and We also examine the emergence of a new address the issue as to whether its characteris- wave of operators which are labelled as Over the tics make it easier or more difficult to manage. Top (OTT) and how they have threatened the The commercial imperative arguably has original business models of the PPV operators. put more pressure on sports bodies to govern their respective operations in a transparent zz 7 Chapter 6: Formulating and and equitable manner. We also look at evi- Implementing Sports Marketing Strategy dence of good and bad practice in this area. Strategy is at the heart of any successful business. Successful sports properties and organ- zz 7 Chapter 4: Understanding Fans and isations are characterised by their ability to Their Consumption of Sport think and act strategically. By adopting a In order for marketers to work effectively in planned approach, they can take a long-term the sports sector, it is imperative that they view of the way forward and map out a series have a clear understanding of their central of initiatives and tactic to help them achieve 6 Chapter 1 · Introduction: The Sports Sector in a Global Context

their goals and objectives. Without evidence multi-layered-from the central core elements 1 of such a planned approach, it is most likely to a redefinition of what the product could be that they will lack direction, akin to a car with in the future. Some sports organisations take a faulty steering wheel. a myopic and narrow perspective on what In this chapter we consider the key ingredi- constitutes the product. Others have redefined ents of strategy and the different approaches their product to take account of the chang- that sports organisations can adopt to drive ing environment and fan preferences. Some changes and move their business forward in have made changes to the product in order to an unpredictable and fast-moving environ- appeal to new segments. ment. We assess the concept of innovation in We also consider the dangers of adopting sport and examine how new product develop- an overly prescriptive approach to planning. ment can enhance, or in some cases, detract from the overall value proposition.

zz 7 Chapter 7: Ticketing Strategies in the We also assess the role that branding plays Sports Sector in shaping the marketing strategy. Ticketing (more commonly referred to as pric-

ing) strategy plays a crucial role in the success zz 7 Chapter 9: Globalisation of the Sports of overall marketing strategy in the context Product of the sports sector. It is a significant revenue The commercial imperative dictates to many generator for most sports clubs. Some com- sports organisations that they must seek mentators argue that, in light of the contri- out new avenues for increasing the revenue bution of media rights, ticketing has become streams. Product globalisation represents the less important. However, this is a dangerous next logical sequence to follow. In tandem assumption. It is possible that income from with other business sectors, this option pres- media rights might decrease. Ticketing focuses ents a number of attractions for the CEOs on the fan. They pay to watch their favourite and senior management of sports properties. teams. It will continue to play a major role in In this chapter we consider the different revenue generation going forward. modes of entry that sports organisations use In this chapter we assess the different in order to penetrate specific countries or geo- approaches to ticketing and examine them in graphic regions. the context of the characteristics of the sports We focus on some examples of how sector. sports organisations such as the English We also consider the role that the second- Premier League, the NBA and the NFL have ary ticketing market plays in the process. Some approached new geographic markets. commentators argue that such operators pick We assess the criteria that sports market- up on the weaknesses in ticketing strategy and ers can use in order to assess the attractiveness allow fans to gain access to tickets. Others see and risk associated with market entry. them as a blight on the fan: costing them sig- We also examine the role that technology nificant amounts of cash. and social media platforms have opened up the door for fans that may not be in a position

zz 7 Chapter 8: The Sports Product and to physically attend games, but can do so from Brand-Building Decisions remote locations, using the appropriate media As the commercial imperative moves to the streaming devices and season passes. fore in many sports organisations, we see the

widespread adoption of terms that are used zz 7 Chapter 10: Managing the Sports universally in traditional manufacturing and Sponsorship Process services sectors. The “sports product” and In this chapter we evaluate another of the “brand-building” have entered the lexicon in revenue streams for sports organisations: the context of the sports sector. sponsorship. Sports sponsorship represents In this chapter we consider the compo- between seventy to seventy-five per cent of nents of the sports product. We argue that it is all expenditure by companies in this area. 7 1 1.5 · Chapter by Chapter

We assess the attractiveness of sport as a 1.5.2 Case Studies medium for branders to align their product’s values and properties with an appropriate I have developed a number of cases in this sec- sport. tion to help you apply and understand some Sport is associated with passion, excite- of the issues faced by sports organisations ment, uncertainty, enjoyment. What’s not to and marketers. They will also stimulate some like about tying in your brand to such an envi- discussion in class. ronment? I have related each of the following cases We consider the various stages of the to the relevant specific chapter. Please note sponsorship process: from identifying poten- that some of them are relevant discussion tial partners, putting a value on the sponsor- cases for other chapters as well. ship, managing the relationship between both These cases are for discussion purposes parties in the process and assessing its effec- only. You should not interpret them as an tiveness. indication of good or bad practice. We examine the threat that is posed by ambush marketers. These are companies that 7 Chapter 2 are not official partners and pay nothing to 55 Dubai: Back to the Future the sports property owners. We consider the 55 Good on Ya Sport impact that they can have on the value of the 7 Chapter 3 official sponsorship deal. We look at remedies 55 South African Cricket: Dark or Bright for eliminating, or more realistically, minimis- 55 FIFA and Its Relationship with Adidas ing the threat from such sources. 55 Bernie Ecclestone: A Man For All Seasons

zz 7 Chapter 11: Sports Marketing in an Era 7 Chapter 4 of Radical Uncertainty 55 Flying Arrows In the final chapter we take some time to con- 55 Rio Olympic Games and Fan Consumption sider the future of the sports sector over the Patterns next 15–20 years. This exercise tracks the way 7 Chapter 5 in which emerging developments might con- 55 Squashed. Anyone for Tennis? tinue to pan out. For instance, tools such as

Augmented Reality (AR) and Virtual Reality 7 Chapter 6 (VR) are in the early stages of fan adoption. 55 Twenty-Twenty or One Hundred Vision It is likely that refinements to existing technol- 55 Vaporised ogy will make such tools more attractive for 7 Chapter 7 adoption. 55 The Leaving of Liverpool: Fans Walk Out We consider what the stadium or sports 55 The Price is Right: The Case of Boston arena of the future might look like. Key devel- Celtic and the NBA opments in areas such as sustainability and the environment will play a more significant 7 Chapter 8 and influential role over the next decade. The 55 I Want to Ride My Bicycle sports sector will be obliged to increasingly 7 Chapter 9 factor such considerations into their formula- 55 Rugby: Pushing the Scrum Backwards tion and implementation of strategy. 55 Snookered We examine the implications that arise from the Coronavirus crisis that has so 7 Chapter 10 blighted every aspect of our lives and how 55 Pie in the Sky: Anatomy of a Sponsorship this impacts on the sports sector. We borrow Deal a phrase from the business literature: “radical 55 Siemens: Knowing Me, Knowing You uncertainty”, to capture the realities of life, 55 Telstra and Its Loose Connections post Coronavirus. 55 Women’s Sport: Catching the eye 9 2

Sport and Its Role and Contribution to Society and Economic Development

Contents

2.1 Introduction – 11 2.2 The Meaning, Purpose and Organisation of Sport in Society – 11 2.2.1 Defining the Concept of Sport – 11 2.2.2 Exercise – 12 2.2.3 The Purpose and Value of Sport in Society – 12 2.2.4 Exercise – 13 2.2.5 Evolution and Organisation of Sport – 13

2.3 Government Attitudes and Policies Across Geographic Regions – 15 2.4 Sport and Culture – 18 2.5 The Role of Funding in Sports Development – 20 2.6 Funding for Sports at the Elite End of the Spectrum – 22 2.7 Sports Tourism and Its Contribution to Economic Development – 25 2.7.1 City-Based Branding – 26

2.8 Bidding for and Staging Major Sports Events – 27 2.8.1 Benefits of Staging Mega Sporting Events – 28 2.8.2 Legacy – 28 2.8.3 Image Change – 29 2.8.4 Cost Overruns – 30

Electronic Supplementary Material The online version of this chapter (https://doi.org/10.1007/978-3-030-53740-1_2) contains supplementary material, which is available to authorized users.

© The Author(s) 2020 S. Ennis, Sports Marketing, https://doi.org/10.1007/978-3-030-53740-1_2 2.8.5 Understating Costs – 30 2.8.6 Overstating Economic Benefits – 30 2.8.7 The White Elephant Effect – 31 2.8.8 No Real Supporting Evidence to Support the Perceived Benefits – 31

2.9 Criteria Used to Assess Bid Submissions for Mega and Major Sports Events – 31 2.9.1 Vital Factors – 31 2.9.2 Supporting Factors – 32 2.9.3 Bidding and Hosting Mega Events: Losing Its Appeal – 32

2.10 Conclusions – 33 Appendix – 34 References – 37 11 2 2.2 · The Meaning, Purpose and Organisation of Sport in Society nnLearning Objectives approaches to managing this relationship and On completion of this chapter you should evaluate relevant examples and case studies. be in a position to address the following In particular, we evaluate the different objectives: approaches used by policy-makers to fund the 55 To understand the role that sport plays development of sport across the spectrum: in society from “grass-roots” up to the elite end. We also 55 To assess the links between sport, look at geographic differences across the culture and politics major geographic regions. 55 To evaluate the various funding models We also consider the role that culture plays that are adopted by policy-makers to in influencing people’s attitudes to sport. We develop sport examine the role that the historical develop- 55 To examine the different views and ment of a particular country plays in develop- perspectives of the role of sport in society ing sport from an unstructured and disorganised 55 To assess the role that sport plays in the way, into something which has in many cases economic development of a country/ evolved into a professionally organised and region highly structured industry. 55 To contextualise the link between sport, Intertwined in this chapter is the role that tourism and destination marketing sport can play (for good or bad) in heighten- 55 To assess the opportunities and ing nationalism and pride in the country con- challenges of bidding for and hosting cerned. For many people, sport allows them to major sporting events. escape the tedium of daily work and life and instead fantasise and participate in the success of a particular sporting individual or team. In the latter half of this chapter we con- 2.1 Introduction sider how sport has become a significant player in the development of tourism and city In this chapter we consider the role that sport branding. This is frequently manifested in the plays in society. This is important because it desire of particular countries and cities to bid places the subsequent assessment of sports for and host major sporting events or compe- marketing in context. titions. We look at the opportunities and chal- We consider the ways in which sport has lenges involved in this process and examine evolved and changed from an activity that was the practical realities by looking at relevant regarded as essentially an optional, amateur and examples and cases. “pure” activity, in many ways developed in order to distract people from the realities of life, to something that has “morphed” into a highly commercialised and professional business sector. 2.2 The Meaning, Purpose A number of factors have led to this shift and Organisation of Sport in focus and emphasis. in Society We assess the links between sport, culture and politics. Sport cannot exist or develop in 2.2.1 Defining the Concept of Sport isolation: it is dependent on a number of interwoven issues and factors. Among them It is invidious to start a chapter on sport by being the attitudes and perspectives of policy- attempting to define what the term actually makers and politicians, to the role that sport means. However, it is important to do so in can play in shaping and influencing their order that we can identify its characteristics. respective societies. Coakley and Pike (2009) conclude that This relationship between politics and most sports commentators, practitioners and sport can be a force for good and evil; most policy-makers tend to coalesce around the fol- likely in equal measure. We consider different lowing definition: 12 Chapter 2 · Sport and Its Role and Contribution to Society and Economic Development

Another key strand to the definition rests “Sports are institutionalised competitive with the concept of sports being institution- activities that involve rigorous physical alised. This implies that as sports evolve, they 2 exertion or the use of relatively complex adopt standard rules and procedures and are physical skills by participants motivated administered by an overall governing body or by internal and external rewards” (p 5). council. Such organisations evolve and adapt the rules, take account of emerging technologies, record performances, address issues such as cheating and bad behaviour and take I suggest that we inject some caution in terms responsibility for improving the standards of of how we interpret this definition. At first the sport and spreading it to a wider audience glance it would appear to rule out activities and a greater number of participants. such as chess, darts and snooker. We can extend In summary, it may be overly simplistic to this further, to rather esoteric sports such as apply a rigid definition of what constitutes a synchronised swimming perhaps. Clearly there sport. Clearly there are some “sports” that do is little or no physical activity involved when not evoke much physical exertion but none- two people are playing chess. Yet we cannot fail theless require high levels of cognitive skills but admire the mental agility and capability of and mental agility in order to compete at the such players, particularly at elite level. Likewise, elite level. Thus, in my view, sports such as snooker is an immensely challenging game of darts and snooker fall under the category of skill, yet has little “rigorous exertion”. For our sport as they fulfil most of the typical charac- first activity in this chapter I would encourage teristics of a sport (competitive, institution- you to assess the following question. alised, providing entertainment for an audience and so on). We should also recognise that there is no 2.2.2 Exercise universally accepted view of what constitutes a sport and more importantly how sport “fits ??Assess the view that snooker is not a sport into” a particular society or social setting. In and does not deserve to be placed in the some regions certain sports have precedence same category as sports such as rugby and over others and attract the most funding. football. Different attitudes may prevail about issues such as gender equality or the provision of Perhaps we should read the definition more funding to new or emerging sports. In extreme carefully in order to avoid taking a “dog- cases (as we shall discuss later in this chapter) matic” view of what constitutes sport, in political leaders can use sport to further their terms of internal and external rewards. This particular political agenda or as a surrogate enables us to recognise that many people par- for extreme nationalism. ticipate in sport because they derive strong personal enjoyment from performing a particular set of activities. From an external perspective there is also the reward that comes 2.2.3 The Purpose and Value from receiving approval from the fans, specta- of Sport in Society tors or the viewing audience. A key element of sport is its competitive Virtually all of us would probably subscribe nature. Clearly the nature and extent of the to the view that sport in essence is inherently competition can vary depending on the skill “good” for both the individual in particular level attached to the activity. At the top end and society in general. This generally applies we have the elite, professional sports competi- whether or not we take an active role in tors. At the lower end it may simply be the participating in a particular sport or whether desire to complete a 10K run in a certain time we are ardent fans or supporters of a team or by a casual or “fun” runner. competition. 13 2 2.2 · The Meaning, Purpose and Organisation of Sport in Society

While there are negative associations with 2.2.5 Evolution and Organisation sport such as systemic state-sponsored dop- of Sport ing, cheating, match-fixing and so on, the benefits largely outweigh the “downsides” in most When we consider how sport has evolved in people’s minds. We can summarise the bene- society we should note that it is linked closely fits as follows: to history and the social, attitudinal and cul- 55 Sport allows us to escape the daily stress tural patterns which prevailed at that particu- and pressures of every-day life lar juncture in time. In effect, everything to do 55 It provides a mechanism for people to with sport is contextualised within the society exercise to different levels of exertion and at that time. thus can address health issues such as We can see differences in the way in which obesity and diabetes individual sports have evolved and organised 55 It can act as a mechanism for bringing across the different geographic regions. For opposing political, religious and cultural instance, Van Bottenburg (2011) provides an difference together and be a potential interesting analysis of how sports became solution to conflict institutionalised and formalised in the cases 55 It can instil a sense of national pride and of North America and Europe. identity in individuals In the case of the USA, sports such as 55 It can contribute significantly to the overall baseball, basketball, hockey and American economic development of a city/region/ football became very popular in the nineteenth country and twentieth centuries. In this situation, 55 It can showcase cities and countries and schools and universities played (and continue significantly boost sports tourism to do so) a significant role in the formalisation 55 It can provide an outlet for disadvantaged and development of these sports. In particular people and groups to enhance their future they also reflected parent’s attitudes to the prospects importance of extra curricular activities-par- 55 It can direct people away from criminal ticularly in the case of middle-income parents. activity Over a prolonged period of time, the schools 55 It can provide discipline and focus for and universities took over the running and individuals administration of these sports. 55 It can create “role models” that young They also quickly recognised the impor- people and children can look up to and tance of commercialisation and this was evi- seek to emulate denced by the emergence of owned-franchises 55 In multi-cultural societies sport can bring (teams owned by individual entrepreneurs people together in a common cause e.g. and organisations) who saw the commercial supporting a football team value of their involvement in leagues and 55 It can inspire people to perform better in competitions that had major appeal within both their chosen sport but also in their their relevant segments of customers. general lifestyles. Sociologists argue that the North American class structure (although containing numerous flaws such as racial discrimination) was less 2.2.4 Exercise rigid than was the case at the same time (late nineteenth/early to mid/twentieth century) ??Examine more fully the “downsides” that than was the case in countries such as the sport brings to society. UK. In the latter case, particularly during the 14 Chapter 2 · Sport and Its Role and Contribution to Society and Economic Development

Victorian era, there was considerable opposi- developed facilities and a coaching infrastruc- tion to the concept of physical education. In ture which quickly led to a focus on the elite Europe many countries used gymnastics as a end of the spectrum. 2 means of improving individual and class disci- As a consequence of this focus, it could be pline. argued that the USA more quickly adapted to Holt (1989) notes that commercial forces the challenges of producing elite athletes that were largely excluded from sport and its devel- could consistently win medals at hallmark opment in the UK. events such as the Olympic Games. Put simply, The key sports of baseball, basketball, the infrastructure and coaching created an hockey and American football quickly gained environment that encouraged and developed traction and popularity as a result of the sports performers at the top end of the spec- increased focus on commercialisation and pro- trum. fessional marketing within North American By contrast the European model focused society. Consequently, they had a large, captive on a “sports for everyone” philosophy. market and did not become too involved, or Ingrained, as sports was, in the shape of a vol- indeed see the need for international develop- unteer and club focus and linked to welfare ment of their sports. policy principle, this emphasised the impor- By contrast, sport in Europe adapted tance of participation. This happened argu- many of the popular English sports such as ably to the detriment of elite athletes who did football (soccer) and tennis and engendered not experience the same infrastructure as their many inter-dependencies. Sport in many North American counterparts. European countries largely evolved through Moving to Eastern Europe, a perusal of the significant contribution of volunteers and sports development in countries such as the clubs. Schools and universities played a less old Soviet Union and Eastern Germany indi- significant role in propagating the respective cates a far more proactive role being played by sports. Of course, we have to acknowledge the respective governments. Sport was seen as that variations occurred and still exist across a mechanism to promote the political ideol- the different European countries. This is to be ogy of the leaders. This led to many unsavoury expected: given the different social and cul- practices such as systemic doping of athletes tural patterns which exist. We explore this and a disregard for the regulations. more fully later when we consider the different In the case of Asia, sport evolved initially funding models for sport. through religious missionaries who went to Van Battenburg (2011) argues that the different countries in the region in the nine- development of sport across Europe and the teenth century and introduced various sports USA is not static but constantly evolves and that were popular in Europe and North interacts. America. Hong (2006) describes this initia- In terms of attempting to differentiate tion as a product of Western cultural impe- between the two vast regions, he suggests that rialism. The Asian Games (founded by the the North American organisation and devel- YMCA in 1913) was the first attempt to run opment of sport tends to follow an “educa- an organised games. Countries such as Japan, tional - commercial” configuration. By contrast China and the Philippines saw this develop- the European approach tends to evolve around ment as an opportunity to train people for a “voluntary-governmental” configuration. real competition. The European approach explicitly recog- Over the years the Asian Games has had a nises the more interventionist role of govern- number of ebbs and flows, partly from a lack ment in terms of sports development and of funding and partly from a number of dis- funding. putes between countries. The emergence of The North American approach also powerful Gulf States such as Kuwait also revolved around what might be termed a shaped the direction of sport and led to “many sport” arrangement: where universities numerous disagreements, particularly as to and colleges, many of them publicly funded, how the games should be administered and 15 2 2.3 · Government Attitudes and Policies Across Geographic Regions what countries could be allowed to compete. for distracting the working class away from This led to a split and the emergence of the harsh living and working conditions. Factories East Asian Games in 1993. The arrival of a closed on Saturday for a half-day and this number of ex-Soviet Union countries also allowed thousands of people to attend changed the dynamic of sport in the region. matches. If their team did well, legend has it More recently we have seen the emergence that productivity increased dramatically on of China as a powerful force in world sport. the following Monday. This is not just happening in the context of Within a slightly more cynical context, the winning medals at the Olympics. The Chinese Marxist view of sport is that it is “the opiate president has placed great importance on the of the masses”. In other words, it provides country using sport as a mechanism for rein- something mindless to occupy the working forcing its position as a global power. The class’s time and attention! results of this are to be seen in the major Success in the form of the national team or investment in football at the professional level individual athletes doing well in events such as in China and the increasing investment in the World Cup and the Olympic Games also major European football clubs. Similarly, works well for politicians as people develop a other Asian and Gulf States are becoming strong sense of national pride and identity. increasingly involved in football ownership. This is particularly the case in relatively small Examples include a Thai family acquiring countries (that are not used to success). Leicester City (English Premier League) and a When the Republic of Ireland reached the Qatari investment in Paris St Germain (a quarter finals of the World Cup in 1990 the French football team). impact could be seen in the attitude and mind- In some Gulf States, while not necessarily set of Irish people in general (not just Irish generating athletes and sportspeople of a suf- football fans). There was a strong sense that ficient calibre to win medals, they have given Ireland had arrived in the world. This was evi- passports to non-nationals and have achieved denced by the number of people visiting success in the Olympics as a consequence. Ireland and the number of Irish people travelling abroad. Politicians like to envelop themselves in 2.3 Government Attitudes success. Sporting success in the form of win- and Policies Across Geographic ners, provides just such a setting. It allows a Regions politician to benefit from increased visibility, attention and heightened awareness. Sport The preceding section has examined the devel- can massage a politician’s ego and can enhance opment of sport. We can see that across the reputations – again in situations where an different geographic regions such develop- individual or team has succeeded in major ments have followed different patterns of competitive events. evolution. One constant in any such analysis There are, of course, potentially negative and discussion is the link between sport and consequences that can follow on from the politics. interface between politics and sport. It is not difficult to see why such a link Governments have boycotted major sport- emerges. From a political perspective, sport is ing events. For instance, the UK government seen as something which exhibits positivity attempted to boycott its Olympic team from and a glow that appeals to many people, irre- competing in the Moscow 1980 Olympic spective of class, gender or religion. Thus, it Games. The period from the early 1970s can be argued that it has a major unification through to the early 1990s witnessed the isola- role to play in societies which in many cases tion of South Africa from competing in major are disunited and in conflict. international sporting events. While this had In the UK for instance, in the early part of much justification due to the nature of apart- the twentieth century, politicians regarded heid as practiced by that government, many football and its development, as a mechanism people argued that sport should not be 16 Chapter 2 · Sport and Its Role and Contribution to Society and Economic Development

dragged into politics; nor should politics instance, serious (but unproven) questions become involved in sport. have been raised about the manner and cir- Political leaders can take their link to cumstances surrounding the award of the 2 sports to extremes. In the 1960s and 1970s for 2022 World Cup to Qatar. instance, many of the so-called Eastern-Bloc Other criticisms of the interface between countries (satellites of the Soviet Union) prac- politics and sport include the attempt to link a ticed systemic state-sponsored doping. sport to a particular cause. We witnessed this More recently the interface between poli- in the sport of NFL in the USA, where tics and sport has manifested itself in the bid- American footballers have been accused of ding for and hosting of major sports events. disrespecting the country by kneeling down We investigate this topic more fully later in the during the playing of the national anthem. chapter. However, there have been instances This practice commenced in 2016. The coun- where sports-entity holders (the owners of the ter-view is that the President: Donald Trump sport) and politicians have been accused of has also used this action by the players to play chicanery and unethical behaviour. For politics.

China Makes Its Mark

China is one of the largest and most populated a more nuanced and focused approach to over- countries in the world. Since the 1980s it has all development was required. undergone a transformation in many different He encouraged leading entrepreneurs and areas: most notably in its shift away from the corporations to invest in the Chinese Super traditional Communist policies to a subtler, yet League and also to invest in sports property noticeable, genuflection towards some of the acquisitions in key international markets. basic principles of traditional capitalism. Part of the decree focused on the need to The sports sector typifies this transforma- increase the sports space available to society. In tion. Up to the 1990s sport was exclusively the the 13th Five-Year plan (2016) it set a target of preserve of government, at national, regional increasing the sports facilities by 700 million and local level. In tandem with the shift, sport square metres of space by the year 2025. has also moved towards a more free-market Part of the plan also outlined a target of view of the world. This is reflected in the level building one-hundred new sports towns by of investment in sport both domestically and in 2025. This would appear to provide strong evi- international markets. dence of the intent of President Jin Jinping in The emergence of President Jin Jinping terms of where he sees the sports sector over brought further transformation to the sports the next ten to fifteen years. sector. A life-long fan of football, he has moved Major business-people such as Wang the sports sector to the centre of the overall Jianlin and Jack Ma together with companies five-year plan for the economy. This is most such as the Wanda Group and Alibaba have accurately reflected in a decree introduced in invested billions of dollars into sports proper- October 2014 which was titled “Opinions on ties such as domestic and international football accelerating the development of the sports teams, players and agencies. For example, industry and promoting sports consumption”. Wanda has invested in Infront Sports and This was introduced by China’s State Council, Media and has taken a stake in Athletico the central governing body. Madrid. It has also taken over the Ironman He also focused on soccer as a central plank Triathlon series. in the development of sport policy in China. Fosun International Inc has acquired Jinping was motivated to introduce such Wolverhampton Wanderers (an English initiatives because he recognised that the over- Championship football team). It has also taken all double-digit growth enjoyed in the economy a stake in a company owned by football agent was no longer sustainable and as a consequence Jorge Mendes, called Gestifute. 17 2 2.3 · Government Attitudes and Policies Across Geographic Regions

Li Yonghong, a Chinese businessman, large and (at the time of writing) shows little acquired AC Milan (the well-known Italian sign of slowing down. This is reflected in the football team) in 2017. Unfortunately, his own- levels of expenditure on sports clothing, equip- ership was short-lived and in 2018, the club was ment and accessories. Companies such as Nike sold to Elliott Management (a venture fund). and Adidas have made impressive inroads into There are many other instances of such this market. Likewise, Chinese companies have major and significant investment. The peak cast aside the traditional image of being copy- period for this level of investment was roughly cat manufacturers of sports clothing, and are between 2014 and 2016. The Chinese economy now offering value propositions that can com- has since slowed down, leading commentators pete on quality with the established global in both the economic and sports spheres to sports manufacturers. Chief among such local express concern about the future sustainability companies are STARY and FLIPSLED. of such investment. Football, perhaps the most global and The extent and depth of expenditure can be accessible of all sports has not proved to be a seen from the enormous salaries that have been successful hunting ground for China. It has paid to footballers in an attempt to lure them to made little or no impression via its national play in the Chinese Super League. At first glance, team globally: only qualifying for the World it would appear to make no financial sense: Cup final in 2002. The nature of the level of essentially paying players to play in a league that investment in the Chinese Super League and the in terms of standards is a long way below the international investment in clubs and sports quality of the “big five” leagues in Europe. properties explicitly sends a signal that China Why has there been such a feverish level of expects to “sit at the top table” globally by 2030. investment and expenditure? It has clearly been The level of interest in the Chinese Super driven from the top: in the form of President League is evidenced by the major jump in pay- Jin Jinping. Such overt decrees as the one initi- ment for exclusive media rights paid by Chinese ated in 2014, explicitly encourage business peo- Sport Media in 2017 (£1.5 billion for a five-year ple to invest. deal). Is this a dangerous direction to pursue on Major football clubs in Europe also target the part of the Chinese government? It is notice- the Chinese market aggressively in terms of pre- able that in 2017 the Chinese Super League has season friendlies and merchandising. How long introduced new regulations restricting the num- will it be before a Chinese footballer breaks ber of non-Chinese players that can be signed through and makes the big time with one of the by an individual club. Likewise, tax laws have main clubs in England, Spain or Italy? been introduced which penalise foreign players. We have yet to see sports such as rugby and Chadwick (2017) points out that the govern- cricket make any inroads into the Chinese mar- ment still controls all aspects of sport in terms ket. In individual sports such as athletics, swim- of its development and expansion. This allows ming, tennis and basketball, China has for quick decisions leading to quick implemen- performed credibly in the context of individuals tation with regard to any change. winning global events and credible local sports Due to the slowing of the economy, the icons such as Li Na (tennis), Guo Jingjing Chinese government has made a number of key (swimming) Lin Dan (badminton), Liu Xiang statements cautioning Chinese entrepreneurs and (110 metre hurdler) and Yao Ming (basketball) corporations against taking undue risk with have emerged over the past 20 years or so. regard to international investments. It is clear that The link between sport and politics is never much closer monitoring and auditing of the finan- more visible than the case of China and it appears cial performance of corporations is on-going. to show little sign of changing any time soon. China is an enigma for sports commenta- (Source: adapted by the author from tors and practitioners. The boom in consump- Chadwick (2017), (White Paper: Yutang Sports tion of sport among Chinese consumers is (2017). 18 Chapter 2 · Sport and Its Role and Contribution to Society and Economic Development

??1. In your view how sustainable is the poli- influenced by symbols and artefacts (e.g. dress cy pursued by China in the longer-term? code, physical layout and the feel of a particu- 2. Is this strategy good or bad for global lar environment such as the work-place). We 2 sport generally? Detail the benefits and behave according to the values of the society. potential downsides for the key stake- We do not necessarily behave in a universal holders such as sponsors, club owners, and standard way in this case. Many of us sport-entity holders, fans and media conform to the accepted values and norms: rights owners. some respect some of them and a few of us 3. Assess the role played by the Chinese may rebel against some or all of them. government in developing the Chinese We belong to a number of social groups: sports sector domestically and in the ranging from our immediate family to social global sports environment. groups and work groups. Culture is often described as “fuzzy” in so far as people do not follow identical patterns 2.4 Sport and Culture of behaviour or adhere rigidly to a common set of values. As we noted earlier, variations The old adage that “no man (or woman) is an can occur. island”, is apt in the context of discussing the Culture is also subject to change: nothing relationship between sport and culture in soci- remains static. However, most commentators ety. Very few of us are so reclusive that we can agree that change can be gradual in terms of exist without any formal or informal contact how it diffuses across groups and sub-groups. with fellow human beings. Likewise, we are Cultural diffusion is also a selective process: not immune from the various behaviours, not everything is accepted by society in an norms, signs and symbols that permeate our indiscriminate or non-questioning manner. every-day existence. The term “culture” is dif- Spencer-Oatey (2012) also notes that cul- ficult to define with preciseness. tural borrowing exists. This happens more fre- Hofstede (1994) defines the term as“…the quently in cases where people live in a collective programming of the mind which dis- multi-cultural society. Some of the values tinguishes the members of one group from and/or behaviours of one culture may be sub- another”. sumed into another culture. This is a selective Spencer-Oatey (2012) provides a more process and it is also common to witness situ- detailed interpretation and suggests that cul- ations where one group belonging to a specific ture refers to “a set of basic assumptions and culture is resistant to borrowing from another values, orientations of life, beliefs, policies, pro- culture. A good example would be in the case cedures and behavioural dimensions that are of the religious beliefs of a particular group shared by a group of people and that influence within a society. (but do not determine) each member’s behav- So, in the context of sport and its role in iour and his/her interpretations of the meaning society, what role does culture play in sports of other people’s behaviour”. development? It is not our intention, in this chapter, to Firstly, the nature of society in many coun- engage in prolonged discussion on culture: we tries and regions has changed perceptibly over

discuss it in a different context in 7 Chap. 4. the past couple of decades. Greater freedom However, we need to recognise that culture of movement and social mobility means that plays a significant role in shaping people’s atti- multi-culturalism prevails in many societies. tudes, behaviour and perceptions of the role In the context of sport, this integration of val- that sport plays in society. ues, ideas, artefacts and so on in theory (but Most researchers in this field argue that not necessarily in practice) can lead to greater culture is learned: not inherited. We, as indi- inter-cultural understanding. Sport plays a viduals, learn and develop our values within part in this process, particularly in the context the context of the social environment within of the introduction of sports that are popular which we live, work and socialise. We are within one culture and are now being played 19 2 2.4 · Sport and Culture in another country. Global TV coverage and seen as exclusively a male preserve. This view live streaming of sports has also succeeded in has tended to predominate over the centuries. making them popular in different geographic Masculinity and muscularity were the twin pil- regions. In many ways this has speeded up the lars upon which most sports were developed. diffusion of individual sports and their subse- In Western Europe and North American quent development. right up until the 1950s and 1960s, women This is not a new development however. In were reluctantly accepted into the sporting a previous section we identified the role that milieu. Their traditional role as home-makers missionaries and the military played in intro- and the “gentle sex” permeated through to ducing sports such as football, American their participation in sports. Where they did football, basketball and baseball to countries compete, it was mainly in the more genteel in Asia. Over time (gradual cultural diffusion) and less physically demanding sports. The these sports have gained in popularity (albeit norms and values of many societies reinforced at different levels of uptake) and are now this view. played, followed and enjoyed by groups of A case in point was the Women’s mara- people in these countries. thon race at the Los Angeles Olympics in We have noted already how the perception 1984. It may seem remarkable in the context of sport changes over time. Up until the 1980s of athletics today, but this was the first time the Olympic movement was an aggressive pro- women were allowed to compete in the mara- ponent of amateurism. This in many ways was thon event. Up until then it was seen by many a legacy of Victorian times in the UK, where people as being too demanding for females sport was the preserve of the “gentleman and could possibly damage their health. For amateur” and the notion of paying individu- the record, fifty women took part in this inau- als to participate was regarded as squalid. gural marathon and forty-four of them com- If we consider the evolution of sports such pleted it. as rugby union and rugby league, we can The hegemony of the male species in no graphically see this legacy. In the case of rugby longer as dominating as it once was. Women league in the UK, it essentially emerged as a compete in sports such as MMA, boxing, split from rugby union because of the latter’s rugby, cricket and football to a very signifi- objection to paying players to compete in a cant extent. This is reflected in larger TV and professional manner. It started in the North streaming viewing figures. of England (Lancashire and Yorkshire) and We can also witness changes in sports in initially was the preserve of the working the area of diversity. Sports that were once the classes. Although it has expanded significantly preserve of “white males” e.g. rugby and over the years (both within the UK and inter- cricket in South Africa, are now played by nationally) it is still strongly associated with other cultures and races and in the process the “working man’s sport”. It was not until have built up significant volumes of support the mid-1990s that rugby union accepted (it within these cultures. was already happening informally) the con- The 1997 Treaty of Amsterdam stressed cept of professionalism. the social importance of sport and identified We referred to norms earlier in this sec- one of its key roles as being one of uniting tion. Norms revolve around the expected and building national identities. Various stud- behaviours and values that exist within soci- ies by Euromonitor in the past number of ety. Most people tend to conform around years consistently show that almost three- these norms and it can take time before they quarters of Europeans regard sport as a may change or alter. A good example here is means of promoting integration. the traditional perception of gender involve- In a later chapter, we consider in more ment in sport. detail the influence of culture on the individ- Sport has traditionally been perceived as ual fan’s motivations and behaviour. Here we the domain of the male species. If we go right concentrate on the influence of a society’s cul- back to the ancient Olympics in Greece, it was ture on its relationship with sport. 20 Chapter 2 · Sport and Its Role and Contribution to Society and Economic Development

In summary, sport and culture are inextrica- us are office-bound or work from home, again bly linked in terms of trying to understand the adopting a sedentary position. ways in which sport evolves and develops in a While governments to varying degrees, are 2 particular society. Individuals and sport cannot taking action on these issues by trying to exist in isolation. Both are dependent on par- address the challenge of encouraging greater ticipation, networking, relationship-building participation across the sports spectrum, real- and interfacing with various stakeholders (gov- ity intrudes in the form of insufficient finance ernments, policy-makers, professional sports being available in order to promote sports. bodies, voluntary clubs and sports societies and At the grass-roots level, clubs and sports so on) in society. All are shaped behaviours, bodies are reliant to a greater extent on fund- norms and values. As individuals we learn from ing to develop its sport. Funding can come such interactions and are in turn shaped by from the following sources: society. 55 The taxpayer via government allocations Sport plays a significant role in the lives of 55 Levies generated from national lotteries many people – particularly in terms of par- (albeit it is in competition with other ticipation in, attending and viewing sporting bodies such as the arts, health and so on). events. What sports we play and watch, are Levies in some cases are also placed on shaped by the culture of the society within betting companies and betting which we live. For sports marketers it is impor- 55 Corporate sponsorship, where companies tant that we have an understanding of such invest in a particular sport. In the latter influences and how they can shape the future case there is usually an expectation that of a particular sport. they will get a return on their investment 55 Individuals in society who are prepared to pay subscriptions in order to benefit from the facilities, coaching and so on 2.5 The Role of Funding in Sports 55 Revenue from media rights paid by Development broadcasters for access to major games, competitions and events. Some of this While high profile leagues and competitions revenue can filter down to the community such as the English Premier League (EPL) or grass-roots level of the particular sport derive large amounts of revenue streams to in question. more than sustain the cost of running such events, many sports struggle to generate the Eurostrategies (2011) undertook a compre- required funding to develop the sport, the ath- hensive study with sports clubs, sports minis- letes and its development at community or tries and key stakeholders across the full range grass-roots level. of member states in the EU. It examined the In this section we consider the different various approaches and frameworks used to approaches or models that are used to address provide funding for sport. this challenging aspect of sports development Four revenue sources were seen to be criti- in society. cal in terms of trying to identify variations in As we mentioned earlier, governments of approaches to sports funding across the all shades and hues have to address significant member-states of the EU. health-related issues in society such as obesity They can be summarised as follows: and specific diseases such as diabetes. Young 55 Level of sports participation (measured by people in particular are also engaging with membership rate) more sedentary activities. In doing so they run 55 The average level of public funding per the risk of not engaging in sufficient exercise capita and therefore building up long-term health 55 Relative importance of the direct problems. contributions by householders Over the years, people’s lifestyles and work 55 The contribution of voluntary work habits also militate against exercise: many of (Eurostrategies 2011, p 9). 21 2 2.5 · The Role of Funding in Sports Development

We consider the main features of each 55 Even lower levels of public expenditure per approach here. capita 55 A high level of revenue coming from levies zz The Northern and Western Europe Model on lotteries and betting/gambling service 55 Evident in Austria, Belgium, Denmark, 55 Low levels of household expenditure. Finland, Germany, Ireland, Netherlands, Sweden and Luxemburg In addition to the four models identified in the 55 These countries typically had high levels of study, variations were also pinpointed in the participation in sport (around 20% of the cases of France and the UK. population). This leads to a high level of In France the situation that pertains is social provision similar in many ways to the countries identi- 55 The high level of volunteers and officials fied in the first model. However, there is lower tends to keep some of the costs down willingness on the part of households to spend 55 Contribution by householders is relatively money on sport. The membership rate of low. clubs and sports associations is lower than group one countries. However, there is a zz The Mediterranean Model (Greece, Italy, higher level of public funding. Spain and Malta) In the UK there is a relatively lower level of 55 Low(ish) level of public subsidy public support from government agencies. 55 Levels of household expenditure is high Households demonstrate a higher propensity when compared to the extent of public to spend money on sport and there would funding appear to be a higher appreciation of the 55 The public spends roughly half the amount importance of sport. The downside is that with per capita to that of households the comparatively lower levels of public sup- 55 Contribution of voluntary work is lower port, there is a lower rate of participation than than is the case in the Northern and many of the other countries in group one. Western Europe model. The report makes a number of observations as to the future challenges of funding sport in society over the coming years. zz The Rainbow Model 1. Secure, increase and diversify the resources 55 Central European countries mainly make up allocated to sport in general and grass- this group (Estonia, Hungary, Latvia, roots sport in particular. Portugal, Romania, Slovakia, Slovenia, 2. Promote and enhance financial solidarity Lithuania between the professional/elite end of the 55 To some extent these countries have been spectrum and the grass-roots end. affected by the collapse of the sports 3. Promote and support voluntary work. infrastructure resulting from the breakdown 4. Recognise the public interest of grass-roots of the old Soviet Union in the later 1980s sport in other policy areas. 55 Limited demand for leisure sports, 5. Improve the evidence-base relating to associated with relatively low-income levels grass-roots sports participation and fund- 55 Low on the list of public funding priorities ing: particularly in the area of transpar- 55 Low levels of voluntary work ency with respect to financial flows of 55 Memberships rates between 5% and 12% money. 55 A need to advance the sports culture. This report is comprehensive in the context zz BCP Model of Europe. We need to recognise however 55 Refers to Bulgaria, Czech Republic and that 6–7 years on from this study things may Poland have changed in many of the member-states 55 Similar to the Rainbow Model in terms of of the EU. The deep recession which existed social demand around that time would certainly have 22 Chapter 2 · Sport and Its Role and Contribution to Society and Economic Development

affected public expenditure levels on sport with income levels rising more quickly (albeit and also on the propensity of households to from a much lower base than many of the also spend money in this sector. Since then Western European countries). 2 economies have shown signs of emerging In terms of attitudes to sport from the per- from the deep recession although expenditure spective of the population; particularly younger on sport probably is at the lower end of pub- people, we should acknowledge the growth in lic expenditure. sedentary activities such as “e-sports” in gen- In the case of central and eastern European eral and gaming in particular. This is likely to countries such as Poland, Czech Republic and have a “knock-on” effect on participation rates so on, benefits from joining the EU are likely in more traditional sports such as football and to have improved their economic position running.

Benetton and Its Community Roots

The concept of shared value was put forward Verde Sport – a Benetton sports company. This by Porter and Kramer (2011). This approach to is separate from Benetton’s sponsorship of the redefining the concept of value is based on the local basketball team and various other spon- belief that business should not be fully gov- sorships of sports over the years. The facil- erned by the economic imperative. Rather, the ity contains a comprehensive infrastructure needs of society and the communities within including four basketball and volleyball courts, which companies work should also come into 2 beach volleyball courts, six rugby playing the decision-making process with respect to fields, three air-conditioned gyms for basket- their future strategic direction. ball, volleyball, a swimming pool, a fitness cen- In the context of the sports sector, Benetton, tre, a nine-hole practice golf course, restaurant, the well-known fashion company provides a fan-shop, guest quarters for players, a three good example of how corporations can practi- hundred seat conference centre and meeting cally implement this concept. room spaces and a special play area dedicated Benetton, despite its global imprint and to children between the ages of 1–6 years. success over the past 40 years or so, started off This multi-functional sports infrastructure as a traditional family-owned clothing manu- is free for everyone in the community through- facturer in Treviso in north-east Italy. Treviso out the 365 days of the year. is the provincial capital of the Veneto region. This is a good illustration of a company In the early days of its operation it established that recognises the role that the local commu- a major local sports facility in Treviso called nity has played in its success. By creating, devel- La Gharida - Citta dello sport. This has grown oping and managing such a structure it can be over the years to a 220,000 square metre facil- argued that this highlights the concept of ity. It is owned by Benetton and managed by shared value in practice.

2.6 Funding for Sports at the Elite qualifications in finals of keynote sports End of the Spectrum competition such as the Olympic Games or World Champion championships? De Boss- Our preceding discussion has focused to a cher et al. (2013) pinpoint the following large extent on funding for sport in general, influences. National pride, international particularly at the grass-roots level. In this recognition and prestige, public interest and section we consider the challenges and the “feel good” factor and the popularity of approaches to funding sports and athletics at sports and the possibilities of increasing the professional/elite level. participation rates as a consequence of the How important is it for a nation to expe- success of top athletes and their position as rience success; in the form of medals and/or role models. 23 2 2.6 · Funding for Sports at the Elite End of the Spectrum

The attitudes of governments and policy- 55 Micro-levels: reflected in the success of makers to sport in general and to elite sport in individual athletes, influence of inherited particular varies across the globe. Objectives genes and the social influence of family, can include the following: friends and coaches. 55 To encourage as many people in the population as possible to participate in sporting As we noted in the preceding section, the pol- activities icy-makers responsible for public funding and 55 To focus on key demographics in order to investment in sport have a challenge of trying reduce obesity and health e.g. teenagers, to capture a balance between the elite end of middle-aged people and so on sport and grass-roots levels. 55 To apply a diverse approach to funding, While ideally, we might want to see both giving equal recognition to all sports ends of the spectrum treated in equal mea- irrespective of popularity sure, in practice we can find many variations. 55 To focus on and prioritise those sports that Let us explore the elite sports end in are most likely to generate medal-winning greater detail. opportunities at hallmark sporting We have already identified the main value competitions such as the Olympics of sport to society. The key stakeholders such 55 To regard sport as being less important as governments, sponsors, coaches, scientists than other key priority areas for public and many individual members of society rec- funding e.g. health, education and culture ognise the importance of achieving interna- 55 To place sport at the centre for promoting tional success in sport through measures such a political agenda. as cups, trophies, competitions and medals that are won by that country’s teams and indi- These objectives typically are not mutually vidual athletes. exclusive: they tend to mix and merge and will If taken to extremes, such as the way in fluctuate, depending on the policies of succes- which political leaders in some cases have sive governments, the state of the economy used sports for their own political ends, it and the circumstances pertaining to the coun- can lead to unethical practices such as cheat- try’s performance and success in sporting ing and the abuse of talented children. events and competitions. Pursuing success at all costs, in addition to De Bosscher et al. (2015) pinpoint a num- unsavoury practices and behaviour can also ber of components that can lead to elite sports lead to serious questions being raised about success. They are summarised as follows: the way in which public money is being dis- 55 Macro levels: influence the social and cul- bursed across the sports fraternity (individ- tural environments and reflect the economy, ual sports and their administrators). Green demography, geography and climate, urban- (2006) raised some questions about the effi- isation, politics and the national culture cacy of sports funding and posits the view 55 Meso-levels: influence the policythat in some countries there has been a shift environment such as coach development in focus from “a sports for all” policy to “not policies on talent identification, recruitment about sports at all”. and development Let us look at the case of the UK.

A Case of Success Breeding Success

The 1996 Atlanta Olympics represented a par- Prime Minister, John Major was a strong advo- ticular low spot for UK sport. This was cap- cate of this policy which arguably may have tured in its 36th place in the overall medal table done some good for general participation in (one medal). Many commentators attributed sports but did not provide adequate investment this perceived failure to be in part due to the at the elite end. This was in contrast to other focus by Governments on “sport for all”. The countries who employed a much stronger level 24 Chapter 2 · Sport and Its Role and Contribution to Society and Economic Development

of funding to elite athletes and sport in the port such a culture. By contrast, sports in quest for medals and success. groups three and four receive little or no fund- 2 A change of government in 1997 brought in ing. If a sport is in category four (where the a new political perspective which viewed sport expectation is that such a sport is unlikely to as being critical to society and this view was produce a medal) it will receive no funding. A reflected in a change of direction in the way in sport in category three (where the expectation which funding was provided. Further govern- is that it can deliver at least one medal) receives ments continued with this policy resulting in very little funding relative to those in the top the scrapping of some funding that was allo- two categories. cated to support sports in schools. This is graphically demonstrated in the case Individual objectives such as one of increas- of GB badminton which has seen its funding ing the level of participation in sport by 1 mil- decrease from £5.9 million (in the last tranche lion on 3 days a week, was refocused to younger of allocation) to zero. This is despite the fact people as opposed to the entire population for that it achieved its target at the Rio Olympics. 1 day a week. Other sports that have lost their funding Sports such as cycling received far more include: synchronised swimming, water polo, funding. This was in order to allow it to employ goalball, wheelchair fencing and visually the best designers, coaches and scientists avail- impaired football. able. From the Beijing Olympics (2008) to the Further inequities would also appear to most recent one (Rio de Janeiro) in 2016. As a surround the sport of the modern pentathlon. result, the UK has become arguably the most This sport received funding of roughly £ 7 mil- dominant country in this sport and this has lion over the next 4 years. This allocation will been reflected in its medal haul. support eighteen athletes; none of whom have Sports such as athletics and rowing have any realistic chance of delivering a medal to also received large increases in funding over the Team GB. It can be argued that sports such as years, again leading to significant improvement the modern pentathlon, equestrianism and sail- in performance and medal-winning at the ing: at best peripheral sports in terms of par- Olympics and World Championships. ticipation and level of interest among the This increase in performance led to the UK general public, receive a disproportionate finishing second on the medal table at the Rio amount of financial support. Olympics in 2016 (67 medals). Many commenta- Likewise, it can be argued that some sports tors argue that this is a key measure and validator are more difficult to win medals in than others. for the policy of investing heavily in key sports. For instance, sailing is a niche sport where not Others disagree. many countries or competitors perform in. By Ingle (2017) argues that a focus on medals contrast, a very popular sport such as basket- has led to unfair and inequitable practices in ball, is very difficult to compete in for a country the way in which funding is allocated to sports. like the UK; due to the depth and nature of the Sport UK, the body responsible for managing competition. Basketball has also seen its level the budget, has created four categories or bands of funding cut substantially. Is this unfair? of sports. Groups one and two reflect sports Given that it is a sport that is very popular with that have consistently delivered medals and young people, particularly those from ethnic therefore receive the bulk of the funding. This communities and some of whom live in is based on the principle that success breeds deprived and disadvantaged areas. success and a culture of winning and innova- The Director of Performance has suggested tion can be further improved and developed a medal target of 81 medals for the Tokyo only by the requisite funding necessary to sup- Olympics in 2020. 25 2 2.7 · Sports Tourism and Its Contribution to Economic Development

??1. Examine the extent to which you would 2.7 Sports Tourism and Its agree with the view that a focus on med- Contribution to Economic als is damaging to the overall develop- Development ment of sport in the United Kingdom. 2. Select another country (or your own In this section we consider the role that sports country if you are not from the UK) tourism plays in the economic development and assess its approach to funding ath- of countries, regions and cities. Roche et al. letes and sports at the elite level. (2013) cite the World Tourism Organisation In summary, funding models for elite sports who estimated in 2011 that tourism was the again show variations across different countries largest industry globally. and regions. Some focus on elite sports, possibly Kressman (2016) suggested that the sports at the expense of addressing the need to encour- tourism sector globally was worth in excess of age individuals in society to take up sports and $600 billion. This highlights the growing con- participate in events. The culture and values of tribution of this sector to tourism. This society (as we discussed in an earlier section) growth has been driven by a number of fac- revolve around the community and an ethos of tors including the following: volunteerism. This is evidenced in countries like 55 The growing exposure to sports events, Sweden and can be seen in clubs and schools competitions world-wide via subscription- where volunteers manage, coach or provide based television, the Internet and the con- leadership and direction for the development of sequent desire to attend such events the particular sport in question. 55 The growth in the number of participants In the future, opportunities arise in the in events such as marathons, 10K races, area of funding from closer relationships with orienteering, cycling and so on the business world. Our case study on 55 The growth in the number of people Benetton shows how both the company and engaging in active lifestyles revolving the community can derive mutual benefits around sport from an initiative. 55 Increases in disposable income (relatively Australia in the form of its Australian speaking) in key geographic regions such Olympic Council, is encouraging the federal as China, India and Russia. Middle- government to establish a national lottery. income segments in particular have grown They propose that two-thirds of the profits significantly and many people in this could be dedicated to funding for sports. They grouping want to travel to watch sport or estimate the funding from this source could to participate e.g. golf holidays. generate additional money of around $50 million Australian dollars. This has been stimu- Further indications about the importance of the lated in part from the poor performance of its sports sector to the economy can be found in a athletes in the Rio 2016 Olympic Games. study commissioned by the EU (2012). It esti- As young people turn more towards mated that it generated 2.12 per cent of total e-sports and gaming, the imperative is there employment across the twenty-seven-member for governments to encourage active partici- states. Germany had the largest number of pation in traditional sports in order to combat sports-related jobs (1.15 million) followed by health problems. the UK (610,000) and France (410,000). At the same time, it is also important that a Peric (2015) identifies four experiences nation produces athletes and teams that the that sports tourists seek: younger generation look up to and seek to 55 Entertainment experiences: where partici- emulate. Role models and sporting icons play a pants are mostly passive (spectators) and significant part in cultivating interest in sports is more likely to be one of absorption than participation. Without such “heroes” and nar- of immersion ratives, this becomes a major challenge for the 55 Educational experiences: tend to involve sport sector and its sources of funding. more active participation 26 Chapter 2 · Sport and Its Role and Contribution to Society and Economic Development

55 Escapist experiences: can teach just as well ity for overall tourism, the business commu- as educational events can, or amuse just nity, hotels and restaurants and so on. This like entertainment ones, but they involve engagement is based on the realisation that 2 greater participant immersion (they want synergies can be achieved by working with to become an active part of the event) stakeholders that also can benefit from the 55 Aesthetic experiences: tend to minimise hosting of an event or a particular game. the active participation, while participants Devine et al. (2011) highlight the dangers are immersed in an activity or environment, of pursuing a strategy of staging events that but they by themselves have little or no are not integrated or planned and where a effect on it (p 88). lack of communication or cooperation between the interested parties can create a He suggests that the sports tourism products barrier to the success of the business. From can start off in any one of the four directions the perspective of economic development this and can be developed further to address some situation can lead to missed opportunities. It or all of other experiences. An example could can also create negative perceptions interna- be a basketball training academy for begin- tionally if the event is mismanaged or ele- ners. This is essentially sports training in the ments of the infrastructure do not measure up sport of basketball and unlikely to attract e.g. not enough hotel rooms or poor telecom- fans or spectators. However, it could also munications facilities and technology. incorporate a basketball competition at the weekend which could generate an attendance and could further develop by inviting famous 2.7.1 City-Based Branding basketball players to take part in a brief dem- onstration of their skills and meet afterwards Given the increasing opportunities to generate with the fans. significant revenue for the local and national Sports tourism can be directed towards economies, it is no surprise to see that cities individuals who want to be active (marathon have embraced a more professional and strate- running, cycling and so on) or those who are gic approach to managing sports tourism. passive spectators at events or those visiting Branding of anything (physical product, famous football stadia. service, person, city and so on) is predicated For the active tourist, we can see how on the belief that in order to be relevant to a sports marketers further segment this group target audience, the “product” must be able to by creating specific sports tourism products achieve one or two points of differentiation such as golf tourism, snow-based tourism, from its direct and indirect competitors. city marathons and so on. The passive tourists Otherwise why would anyone want to pur- (depending on their sporting interests and chase or consume that product? passions) have a vast array of products to In the context of tourism and destination choose from. Examples include attending marketing this is equally important and chal- mega sports events (World Cup, Olympics, lenging. Marketers are faced with the task of World Championships, Tour de France creating a product that resonates with a target stages), attending qualification games involv- market; where individuals in this segment ing their particular country (World Cup qual- have positive perceptions and attitudes about ifiers in football), and visiting host cities to that product, will purchase it again and act as watch their team in action (Six Nations Rugby, ambassadors for the product by “spreading test cricket matches). the good news” about it to their friends and Over the past number of years, it is increas- social networks. Social media platforms have ingly common for sports event organisers, helped in this regard. clubs and sports bodies to work more closely This can work both ways. Good experi- and collaboratively with other key stakehold- ences will lead to inspiring narratives on social ers such as city/local authorities, national and media. Likewise, bad experiences will generate regional government bodies with responsibil- negative comments and publicity. 27 2 2.8 · Bidding for and Staging Major Sports Events

In this context, some cities have seen sport sports events provides the city or region with in general and events in particular, as a good the opportunity to project other key dimen- opportunity to generate revenue, increase the sion of its tourism product e.g. cultural activi- number of visitors and capture international ties, beaches, historic castles, scenery and so coverage as a consequence of staging such on. activities. Sport-focused city branding can It also enables the city to project its people: also engender a sense of pride in the citizens; their friendliness and so on. Glasgow used particularly when high-profile events are sport to project its points of differentiation. It staged. has staged the Commonwealth Games in 2014 City-based branding has specific chal- and hosted the UEFA Cup Final in 2007. It lenges and complexities that are not to be has a tradition of sport. found to the same extent in other sectors. Moilanen (2015) identifies some characteristics of city branding. They can be identified as follows: 2.8 Bidding for and Staging Major 55 It is a multi-dimensional product, contain- Sports Events ing many diverse elements (heritage, history, culture, infrastructure, sport and Evidence that the sports sector plays a promi- buildings to name but a few) nent part in the economy and within society in 55 It is delivered by many different general is to be clearly found in the role of stakeholders hallmark sports events. It would appear that 55 Often there is a conflict of interest between some countries will do anything to win the the stakeholders. This can lead to a rights to stage such events. breakdown in communications and an ill- What constitutes such an event? conceived strategy Mega sports events refer to typically recur- 55 Management and marketing of the brand ring events that have a global relevance and can be outside the control of those tasked appeal and capture the level of media interest with this responsibility that corresponds to the scale and interest of 55 The pernicious influence of politicians is a the event. At the top of the pyramid lies the common feature Olympic Games and the football World Cup. 55 Dangers associated with making In both cases they attract the interest of a unrealistic promises or exaggerating sports global audience of sports viewers and fans. assets and features (Herstein and Berger Typically, mega events attract a very large 2013). number of visitors who come to the city or country to attend the event. Such events are Melbourne is a good example. It has a very likely to have significant impacts on issues strong tradition for staging mega-events such such as infrastructural development and as the Olympic Games and the Commonwealth urban regeneration. Games. It stages a Formula One event each We can apply a notional “categorisation” year, hosts the Australian Open Tennis of such events by recognising that the scale Championships (one of the four “Grand Slam and scope of the event can vary. At a slightly “events), stages test matches at the Melbourne lower level, major sporting events, while still Cricket Ground (MCG) and other major having an international relevance and appeal, national events such as Australian Football attract less viewers and visitors and a slightly League games. It has invested in the appropri- lower international media coverage. They ate infrastructure by way of stadia, hotels and relate to World Championships in specific telecommunications. sports such as athletics, rowing, rugby and The benefits to the stakeholders are clear. boxing. Major events can also refer to regional Increased visitors spend money in the city championships such as the Asian Games or which impacts on hotels, bars, restaurants and the European football championships. They so on. International media coverage of mega also tend to be recurring (every 2–4 years). 28 Chapter 2 · Sport and Its Role and Contribution to Society and Economic Development

Another category of major sporting events 55 The “feel-good” factor among the city’s refers to “one-off” games or competitions. citizens Events such as the European Champions 55 Boost for hotels, hospitality, restaurants 2 League Final would fit into this category. and entertainment outlets. Some sports have key competitions that reflect the top end of their schedule. Golf has Long-term benefits the “Four Majors”. With the exception of the 55 New and improved sports facilities that can US Masters (always staged at Augusta), the be used post-event other three tend to be allocated to individual 55 Investments in overall infrastructure, roads, golf courses that meet their requirements. transport and telecommunication In the case of tennis, it stages four “Grand 55 The “advertising effect” falling out from the Slam” events (US Open in New York, French global media coverage of the event Open in Paris, Australian Open in Melbourne 55 Boost for tourism as a result of increased and the Championships, Wimbledon in numbers of visitors London). 55 Potential for foreign direct investment and Annual sports events such as the Superbowl increased international trade as a result of (NFL) generate more limited global appeal the city’s exposure to foreign corporations but within the context of the USA, the city 55 Can put the city on the international map. that stages the event can showcase its assets to Examples include Barcelona (1992 a wide audience. Olympics) that transformed itself into an At the lower end of the events spectrum, international city and became one of the cities can stage national championships or most popular destination cities in the world competitions which clearly have a more lim- for tourists ited appeal in terms of viewers and visitors. 55 The “advertising effect” can also lead to spin-off’s for neighbouring cities and the 2.8.1 Benefits of Staging Mega country as a whole (Coattail Marketing). Sporting Events

The Summer Olympic Games is arguably the 2.8.2 Legacy biggest sporting event, recurring every 4 years. The city which wins the bid to stage the games “Legacy” is a term that is highlighted as typically has to handle around 10,500 athletes being a critical expected positive outcome from over 200 countries. It has to have the facil- resulting from hosting a mega/major sport- ities to stage over 300 events in 28 different ing event. This refers to critical key perfor- sports. It typically sells around 10 million tick- mance indicators that are used to assess the ets for these events. The International Olympic long-term success or otherwise of the event. Committee (IOC) generates around 50 per cent It comes into play long after the event itself of its total revenues from media rights, from has been staged. It poses the following ques- which it provided a portion to the host city. tion. What evidence is there to indicate, a Baade and Matheson (2016) identify a number of years after the event had taken number of short and long-term benefits that place that the city/country/region has gained can accrue to the host city. We can summarise long-term benefits as a consequence of stag- them as follows: ing that event? Indeed, the sports-entity holders such as Short-term benefits the IOC and FIFA explicitly look for evidence 55 An economic boost to the city arising from in the bid submissions that the committees construction identify specific areas where such legacies are 55 Increase in the number of tourists expected to happen. 55 Media rights received from the IOC Legacies can be divided into “hard” and (roughly 30% shared with the organising “soft” elements. committee) 29 2 2.8 · Bidding for and Staging Major Sports Events

Soft structures include: knowledge (e.g., made major investments in acquiring the organisational, security, technological); net- rights to host mega and major sporting events. works (e.g., political, sport federations, secu- Examples include Abu Dhabi and Bahrain rity); and cultural goods (e.g., cultural identity, (Formula One races), Qatar (2006 Asian cultural ideas, and common memory). Games) and arguably the most unexpected of Hard structures include: primary struc- all: winning the bid to stage the 2022 World tures (e.g., sport infrastructure, training sites); Cup. secondary structures (e.g., villages for athletes, The political ramifications generated by technical officials and media); and tertiary the awarding of this event to Qatar have structures (e.g., security, power plants, tele- revolved around accusations of bribery and communication networks, cultural attrac- corruption on the part of the Qatari bid com- tions) (Preuss 2004). mittee. No hard evidence has been produced The importance of achieving legacies to support this accusation. resulting from the hosting of major sporting States in this region also have to grapple events is highlighted in the concept of legacy with negative perceptions of the way in which planning. Hartman and Zandberg point to the Rulers run their regimes; with questions the literature on this concept and describe it raised about issues such as women’s rights, as a situation where the event is embedded in democracy, labour conditions and so on. a larger picture: focusing on a pre and post- Foley et al. (2012) point to the fact that many event development surrounding the planning. of the rulers have aggressively taken the sports In other words, legacies should not be expected event space by storm in the past number of to emerge in a spontaneous and unanticipated years. manner. Rather they should be planned from Amara (2008) argues that investment in the very beginning of the bidding process and sports events is driven to a significant extent feature as the central platform of the bid. by the need to build a new identity through “an emerging model of the modern monarchy state” (p 107). 2.8.3 Image Change The implications of these moves by the Gulf States in the sports space are not likely We enter the political sphere in this instance. to have any impact in the short-term. It takes Political leaders frequently see sport in gen- time to change the global perception of a par- eral and mega sports events in particular as a ticular country’s culture, political philosophy conduit for promoting their political agenda and so on. and philosophy. Adolf Hitler could quickly Qatar had originally set as its aims for the envisage the benefits of using the 1936 Doha Asian Games in 2007 around the fol- Olympic Games as a means of reinforcing his lowing objectives: political views and signalling them loudly and 55 To put Qatar (with the world’s third largest clearly to the rest of the world. natural gas reserves, but with a low inter- The Chinese government used the Beijing national profile) “on the map” games in 2008 to change the popular image 55 Increase tourism by establishing an annual that many countries held about its society and circuit of international sporting events in political beliefs. It went for a “soft” approach, Qatar, and using the individual competitions, the stadia 55 Instil discipline in Qatar’s young people and “soft scenes” of everyday life in a modern by providing facilities to enable them to city to project a different image. This appeared participate in sports (Kolatch 2007). to work in terms of changing peoples’ perceptions. It subsequently failed in a bid to stage the The Gulf region has also recognised the 2016 Olympics but won the rights to the 2022 power of sport on a global stage. We looked at World Cup. the case of Dubai earlier in this chapter. Over If we take these benefits at face value it is the past 20 years or so other Gulf States have clear that by winning the right to host mega 30 Chapter 2 · Sport and Its Role and Contribution to Society and Economic Development

events it can be argued that there are clear The seeming inability to make accurate “wins” to be generated. forecasts and the frequency of this happening, However, a closer examination of these has led to many cities in recent years pulling 2 claims leads to the intrusion of reality! Baade out of the bidding process because of a lack and Matheson (2016) note that “predictions of interest and cynicism in the city and com- are rarely matched by reality” (p 207). We munities. have to recognise the downsides that can fall The London Bid Committee (heavily sup- out from hosting mega sporting events. ported by the Labour Government) pro- The drawbacks are as follows. jected costs of around £3–4 billion. It ended up with a cost return of around £17 billion. Many people criticised the committee for 2.8.4 Cost Overruns being disingenuous with the true costs. Vested interests in the form of government, This would appear to be an endemic feature of construction developers, and banks and so most bids and subsequent costs associated with on would appear to have played a role in the the event. The worst example of this occurred budget-setting and subsequent communica- with the Montreal Olympic Games in 1976. The tions strategy. local authorities estimated that it would cost $125 million to stage. The actual cost plunged the city into over $2.8 billion in debt. It took 2.8.6 Overstating Economic until 2008 before this debt was fully cleared. Benefits Cost overruns are often outside the control of the local organising committee. The Some commentators suggest that because the timeline from developing the bid submission people behind the bidding process and the to winning the bid to staging it can be any- preparation of the documentation have a where from 10–15 years. Clearly land values vested interest in proceedings, there is a dan- and construction costs can fluctuate during ger that benefits, in the form of increased this period. Extraneous events that affect the employment and higher levels of tourism, are general economy can also rebound on the exaggerated in order to impress key stake- original budget. holder. This is often seen in the net number of Zimbalist (2010) notes that the bid com- visitors attending the event. For instance, mittee for Athens (2000 Olympics) initially Baade and Matheson (2016) cite the experi- projected a cost of $1.6 billion. The eventual ence of London during the 2012 Games. The cost came in at $16 billion. Beijing estimated number of visitors to London declined signifi- the costs would be around $1.6 billion. The cantly in net terms during the months of July final costs were $40 billion. and August (when the event was staged) as compared to the previous year. This was 2.8.5 Understating Costs graphically highlighted by the decision of London’s West End Theatres to close during In the quest to convince key stakeholders such this period. as businesses, sponsors and the citizens of the Many people who have no interest in the city, the bid committees have often been particular event will more than likely avoid accused of understating the real costs of stag- the city or region in question. Indeed, local ing the event. It is hard to prove if this actu- residents in many cases make a decision to go ally has happened. However, the desire on the on holiday to a foreign destination to escape part of key influencers such as political lead- the perceived hassle and chaos that tends to ers and party officials and the pressure placed happen. Examples of this include increased on committee members, can lead to political security operations (with a range of restric- expediency. This can lead to negative perceptions on parking and movement) and conges- tions among the citizens post-event. tion in the key areas of the city. 31 2 2.9 · Criteria Used to Assess Bid Submissions for Mega and Major Sports Events

2.8.7 The White Elephant Effect tion of these studies does not generate much support for the view that major economic While mega events such as the Olympics and benefits automatically flow from the staging the World Cup can lead to the construction of of mega-events in general and the Olympic state-of-the-art stadia, in many cases the per- Games in particular. ceived potential benefits suffer from exagger- Most of the studies which indicated some ated claims from the host committees and improvements such as the creation of new political leaders. What happens to these stadia jobs and household consumption typically 2–3 years after the event? could best be described as modest in terms of The evidence is mixed. Coates and their contribution to economic development. Humphreys (2008) researched this question and came to the conclusion that there was little empirical evidence to support many of the 2.9 Criteria Used to Assess Bid perceived economic benefits associated with Submissions for Mega new stadia and arenas. and Major Sports Events Examples include Athens, where the main stadium and many of the other arenas that The value of sports properties which fall featured in the Olympics in 2000 now lie der- under these categories allied to the potential elict and in a major state of disrepair. benefits that can accrue to the “winner” ensure The iconic “Bird’s Nest” stadium which that in theory a rigorous methodology is used received so many plaudits from designers has to judge the merits (or otherwise) of submis- been rarely used since 2008 and has been par- sions. tially converted into apartments. Westerbeek et al. (2002) undertook a Conversely the athletes’ villages that were major study which identified the key criteria built for the Atlanta (1996) and Los Angeles used and the process involved in making bids (1984) games were converted into new dormi- for such events. The findings indicated that tories for local universities. The stadium used eight key success criteria were identified. They in the London 2012 games was rented to one further divided the criteria into four that were of the London-based premier league football deemed to be vital to the potential success of teams: West Ham. It was re-designed in such a a bid and four that were important, playing a way as it could be converted back to an athlet- supporting role. ics stadium to enable it to stage major championships (it staged the World Athletics Championships in 2017). 2.9.1 Vital Factors Glasgow, as part of its bid submission guaranteed that the athletes’ village would be 55 Ability to organise events: (management transformed into social housing. It has taken expertise, sport-specific technical exper- far longer than originally stated by the bid tise, technical infrastructure, a track record committee to deliver on this promise. of organising events and staff knowledge) 55 Political support: (government involvement and support for the bid and the process (financial, human resources and 2.8.8 No Real Supporting Evidence physical) financial and political stability of to Support the Perceived the city/country) Benefits 55 Infrastructure: (the necessary telecommunications, transport, road infrastructures, Baade and Matheson (2016) reviewed the community support, necessary hotels and extant academic research on the economic accommodation, stadia, and ability to impact of the Olympic Games. Their evalua- deliver proposed stadia and arenas) 32 Chapter 2 · Sport and Its Role and Contribution to Society and Economic Development

55 Existing facilities: pre-existence of estab- 2.9.3 Bidding and Hosting Mega lished high quality facilities that have Events: Losing Its Appeal already been used to stage major sports 2 events previously (including stadia and Event property owners such as FIFA, UEFA hotels and accommodation). This leaves and the IOC have been the subject of intense the city/region in a better position to start criticism for the manner in which they have construction early. conducted the bidding process. Accusations of a lack of transparency, corruption and chica- 2.9.2 Supporting Factors nery have been rife: most notably with the award of the 2022 World Cup to Qatar. 55 Communication and exposure: (reputation Countries with questionable civil rights poli- of the city/region, city-based marketing cies have staged major sports event. High pro- initiatives, communications and IT sys- file personalities such as Sepp Blatter have had tems) to resign or been removed from their posts as a 55 Accountability: (relationships events bid- consequence of their dubious practices. ders have with event owner(s) and the There is now evidence to indicate that the public(s), transparency in terms of the kudos resulting from staging mega sports events financing of the bid and the required infra- are being outweighed by a degree of worry and structure, justifying to the public how their cynicism among prospective bidders. money is being spent) In 2015 Boston formally withdrew its bid 55 Bid team composition: (the mixture of to stage the 2024 Summer Olympics. This expertise on the bid team/committee and happened despite putting together a very sim- how they are perceived by relevant stake- ple and low-cost proposal. It relied on using holder, gender balance, sports experts existing stadia and developing temporary such as former athletes, ambassadors, stands and arena. It identified a cost of $4.5 high level businesspeople and age and billion to organise the event with a further $6 experience) billion allocated to improve existing infra- 55 Relationship marketing: (the power and structure such as roads. It did not however influence of people on the board such as engender any public support for the bid: a political leaders, allowing access to key vociferous campaign run by citizens of the influencers and decision-makers and mak- city indicated that the bid would be doomed. ing friends with them in order to bolster Budapest also pulled out of bidding for credibility, trust and confidence). the 2024 games. Over 250,000 signatures from its citizens forced a referendum. The local Since this study, arguably, the stakes involved authorities saw the writing on the wall and in the bidding process and the resulting promptly pulled out. rewards to the successful bid committee have This cynicism has come about because of been raised even higher. The Internet, social the plethora of bad publicity surrounding these media and digital marketing tools and tech- events. Concerns about taxpayers being exposed nology have increased the level of exposure to the debt arising after the event have also and coverage that the winner will be able to coloured judgement. Cities are effectively taken obtain. As noted earlier, media rights have over by the event property-owner and some citi- also increased exponentially, with a portion zens become annoyed when they witness the of that filtering through to the host cities and effective “lock-down” as evidenced by road clo- countries. sures, restricted entry, over-zealous security and Environmental and ecological concerns so on. When the senior administrators are have also emerged over the past 15 years. escorted around in luxury limousines, the anger These issues are now assessed in relation to becomes even more pronounced! how the various bids factor these issues into The notion that host cities have become the their strategy. This is reflected in areas such as playgrounds for over-paid and corrupt admin- the design of new stadia and infrastructure. istrators has gained traction in the media. This 33 2 2.10 · Conclusions is compounded if the cities are left with white end of the spectrum, provides the appropriate elephants, large costs to the taxpayers and little environment and facilities to enable athletes or no boost to the economy. to compete and be successful at international Ethical concerns have also been expressed level and at the global championships in their about the dangers arising from cities and area. countries located in developing economies, Sports tourism has become a critical part staging such events have also grabbed media of general tourism’s contribution to national attention. For instance, many of the stadia economies. The global appeal of sport is evi- that were built for the 2014 World Cup lie idle denced in the numbers of fans prepared to and derelict. travel to witness sports events. Also, growth In response some form of reality has areas such as participation sports attract large intruded into the mind-set of the sports entity numbers of people to cities to compete in holders. events such as marathons, skiing and orien- For instance, UEFA made some radical teering. changes to its staging of the UEFA Euro We considered the issue of bidding for and Championships 2020. Instead of locating the hosting mega/major sports events. For years finals in one country, or across two countries, it many cities and countries pursued the acquisi- has elected to stage the event across thirteen tion of the rights to stage such events with cities in Europe. These range from Baku great zeal, sometimes bordering on unethical (Azerbaijan) to Copenhagen and Bucharest. behaviour. More recently, due to scandals and The CEO argued that this allows cities and the ever-spiralling costs associated with such countries who could not afford to stage the full events, cities are re-appraising the benefits event to become actively involved. It is also a that might or might not accrue from such recognition that it may no longer be feasible to events. expect countries to cover the full costs and Overall, the sports sector has grown in challenges of staging such events. It also importance in many countries over the past addresses the possibility that in the future only 10–20 years. This is due to a number of rea- wealthy cities and economies could act as sons but the move to a more business-like and hosts. professional approach to marketing sport has undoubtedly helped in this regard.

2.10 Conclusions Learning Outcomes In this chapter we have considered the role 55 Sport in general plays a significant role that sports plays in society. Due to the posi- in the economic development of a tivity and excitement that typically surrounds country and is a source of major this sector we have seen how it impacts on employment many parts of society, acting as a diversion 55 The value of sport can be seen in areas for many from the mundaneness of everyday such as building national pride and life. national identity, escapism, increased The relationship between sport and poli- tourism, bringing cultures together and tics is very strong: political leaders and parties acting as a conduit between people of can see the way in which sport can be used to different religions and political views embed them in the community, promote their 55 Culture is closely linked to sport, political agenda and increase their profile on particularly in terms of how peoples’ the national and global stages. attitudes, behaviours and perceptions Funding for sport is an essential platform influence their involvement in sport for sports development in society. We assessed 55 Political leaders and parties view sport the different models that are adopted to as a mechanism for increasing their increase participation in sporting activities profile and political agenda. This can and address health issues. The higher (elite) 34 Chapter 2 · Sport and Its Role and Contribution to Society and Economic Development

2. Using TWO examples, assess the ways in engender both positive and negative which city-branding can capitalise on outcomes for societies sport to build its brand equity. 2 55 Funding sport at elite and grass-roots 3. Assess the extent to which you would level is critical in terms of sports devel- agree with the view that schools and uni- opment. The challenge is to capture a versities could play a much more proac- balance between public funding, house- tive role in sports development at the elite holders paying for sports services and end of the sports spectrum. corporate involvement 4. You are the Marketing Director for the 55 Sports tourism is one of the key sport of badminton. You have been asked categories of overall tourism strategy in by Sport UK to make a twenty-minute many countries presentation to them justifying why your 55 City-based marketing and branding is allocation of funding should not be with- central to attracting visitors and sports drawn. Detail the issues you would cover tourism in general and hosting major in your presentation. sports events 5. Culture does not remain static. It changes 55 Bidding for the right to stage mega/ over time. Discuss the implications of major sports events has led to unsavoury this observation for sports. Select one behaviour from the perspectives of the sport and examine the impact in detail. sports event owners and prospective 6. Traditional sport has been portrayed as bidders male-dominated. To what extent do you 55 There is little evidence to suggest that agree with this view? Use examples to cities and countries benefit greatly from support your line of argument. hosting such events 7. Some commentators argue that the ben- 55 Planned or predicted legacies in efits of staging mega sports events far particular, often do not emerge, leading outweigh any disadvantages. Examine to the “white elephant” effect the extent to which you would agree with 55 Increasingly, sports property owners this perception. Use a detailed case study are looking at more innovative and less- to develop your point of view. costly ways to stage mega sports events 8. Evaluate the merits of adopting a multi- such as using a multi-city approach. city approach to staging mega sports events.

??End of Chapter Discussion Questions 1. Examine the role that sports “role models” play in encouraging individuals to Appendix participate in sport. Use a detailed example to support your point of view.

Dubai: Back to the Future

Dubai is one of the emirates that make up the that they needed to develop a long-term vision United Arab Emirates. and identified sectors such as retailing and It invested in sport back in the 1980s and sports. They realised, that if developed and was one of the first city states in the Gulf region marketed properly, such investment would to recognise the power of sport. To some extent generate revenue streams to allow the city to it was forced on them. Dubai did not have oil prosper. reserves that their neighbouring Emirate Abu Since the 1980s it has built up a track record Dhabi enjoyed. The rulers of Dubai realised for hosting and delivering a number of high-pro- 35 2 2.10 · Conclusions

file sports events and competitions. These include titions; drone racing; manned drone racing; the Dubai Rugby Sevens, the World Cup of robotics swimming; robotic table tennis; horse racing, Dubai Duty Free tennis champion- robotic wrestling; and a cybathon competition. ships (part of the ATP and WTA tours) and the It has bolstered its investment in staging DP World Tour golf event; better known as the sports events by investing heavily in the required finale of the “Race to Dubai”. This latter event is infrastructure, e.g. Meydan racecourse and the held towards the end of the calendar year. Sheikh Mohammad bin Rashid stadium. This In recent years, it has established itself as a has a capacity of 60,000, is fully air-conditioned world class venue for sky diving and air sports and its cradle-like support allows for a range of competitions. In 2012 it hosted the FAI World facilities that operate underneath the structure. Parachuting championships and in 2015, the Other sports facilities include the Ned Al Sheba FAI World Air Games. sports complex, which contains state-of-the-art More recently it set itself the task of being indoor and outdoor training facilities including an innovative city when it comes to staging altitude acclimatisation chambers and leading- sports events. While not pulling away from the edge training pitches. Many of the leading traditional events and sports, it has adopted the European football teams visit there for pre-sea- view that it has to look to the future. son and mid-season training. As part of its look ahead to the future, it By integrating sport with retailing, and staged the first World Future Sports Games. designing a modern infrastructure of hotels This revolved around staging futuristic tech- and entertainment, it can be argued that Dubai nology-based sports competitions. As befits the is up there with the best of the world cities that title of the games, the sports featured modern have used sport as a mechanism for differenti- technology and artificial intelligence (AI). The ating and branding its product. events included the following: driverless car (Compiled by the author from various racing; robotic soccer; robotic running compe- sources on the Internet).

??Discussion Questions 2. Assess the approaches to sport that have 1. Is there a danger that investing in been employed by neighbouring Gulf unproven sports, such as the ones that States such as Bahrain, Qatar, Saudi Ara- featured in the World Futuristic Games, bia and Abu Dhabi. the rulers of Dubai will become removed from mainstream sports?

Good on Ya Sport

Australia’s sporting culture derives from its his- Such sports were seen as vehicles for devel- tory as a former British colony. In the nine- oping discipline and manliness in males and teenth century many convicts and prisoners played a role in developing a civilised society. were sent to this vast land as a form of punish- In contrast to the focus on gentlemen pur- ment. It was seen, literally, as the end of the suing sport in the UK, the life of the colonists world. The arrivals had to make a go of things in the early decades was rough and tough. in their new setting and they quickly took up Brought up in such a violent environment, many of the sports that they were familiar with where drunkenness and gambling were com- from the UK and Ireland. Sports like cricket mon features of life, sport had to blend into and rugby took hold and what was later to this atmosphere. Australian sports tended to become known as “Aussie Rules Football” reflect this lifestyle and the colonist saw them- evolved: mainly from rugby and Gaelic football selves as being much tougher and competitive (a native Irish sport). than their counterparts back in the UK. 36 Chapter 2 · Sport and Its Role and Contribution to Society and Economic Development

This environment instilled a strong sense of which had to survive alongside the fast-growing pride and being successful in sport was seen as multi-cultural society that was evolving. 2 a key indicator of such national identity. The Yuendumu Games was established in As the country developed, it was perhaps 1962 to celebrate the cultural and sporting tra- inevitable that Australian society began to “mir- ditions of the indigenous population. ror” some of the behaviours from the UK. This Australian Rules Football and boxing are was reflected in the class system. As the colo- particular sports where we have seen numerous nists evolved, some moved into higher income indigenous sportspeople participating in and streams and a class structure evolved in equal enjoying success. In the case of boxing, for measure. This was reflected in the development example, Lionel Rose became the World of schools to reflect these income levels. This Bantamweight champion in 1968. Yvonne applied to the area of sports also. Some sports, Goolagong enjoyed much success also in the such as cricket, tennis, golf, rowing, yachting, sport of tennis. hunting and horse racing, reflected the upper- The multi-cultural aspect of Australian class pursuits of the day. Like the UK, individu- society has been ever-present since the arrival als fitting into this social class had more time of the early settlers. and money for such pursuits. By contrast, the This was manifested in the arrival of immi- working classes worked 6 days a week and had grants from a range of European countries little time for leisure activities. such as Italy, Greece, Serbia, Croatia and so The era of amateurs and professionals also on. More recently, in the last 50 years or so, the emerged in the Australian social system. population of Australia has increased with The role of women in sport followed a simi- arrivals from Asian countries such as Malaysia, lar line of development. Physical exertion was Vietnam, Taiwan and China. seen as not being compatible with being a Twenty-five per cent of the Australian pop- women: perspiration and damage to reproduc- ulation were born overseas. Over forty per cent tive systems were perceived as being major of the population have at least one parent that problems! was born overseas. Following a similar pattern of evolution, The multi-cultural environment has helped such outmoded thoughts and practices gradu- to integrate different cultures and introduced ally faded away, although right up to the pres- sports activities such as tai chi, while sports, ent day, some sports are associated more with such as badminton, have grown in popularity the upper classes. However, like many other as a consequence of its popularity within the countries, major initiatives have addressed Asian communities. issues such as diversity, gender balance and The climate of Australia also contributes to equality, and participation rates. the stereotype of it being an outdoor society, The indigenous population of Australia where sport and sporting activities play a sig- (the society that was there before the settlers nificant role in everyday life. arrived) had their own sporting pursuits. These The perception that Australia is in some involved foot running, climbing, object-throw- way remote from other major centres of popu- ing and water-based activities. These pursuits lation in Europe and North America has high- were survival-based with respect also for their lighted the importance of being successful in tribal elders. Their pastimes reflected their sport and thus, being in a position to show the close relationship to the land and water. Within rest of the world what Australia and the changing society that evolved throughout Australians are all about. This is typically cap- the nineteenth and twentieth centuries, it is tured in the sport of cricket, where the tradi- clear that they had their own distinctive culture tional and long-established Test Series with 37 2 References

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Sports Governance

Contents

3.1 Introduction – 40 3.2 Governance Defined – 41 3.3 Governance in the Context of the Sports Sector – 42 3.4 Role and Remit of Sports Governance – 43 3.4.1 Exercise – 44

3.5 Characteristics of Sports Organisations – 45 3.6 Key Criteria for Effective Sports Governance – 48 3.6.1 Accountability, Transparency and Independent Monitoring – 49 3.6.2 Exercise – 49 3.6.3 Transparency – 49

3.7 Global Perspectives on the Governance of Sport – 53 3.7.1 The Changing Influence of Anglo/American and European Cultures on Sport Globally – 54 3.7.2 Impact of Different Cultures and Behaviours on Sports Governance – 54 3.7.3 The Legal Response – 56 3.7.4 Exercise – 57

3.8 A Framework for Effective Governance – 57 3.9 Conclusions – 58 Appendix – 60 References – 72

Electronic Supplementary Material The online version of this chapter (https://doi.org/10.1007/978-3-030-53740-1_3) contains supplementary material, which is available to authorized users.

nnLearning Objectives damaging to the particular sport, organisa- On completion of this chapter you should tion or activity. be in a position to address the following Sports organisations have moved away objectives: from utilising enthusiastic and well-meaning 55 To understand the overall role of gover- “amateurs” running the sport, to recruiting nance in organisations and its relevance individuals who have proven themselves in the 3 to the sports sector harsh commercial world. It is inevitable they 55 To assess the roles and responsibilities will bring procedures and practices to bear on of key decision-makers in sports organ- how they run sports organisations. isations with respect to governance For many sports organisations this has led 55 To evaluate the scope and remit of se- to a focus on strategies such as “building the nior management and administration brand”, widening revenue streams, becoming 55 To understand the factors that have led more clinical in negotiating with stakeholders, to sports governance moving to the top such as the media, over rights and pursuing of the agenda for sports organisations sponsorship deals more aggressively. 55 To identify the characteristics of the In their quest for greater profitability many sports sector and their impact on gov- sports organisations have been accused of ernance unethical behaviour. In pursuing a more com- 55 To assess the relationships between se- mercial and aggressive strategy, critics argue nior management and administrators that they have potentially destroyed the purity and the key stakeholders and innocence of sport and have created a 55 To assess the implications that arise selfish environment where key stakeholders from running elite sports as a business such as fans have suffered as a consequence. 55 To identify and assess the criteria for ef- We will explore this accusation later. fective sports governance One of the “by-products” of commerciali- 55 To evaluate the challenges facing se- sation and a focus on profit is that of greed. nior management with respect to gov- We can witness this in the behaviour of indi- ernance. vidual competitors, senior management of clubs and organisations and indeed governments as all pursue the ultimate goal of suc- 3.1 Introduction cess. This is evidenced by issues such as corrup- As we have noted in earlier chapters, the world tion, doping, match-fixing and gambling. We of global sport has changed irrevocably over assess the implications that arise from these the past couple of decades. At the elite or top activities on the governance of sport in this level in particular, sport has witnessed a trans- chapter. formation from an activity which has been In the early sections we consider the role run with an emphasis on its purity and par- and remit of sports governance and recognise ticipation to an area which is run as a busi- that it impacts directly on how a particular ness. We explore the broader implications of organisation is directed and controlled. We this development as a running theme within consider some cases to demonstrate the effects the book. However, one of the main conse- of good and bad governance. quences of this shift toward a “business” or We assess the characteristics of sports “business-like” approach to managing and organisations and how, arguably, it is more marketing sport has been a focus on how such difficult to govern sport than it is to govern sports are governed. traditional business organisations. As clubs, leagues, events, and individuals Later in the chapter we evaluate the rela- seek greater success and profitability, it is tionships between sports organisations and inevitable that we witness an infiltration of key stakeholders such as sponsors, media, activities and behaviour which is unethical or governments and sports fans. 41 3 3.2 · Governance Defined

We examine the criteria that lead to effec- Increasingly organisations are being held tive sports governance. We highlight the to account for their actions and behaviour. importance of creating a climate and mode of When they appear to deviate away from what operation which is built around transparency is considered “acceptable”, they attract due and accountability and scrutiny to the rele- opprobrium from the media. vant stakeholders. Over the past decade we have witnessed Finally, we discuss the future challenges many instances of organisations that have facing sports administrators and marketers. “over-stepped” the mark. For instance, some banks operating in the financial sector have been prosecuted for misleading customers and 3.2 Governance Defined selling financial products that are not appropriate for them. It is a moot point as to When we use the term “governance” we are whether such behaviour has been sufficiently referring to how an organisation is owned, con- punished or sanctioned. However, the net trolled and managed. We should acknowledge consequence is that organisations across the that this is a complex and confusing area. For business and non-business spectrum are being instance, Mallin (2013) notes that it includes increasingly held accountable for their actions “legal, cultural, ownership and other structural and behaviour. In a world where the media differences” (p 15). Therefore, it would be dan- operates on a constant “24-7” principle, it is gerous to assume that a standard “one size fits very difficult to sustain unethical or socially all” approach to designing and implementing a irresponsible behaviour. governance system and approach will work Organisations increasingly have to focus globally. We should be cognisant of these dif- on issues such as transparency and account- ferences. While accepting that patently unethi- ability. As we shall see later in this chapter, cal or sharp practices are not acceptable, both are the cornerstones of effective gover- everything is contextualised within the cultural, nance. social and legal framework that pertains in dif- In addition to addressing social responsi- ferent countries or regions of the world. bility or corporate citizenship, organisations The ASX Corporate Governance Council are obliged to protect the interests of their defines governance as“the framework of rules customers and shareholders. The stewardship and relationship, systems and processes within of the organisation therefore should reflect and by which authority is exercised and con- this in its approach to developing overall busi- trolled within corporations”. (2014, p 3). ness and marketing strategy. For instance, Consistent with the growth in emphasis taking undue risks with investor’s money is a placed on the concept of good corporate gov- good example of where a company can dam- ernance, is the emphasis on viewing any age the stakeholder in the longer term while organisation (be it profit or not-for-profit) as pursuing the consummate urge to derive more an entity that should behave and operate on and more profit in a particular area. the rationale that it should be a good corpo- Policy-makers globally are also introduc- rate citizen. This extends across areas such as ing a range of legislative measures to enable working for the good of the community, not them to take legal action against organisa- damaging the environment and complying tions who breach ethical and social responsi- with the rules and regulations as set out by the bility boundaries. Admittedly this varies respective policy-makers. across the different regions and again rein- This philosophy argues that the sole objec- forces the point that no standard set of mea- tive of any for-profit organisation is not just sures is applicable in all cases. to seek profit. Rather it should do so within Apart from such measures addressing the realms of operating within and respecting issues of accountability and transparency, societal values. Therefore, such organisations they also address the issue of providing confi- have a wider set of objectives besides profit- dence to the general public and customers. ability. Whether this translates to reality is question- 42 Chapter 3 · Sports Governance

able: many people have a healthy cynicism for exemplified in the reduction in influence and the ways in which “big business” operate and role of the “amateur enthusiasts” who tradi- are dubious about some of the compliance tionally have been at the top in most sports at measures that have been introduced. elite level. They have been replaced by “hard- Other key issues such as gender represen- nosed” commercial businesspeople who have tation are also taking up a higher degree of attempted to drive the respective sport for- 3 significance within the context of corporate ward by employing principles and procedures governance. For instance, are women suffi- that are more typical of how commercial ciently represented on Boards of Directors? operations are run. Are specific interest groups sufficiently repre- This change has varied in intensity and sented? What about ethnic representation? degree depending on the sport and on the geo- These are big issues, and as we shall see later graphic location. It can be argued that the this chapter, have major significance for the North American sports of NFL, baseball and governance of sport. basketball were pioneers in the field of mone- In summary, governance is all about pro- tisation and capitalising on the inherent value viding direction, leadership, control and com- attached to the sports. This was best exempli- pliance for an organisation. Typically, a Board fied in their deals with media broadcasters. of Directors takes responsibility for providing In Europe the English Premier League this direction and leadership and they employ since its inception and re-design of the origi- executives to take the organisation forward by nal First Division in 1992, has also maximised developing strategies and procedures that fol- its profits. Again, this is demonstrated in the low the general vision and direction. value of successive domestic and international The absence of a coherent approach to gov- media rights deals. ernance can lead to a “vicious spiral”; where Individual clubs have also invested heavily the organisation loses focus, implements poli- in building the international brand on the cies that are at odds with acceptable behaviour global basis. This has permeated through to and where it risks alienation from its key target other football leagues in Europe such as La markets and stakeholders. It is analogous to a Liga and Serie A. ship without a rudder: it will flounder around Sports such as tennis, rugby, cricket and in the sea and ultimately disintegrate. basketball have also recruited people from industry to monetise their respective businesses. 3.3 Governance in the Context Governments have also sought to raise of the Sports Sector participation levels in sport in order to address social and health issues such as obesity. More Our focus in this book is to examine the key professional and systemic approaches have developments and decision areas that impact also been introduced by governments to use on effective sports marketing. As mentioned in sport as a mechanism to promote nationalism; the introduction, governance is one area that mainly through winning medals at hallmark has emerged over the past couple of decades events. They have also employed more and and arguably is still weak, variable and tenta- more individuals from the commercial sector tive in terms of how sports organisations face to heighten the profile of sport at elite level up to the inevitable challenges that it brings. and also in the lower tiers such as the promo- We have witnessed, at the elite level of tion of mass participation sports events. most sports, a shift away from the traditional We have witnessed the proliferation of approach to governing sport to a more mod- marriages between commercialisation and ern one, which is built around commercialisa- volunteerism with the emphasis increasingly tion and monetisation of assets. This is on commercialisation. 43 3 3.4 · Role and Remit of Sports Governance

3.4 Role and Remit of Sports sports events and games to meet the needs of Governance broadcasting to key markets at times that are appropriate for that time-zone. Arguably this The governance of any sport generally falls may not represent the best interests of the pri- within the remit of the board of directors. The mary stakeholder: the fan. In this case it can board is made up of individuals who have cause hardship and disruption for fans as they been elected to represent the interests of the have to travel to games at unsuitable times. shareholders or constituent members of that The media can also put pressure on the sporting body or organisation. Shilbury et al. guardians/directors of the sport to change the (2013) note that “to govern is to steer….and to nature of the sport in order to make the prod- make decisions that are consequential, strategic uct more attractive for the global TV/tablet/ and impactful, usually on behalf of others” second screening viewer. This potentially can (p 363). The board sets the strategic agenda affect the duration of the game or simplifying for the organisation and defends the ethos the rules. Currently, the organisers of the male and values of the sport in such a way as to and female tennis tours are contemplating protect the interests of the key sports stake- reducing the length of a game in order to holders. They can be identified as: fans, ath- potentially make it more exciting. Conversely, letes, coaches and infrastructure, sponsors, the directors of the four “Grand Slam” events media and government (where relevant). are under pressure to increase the number of Ferkins and Shilbury acknowledge that sets that women play – from the best of three the inter-relationships between the various to the best of five. This has been driven by the actors in this process can be complex and con- fact that they currently receive equal prize fusing. For one thing there is certainty that money to their male equivalents. stakeholders will wield different levels of This raises a dilemma. Clearly, broadcast- influence around issues such as power, legiti- ers can bring in large amounts of money for macy and urgency (Ferkins and Shilbury the governing bodies. This can then be spent 2015). Thus, we have situations where there and redistributed in such a way as to improve are multiple stakeholders with different objec- the quality of coaching, facilities, general tives that do not always coalesce around infrastructure and raise the profile of the agreed agendas. sport (thus attracting more lucrative sponsor- This can lead to debate about who the ship deals). This has to be balanced against board actually represents? The obvious answer any threat (potential or otherwise) to the val- is the members who see themselves as the ues of the sport. owners of the sports organisation. However, Such developments and pressures reflect as we have seen in many cases; shifting agen- the complexity and challenging nature of das and power leverage can lead to situations sports governance. If values are compromised where the so-called primary stakeholders or decisions are made that have a potentially (Clarkson 1994) identified as individuals or negative impact on primary stakeholders then clubs that are critical towards the survival of it can be argued that governing bodies are not the sport, may be superseded by secondary operating in their best interests. stakeholders (who can influence the direction We can identify the areas that the board of of the sport but are not deemed to be essen- directors’ address in the sports context. We tial). should note that at elite levels of sport, the A good example here is the pervading and board will typically employ a number of growing influence of media on sports. senior executives to drive the strategic vision Broadcasters such as ESPN, Star Sports and of the sport forward and implement strategies Sky have invested so much in particular sports that follow these objectives. that they can clearly put pressure on execu- This can generate debate and controversy tives and directors to make decisions that suit as well. Is senior management there to imple- their agendas. We see this in the scheduling of ment and follow the instructions of the board? 44 Chapter 3 · Sports Governance

Do they exist to set the agenda for the future mately can severely damage the sport. A sud- direction of the sport? What levels of account- den movement away from one extreme to the ability to the board (together with checking/ other can also lead to problems of a long-term monitoring mechanisms) exist? nature. If the board is very conservative and Different views are put forward on this made up of members that are appointed on topic. For instance, it can be argued that senior the basis of patronage and entitlement and 3 management are there to implement the vision not on capability or skills, then a sudden shift of the board. In other words, the board of in direction by a new CEO can create very dif- directors provides the “brains” in the form of ficult working relationships and lead to nega- the strategic direction, and management pro- tive consequences for the sport. vide the “brawn” in so far as they are tasked with making sure that the implementation of strategies is consistent with these objectives. 3.4.1 Exercise The contrary view would suggest that the senior management are recruited to take the ??Identify a sports body that has gone through sport/club/organisation forward and must be a major change in direction recently and as- given sufficient leeway by the board to initiate sess the relationship between the governing strategies that will move the organisation for- body and the senior executive during this ward into the longer-term. This tends to be process of change. the typical approach found in the traditional commercial sector. If the CEO or the senior We can make the observation that the board strategy team in this case introduce radical of directors has to tread a fine line between change that is clearly at odds with the long- allowing the senior management team and term success of a business, they will quickly CEO to drive forward change (where appro- be removed from office. priate) and long-term initiative and monitor- This raises questions about the attitude of ing the initiatives in such a way as they do not the board to their relationship with senior threaten the key values and ethos of the sport. executives/management. Should they be Both extremes (a dictatorial and one-sided paternalistic and conciliatory? Should they approach or a loosely monitored one) can adopt an autocratic and dictatorial stance? lead to irreconcilable differences in the rela- Much will depend on the make-up of the tionships between both parties. board. Are they appointed on the basis of The broad areas which need to be covered skills and capabilities that they bring to the in the context of sports governance are sum- sport? Are they appointed because of patron- marised below: age or reward for long-term service to the 55 Developing, maintaining and changing sport? Are they democratically elected? Are (where appropriate or necessary) the rules they representative of the overall membership and regulations of the sport of the organisation? Are they representative 55 The development of the sport, both locally, of the demographic make-up of members? regionally, nationally and globally Do they represent vested interests? 55 Developing the facilities, coaching and The answer to these questions is that old academies to improve the quality of ath- perennial response: it depends! letes competing in the event from grass- Most sports bodies display some of the roots up to elite levels aforementioned features. No organisation is 55 To initiate, maintain and work with exist- perfect in terms of how it is constituted and ing sponsors certainly all sports bodies embody weaknesses 55 To seek new potential sponsors and deficiencies. 55 To liaise and network with key stakehold- If an organisation veers too much toward ers such as the media, governments and the extreme end of the spectrum with regard politicians to its relationship with senior executives then 55 To set and oversee policy on key issues it is likely to create major problems that ulti- such as gender balance and representation 45 3 3.5 · Characteristics of Sports Organisations

55 To set and oversee policy on the issue of 1. The nature of sport. A key outcome in diversity (participation levels in different sport is that of uncertainty. You cannot categories, disability) and within areas of predict with one hundred per cent accu- low economic growth and unemployment racy the outcome of a particular event or 55 To develop and implement robust, trans- competition. Contrast that with the case parent policies and procedures with respect of a car manufacturer which churns out to cheating (incorporating doping and hundreds of thousands of cars annually misuse of technology) with no doubts about their performance 55 To develop and implement robust, trans- capabilities. This poses challenges for parent policies and procedures with respect sports administrators in terms of plan- to issues such as match-fixing and illicit ning for the future; in an environment betting which is built around uncertainty. 55 To develop policies and procedures for 2. Flawed financial models. Most businesses negotiating media rights for their specific that I am familiar with, operate for profit assets and are driven by the need to manage 55 To arbitrate on matters of dispute within financial resources tightly in order to gen- the sport erate acceptable sales, market share and 55 To implement the rules and regulations in profits for their owners or shareholders. an equitable and transparent manner While poor governance can lead to risky 55 To create and implement policies, proce- decisions regarding investments and the dures and measures that allow the board squandering of resources, most corpora- and its senior management to be held tions attempt to follow a logical strategy accountable to the appropriate stakeholders in terms of managing finances. 55 To develop systems and procedures for However, in sport we see evidence that awarding the right to hold hallmark events organisations and clubs that are run by for the sport. people with commercial expertise and experience, do not follow such basic prin- The board of directors or appointed guard- ciples. Many football clubs in the English ians of the particular sporting body, together Premier League for instance generate with the executive team are responsible for manifestly large sums of cash. However, designing and implementing policies, proce- in the quest for success many of them dures and strategies that address the core val- blow the cash away on vastly inflated sal- ues and ethos of the sport, recognising that aries and transfer fees. Despite the vast the sport or organisation in question has to be amount of money generated by the league responsive to the changing environment and the clubs, many of them are running within which it operates. at large losses. Quite simply they do not follow logical business principles. Emotion (driven by the desire for success 3.5 Characteristics of Sports in the form of trophies) and so on, over- Organisations comes any qualms about managing the financial resources. The question has to be asked as to whether 3. Composition of the Board. While we rec- the characteristics of sports bodies means that ognise that there is an inexorable shift in it is more difficult or easier to introduce and composition of the board or senior implement effective governance? It is not an administrators from volunteers and easy question to answer but we will firstly enthusiasts to commercially minded peo- identify the characteristics of sport which ple, in many cases such boards do not may make it different from traditional corpo- necessarily reflect the reality of what is rations and how they operate. needed in order to run the sport properly. 46 Chapter 3 · Sports Governance

How many boards of sporting bodies football increasingly become dependent are dominated by middle-aged males? I on sponsors from the alcohol and gam- would argue, too many. These people may bling industries. It is not our role here bring some skills and expertise to the table necessarily to debate the merits or other- but do not necessarily reflect the needs, wise of such practices. However, it can be desires and expectations of their key stake- used as an indication of the dependency 3 holders (be they fans, participants and so of sport on such corporations. on). Sports such as golf are a good exam- 7. Relationships between governments, policy- ple of the dominance of middle-aged makers and sporting bodies. This is a grey males, where there is a serious need to area. However, such interfacing has impli- reflect the views of young people or females. cations for governance. Governments see 4. Lack of due diligence. In the quest to sport as a mechanism to promote their attract more investment and cash into the agenda globally. The Olympics is possibly club, many sports bodies do not carry out the most valuable sports brand world- the extensive due diligence that is more wide. The staging of such an event can commonly applied in traditional business generate great prestige and publicity for operations. An underlying mantra of this governments. Many Olympic Games have text is that “sport is a performance-driven been tainted by the stench of corruption business”. This explicitly recognises the in the context of governments and politi- importance of being successful. Many cal leaders using the event to promote a sports are also cash businesses. They political ideology or an attempt to change require large volumes of money to move the perception of that country’s politics the product forward. We have witnessed world-wide. This has led to many accusa- many scandals about fraudulent individ- tions of “buying off” individual Olympic uals investing in clubs and sporting bod- members to get their vote. We have seen ies for their own individual benefit. this also with respect to the staging of the 5. A focus on the “now”: not the future. The World Cup. quest for success in sport is often ephem- 8. Emotion. The sports sector is character- eral and short-lived. As mentioned previ- ised by emotion, passion, excitement and ously, clubs and organisations are often experiences. When combined, they can tempted to spend vast amounts of money challenge logical decision-making and on players in order to “buy success”. Not behaviour. For instance, it can lead to the surprisingly it does not necessarily lead to condoning of unethical behaviour in the success in the form of trophies. In the form of cheating, match-fixing and dop- English Premier League for instance it ing. It can lead to the apparently bizarre has not been unknown for clubs to effec- situation where the administrators of a tively take out a mortgage on season particular sport may be willing to “bury ticket sales for a ten-year period in order their heads in the sand” and ignore to generate cash to enable them to buy instances of cheating that have been players. This is a classic example of the proven in the test laboratory. This is focusing on the “now”. It invites high lev- exemplified in the sport of cycling where els of risk and potentially damages the instances of systemic doping have been future viability of the club. Good busi- ignored because the administrators feared ness common sense can go out the win- that ensuing bad publicity would damage dow with such practices. the overall image of the sport. It is 6. Seeking out and doing deals with unsuit- strongly suspected that this is why Lance able sponsors. With the ever-increasing Armstrong was allowed to continue com- need for cash for many sports organisa- peting (and winning) numerous editions tions many commentators query the suit- of the Tour de France. ability of certain categories of sponsors. 9. Accountability. This again is a grey area. For instance, sports such as rugby and Some large and powerful sports bodies 47 3 3.5 · Characteristics of Sports Organisations

have only recently had to face up to the FIFA, the International Olympic Council question of who they actually answer to. (IOC) and the National Basketball In traditional businesses of course, senior Association (NBA) among others, pursue management and boards of directors are a virulently commercial, business-driven answerable to their owners or sharehold- strategy. However, many such sporting ers. They are also answerable in a less institutions are recognised as being non- direct way to the financial media who pass profit by government agencies. This has judgement on their relative performances. implications for how they are perceived – However, in the case of the sports sector it particularly in terms of transparency and might be dangerous to assume that senior accountability. This raises a dilemma in administrators are answerable to such a terms of how they operate their business. clear and transparent extent. A typical It also raises questions about the way in case in point in recent years is the case of which they are governed. Self-regulated, FIFA – the ruling body for football (soc- closed and insular bodies do not exactly cer) world-wide. Many of us are familiar stimulate an open and transparent envi- with scandals of an ongoing nature which ronment. This can create opportunities came to the fore in 2015 when a number for obfuscation and a lack of clarity in of senior administrators were arrested in their strategic direction. This makes it dif- Switzerland and the Federal Bureau of ficult for independent observers to accu- Investigation in the USA (FBI) carried rately track their performance. In turn out a detailed investigation. We discuss this can lead to breaches in behaviour various aspects of the scandal in a case that would be more quickly recognised study later in this chapter. and held to account in traditional com- However, the most revealing aspect of mercial operations. the investigations was the issue of accountability. FIFA was not accountable to any particular government body or agency. In summary, there are a number of features of Although headquartered in Switzerland, the sports sector which might indicate that it its President, Sepp Blatter operated within is arguably more difficult to address the issue closed surroundings and a very narrow of sports governance than might be the case body of individuals, all within the context with traditional business corporations. of the FIFA organisation. He was able to Perhaps the picture is not that simple. For dispense largesse in the form of cash to instance, Haigh (2016) in an assessment of the delegates from a number of countries who way that sport is run and administered in were members of FIFA. Ostensibly this Australia makes the following observation: could be interpreted as providing finance to encourage and develop football in »» “What we’re presented with in Australian deprived and under-developed regions sports governance, then is a curious mix of and countries of the world. Investigations shiny corporatism and altruistic volun- appeared to indicate that it was a non-too- teerism, cosy privilege and noblesse oblige sophisticated way of establishing influence (pp 3–4)”. and control over key delegates. It is no wonder that someone like Blatter arguably This quote articulates the dilemma facing the lasted so long as the President of such an issue of governance in the sports context. organisation. There can be no doubt that While organisations within many tiers of Blatter left a lasting legacy on FIFA and sport (from grass-roots to elite level) continue did much to explode the issue of effective to embrace a more professional and commer- governance within the sports sector. cially minded approach to strategy and focus, 10. Global business versus non-profit. Many they still retain some of the traditional values sports bodies and organisations such as and practices of an earlier era. 48 Chapter 3 · Sports Governance

3.6 Key Criteria for Effective Sports or scandals are dealt with from within. Governance Rhode’s view also does not take into account the pervading influence of social media, which We have examined the specific characteristics was in its infancy at the time of the publica- of the sports sector. This suggests that it has tion of his book. 3 some influences and drivers that make it dif- Critics are forcing policy-makers to ques- ferent from the traditional corporations oper- tion the efficacy of this approach. This argu- ating in the corporate world. In this section we ment is based on the view that if you allow consider the criteria that shape an environ- “self-policing” by internal members, you cre- ment where governance can be applied in a ate a situation where issues are covered up or coherent and relevant manner. The overriding ignored (in the worst-case scenario). This ends message so far is that the sports sector has up with bad decision-making and a failure to arrived rather late in the context of fully address the fundamental problems. embracing the concept of governance. While nobody might argue for an environ- To some extent this can be expected. Esam ment where a sports organisation has to sub- (2016) argues that bad governance has been jugate its processes, procedures and strategy more readily identified with traditional busi- in totality for approval to a state agency (one nesses rather than within sports bodies and end of the spectrum), it is difficult to counte- organisations. He bases this view on the per- nance an argument which is based on the view ception held by many people that sport is all that it should operate in a fully autonomous about purity and integrity. As we have noted manner. If a sports body is a recipient of pub- this rather “rose-tinted” interpretation has lic funding then the latter view is virtually been dented in recent years by numerous scan- impossible to sustain. dals across sports as diverse as cycling, chess, Mehta (2017) provides some interesting athletics and fencing. observations on this question of autonomy. Rhodes (1997) notes that sports organisa- He notes that the traditional model of self- tions “tend to act in self-organising, interor- regulation allows for a degree of flexibility ganisational networks characterised by and argues that bodies such as the IOC have interdependence, resource-exchange, rules of addressed criticism and introduced changes. the game and significant autonomy from the However, other sports bodies have been state” (p 23). This partially reinforces the view accused of not taking appropriate measures that many such institutions operate in a differ- or introducing robust processes for deal- ent way to the more regulated and account- ing with systemic scandals. For instance, able traditional commercial corporations; the International Association of Athletic particularly with respect to accountability. Federations (IAAF) has been heavily criticised The level of independence would seem to be for the way in which it has dealt with doping higher in the case of the sports sector. and cheating in that sport. At state level, the However, we need to be somewhat cau- Russian Athletics Federation was banned tious here. The raft of scandals that have hit from the 2016 Olympics after being found many sports, combined with more extensive guilty of employing a systemic approach to and penetrating; not to say cynical media cov- doping its athletes. erage, has focused the spotlight on sports The issue of political intervention in the organisations. This in turn, has led to a running of sport opens up a number of poten- clamour for governments and policy-makers tially sensitive and controversial questions. For to adopt a more interventionist approach. instance, it poses the risk of governments This is particularly so in the perception that attempting to manipulate a sports body in such sports bodies have traditionally operated in a a way as to ensure that favoured individuals self-regulated manner: where overall gover- acquire senior and influential positions. They nance is driven by the internal senior mem- could also potentially refuse to accept individ- bers of the institution and where any problems uals elected by the sports body in question. 49 3 3.6 · Key Criteria for Effective Sports Governance

It is difficult to argue for a total rejection the lack of accountability that can occur in of the role of government in sport however. major sports bodies. We can see how a sports Where serious instances of fraud, corruption organisation such as FIFA measures up on and systemic cheating are taking place, argu- the issue of accountability (. Table 3.1). ably the government has a part to play in Only two mechanisms would appear to addressing such issues – particularly where suggest that FIFA has some form of specific the ethos and values of the sport are being accountability. In the case of legal issues, the called into question. Swiss legal system (the country where FIFA is Clearly, where sports bodies are receiving headquartered) could in theory act as a con- publicly funded finance from the taxpayer it trol mechanism. However, in practice, the can be strongly argued that the government Swiss authorities grant protection against directly or indirectly (through an independent internal and external examination and they body) should have some degree of oversight have been reluctant to prosecute FIFA for any of the way in which that sport is being gov- alleged wrongdoing. erned. We might also expect existing sponsors to take some form of sanction as a result of bad publicity. Again, it would appear as though 3.6.1 Accountability, Transparency many of them have backed away from the ulti- and Independent Monitoring mate sanction of cancelling contracts with offending institutions. In this section we explore more fully the key We should bear in mind that this article principles of effective sports governance. The was published before the major scandal sur- preceding discussion implies that a sports rounding FIFA emerged in 2015. organisation should meet the key criteria of What can we learn from this case? The accountability and transparency. Also, in order obvious implication is that in situations where to ensure such an open environment, it can be sports bodies and institutions are largely free argued (though not necessarily accepted by from the typical accountability criteria it everybody) that there should be some form of becomes a breeding ground for corruption external and independent monitoring of the and other nefarious activities. It can also be processes and procedures to be implemented. argued that it creates a mood of arrogance Accountability is central to any attempt to and insularity which makes it extremely diffi- formulate and design effective governance cult to drive change in the ethos and corpo- policy. Every individual in society is account- rate culture. able for their behaviour and has to adhere to the basic laws of the country or region. Failure to do so is likely to lead to some form of pun- 3.6.2 Exercise ishment or sanction. Likewise, in business, corporations that fail to behave in the accept- ??Making use of material that is available on able way are also likely to suffer the conse- the Internet, critically assess how FIFA has quences. addressed its problems since the 2015 scan- In practice, if the relevant legislation is not dal. effectively policed or implemented then the likelihood is that unethical behaviour will occur. 3.6.3 Transparency Grant and Keohane (2005) put forward a set of criteria which can be helpful in under- The issue of transparency is another central standing the issue of accountability. Although platform of effective governance in general written from the perspective of the political and sports governance in particular. As we scene, they can be applied to any industry sec- have noted, the number of scandals surround- tor; including sport. Pielke (2013) has applied ing sport has increased exponentially in the these criteria to the case of FIFA to highlight past number of years. One of the prime 50 Chapter 3 · Sports Governance

.. Table 3.1 Accountability measures within FIFA

Accountability Explanation Within FIFA

Hierarchical The power that superiors have over subordinates within NONE an organisation. The president is only 3 accountable to the FIFA-congress, which he leads Supervisory Relationships between organisations. E.g. does someone NONE else need to approve decisions? Member association without any power Fiscal Is there any control over funding? LITTLE Little transparency in FIFA’s finances Legal International bodies must abide by the laws of relevant Opportunity for jurisdictions accountability. FIFA has to abide to Swiss Laws Market Power that can be exercised by investors or consumers Sponsors could influence through market mechanisms FIFA a main investor Peer How do peer institutions evaluate the institution? NONE Only direct peer IOC; no accountability to them or any other NGO Public Reputation of an organisation among superiors, NONE reputational supervisory boards, courts, fiscal watchdogs, markets Essentially no accountability and peers; related to each of the accountability forms to its public. listed above. People care about the game, not FIFA. No widespread call for reforms.

Source: Table based on Pielke (2013)

sources of dissatisfaction amongst fans and sports entity such as the World Cup or the other key stakeholders within the sector is the Olympic Games. Access to and responsibility absence of any real transparency with regard for dispersing such funds leaves that body in a

to how many sports authorities and bodies powerful position. As we discussed in 7 Chap. actually operate. When a scandal emerges, in 2 they also have close (some would say almost every case it is unclear as to how the unhealthy) relationships with political parties, processes and procedures occurred to allow leaders and governments. We see this most such an eventuality to happen. Why should clearly in the case of the bidding for and host- this be the case? ing of major sports events. Politicians in many Forster (2015) argues that Global Sports cases use the opportunity to promote their Organisations (GSOs) – those bodies respon- own image and agenda and will do anything sible for the overall governance of sport, are to ensure that their country or city is awarded immensely powerful in a number of different the rights to stage the event. ways. For instance, although many of them GSOs are also accused of a lack of trans- are categorised as non-profit organisations, parency in terms of how they disburse reve- they generate vast amounts of income and nues. This was a heavy criticism of how FIFA, cash because they own a particular asset or and Sepp Blatter, in particular operated. Many 51 3 3.6 · Key Criteria for Effective Sports Governance federation members from developing econo- 2. Who decides what and why? This might mies or poorer regions of the world were the appear to be an easy question to address. recipients of funds. Ostensibly such cash was All Sports Governance Organisations awarded to develop football pitches and facili- (SGOs) have an official legislative body. ties and to hire coaches to develop academy However, it may be dangerous to presume systems. In reality, much of this largesse was that they make the critical decisions. In held in the bank accounts of the key official in many cases this consists of a narrow execu- that particular country or region. In return, tive board or a couple of individuals. Such many commentators observed that Sepp decisions are often made in “behind-closed Blatter received their votes and support when door” sessions and are not necessarily docu- it came to the election of a new president. mented. This again raises questions as to Whatever the accuracy or otherwise of the role of the overall legislative body. While such observations, the message that can be it may take a vote on an overall change in taken out of this example is the lack of trace- direction or strategy, the key decisions have ability as to how such decisions were made already been made and all that happens is a and instigated. “rubber-stamping” exercise with little or no It is very difficult to hold someone to informed or reflective discussion taking account for a particular decision, if the pro- place. How can somebody be held to cess by which that decision was initiated and account for instance if no detailed minutes implemented is obfuscated and effectively or voting records are published for public cannot be traced. consumption on the Internet? In the context of transparency, Duval 3. What are the rules saying? While many (2016) poses three questions that need to be organisations publish their detailed rules answered in order to assess the extent and and regulations, Duvall is critical of the depth of transparency within a sports organ- lack of enthusiasm about making available isation. the rationale behind rulings on specific 1. Where is the money going? This is an aspects of the sport or issues that emerge attempt to follow the argument that if you from time to time. This is evident in many “follow the money” then you will get the doping-related instances. The SGO will answers. On this basis it can be argued that publish the general findings in a press if disbursements and expenses can be iden- release. However, it can be very difficult to tified and traced, then it becomes much get the actual detail as to how that deci- clearer as to how the organisation operates sion was arrived at. He cites the example and more importantly justifies its proce- of the Garcia Report into the way in which dures. However, sports bodies can create a the World Cup was awarded to Russia and bewildering array of accounts and organ- Qatar. The author was commissioned by isations which makes this task extremely the FIFA ethics committee to investigate difficult. In some countries the financial the case and publish a detailed report authorities do not necessarily make it easy together with recommendations. When the by protecting such activities. Annual report eventually was published it con- reports can identify the amount of general tained many parts that were redacted by expenses incurred for instance but do not the Committee in order to protect the con- specify the details to any significant extent. fidentiality of certain members. This inter- As Duval notes “The implicit complicity nal “self-policing” did not produce a (countries such as) of the Swiss State (or report of substance that shed any real Monaco for the IAAF), and Swiss local insight into what actually happened. Such authorities, is undeniable. It is not unlike the practices only serve to increase the incre- organized financial opacity that enabled dulity and cynicism among stakeholders Switzerland to become the central node of and clearly do not address the pressing tax evading schemes.” (p 1). inter-related issues of accountability and transparency. 52 Chapter 3 · Sports Governance

From the preceding discussion it is clear that include activities based on encouraging peo- the issue of sports governance has major ram- ple to exercise and address the dangers of obe- ifications for sports marketers. If serious ques- sity. In such cases, some initiatives may be tions are raised about the various approaches funded from the tax payer’s contributions and to governing sports across the different levels are provided “free” at point of consumption. (from elite to grass-roots), it makes the task of In the case of merit goods, where there is the 3 increasing the fan-base, negotiating deals with expectation that people are likely to under- existing and potential sponsors and dealing consume, they may be subsidized. This makes with ongoing media rights more complex and the questions of accountability and transpar- difficult. ency even more critical; if there is a danger of While most of the focus in this text is on fraud or corruption due to inappropriate mis- sports at elite level, we also need to recognize use of such funds. that at other levels the imperative is not neces- The role played by volunteers in terms of sarily structured around the sole objective of ensuring that sports events and competitions profit. take place should not be ignored either in From a government perspective, sport may the context of how such sports are governed be regarded as a public or merit good. In these and marketed. Bad governance, leading to cases, some sporting initiatives may be paid bad behavior can make the job of the sports for by the government in order to encourage marketer more difficult to implement and people to participate in sport. Examples justify.

Justin Gatlin and the Role of IAAF in His Career

On 5th August 2017, at the World Athletics on appeal in part because of the circumstances Championships held in London, the American surrounding his first case. runner Justin Gatland more than upset the He argued in his appeal that he was set up applecart when he broke the dominance of by his masseuse who rubbed testosterone cream Usain Bolt in the 100 metres event. He ran his on his legs and buttocks without his knowledge compatriot Christian Coleman and Jamaican and that this would effectively place the drug in Bolt into second and third place respectively. his system. He also agreed to cooperate with the In doing so, he lit the fireworks on a very con- authorities and taped conversations that he had troversial issue that has haunted the sport of with his coach at the time, Trevor Graham. This athletics over the past 15–20 years. individual has had a chequered history of dop- Gatlin was convicted not once, but twice ing with athletes such as Tim Montgomery and for doping. In 2001 he received a two-year ban Marian Jones. They subsequently received bans for taking medication containing an amphet- and in the case of Jones, received a jail sentence. amine (a banned substance). He claimed this He served the period of 4 years and was for an identified problem: attention deficit returned to active competition in 2010. Since disorder and that this had been logged for over then he has performed better than ever in the 10 years or so prior to his offence. The ban was elite US and European events and in the World subsequently halved. The United States Anti- Championships and Olympic Games. In the Doping Agency (USADA) subsequently case of the World Championships he has won admitted that Gatlin neither cheated nor two silvers and ultimately the gold in 2017. He intended to cheat. has also won silver and bronze at the Olympic The second time round occurred in 2006 Games since returning in 2010. when Gatlin was tested positive for testosterone The fact that the 100 metres final is seen by and received a ban of 8 years. This was halved many as the “blue riband” event of the sport of 53 3 3.7 · Global Perspectives on the Governance of Sport

athletics always places it in sharp focus, partic- such an approach is not acceptable. In a sport ularly when it is likely to be stained by scandal. where there has been numerous and systemic The win at the London Championships cases of doping and cheating offences (for sparked off much heated debate about the issue instance the Russian ban from the Rio of doping, cheating and fraudulent behavior. Olympics in 2016 and going as far back as Ben Critics of his win stated that it was positive Johnson in the same 100 metres event in the proof of the weak and tentative approach of Seoul Olympics in 1988). the governing body, IAAF with respect to deal- As the IAAF continue to struggle to main- ing with the problem of doping. The failure by tain the credibility of the sport, Gatlin’s win the World Anti-Doping Agency to increase the shattered some of the initiatives introduced by ban from 2 to 4 years until 2015 is an indica- Lord Sebastian Coe – the CEO of the body, to tion, critics say, of the haphazard and weak address the issue of reform of the sport. The approach. ability to retain existing sponsors and attract The IAAF has strongly supported life-time new ones has also been threatened by such neg- bans but argue that judgements at arbitration ative publicity. boards and legal courts have indicated that

??1. Assess the approach of the IAAF with creates difficulty in terms of monitoring their respect to addressing the issue of dop- corporate behavior and governance. It creates ing in the sport of athletics. opportunities to create procedures that can 2. Is the correct decision from the per- infringe ethical behavior at best or in the spective of sports governance in this worst-case scenario escape the scrutiny of leg- case to ban offenders for life? islators and governments. They also create a degree of obfuscation over where they are located. We have seen sim- 3.7 Global Perspectives ilar instances in traditional business opera- on the Governance of Sport tions where companies such as Google and Amazon have been able to take advantage of Palmer (2013) notes that when we examine the tax subsidies by transferring profits and issue of sports governance in a global context, income to countries where they can receive the we are dealing with three different levels or best possible tax benefits. Large sports organ- tiers of sports bodies: supranational, national isations such as FIFA and the IOC locate and subnational. In the case of the first tier, their offices in a particular country but it is they arguably represent organisations that are fair to say that it is difficult to pin them down difficult to pin down to any specific set of gov- on their behavior – particularly over the way ernment regulations. They also exhibit what in which revenues and expenses are managed. Henne (2015) refers to as hybrid characteris- It can be argued that the inexorable move tics. By this she refers to “synergies between towards corporatization in sport has led to binding and non-binding mechanisms” increased examples of poor governance. (p 326). For instance, while many of the sports When sports organisations move away from organisations which fall into the suprana- being the guardians of an amateur sport tional category exhibit all of the trappings (where the issue of profit generation does not and substance of traditional multi-national feature on the agenda) to one which is run on companies, they also retain the classification a “hard-nosed” commercial basis by individu- of being a non-profit body. This juxtaposition als who have worked extensively in the tradi- 54 Chapter 3 · Sports Governance

tional commercial sector, we should not be Beijing (2008) have successfully staged this surprised by such increased incidences. mega-event. We should acknowledge that there is a The power has also shifted in the sport of danger that sports marketing experts and aca- cricket to the Indian cricket body. The head- demics apply a “one-size-fits-all” approach to quarters has shifted from London to Dubai a the challenges of introducing an effective number of years ago, again reflecting the 3 sports governance policy and strategy. We growing commercial influence. need to realise that there are reasons why The Gulf region has made a number of sports bodies behave in a different way within bids for hallmark events across a number of different geographic regions of the world. sports: the most critical one reflected in the We consider some of these issues in the decision by FIFA to award the 2022 World next section. Cup to Qatar. We can debate the merits or otherwise of this decision in another part of the text. However, it reflects the fact that 3.7.1 The Changing Influence countries with little or no background or heri- of Anglo/American tage in sport have the financial capability, and European Cultures muscle and influence to win such a bid. We on Sport Globally have also witnessed the staging of many major events in countries within the Gulf region. They are too many to list here but we can Historically, due to a combination of extend- highlight Formula One (Bahrain and Abu ing their respective empires, Great Britain, Dhabi) as a typical example. America and some European countries, as More concrete and systemic examples of part of their colonization, were also responsi- companies in Asia, and the Middle-east can ble for spreading their respective sports to be found in the numerous, high-profile take- these regions. We can cite the examples of overs of English Premier League teams. A cricket in India and Pakistan and baseball in quick perusal of who owns the twenty English Japan and Taiwan to support this view. Premier League teams will reinforce this Horton (2011) notes that colonial powers like observation. Great Britain, in effect, created deep cultures The acquisition of media rights for major and structure with respect to their traditional sports events in countries such as China also sports such as cricket. We can still see this provide strong evidence of the importance of sports powerful influence on society in coun- sport to those societies. tries such as India and Pakistan. While countries such as India, China and However, as we have noted earlier in this other south-east Asian countries have little text, a shift has been afoot over the past cou- tradition in sports such as football, basketball ple of decades in terms of where the power and so on, they have become key players in lies in sport. For example, as many of these such sports by dint of the amount of invest- so-called developing economies enhanced ment that they have brought to the respective their economic performance they also gener- sports. ated a society with larger amounts of spending power, seeking greater choice, variety and quality in terms of their leisure time. Sport is 3.7.2 Impact of Different Cultures a natural recipient of such demands. As a consequence, we have witnessed much and Behaviours on Sports greater involvement and more importantly Governance investment by companies, sports bodies and governments in the area of sport. It is not our brief in this text to engage in sub- Asia for example has staged a number of stantive discussion on general issues such cul- Olympic Games since its first hosting: Tokyo ture in society. However, it is important to (1964). Since then cities Seoul (1988) and recognize that as countries from regions of 55 3 3.7 · Global Perspectives on the Governance of Sport the world that have become much more sig- every part of the world since sport was nificant in terms of their contribution to invented. sport, it is reasonable to assume that the issue Instances of poor governance and unethi- of sports governance becomes even more cal behavior also is not confined to any par- complex and difficult to grapple with. ticular region. The approach to economic policy and In the case of the bidding process for the development differs across regions and can 2006 World Cup for instance, various investi- impact on the approach to managing and run- gations laid heavy criticism at the German ning sport. Some countries operate in a way in government for agreeing to lift sales of arms which companies are allowed to compete in to Saudi Arabia and also agreeing to create open-market, liberal economies. This is investment in countries such as South Korea reflected in the attitudes to profit and growth and Thailand, all in return for votes. The end and can be a source of encouragement for result? Germany won the bid to stage the 2006 individuals who want to pursue a “win at all World Cup. It would be wrong to assume that costs” approach. It could be argued that the this decision was solely based on the above approach to sports management and gover- investments. Germany clearly ticked the boxes nance in a country like the USA reflects this in terms of heritage, infrastructure and so on. philosophy. By contrast other countries have However, the close involvement of govern- traditionally operated an approach which ment, German corporation and the German reflects a more rigid and centrally planned bid committee certainly helped. philosophy. In the context of sport this can It is also not unusual for members of rul- lead to a very close relationship between the ing families in regions such as the Gulf region government and the sports officials. In both to hold high office in the respective sports cases the issue of sports governance can lead bodies and organisations. While this is clearly to different approaches to issues such as an overt indication of the incestuous relation- accountability and transparency. ship between politicians and sports bodies, it Differences in attitude to factors such as is by no means unique to these regions. It gambling have led to major governance issues becomes even more complex in countries such for senior administrators and Boards of as Russia where sports organisations have Directors. The emergence of key markets in been structured in such a way as to represent Asia for instance has opened up major reve- and implement the direct interests and priori- nue streams for European football clubs. ties of government. In many European coun- While this potentially has positive benefits for tries a perusal of the membership and the clubs it has also led to instances of organisation of sports bodies will also reveal attempts to engage in match-fixing. Similar that government officials and key influencers issues have arisen in the sport of cricket. feature in terms of representation, albeit in a Attitudes to gambling vary world-wide. In subtler way. Arguably in this latter case it is Muslim countries it is banned. However, it even more difficult to monitor or trace. has not prevented gambling (telephone and Attitudes to the role of sport in society online betting) and arguably the greatest (discussed in more detail in 7 Chap. 2) also problems with regard to match-fixing have vary and can lead to poor governance. The emanated from these countries. This raises most extreme example perhaps is the way in questions about the ways in which legislation which the Nazi party attempted to use the has attempted to address such problems. 1936 Olympic Games as a vehicle to promote The link between politics and sport also their political philosophy and agenda. Less varies considerably across different geo- extreme but similar accusations have also graphic regions. It would be wrong to assume been levelled at the Chinese government for that very close relationships only occur in the way in which they used the Beijing regions such as Asia, Africa and the Gulf Olympics (2008) to create a softer image of region. Politics and sport have coalesced in their policies. 56 Chapter 3 · Sports Governance

Where countries with different philoso- 1. Structure. phies and practices on issues such as violations 2. People. of human rights, gender equality, child-labour, 3. Communication. and racial discrimination gain increasing influ- 4. Standards and conduct. ence over the running of sporting events and 5. Policies and processes (for a fuller descrip-

competitions, the issue of sports governance tion visit: 7 https://www.sportengland. 3 becomes even more complex. org/media/11193/a_code_for_sports For instance, many sports bodies are keen _governance.pdf). to do business with such countries, on the basis that their involvement (as owners, inves- In a European context the European tors, sponsors or competition hosts) will gen- Parliament, in light of the major scandals to erate finance to re-invest in the sport. They have emerged in recent years, adopted a reso- place great emphasis on spending this money lution “on an integrated approach to sport on grass-roots sports in order to encourage policy, good governance, accessibility and children to take up the sport. As a conse- integrity” in 2017. This body was motivated to quence, there have been many instances of move in this direction by the recognition of poor governance as sports bodies “turn a the important role that sport plays across the blind eye” to evidence of bad behavior. twenty-seven member states: the sports sector covers 3.5% of total EU employment. ??Should high-profile sports become involved However, this resolution does not carry any in sponsorship deals with companies and legal weighting. brands from the alcohol sector? Outline the It reinforces the UK approach by urging arguments for and against. its member states to force sports bodies, in receipt of public funding to comply with minimum standards and codes of behavior. 3.7.3 The Legal Response Critics of the EU resolution point to the fact that it merely contains some pious plati- Due to the characteristics of sports organisa- tudes without focusing on the challenges of tions – particularly at supranational level it is implementation. In particular, it fails to spec- extremely difficult to enforce detailed legisla- ify how the EU might more actively engage tion on the part of governments and policy- with specific sports organisations across makers. The practice within countries such as Europe. the UK was to initially lay out a voluntary This highlights potential serious difficul- code by which sports organisations could sign ties if legislative bodies such as the EU tread up to. Generally, such initiatives were volun- too far into the ways in which individual tary in nature and had no legal legitimacy in sports are governed. Cries of political inter- the sense that they could be enforced in a ference are likely to abound and levels of trust court of law. Typical of this approach was the and confidence on the part of senior adminis- Voluntary Code of Good Governance trators are likely to decline. introduced in the UK in 2011. This was subse- However, staying completely out of sport quently refreshed and updated in 2015. is only going to lead to further instances of In 2016 Sport England and UK Sport malpractice, corruption and fraud. A self- jointly developed a Code for Sports policing system; where the sports body moni- Governance. This was based on the findings tors itself is unlikely to work either. from interviews with over two-hundred sport- In light of the ever-increasing number of ing and non-sporting organisations and is sig- scandals occurring in sport globally it is inde- nificant in so far as it is mandatory for sports fensible, particularly in the case of sports organisations to comply with the code if they receiving public funding, that no robust codes are recipients of public funding. The docu- of behavior, with mandatory elements should ment covers five broad principles: not be introduced. 57 3 3.8 · A Framework for Effective Governance

3.7.4 Exercise ated a culture whereby they have insulated themselves against any possibility of being ??Using the resources of the World-wide web accused of poor behavior. assess the nature of the relationship be- This is changing; mainly due to the pre- tween the government and sports organisa- ponderance of scandals in recent years. The tions with respect to sports governance in increasing influence of social media and “24– ONE of the following countries. Australia, 7” news channels make it increasingly difficult South Africa, Denmark or Jamaica. to escape scrutiny. It therefore forces sports bodies to adopt a set of principles and procedures that conform to the heightened expecta- 3.8 A Framework for Effective tions and demands of the key stakeholders in Governance the industry: fans, sponsors, governments and media. Our investigation of sports governance indi- It is difficult, if not impossible to apply a cates that this is not an easy area to manage. “one-size-fits-all” approach as there are con- The peculiarities of sports organisations, siderable differences across different geo- combined with the inexorable rise of commer- graphic regions. Healey (2012) notes that in cialization and increasing access to multiple Australia the law applies to sport just as it streams of revenue creates many opportuni- does to other organisations and business sec- ties for bad practice and behavior. tors. In the USA there is a sharp difference Because of the nebulous relationship between amateur sports organisations and between governments and sports bodies it can professional sport. In the former case the be very difficult to identify the wrong-doers community leagues and schools athletics asso- and effectively sanction them in such a way as ciations conform to the American Sports Act they are properly punished and removed from and the rules laid down by the United States the sport. Olympics Committee. By contrast, profes- When we consider the causes of poor sional leagues have greater freedom. For sports governance, the root causes revolve instance, in the case of Major League Baseball, around a lack of accountability and a lack of it is not subject to anti-trust legislation despite transparency. This leads in turn to a lack of the obvious commercial aspect of its opera- democracy in terms of the processes and pro- tions. In Europe, sports bodies are governed cedures adopted in organisations. Minikin by general EU legislation on various forms of (2015) cites the work of Allern and Pedersen economic activity such as freedom of move- (2007) who highlight the importance of ment of individuals. However, as we have addressing the issue of democracy and iden- noted earlier in the chapter the EU has little tify three different dimensions. legislative powers regarding the rules of sport. 1. Competitive democracy: emphasizes the As we have noted some initiatives have been use of the vote to reach a decision con- introduced to a code of behavior but it is cerning competing interests. unlikely in the medium-term to have a direct 2. Participative democracy: seeks active effect on sports governance. participation by all members and is In terms of developing a framework for characterized by a consensus-based effective governance it is critical that sports approach to decision-making. bodies provide procedures that address the 3. Deliberative democracy: seeks to solve con- following issues, with targets and key perfor- flict through discussion and consultation. mance indicators where appropriate. This set (Minikin 2015, p 438). of questions is by no means exhaustive and needs to be refined and adapted to reflect the Many sports bodies, certainly at the top tier, scale of operations of the sports organisation such as those operating at transnational level, in question (global, international, national, operate in their own “bubble” and have cre- regional, local). 58 Chapter 3 · Sports Governance

An effective framework for sports gover- 55 Identification of how the organisation nance has to be based on the principles of complies with relevant legislation at gov- accountability and transparency. ernmental and/or sports sector level Clear and unambiguous communication is 55 Identification of a process which allows indi- a critical dimension within the context of viduals to raise concerns about aspects of addressing these two principles. Ultimately behavior on the part of the governing body. 3 sports bodies are answerable to their stakeholders. The way in which budgets are This list is by no means exhaustive. The extent approved and implemented is critical to suc- to which these items are implemented inevita- cessful governance. Stakeholders should be bly will be shaped by a number of influences. able to monitor the sources of funds and how These include the following: they are subsequently allocated. Clear criteria 55 The size, scale and influence of the sports should be identified on web sites. body Likewise, the process by which members 55 Differing cultural attitudes across the of the board or governing body are nomi- world to issues such as social responsibil- nated and elected needs to be clearly stated ity, corruption and the influence of gov- and available for easy access and identifica- ernments on the sports organisation tion. 55 The role that public funding plays in the Minutes of meeting should also be dis- revenue streams for the sports organisation. seminated via appropriate communication methods such as the website. In summary, this framework needs to be In the context of both principles, the fol- adapted and contextualized. It is dangerous lowing issues need to feature strongly. By to put forward a “one-size-fits-all” approach doing so they can address the dangers of a due to the diversity of opinion, behavior and lack of accountability, transparency and practice that is encountered globally. democracy: In view of the scandals and poor behavior 55 Clear identification of the overall remit of that has occurred in the sports sector over the the organisation: objectives and strategy past number of years coupled with the increas- 55 Clear identification of the process by ing pressure placed on sports bodies by gov- which decisions are arrived at ernments and policy-makers, it is imperative 55 Clear identification of the term of office that the issue is addressed in a planned and for members of the board and the ratio- coherent manner. nale for such a decision 55 The composition of the board: identifying the logic for the structure 3.9 Conclusions 55 Roles and responsibilities of individual board members and the executive team In this chapter we have examined the concept 55 Declarations of specific areas of interest of governance and how it impacts on the from board members that might create administration of sports organisations and possible conflicts of interest bodies. Sports governance has risen in promi- 55 The procedures for reporting key perfor- nence on the strategy agenda for the sports mance indicators and targets sector and has been driven by the raft of scan- 55 Identification of how the governing body dals which have afflicted many sports over the addresses issues such as gender equality, past decade or so. diversity and social responsibility In part, this has happened because at the 55 Identification of how the performance and elite level, sports organisations and clubs have direction of the sports body is audited: moved from a situation where it has run sport from an internal and external perspective. in an amateur way (emphasizing the purity of In the latter case this may refer to the the sport and participation) to a position appointment of an independent board where it is run with a focus on revenue stream member generation and the adoption of business prin- 59 3 3.9 · Conclusions ciples. While this is not necessarily bad for sport, it has spawned greed and an increasing the sport’s body’s relationship and tendency to behave unethically as organisa- interaction with key stakeholders tions seek to extract as much money as possi- 55 The Anglo/European and American ble and applying business principles that in cultures have shaped and influenced the some cases lead to unethical behavior. way in which sports organisations have We acknowledged that many sports organ- addressed the issue of sports governance isations have tended to operated “under the 55 We should avoid adopting a universal radar” and in a different way from more tradi- approach to the creation of a framework tional business sectors. This is evidenced in some for effective sports governance cases by the simple question of who they are 55 Cultural differences and behavior shape answerable to. Trans-national sports bodies such attitudes to governance in areas such as as FIFA and the IOC have appeared to operate corruption, gambling, cheating and within their own internal “bubble” and appear diversity to be exempt from scrutiny in any country. 55 While not condoning bad behavior This lack of scrutiny in many cases had led within the realm of sports governance, to instances of behavior which would not be we should recognize that procedures tolerated in traditional business sectors. While and policies for managing governance such sports bodies apply business principles will vary and will evolve, depending on they are often run in a “ham-fisted” and non- the context and geographic region. democratic manner. Hence the need for proper governance. We identified two critical aspects of effec- ??End of Chapter Discussion Questions tive governance: accountability and transpar- 1. Assess the view that the focus on treat- ency. Without proper procedures, policies and ing sport as a business had damaged its systems to address these issues, the end result overall values. Use one detailed exam- is likely to create a non-democratic body, with ple to support your point of view. loosely applied and ambiguous practices that 2. Some commentators argue that it is encourages bad behavior and ultimate dam- impossible to devise a standard set of age to the sport or the individual club or principles for managing sports gover- organisation. nance. How valid is this view? We also identified a number of characteris- 3. Evaluate the role that cultural differ- tics of sport that lead to such behavior. This is ences play in shaping attitudes to the evidenced in the way in which revenue streams governance of sport. are managed, with the focus in many cases on 4. Charismatic leaders in sports organisa- short-term success at the expense of a coher- tions generally create a culture of conflict. ent long-term view of the business of sport. How accurate is this view? Use examples to support your line of argument. Learning Outcomes 5. Examine the roles played by the Chief 55 The characteristics of sport and the Executive Officer and Chief Marketing sports sector make it different from Officer in the area of sports governance. many of the traditional business sectors 6. Assess the extent to which you would 55 The increasing focus on revenue, profit agree with the view that governments and success has led to increasing evidence have a major role to play in ensuring of poor governance and bad behavior that sports organisations address sports 55 Sport at the elite level is no longer just governance in a responsible manner. about sporting principles: it is a business 7. The characteristics of sport in general 55 This leads to a lack of accountability and sports organisations in particular and a lack of transparency in terms of ensure that it is very difficult to apply standard principles and procedures for 60 Chapter 3 · Sports Governance

addressing the issue of sports gover- as doping and cheating, as long as they nance. Examine the extent to which you can witness excellent performances in would agree with this proposition. the arena. Use examples to support 8. Evaluate the perception that sports fans your point of view. generally do not care about issues such 3

Appendix

South African Cricket – Dark or Bright

Background siasm within the coloured communities, largely The history of cricket in South Africa is inex- under the radar of the international gaze. tricably bound up with the policy of apartheid, Many talented white cricketers did not have which was introduced by the government in the opportunity to display their talents on the 1948. This policy actively discriminated against international stage at the top level as a result of the black and coloured members of South the ban. They did play in England and Australia African society and was manifested in a range at county and state level (below the top (test) of initiatives, such as segregation on buses, sep- standard). arate schools and separate areas where people South African cricket attempted to circum- could view sporting events in the stadia. vent the ban by organizing rebel tours to their Although encountering world-wide criti- country. International teams were recruited and cism and opprobrium, sports such as rugby offered high levels of payment and a couple of (traditionally played by the Afrikaner and them took place. It aroused the ire of the anti- white community) and cricket (predominantly apartheid supporters and although one or two white) continued to operate in the domestic attempts were made by those players to do some and international arenas. basic coaching in the local black townships, it The issue was brought to a head in did not have much success in stemming the tide 1968/1969 with a coloured player by the name of criticism. South African officials, such as Dr. of Basil D’Oliveira. He had left South Africa Ali Bacher, were accused of hypocrisy because some years before, because of lack of opportu- they put the self-interest of the white cricket- nities to play at a top level for that country. He playing community at the core and also sought was banned from entering South Africa when to generate profit from these tours. he was selected to represent England on their During this period of isolation, cricket tour there. He had already played for England administrators were criticised for not doing prior to this tour and ironically was not initially enough to develop cricket in the coloured and selected. That clearly would have solved the black communities. They were also accused of problem for the South African Government. meekly accepting the apartheid policies of the However, one of the selected players got injured South African government during this period. and D’Oliveira was called up as a replacement. This triggered the ban and England cancelled Re-Introduction the tour. Other countries such as Australia also Much of the subsequent part of this case is cancelled up-coming tours and South African centred on what happened after the release cricket was cast out of the international cricket of Nelson Mandela in 1990. This move by the scene. South African Government effectively signalled Over the next 20 years or so, cricket contin- the end of their uncompromising approach to ued to be played strongly and vibrantly in apartheid. Mandela had been a noted critic of South Africa. Some coaches and administra- apartheid and was instrumental in setting up tors worked on building up interest and enthu- the ANC – a protest movement which aggres- 61 3 Appendix

sively challenged apartheid from the early 1960s tional competitive environment. It is probably onwards. He spent the best part of 30 years in jail fair to say that the continuing lack of investment for his actions. in infrastructure and coaching in the develop- The move to re-integrate South African ment of these communities was “shoved” under cricket happened very quickly. the carpet and accepted by politicians, adminis- Dr. Ali Bacher, one of the leading propo- trators and indeed the general public, in their nents and organizers of the rebel tours, quickly quest to re-establish South Africa as a successful moved to get South African cricket back on the sporting nation once again. international stage. With help from the ANC, the The Springboks (the national rugby team) two existing cricket boards: the South African won the World Cup in 1995. This was hosted by Cricket Board (the traditional body) and the South African as well, so there was an immedi- South African Cricket Union (which was always ate boost to the country in terms of pride. One run on multi-racial lines) came together and of the most iconic photographs in sport shows merged. The new body was called the United Nelson Mandela wearing the Springbok jersey Cricket Board of South Africa (UCBSA). (seen by many as the ultimate seal of approval During early through to mid-1991 Bacher of the apartheid era in years gone by), present- and colleagues feverishly set about networking ing the trophy to the South African captain. and negotiating with international cricket This single act reinforced the message that board representatives in an attempt to gain suf- Mandela was prepared to forgive (if not neces- ficient support and votes to be re-admitted into sarily forget) this period of history. international cricket. The next few years witnessed the establish- After numerous meetings, they eventually ing of the South African cricket team: known gained approval from key cricket nations such as the Proteas, as a successful member of the as the West Indies, Pakistan and India. South international cricket circuit in at both test and Africa was also approved for participation in one-day level. However, not many black players the 1992 World Cup. A further bonus occurred emerged, of sufficient calibre, to be classified as when the Indian board responsible for running consistently good enough to play at this elite cricket had to cancel a visiting tour from level. One such player however, Makhaya Pakistan and asked South Africa if they could, Ntini, was the first ethnically born black player at short notice, step in for a tour to India. South to play for South Africa. He became one of the Africa was back on the international cricketing iconic players from 1998 to 2009, and was only scene almost in the blink of an eye! The team the third player from that country to take 300 were received rapturously by Indian cricket wickets in test cricket. He also became a role fans and the show was on the road. model for the black community and did a lot to foster interest in cricket from this community. Post-1992 Since then, a number of black players have With little development, in any formal sense made contributions to South African cricket of cricket, in the black and coloured commu- including: Lonwabo Tsotsobe, Aaron Phangiso, nities it was not surprising that the initial Kagiso Rabada and Temba Bavuma. teams were made up of almost exclusively Today, cricket is the second most popular white cricketers. sport in South Africa, and is the only sport in Nelson Mandela took over as the President the country to feature in the top two sports of of the country and he followed a policy of for- all race groups. This has had both successes: giveness about the way in which apartheid poli- Herschelle Gibbs, a Cape Coloured, is one of cies, so vigorously pursued by successive South the sport’s most dominating batsmen and the African governments, had impacted so dread- black bowler Makhaya Ntini reached number fully on the black and coloured populations. 2 in the ICC Player Rankings in 2006. This manifested itself in a benign attitude to the As might be expected when the black popu- re-entry of cricket and rugby to the interna- lation were represented by their own political 62 Chapter 3 · Sports Governance

parties and movements and dominated the tegic priority with the focus on the following structure of the government, gradual moves resolutions: were made to address the on-going imbalance in 1. Governance. the structure of sports such as rugby and cricket. 2. Procurement and appointment of staff. Both sports were still dominated by the 3. Professional cricket. 3 white population. Many critics of the system 4. Amateur cricket. argued in that, in the case of cricket most of the 5. History and Legacy. black players who broke through to play at the 6. Funding. top level came from wealthier backgrounds and (source: 7 http://cricket.co.za/cat/23/About- received extensive coaching at private schools. CSA/1943/Transformation-Philosophy/) Thus, it was argued, that the imbalances and Currently Cricket South Africa is commit- injustices in the sport of cricket were not being ted to its undertaking on transformation and properly addressed by the government and the redress that includes delivery of the following administrators. This would appear to support key issues: the view that sports, like rugby and cricket, had 55 Demographically representative entities not really undergone any serious form of trans- and democratic structures formation. 55 Development of cricketers and our human capital Changes Afoot 55 Equitable allocation of resources and The United Cricket Board of South Africa equity across the board (UCBSA) originally merged from two ear- 55 Ethos of dignity and equality lier incarnations of boards, also went through 55 A culture of sustainability, non-racialism a process of change and became known as and access for all Cricket South Africa (CSA). Before it changed 55 Recognition of the history of all South its structure, however, it established its first African cricket. Transformation Monitoring Committee at a special conference at the Southern Sun hotel in 1998. During the late 1990s through to the mid-2000s a This committee identified ten major thrusts consistent argument was put forward and largely or directions that the sport should follow in centred on the view that if South Africa was to order to transform the sport to reflect the be seen as a “rainbow nation”: this should be demographics and changing nature of South reflected in “rainbow cricket and rugby teams”. African society. Various initiatives were introduced to force These thrusts were identified as: cricket teams to introduce a quota system, 1. The role of the UCBSA Board. whereby they had to pick a certain number of 2. Democratization. players from the black community in their 3. Redress and representivity. teams. This engendered much controversy and 4. Constitution. debate within the cricket sector and across the 5. Competitiveness and revenue. country as a whole. 6. Development. Its advocates argued that this was the only 7. Closing the gap. practical way in which to ensure that players 8. Funding and distribution. from these communities could progress their 9. Recording the full history of South careers. It would also allow them to be devel- African cricket. oped, not just as players, but also as role mod- 10. Accountability and monitoring. els for the youngsters. The counter-argument was based on the Progress was reviewed and the UCBSA Thrusts view that players should only be chosen on the were fine-tuned by CSA at its National basis of merit, that is you are picked if you are Transformation Indaba in 2013, whereby the good enough; not because you have to make up rapid Africanisation of cricket was made a stra- a quota. 63 3 Appendix

Ironically, as a result of such measures, and legal advisors were asked to carry out an white players felt that they were being victim- enquiry and make investigations. This report ised. In some instances, players of major talent was commissioned by the Minister of Sport and such as Kevin Pietersen, decided to move to Recreation and instructed a Ministerial England to pursue his international ambitions, Committee of Enquiry, chaired by Justice arguing that he was being restricted by the Nicholson, to carry out this investigation. quota system in South Africa. The subsequent King Report on Governance In 2007 CSA decided to do away with the for South Africa (2009) also emerged because quota system. South Africa had introduced a of international changes in approach to this quota system in 1998 to address the racial dis- area. It emphasises the need for transparent and crimination caused by the Apartheid system. effective communication with its various stake- The stipulation was then that every team had to holders, to build trust and confidence. field four players of colour - a term which The report concluded that both officials encompasses black Africans, mixed-race peo- had a duty to inform CSA about the back- ple and those of Asian descent. It was officially ground to the negotiations about the payments removed in 2007. and that they did not act in the best interests of Sports minister Makhenkesi Stofile stated the organization. the focus would switch to helping black athletes Commentators made the observation that by investing £15m a year. the sacking of Majola and McIntosh was caused mainly by the situation where a large and “Quotas are out. We are not going to »» unwieldy board is threatened by the power that decide who must be on the team. All we resided in the hands of a couple of individuals. are saying is expose everybody, give In 2013 the CSA re-introduced the quota them an opportunity”, (7 http://news. system. A recent report, presented to CSA at bbc.co.uk/sport1/hi/front_page/ that time, contained information that most 7082466.stm) black African players give up the game between This caused further debate. Surveys suggested, the under-19 and provincial level, at an age at that by a small majority, the general population which, if they are not contracted, will need to still favoured its retention. find jobs. The report also revealed that when black African players do get into the system, Further Change they are often further side-lined. Only two Serious questions were raised about the behav- black African players turned out in more than iour of the CSA. South Africa hosted the Indian 80% of their franchises’ games last season and Premier League (a very successful 20/20 competi- when they did, they bowled less overs and bat- tion in 2009). This happened because of terror- ted lower down than players of other races. ism problems in India. In order to ensure 2016 witnessed a further step up in the continuity and satisfy sponsors, India took up the emphasis on the racial quota system. South offer from CSA to host the event in South Africa. Africa’s Sports Minister Fikile Mbalula felt that CSA’s remuneration committee recom- the government should no longer have to beg mended that bonuses be paid to CSA staff to for transformation across South African sports, reward them for the success of this event. such as cricket, rugby, athletics and netball. He However, the CEO Gerald Majola and the COO announced that none of the governing bodies Don McIntosh had already negotiated bonuses of sports would be allowed to bid for interna- for its senior officials with the IPL and they tional competitions until such time as the ratio received the majority of these bonuses. One of of blacks significantly improved. Support for South Africa’s justices recommended that this position could be made by considering the Majola be the subject of a disciplinary enquiry bare statistics of what happened post- as a result of these allegations. It was established reintroduction to the international arena. Black that these payments had been made. KPMG Africans (defined as those who come from the 64 Chapter 3 · Sports Governance

black, Asian and mixed race communities) enforced to the full. In matches against stronger make up around eighty-five per cent of the total opposition, the number could be reduced. population of South Africa. However, in This raised the overall question as to 2014/2015, they accounted for only ten per cent whether this policy is equitable or not? of players who played at test match level. Since Many commentators felt that selection, 3 readmission, a further statistic revealed that as particularly at the top level, should be based on of 2016 only seven out of ninety players, who the principle of meritocracy-you only get have been selected for their country at cricket, selected if you are good enough. Others felt have come from these categories. that it is a significant step in the process of His comments were generally accepted by transforming the sport of cricket and in the the CSA who decided to go with a policy of longer term will ensure that the sport is repre- having six players out of the eleven in the inter- sentative of the demographics of the popula- national team that must be classed as black tion as a whole. and at least two must be black African. These (Sources: adapted by the author from: remedies, in their view, should address the con- T.A.W. (2017) “A new racial selection policy cern of the Minister that it is a move to redress for South African cricket”. The Economist the injustices of the apartheid era. This policy September 19th. Mnyanda, Siya (2016) was also implemented across the franchises in “Imposing racial quotas is a vital step for- the main league and further down the leagues. ward for South African Sport”. The Guardian. At the national level the policy was refined April 29th. Hoult, Nick (2017) How cricket- and adjusted to allow for six such players to ing quota policy has impacted South Africa”.

appear in test matches in the calendar year, as The Telegraph. July 1st. 7 http://cricket.co.za/ an average. This meant that in some matches, item/1943/Transformation.) against potentially weaker countries, it could be

??Discussion Questions 3. Evaluate the racial quota system 1. Assess the approach to the governance employed by the cricket body. of the sport of cricket in South Africa. 2. Examine the relationship between the governing body for cricket and the government.

FIFA and Its Relationship with Adidas

Introduction best known for organising the World Cup, FIFA is the non-governmental, non-profit which is played every four years. organization which, since 1904, is responsible Between 2011 and 2014 FIFA’s revenues for the governance of global soccer (Pielke have been estimated around US$ 5.7 billion, 2013). Overall, 211 associations divided into six with its main income being sponsorships (U$S confederations (such as UEFA and CAF) affili- 1.6 billion) (Pylas 2015). Within FIFA’s system, ate with FIFA (FIFA 2016a). The former presi- the highest form of sponsorship is the so-called dent Joseph Blatter had been in power for 18 FIFA-Partner, who is allowed to use all FIFA years, before the scandal led to his ban from events for marketing purposes. It is estimated soccer related activities (FIFA 2016b). The that each FIFA-Partner currently pays around newly elected president is former UEFA secre- US$100 million for a four-year cycle (Deutsche tary general, Gianni Infantino. Welle 2013). The six current FIFA-Partners are Apart from setting the rules of the sport Adidas, Coca-Cola, Gazprom, Hyundai/KIA, and supporting those confederations, FIFA is Visa and the Chinese Wanda Group, which just 65 3 Appendix

signed its contract in March 2016. Famous sec- dings or marketing and TV deals, within the ond tier sponsors (sponsoring the World Cup past 2 years. Just hours after those arrests, only) include McDonalds and Budweiser. Swiss authorities opened-up legal investigations with regards to the bidding of 2018 and Adidas 2022, and four men (amongst them former Adidas is a German sportswear company FIFA executive Chuck Blazer) pled guilty in a founded as a shoe manufacturer by Adolf US corruption investigation from 2013 involv- Dassler in Herzogenaurach, Bavaria in 1940, ing bribes totalling more than US$10 million. where it is still headquartered. Today, the Instantly, FIFA tried to save its reputation as Adidas AG develops, designs and markets ath- much as possible. President Joseph Blatter, per- letic products, with brands such as Adidas, ceived by many people as the heart of all evil Reebok, and Rockport. It is the largest sports- within the corrupt FIFA-system, released a state- wear manufacturer in Europe and second larg- ment emphasizing that he welcomed the investi- est in the world, employing around 55.500 gations and wanted to root out all wrongdoings people. Adidas’ global sales in 2015 have within FIFA. Only 2 days later Blatter had been amounted to €16.92 billion. At the time of the re-elected as FIFA President, despite the scandal scandal, Adidas was the sixty-second most and a public outcry for deep-rooted change. valuable brand in the world and additionally As the scandal continued to unfold, more the third most sustainable brand (Corporate officials, as well as the organization itself, were Knights 2015). accused of bribery and corruption, which ulti- Overall, Adidas presents itself as a socially mately forced Blatter to step down just 4 days responsible company, with the goal to make the after his re-election and forced FIFA to post- world a better place, stressing their core values pone the World Cup 2026 bidding. Still, it took as “Performance”, “Passion”, “Diversity” and until 7 August until FIFA announced that it “Integrity”. Adidas’ sponsorship approach is would also conduct internal investigations characterized through tolerance, diversity and about potential corruption within its system. a strictly enforced anti-doping policy. The FIFA scandal peaked again when Adidas is the oldest of all FIFA-Partners, Swiss government officials opened criminal being a partner (and providing every match investigations against Blatter in September. ball) since 1970. Just recently Adidas prolonged Those investigations led to a provisional ban in their contract until 2030 (Reuters 2013). early October and in December the FIFA

Available at 7 https://sports.yahoo.com/news/ Ethics Committee extended this ban from all adidas-extends-world-cup-sponsorship-until- soccer related activities for the next 8 years for

2020-12362990-finance.html (. Fig. 3.1). him and UEFA chief Michel Platini. Overall, the crisis led into a widespread The FIFA Scandal wave of disruption, counting fourteen arrests, FIFA had been accused of corruption and uneth- multiple bans by the Ethics Committee and ical practices for years, especially after the World many additional investigations opened. For Cup bidding results for Russia 2018 and Qatar example, the way in which the bidding process 2022 came out. The public outrage about corrup- was conducted for the Soccer World Cup in tion, bribery and similar, increased strongly. 2006, which was awarded to Germany. The accusations climaxed when FBI offi- In February 2016, re-elections were supposed cials arrested seven of FIFA’s top executives on to mark a new start for FIFA. During those elec- 27 May 2015, just 2 days prior to FIFA’s gen- tions a set of reforms, entailing changes such as eral assembly. Two of those officials were exist- term limits for president and council, integrity ing (at the time) vice presidents: Jeffrey Webb checks of council members, disclosure of indi- and Eugenio Figueredo. All of them were vidual compensation and a clear separation charged with alleged cases of corruption and between management and political functions was bribery in different areas, such as host bid- agreed upon with an impressive majority. 66 Chapter 3 · Sports Governance

Committee

annually

.. Fig. 3.1 Organisational structure of FIFA prior to organiational reform in March 2016. (Adapted by the author from: FIFA 2015b and Larkin (2015)) 67 3 Appendix

The election of Gianno Infantini, as the join them (excluding Gazprom and Hyundai/ new president, however, drew criticism, since he KIA) in their call for Blatter to step down as is believed to be one of Blatter’s protégés, and president. Whereas, the other sponsors did so many people would have preferred someone a few days after the scandal surfaced, Adidas completely detached from FIFA’s past in order refrained from joining this call for action. to transform it into a transparent, non-corrupt This again emphasizes that Adidas stayed organization. more muted than the majority of other sponsors. Adidas’ Behaviour as the Scandal Unfolded A uniform reaction from all sponsors, In order to assess the influences the scandal including Adidas, was evoked through passing had on Adidas, it is important to re-iterate the reforms proposed by the ethics committee, Adidas’ behaviour during the scandal in order as well as the election of the new president. All to better understand the impacts. Throughout main sponsors stated their hopes for the future the whole scandal, Adidas’ reaction has been and exclaimed that they saw this as a step in the neutral. Although no sponsor took rapid right direction. However, reactions were not action, such as a withdrawal, Adidas’ public overly enthusiastic, still stressing that a lot of statements, compared to other sponsors, were work had to be done in order to fully get FIFA very subtle. Whereas for example FIFA-Partner back on track. Visa stated that they would reconsider their In summary, in accordance with the other sponsorship connections if FIFA failed to sponsors, Adidas reacted in a reserved and neu- reform, Adidas indicated that it would con- tral manner throughout the whole scandal. tinue to promote its very high standards of Although, all sponsors refrained from taking ethical behaviour. Adidas also encouraged vast actions, it can be said that Adidas’ behav- FIFA to adopt transparent policies. iour was even less critical than most others. It took Adidas until December to finally (Case adapted from Ennis, S., Marck, state that even they might reconsider the spon- Michael and Giese, Stefanie (2016) “Implications sorship, if FIFA failed to change its gover- for Corporate Sponsors arising from scan- nance policies and procedures. However, it dals in sport: The Case of Adidas and FIFA. also expressed the view that it seemed to be Anzmac Conference Proceedings: Christchurch, going in the right direction. December). Overall, Adidas’ reaction can be considered as a “wait-and-see” approach. References However, with this behaviour Adidas did 55 Corporate Knighets. 2015. 2015 Global 100. not diverge from the other sponsors. As stated, 55 Deutsche Welle. 2013. Adidas nets longer the only sponsor threatening to withdraw at an sponsorship contract with FIFA. Deutsche early stage was Visa. On the contrary, Gazprom Welle, [online] 21 November. Available at:

pronounced their full support for FIFA, stating 7 http://www.dw.com/en/adidas-nets-longer- that the sponsorship agreement would not be sponsorship-contract-with-fifa/a-17244096. affected by the scandal. But, Gazprom, being a 55 Pielke, R. 2013. How can FIFA be held Russian corporation, has to be evaluated differ- accountable? Sport Management Review ently, especially when analysing consumers in (Elsevier Science). 16 (3): 255–267. areas such as Western Europe, due to its govern- 55 Pylas, P. 2015. Coca-Cola, Visa and Adidas ment connection. It must be remembered that are responding to the FIFA corruption scan- Russia was due to stage the 2018 World Cup, It dal. Business Insider, [online] 28 May. Avail-

could be credibly argued that at the very mini- able at: 7 http://www.businessinsider.com/ mum, it was unlikely to “rock the boat”. coca-cola-visa-and-adidas-are-responding- On the other hand, Adidas strongly dif- to-the-fifa-corruption-scandal-2015-5? fered from other sponsors, when they did not IR=T. 68 Chapter 3 · Sports Governance

??Discussion Questions 3. What are the learning points, if any, 1. Assess the approach of FIFA in relation from the point of view of governance to its attempts to deal with the scandal. in this case? 2. Examine the approach of Adidas, as one of the key sponsors, to the ensuing 3 scandal.

Bernie Ecclestone: A Man for All Seasons

Background lost their lives on the circuits. It was not unusual The Formula One sport has its origins in the to see two or three perishing annually. This led European Grand Prix championships of the to a number of initiatives to address the issue 1920s and 1930s. of safety and they reduced the incidences of In 1946 the genesis of Formula One fatalities. emerged with the Fédération Internationale de By 1994 it appeared as though Ecclestone l’Automobile’s (FIA’s) standardisation of rules. and his fellow directors had addressed the A World Championship of Drivers followed in “danger” element. 1950. This belief was shattered in 1994 with some During this period and into the 1950s bad crashes and injuries. It culminated in three around twenty races were held at various ven- deaths during practice and in the actual race at ues throughout Europe, although some were San Marino. Ayrton Senna died following a not regarded as being of much significance. horrific crash in the race. Italian motor manufacturers, such as Alfa This sparked off a raft of changes to the Romeo, tended to dominate the early seasons engine capabilities, overall design of the cars of this sport. and the configuration and design of the race In the late 1950s races were shortened from tracks. The last 20 years has provided evidence around 300 miles to 200 miles. This year also that this tightening up on safety has worked saw the introduction of a championship for and certainly all but eliminated the number of constructors. fatalities. Arguably, it also took away the ele- The early part of the 1960s witnessed the ment of danger from the sport. emergence of a number of British specialist teams such as, Lotus, Cooper and BRM, and The Emergence of Bernie Ecclestone later McLaren, Tyrrell and Williams. These out- Motorsport was in the DNA of Bernie fits were created purely for producing, developing Ecclestone. Ever since he set up a second-hand and completing purpose-built open-wheel racing motor-cycle parts business in the 1940s his pas- cars and had overtaken the industrial manufac- sion for all things “motor” knew no boundar- turing powers such as Ferrari, Mercedes, ies. He also competed in various Formula three Maserati and Alfa Romeo. races during this period. Questions might be Most of the developments during this asked about his skill as a driver because he fea- period centred on innovations to engines and tured in numerous crashes and eventually had aerodynamics. to concede that he was never going to succeed From a marketing perspective, 1968 high- as a top driver. lighted the arrival of unrestricted sponsorship. Initially, he became involved in Formula This happened mainly because of the with- One through his management of a couple of drawal of support from automotive-related the well-known drivers at that time. He took a companies and brands. Tobacco companies major step forward in 1971 when he purchased were at the forefront in sponsoring teams. the Brabham team for £100,000. He was to run Safety was also a major concern. During this team for over 15 years; eventually selling it the 1960s and 1970s a number of top drivers for £5 million. As a team owner, he became 69 3 Appendix

heavily involved in administration issues self); in return, FOPA put up the prize money- affecting the sport of Formula One, and was a grand prix could literally be translated from proactive member of the Constructors French as “big prize”. Association. Television rights shuffled between He took the view that to make the team Ecclestone’s companies, teams, and the FIA in successful virtually all of the resources had to the late 1990s, but Ecclestone emerged on top be poured into the design of a competitive car again in 1997 when he negotiated the present for the Formula One races. The previous owner Concorde Agreement: in exchange for annual of Brabham had focused more on the business payments, he maintained the television rights. of car production. Due to weight issues with Ecclestone recruited some key people to the engines being used (they were heavier than address the safety issue (mentioned earlier in the competition) the performance of the team this case) and from the late 1990s through to fell back somewhat and left them behind most today, these initiatives have significantly of the other teams. improved the safety of the sport-mainly Ecclestone teamed up with a very promis- through the design of the tracks. ing driver: Nelson Piquet. He also changed the He has subsequently dominated the sport engine. The combined effect was that Piquet of Formula One for over 40 years. narrowly lost the championship in 1980, but eventually winning in seasons 1981 and 1983. The Recent Takeover of Formula One In 1985 Piquet left the team, professing In October 2016 the American conglomerate himself unhappy at the unwillingness of Liberty Media formally took over the sport of Ecclestone to pour more money into techno- Formula One. Ecclestone was expected by logical developments, the lack of which, in his many commentators to be invited to continue view made them somewhat uncompetitive. as Chief Executive Officer. However, in early Ecclestone subsequently sold the team that 2017 the Liberty senior management made it year for £5 million. clear that they wanted a clear separation from Ecclestone, during his period as team the legacy of Ecclestone and appointed a new owner, was eventually elected as the Chairman CEO; Chase Carey. They have given him the of the Formula One Constructors Association title “Chairman Emeritus F1 (FOCA). He worked closely with a friend of his The total value of the takeover is around on the association-Max Mosley. The latter £6.4 billion, although that includes a sizeable addressed a number of potentially contentious amount of debt, with the equity valued at just legal issues. Ecclestone saw the selling of TV over £3.5 billion. (The Telegraph: 23rd January rights for the sport as a critical element in 2017). developing the sport and focused much of his attention on this issue. How Has the Sport of Formula One Fared His entrepreneurial skills led to the right to During the Reign of Ecclestone? negotiate TV rights on behalf of the sport. This It can be argued that when Ecclestone acquired came from detailed discussions with FIA-the control over the right to sell TV rights, he took federation which represents the interests of the the sport “fighting and kicking” into the twen- sport. tieth century. Prior to his involvement, some He quickly set up Formula One Promotions people argue that the sport was disjointed and and Administration (FOPA), giving forty- lacking in any centralised leadership or vision. seven per cent of television revenues to teams, For instance, Ecclestone sold the rights to cover thirty per cent to the FIA, and twenty-three per F1 as a single product and not individually as a cent to Formula One Promotions and set of disjointed races. This unified approach Administration (FOPA) (i.e. Ecclestone him- enabled Ecclestone, over time, to acquire a 70 Chapter 3 · Sports Governance

dominant position in the relationship with the (usually around the order of 10%). Figures media companies. show that over the past two decades, F1 was the The last three decades has witnessed the most globally watched sport on television in sport of Formula One broaden its international the world (500 million viewers). horizons to many of the emerging and develop- In terms of who owns and controls the 3 ing economies of the world. sport, the same article revealed the following: This is highlighted in the programme for The actual Formula One Group - the com- the 2017 season. »» panies that own the commercial rights to F1 - is made up of multiple companies. We The 2017 Calendar in Full are talking about 30–40. They invest in 55 March 26 - Australia (Melbourne) multiple jurisdictions - the UK, Jersey, 55 April 9 - China (Shanghai) Luxembourg, Switzerland, all over the 55 April 16 - Bahrain (Bahrain) place - but the parent company of the 55 April 30 - Russia (Sochi) group is called Delta Topco and they are 55 May 14 - Spain (Barcelona) based in Jersey. So, the owners of that you 55 May 28 - Monaco (Monte Carlo) could say are the ultimate owners. 55 June 11 - Canada (Montreal) It is 35.5% owned by a private equity 55 June 25 - Azerbaijan (Baku) firm called CVC Capital Partners. The sec- 55 July 9 - Austria (Spielberg) ond biggest shareholder is an American 55 July 16 - Great Britain (Silverstone) company called Waddell and Reed - they 55 July 30 - Hungary (Budapest) have got in the region of 20%. The third 55 August 27 - Belgium (Spa-Francorchamps) biggest shareholder is the estate of Lehman 55 September 3 - Italy (Monza) Brothers - they have somewhere in the 55 September 17 - Singapore (Singapore) region of 12%. Bernie Ecclestone's family 55 October 1 - Malaysia (Sepang) trust has circa 10% and Ecclestone himself 55 October 8 - Japan (Suzuka) has around 5%. It's a complicated structure. 55 October 22 - USA (Austin) 55 October 29 - Mexico (Mexico City) The report also identifies another layer of com- 55 November 12 - Brazil (Sao Paulo) plexity: there is no standard fee for staging an 55 November 26 - Abu Dhabi (Abu Dhabi). event. Ecclestone recognised that in an era where emerging countries and economies, from Ecclestone also spotted the importance of gen- outside the traditional North American and erating as much cash as possible from the vari- European markets, more revenue could be ous stakeholders in the business. A report extracted. Countries such as China, Turkey published in 2013 revealed that “Generally and Gulf States were eager to place their offer- speaking, $500 million comes from the fees that ings to a wider market. They viewed sport in promoters pay to host races and then another general and Formula One in particular, as an $500 million comes from the fees that broadcast- opportunity to capture world attention, attract ers pay to screen the sport. Then you have circa tourism, change perceptions that people might $250 million coming from sponsorship - track- have about their policies and so on. Ecclestone side advertisers and series sponsors. The remain- realised that higher fees could be charged for ing $250 million is coming from things like the right to stage such high profile events. More corporate hospitality” (F1 perfects formula for established venues, such as Monza (Italian financial success, By Matthew Knight and Inez Grand Prix), did not have to pay as much as the Torre, CNN.) newer venues. It was estimated that Singapore The contracts with the hosts who stage a initially paid over $60 million per year. Grand Prix event are designed in such a way Malaysia, its neighbouring country, paid that upward only annual increases are standard around $67 million. In many such cases, the 71 3 Appendix

government of the respective country paid the enough uncertainty or excitement any more. fees. The team with the best designed car tends to Around forty-eight per cent of the profits win almost every event. This is not good for generated goes back to the teams. In 2011 the generating enthusiasm or interest. profit generated amounted to around $1.2 bil- In a recent Grand Prix Drivers Association lion. However, not all teams are treated (GPDA) survey, 77 per cent of the 217,756 fans equally. Some teams, such as Ferrari, get five that answered it admitted that they were con- per cent more than the others. This is because cerned that business interests were taking pri- of the history and heritage which a team like ority over the sport itself. And a whopping Ferrari “brings to the party”. This is seen as eighty-nine percent felt more needs to be done recognition that too many teams either to ensure that Formula One is more competi- change their names due to alterations in own- tive on the track. ership. Rewarding tradition can be perceived “The fans are clear: they don’t want a radi- as protecting the image and exclusivity of the cal overhaul of grand prix racing that takes it sport. away from its historic roots”, said the GPDA Chairman, Alex Wurz in a statement. “It may Problems in the Wind? sound simple, but the best drivers and teams A critical issue in the development of the sport fighting on track in the most exciting cars is is that of audience figures globally. their priority. And we, the drivers, passionately In 2008 the sport captured over 800 mil- share that view. They want competitive sport, lion viewers world-wide. By 2015, this had not just a show, and they think that Formula declined to around 425 million: a sharp indi- One business has become too important, jeop- cator that the sport had slipped in popularity. ardising our sport.” However, relative to other sports, the figures All of the above trends and developments still make impressive reading – given that fans raise potential questions about the long-term consume sports differently, when compared to future of the sport and the viability of its busi- 2008. ness model. In response, F1 since 2012 began to sell media rights to subscription (Pay) television The Legacy of Bernie Ecclestone? channels. This has generated additional income The removal of Bernie Ecclestone ends an era which it could be argued, begins to offset any in sports marketing in general and Formula losses from a potential drop in advertising or One in particular. His forty-year reign has cer- sponsorship. tainly moved the sports from one end of the It can be equally argued that a move to spectrum to the other. pay television will have an impact on the view- Ecclestone has drawn much criticism over ing figures: not everyone can afford the sub- the decades for his approach to running and scriptions or may be prepared to do so. governing the sport. He has been accused of The lack of involvement or engagement being a dictator and serving his own interests at with the Internet and social media platforms the expense of the Formula One teams and also might indicate the F1 is potentially sowing other key stakeholders. the seeds of terminal decline. Younger people In some ways, he has been receptive to do not engage as much with television any changes in the rules and regulations-particularly more: preferring to watch events through live in terms of engine design, degrading tyres and streaming or OTT alternatives. restricting the number of pit-stops. The drag Attendance at individual Grand Prix events reduction system (DRS) and the kinetic energy is also showing signs of a decline. recovery system (KERS) have both been insti- Many people also feel that the sport has tuted to make the racing more exciting and to become too predictable and does not generate aid overtaking-but don’t sit well with purist 72 Chapter 3 · Sports Governance

fans. Reducing noise levels at events, while super looks, preferably Jewish or Mus- addressing environmental concerns, may have lim, who speaks Spanish”. alienated traditional fans who enjoy the excite- He has also been accused of bigotry and of ment and atmosphere which it generates. being racist. This quote is an indicator of some The personality of Ecclestone and his of his views. He has expressed the view that 3 focused approach have opened doors to key Adolf Hitler was someone who was capable of leaders and rulers in the global scheme of getting things done. things. He is well connected and this has led to Accusations of bribery were made against opening the sport in critical and attractive mar- Ecclestone in Germany and this was eventually kets: such as China, Russia and India. settled out of court with a payment of £60 mil- He has professed ignorance of the role of lion. He also had to settle a tax avoidance case social media and the Internet. in the UK. He has been accused of being “anti- Source: Developed by the author from vari- female”. The following quotation might sum ous sources on the Internet. up his views. Adapted from 7 https://www.motorsport. »» Speaking to Autosport in February com/f1/news/grand-prix-drivers-association- 2000, Ecclestone did not expect women sets-global-fan-survey-record/610591/ drivers to ever do well in Formula One, Knight, Matthew and Torre, Inez (2013) adding: "She would have to be a woman “F1 perfects formula for financial success”.

who was blowing away the boys. What I Available at 7 http://edition.cnn.com/2013/ would really like to see happen is to find 07/30/sport/motorsport/f1-money-billion-dol- the right girl, perhaps a black girl with lar-business/index.html

??Discussion Questions Clarkson, M.B.E. 1994. A stakeholder framework for ana- 1. In terms of how the sport of Formula lysing and evaluating corporate social performance. Academy of Management Review 20 (1): 92–116. One has been governed, how would Duval, Antoine. 2016. The rules of the game: The need for you assess the contribution of Bernie transparency in sports governance. Available at: http:// Ecclestone during his period in charge? www.playthegame.org/news/comments/2016/034_ 2. In your analysis of Ecclestone’s the-rules-of-the-game-the-need-for-transparency-in- contribution, examine his personality sports-governance/. Accessed 2/8/2017. Esam, Alistair (2016) “A lack of accountability”. Gov- and how that has shaped the direction ernance, October, Issue 268, 6–7 of the sport: for better or for worse. Ferkins, Lesley, and David Shilbury. 2015. The stake- 3. The new owners of Formula One have holder dilemma in sport governance: Towards the recently taken over. What recommenda- notion of “Stakeowner”. Journal of Sports Manage- tions would you make to them in terms ment 29: 93–108. FIFA Statutes (2015). Available at http://www.fifa.com/ of the future development and gover- mm/document/affederation/generic/02/58/14/48/201 nance of the sport? 5FIFAStatutesEn_Neutral.pdf FIFA (2016a) Associations. Available at http://www. fifa.com/associations/ FIFA (2016b) Joseph S. Blat- References ter. Available at http://www.fifa.com/about-fifa/the- president/joseph-s-blatter.html Allern, E.H., and K. Pedersen. 2007. The impact of Forster, John. 2015. Global sports governance and cor- party organisational changes on democracy. West ruption. Available at: http://www.nature.com/arti- European Politics 30 (1): 68–92. cles/palcomms201548. Accessed 3//8/2017. Corporate Governance Principles and Recommenda- Grant, Ruth W., and Robert O. Keohane. 2005. Account- tions (2014) ASX Corporate Governance Council. ability and abuses of power in world politics. Ameri- Australia. can Political Science 99 (3): 29–43. 73 3 References

Haigh, Gideon. 2016. Available at www.theguardian. omy? https://www.lawinsport.com/articles/item/ com/sport/2016/jul/29/griffith-review-essay-see- the-future-of-sports-governance-will-sport-sustain- how-they-run-sports governance in Australia. its-traditional-model-of-autonomy (3rd January). Accessed 23/05/2017. Accessed 02/08/2017. Healey, Deborah. 2012. Governance in sport: Outside Minikin, Brian. 2015. Legitimacy and democracy: Impli- the box. The Economic and Labour Relations Review cations for governance in sport. Sport, Business 23 (3): 39–60. and Management: An International Journal. 5 (5): Henne, Kathryn. 2015. Reforming global sport: Hybrid- 435–450. ity and the challenges of pursuing transparency. Palmer, Catherine. 2013. Global sports policy. London: Law & Policy 37 (4): 324–349. Sage Publications. Horton, Peter. 2011. In Sport in Asia: Globalization, Pielke, Robert, Jr. 2013. How can FIFA be held respon- Glocalization, Asianization, ed. P. Pachura. New sible? Sports Management Review. (16): 255–267. Knowledge in a New Era of Globalization. Avail- Reuters (2013) “Adidas extends World Cup soccer until able at www.intechopen.com. 2020, (November 21st). Available at Available at https://www.sportengland.org/media/11193/a_code_ https://sports.yahoo.com/news/adidas-extends- for_sports_governance.pdf. world-cup-sponsorship-until-2020-12362990-fi- Larkin, B (2015) “The structure and policies of FIFA. nance.html) Available at: http://sites.duke.edu/wciip/tourna- Rhodes, R.A.W. 1997. Understanding governance: Policy ment-guides/world-cup-2014/fifa-institutional-poli- networks, governance, reflexivity and accountability. cies/the-structure-and-policies-offifa/ Open University Press. Philadelphia: USA Mallin, Christine A. 2013. Corporate governance. 4th ed. Shilbury, D., L. Ferkins, and L. Smythe. 2013. Sport Oxford University Press. Oxford: United Kingdom governance encounters: Insights from lived experi- Mehta, Ravi. 2017. The future of sports governance: ences. Sports Management Review 16: 349–363. Will sport sustain its traditional model of auton- 75 4

Understanding Fans and Their Consumption of Sport

Contents

4.1 Introduction – 76 4.2 The Concept of Fandom – 76 4.2.1 Fans and Fandom Defined – 76 4.2.2 Fandom Characteristics – 77 4.2.3 Fans as Consumers – 77

4.3 Fan Typologies – 78 4.4 Fan Motivations – 79 4.5 Fans and Affiliation – 81 4.6 Dysfunctional Fan Behaviour – 82 4.7 Fans and Their Consumption of Sport – 83 4.7.1 Change in Direction and Focus – 84 4.7.2 Connectedness – 85 4.7.3 Empowerment – 85 4.7.4 Drive for Enhancements and Data – 86

4.8 Second Screening – 86 4.9 Big Data and How Fans Engage with It – 87 4.10 The Fan Going Forward – 88 4.10.1 Key Drivers and Trends – 89

4.11 Conclusions – 92 Appendix – 94 References – 100

Electronic Supplementary Material The online version of this chapter (https://doi.org/10.1007/978-3-030-53740-1_4) contains supplementary material, which is available to authorized users.

nnLearning Objectives the case with general consumer behaviour On completion of this chapter you should theories and concepts, fans want to be part of be in a position to achieve the following ob- an overall community or group which reflects jectives: their opinions, attitudes and behaviour. Sport 55 Understand the concept of fandom is essentially a social and group-based phe- 55 Assess the different categories of fans nomenon. In this context we assess the con- and the implications for sports marketers cept of tribal marketing and how sport 55 Assess whether or not fans differ from provides a salient platform for fans to engage 4 traditional customers in other business with their sport in the company of like- sectors minded individuals. 55 Contextualise fans within the wider pic- We assess the different motivations that ture of tribalism and tribal marketing shape the fan’s behaviour and how they engage 55 Understand the various factors that with sport individuals, clubs, organisations and motivate fans to consume and engage sports entity-holders. We investigate how these with sport factors and motivations have changed over the 55 Distinguish between direct and indirect past couple of decades. Issues such as social consumption of sport media platforms, digital platforms and technol- 55 Assess the link between consumption ogy have all combined to re-define the ways in and ritualization which fans consume sport. We evaluate the 55 The rise of the virtual fan challenges and opportunities for sports market- 55 Evaluate the role that social media plays ers. in the consumption of sport Our analysis of the fan will provide you 55 Examine the role played by technology with a deeper understanding of the underly- in sports consumption ing drivers that shape their behaviour. We 55 The concept of big data and how fans conclude the chapter by assessing the implica- engage with it. tions for the sports marketers and decision- makers in sports bodies and organisations. This in turn provides us with some good prep- 4.1 Introduction aration for addressing the ways in which they have to respond to fans in order to make their In this chapter, we consider the concept of the product relevant to their target markets and fan and fandom and how they engage with and how they need to introduce changes to their consume sport. This is critical, because, if we existing approach. do not understand the fans, their motives for engaging with sport and the tools and platforms they use to develop their interest in a 4.2 The Concept of Fandom sport, then it becomes very difficult, if not impossible, to devise strategies that resonate 4.2.1 Fans and Fandom Defined with them. If we cannot come up with relevant responses to their behavioural patterns then The terms “fan” and “fandom” appear exten- the likelihood is that much of our sports mar- sively in the sports marketing literature and keting endeavours will at best, be wasteful and also in the context of practitioners working in at worst, fail. the sector. In the initial sections of this chapter we Put simply a fan is someone who exhibits an examine in detail what we mean by the terms interest, enthusiasm or loyalty for a particular “fans” and “fandom”. We expand on this to sports person, club, organisation, event or com- assess the different categories or tiers of fans petition. Fandom refers to the collective behav- that exist and how their behaviour places iour of individuals that is reflected in a group them in such categories. We recognise that situation. Virtually all of us like to share our very few, if any, fans exist in isolation. As is interests and enthusiasm with other like- 77 4 4.2 · The Concept of Fandom minded people. This is reflected in many differ- years; such as hooliganism in football and ent ways; social media engagement and sharing rioting at football matches. of opinions, attendance at live events or watch- When attempting to define and categorise ing a particular sporting event in social set- fans, we have to be careful to acknowledge tings such as bars and people’s houses. that motivations and behaviours are repre- Just as the case with general consumer sented on a continuum. At one end we have behaviour, not all fans or customers behave in passive, disinterested fans and at the other exactly the same way, exhibit the same levels of extreme; fanatical fans that exhibit behaviour interest, support or loyalty. As is the case with that could best be described as excessive (in a the concept of market segmentation, sports positive or negative sense). Issues such as marketers have to grapple with the challenge identification and loyalty are linked to differ- of understanding different behaviours and ent types of fan behaviour and we shall exam- needs on the part of fans. A “one-size- fits-all” ine them presently. approach is no longer acceptable as we shall see in this chapter, in the modern-day marketplace that constitutes the sports sector. 4.2.3 Fans as Consumers

When running seminars on fandom I always 4.2.2 Fandom Characteristics pose the question as to whether or not fans are consumers in the traditional sense of the word. Agas et al. (2012) go a little further than I did It inevitably creates argument and debate and when I defined the term “fan” in the preceding at the end of it we generally conclude that paragraphs. They define it thus: a fan is there is no “definitive” answer. In order to help “someone who expresses enthusiasm and pas- us with this question it would be appropriate sion that even moves beyond reason” (p 111). to consider some of the characteristics of fans. This introduces a dimension that is not as Samra and Wos (2014) highlight three prevalent in other product or service-related “unique” features surrounding the concept of categories: passion. It is difficult to argue fandom. against the notion that passion is a major 1. Fans possess a strong and emotional driver in the case of most fan behaviour. attachment with the consumption objects. Together with excitement and related to the 2. Fans behave as loyal consumers who characteristic of uncertainty, the typical fan exhibit several loyalty behaviours. This is exhibits these characteristics to a greater or reflected in repeat purchases and insisting lesser extent. It is difficult to identify other on staying in the relationship. product/service areas that feature such com- 3. Fans present informal membership behav- mitment and behaviour. We can point to iours such as co-production and invest- entertainment and music-related products, ment. This is captured in the active and possibly religion and lifestyle brands such as on-going relationship between the sports Harley Davidson that may have similar attri- entity and the fan. butes surrounding their value proposition. This reference to passion and behaviour While it is questionable whether these are truly beyond reason, suggests that some fans might unique characteristics there is no doubt that in be characterised as fanatics. The term is team sports such as football, rugby, cricket, derived from the Latin word “fanaticus” and NFL, AFL and basketball, fans tend to exhibit literally translates as a devotee. Such a term these characteristics. This is particularly so in suggests behaviour that in some instances the case of the emotional attachment, active equates to ritualism and sacredness (akin to behaviour and engagement and strong (some religious behaviour). In a more negative con- might say intense) degrees of loyalty. text it suggests unacceptable behaviour that Are fans equivalent to traditional consum- has been witnessed in some sports over the ers? This is arguable. For instance, with team- 78 Chapter 4 · Understanding Fans and Their Consumption of Sport

related sports (as mentioned in the preceding within and between different groups. The paragraph) fans who exhibit strong degrees of sports marketing literature identifies numerous commitment are more likely not to behave in different approaches and frameworks for the traditional ways that consumers do. undertaking this task. We will attempt to For instance, fans of a particular team are unravel the thinking behind some of these con- most unlikely to switch their commitment to cepts. another team easily. If that team is performing Typically, the typologies identified in the badly in terms of results, some fans might stop literature revolve around factors such as com- 4 going to the games until the club signs new mitment, usage/consumption rates, loyalty players or appoints a new coaching team. and self-identity. Unless a fan falls into the very casual, disinter- One of the simplest ways to categories fans ested end of the spectrum, they are likely to go is to distinguish them on the basis of how back to attending games when that team picks often they attend games. This can be captured up on performance and becomes more suc- in the following categories: cessful and competitive. On the other hand, 55 Casual/fair-weather fans: these individuals fans in the highly committed end of the spec- attend infrequently – at most once or twice trum will stick with the club come what may. a year This is in sharp contrast to many B2C and 55 Regular fans: individuals who get to some service brands. If a consumer is dissatisfied or most of the games, mainly or exclusive with the service or the quality or the price of a home games brand, it is far easier to switch to another 55 Diehards: equivalent to fanatical fans who brand or become promiscuous in terms of attend all games home and away. varying purchases around two or three alternative brands. The level of intensity with While this approach is useful as a basic mech- respect to loyalty, emotion and commitment is anism for identifying different fans, it sheds typically not reflected to the same extent. little light on the inner-most thoughts and It can also be argued that fans are “con- behaviours. It also assumes that fans can be sumers with boundaries”. While they con- classified only by their physical presence at sume the product, they have little influence games. This is debatable, given the develop- over how the product might be designed, rede- ments in technology which allow many fans to signed or changed (in terms of rules, technol- consume sport virtually. How would we ogy usage, how the sport spends its money on describe Chinese fans who watch games on facilities, infrastructure, players and coaches). the Internet or via illegal streaming sites and This is changing somewhat (as we shall dis- spend a lot of money on merchandise and so cuss later). However, it makes it difficult for on? At best this approach is similar to demo- the fan to take ownership of the product. graphic methods for segmenting traditional In the worst-case scenario, fan loyalty and markets. It provides a point of comparison commitment can be taken for granted by the but does not get into the minds of fans. authorities and owners of sports brands and Pimentel and Reynolds (2004) introduce the entities, resulting in decisions that only serve concept of commitment when assessing the dif- to alienate them. This can ultimately lead to ferent types of fans. They distinguish between bad practice in the context of sports gover- ultimate fans: who are affectively committed

nance (discussed in detail in 7 Chap. 3). and proactively engaged in sustained behaviours and devoted fans: who are slightly lower on the scale but nevertheless can be expected 4.3 Fan Typologies to be committed to the team under all circumstances. It can be argued that fans can be plot- We have indicated that in order to more fully ted on a spectrum to illustrate the different understand the fan and fandom, sports mar- categories of behaviour, ranging from relatively keters need to have a grasp of how fans differ committed to be zealously committed. 79 4 4.4 · Fan Motivations

Richardson (2004) notes that highly com- the fan’s behaviour: particularly with respect mitted fans are more likely to explain on-field to a number of drivers such as the “big” expe- success in terms of internal controllable factors rience and the socialisation factor. such as team tactics, individual performance by ??In relation to your sport and the team that a player or the team and the contribution of you support how would you assess your ap- fans. Conversely, defeat is often explained away proach and where would you place yourself by external factors that are uncontrollable; for in terms of describing your fan typology? example, poor refereeing. Another stream of literature on fandom relates to the concept of social identity theory. This is an important contribution as it recog- 4.4 Fan Motivations nises the importance of who they are, based on the groups that they associate and affiliate Daniel Wann and colleagues have engaged in with. Sport in general, and team-based sport some extensive work over the years on the in particular, lend themselves to this notion. subject of fan motivations. They have pro- Dionisio et al. (2008) cite the examples of vided some useful insight into the inner work- BIRGing and CORFing as indicators of social ings of the minds of fans. From an extensive identity theory in action. BIRGing refers to the review of articles and publications on the psy- concept of “basking in reflected glory” and chological factors that encourage fans to con- captures a behaviour where the individual par- sume sport Wann et al. (2008) noted that there ticipates in successful outcomes that have hap- appear to be eight motives that appear exten- pened through success on the pitch that is sively in the literature. winning a cup or championship. Through the 1. Escape: where fans view sport as an oppor- prism of this success, an individual can experi- tunity to get away from the boredom of ence a feeling of vicarious achievement (the everyday life such as work and study. It pleasure from imagining the success achieved provides a diversion. By attending or by others such as a team) and sharing that watching sport they can momentarily for- experience with others. By contrast, behaviours get about troubles such as bills and paying such as casting off reflected failures, refers to the mortgage. the psychological tendency of fans to back 2. Economic: this motive strictly speaking away from failure by not attending matches. does not mean that an individual is actu- Stewart et al. (2003) carried out an exten- ally a fan of a particular sport. Primarily a sive review of the literature on fan typologies sporting event, game or competition, pro- and devised the following framework and vides that person with an opportunity to identified three categories of fan. make some money by means of gambling 1. Internalised, vested and focused fan: the or betting on the particular outcome. With most important factor being the emotional the advent of the Internet and online bet- connection to the team followed by the ting facilities this has emerged as a prime desire for excitement and entertainment motive for many people when engaging and finally the “big” experience. with or consuming sport. 2. Self-expressive, committed and casual fan: 3. Eustress: this is the opposite of what we in this case the primary factor is excite- refer to as stress. The latter does not pro- ment and the special experience followed vide any excitement or arousal: it usually by emotional attachment and team identi- can cause illness or depression. Eustress fication. refers to situations where the individual 3. Camaraderie, care-free and casual fan: here can experience euphoria; for example, the the focus is on social interaction and enter- team wins the championship. It resonates tainment followed by team identification. strongly with the excitement and passion that sporting events “bring to the party” This is a useful approach because it encour- and can be a strong motive for attending ages us to think of the motivations that shape or viewing on television. 80 Chapter 4 · Understanding Fans and Their Consumption of Sport

4. Group affiliation: this encourages individu- 55 Learning: the fan watching to learn from, als to share and participate with other like- and be inspired by, the participants minded people in their quest to support 55 Bonding: the use of sports to bond and and identify with a particular team or spend quality time with family event. Fundamentally it represents the 55 Achievement: the feelings of vicarious socialisation aspect of sport. achievement that fans share when their 5. Entertainment: this motive goes beyond the team wins functional aspects of supporting a team or 55 Connecting: the sense of belonging that 4 sport. It recognises that there are hedonic fans feel by being connected to a larger aspects to watching and attending sports group. events. This will vary; depending on the preferences of the individual. For some Of course, it would be too simplistic to ignore people, boxing, wrestling and MMA events the fact that motivations such as the eight present an opportunity to enjoy the vio- identified by Wann and his colleagues are uni- lence that are associated with such sports. versal across all sports. Likewise, it is more 6. Family: although similar to the group affil- realistic to acknowledge that motivations are iation motive, this brings it closer to home. also likely to differ when we take factors such Many people see sport as an opportunity as gender, age, ethnicity and sub-cultures into to spend more quality time with family account. members. In many cases, particularly with Fan motivations for watching and attend- team-based sports, fans initial interest is ing sports are multi-layered. Much of the sparked off by the parent(s) bringing them research in this area is grounded in empirical to games as kids. This tradition is passed studies of North American fans. Clearly that on subsequently to the next generation. environment is not symptomatic of other 7. Aesthetics: some sports are by definition regions of the world. Therefore, I urge caution less aggressive and more focused on partic- when reading around this topic as specific cul- ular demonstrations of skills. For instance, tures are different. This is particularly the case many tennis fans enjoy watching particular in the growth markets for sports consumption players because of certain aesthetic facets such as India, China and the Gulf region. associated with their style of play, for exam- A number of scales have been developed to ple baseline rallies, or a powerful serve. measure the motivations of fans in order to Likewise, in sports such as gymnastics, the shed greater insight. Most of the work on this athletic prowess and skill of an individual topic has largely been built on the eight motives gymnast can appeal to some fans. that were identified from the literature by 8. Self-esteem: this refers to feelings of self- Wann et al. (2008). We can see the similarities worth in an individual and how that can be by citing two scaling methods. For instance, enhanced by sport. For instance, when a Smith and Stewart (2007) utilised three dimen- team wins a competition unexpectedly, this sions within their framework: psychological, can create a sense of BIRGing that we men- sociocultural and social belonging. tioned earlier. Likewise, when the individ- James and Ross (2002) pinpoint four ual is surrounded by thousands of fans at motives: attributes of spectator sports, socia- the stadium, all wearing the team jersey, the bility, entertainment and self-definition. level of self-esteem can rise dramatically. Solberg and Mahus (2014) in their review of fan motivations stress that the general issue A more recent report has refined these motives of sociability features universally in virtually (Performance Communication 2016). Those all of the studies in this area. This resonates labelled as family, self-esteem, group affilia- strongly with our earlier examination of tion and economic, have been replaced by the motives such as family, group affiliation and following motives. bonding. 81 4 4.5 · Fans and Affiliation

Psychological Self-esteem Escape

Personal Social: Aesthetic Family Entertainment Group aliation Sensory stimulation Economic

Motives for in uencing sports consumption

.. Fig. 4.1 Motives for Influencing Sports Consumption. (Source: Adapted from Wann et al. (2001))

In summary, our investigation of the moti- sports fans) then it is unlikely that we can suc- vations behind fan’s involvement in sport cessfully address such challenges as customer reveals that they are multi-dimensional and retention. need to be examined with specific contexts such as the type of sport, gender, age and culture. An analysis of the existing research in 4.5 Fans and Affiliation the area reveals that a number of motives consistently emerge across the various studies. Two of the primary motivations identified

. Figure 4.1 indicates that fan motiva- earlier in the chapter: family and group affiliations can be summarised under three distinct tion highlight the importance of community areas: social, psychological and personal. and a sense of belonging to a community. Why is it important for sports marketers to This leads us to the concept of tribalism and have an understanding of fan motivations? how it impacts on people’s behaviour. People We will attempt to answer this in further detail do not exist in isolation (except for a few in 7 Chap. 5. However, we can make the fol- reclusive individuals). Most of us desire to be lowing observations at this stage. part of something: usually involving people. Like all sectors, marketers are challenged This initially involves family and family mem- to develop products, adapt existing ones and bers. As we grow up, our network extends to look into the future in order to remain rele- school friends, people we play sport with and vant to their target market’s needs and require- socialise with: work colleagues, members of ments. The sports sector is no different. our networks of contacts and so on. The ani- Motivations change over time. Fans can drift mal kingdom tends to hunt in packs. Humans away from traditional sports and move to new likewise tend towards groups and group affili- and perceptually more exciting developments: ation. Nowhere is this more evident than the e-sports being a case in point. case of sport: team-based sport in particular. Customer retention and customer rela- Madrigal (2002) picks up on the rationale that tionship and experience management are fun- for many people belonging to a particular damental challenges for all marketers. Again, group or community helps the individual to the sports sector is no exception. provide distinctiveness from other social If we do not fully understand the motiva- groups. Sports affiliation to a particular team, tions and needs of our consumers (in this case particularly in times of success, provides this 82 Chapter 4 · Understanding Fans and Their Consumption of Sport

degree of distinctiveness and reinforces the behaviour may revolve around boycotting cer- pleasure experienced by the individual because tain games or carrying out a protest march it is shared with other group members of a outside the stadium on the day of a game. like mind, persuasion and motivation. For me Fans can reflect positive group/tribal/com- as a fan, it is captured when my team wins a munity behaviours with respect to their atten- competition or cup and the shared passion dance at games, irrespective of performance that takes place in the stadium. Likewise, on the pitch. They can act as ambassadors for when the team parades through the city after- their team and country at away games. Fans 4 wards, it is hard to beat the sheer joy and from Brazil, Scotland and Ireland in particu- enthusiasm that pulses through the fans. lar, have built up strong reputations for their The notion of tribes and tribal marketing friendly behaviour at international tourna- was introduced to the literature by Cova and ments, even when their teams do not necessar- Cova (2002). They note that the term “tribe” ily win games. “conveys the same characteristics as an “ethnic In an era where there is an ever-increasing group” but on a smaller scale: local, linguistic focus on commercialism the onus is on senior and cultural homogeneity.” (p 597). management of clubs to take on board the Dionisio et al. (2008) reinforce this mes- importance of fans and their behaviours (pos- sage by noting that a tribe is made up of “a itive and negative). This is particularly so in network of heterogeneous persons, in terms of the case of dealing with sponsors. In certain age, sex and income, who are linked by a shared situations, fans can take it out on the club and passion or emotion”. (p 22). sponsor if they do not like the latter or agree The sports sector and fans in particular with its business strategy. would appear to integrate perfectly into this This was evidenced recently in the case of notion of tribes and in particular tribal behav- Newcastle United: an English Premier League iour. team. For a number of years, it was owned by Rituals and symbolism are other critical Michael Ashley: the owner of Sports Direct. aspects of tribal behaviour. We witness this in He received much criticism in the general team sports particularly. Fans wear the jer- media for the way in which he was alleged to seys, scarves and beanies to reflect and rein- have run this business: low wages, little con- force their commitment and passion for the cern for worker’s rights and a reluctance to team. Some fans go further and place tattoos invest in the team. Interestingly, while groups of their team’s crest or favourite players on of fans protested at various junctures during their bodies. When attending games some fans his tenure of the clubs, attendances were very get their faces painted in the colours of the consistent – selling out to capacity in the case team. Rituals revolve around the stadium of virtually every game. Despite Ashley’s repu- (equivalent to the cathedral in a religious con- tation as a business-person, the club was finan- text), meeting places (bars or at the support- cially sound. Ironically fans heavily criticised er’s club), the seat that belongs to the season him and his senior management team for not ticket holder and so on. releasing sufficient funds to invest in players. The behaviour of such groups or communities of fans does not automatically generate unswerving loyalty and commitment to the club at all times. There may be periods when 4.6 Dysfunctional Fan Behaviour loyal fans become disenchanted by decisions made by the board of directors or the man- Fan behaviour manifests itself in different ager. For instance, when a particular player ways. We have identified the continuum from who has proved to be very popular with the the occasional, disinterested fans at one end, fans is sold, this may engender criticism and to the “die hard” fanatical fans at the other in the worst-case scenario, a decline in atten- end. For the most part fans behave in a dance. This is a mechanism for fans to record responsible, positive, committed and loyal their displeasure. More extreme forms of way. However, on a negative note, team-based 83 4 4.7 · Fans and Their Consumption of Sport sports such as football can also attract fans We need to take a wider perspective as to that clubs could well do without. how fans consume sport. The most obvious The adage that successful clubs breed suc- way is by attending live sporting events. cess is only partially true. They also are likely However, we have to recognise that it is not to attract categories of fans that infiltrate the always possible for fans to make the physical club and use it to promote their own attitudes, journey to the stadium or arena. Even those perceptions and prejudices. who do so on a regular basis will also make In extreme cases this can be seen in violent use of a number of media outlets in order to and aggressive behaviour, often fuelled by engage further with their favourite sport, team alcohol. Sectarianism, racism and other or individual athlete. extreme and non-acceptable forms of behav- Many fans may not attend live sports events iour predominate. In the worst case this but none the less fully participate in watching spreads out to violence and fighting. and engaging with a sport through media out- Wakefield and Wann (2006) carried out lets and technology-based platforms. We might research on the concept of the dysfunctional label this category as “virtual fans”. If we fan and their findings largely support the observe successful English Premier League or above observations – particularly the role that La Liga clubs such as Manchester United or alcohol plays in fuelling such disruptive Barcelona, we can see that they have many mil- behaviours. We should inject a rod of caution lions of fans scattered across the globe. Many with the findings from such studies however. of them will never see a live game involving For instance, they tend to be based on specific their team, (mainly due to geographic location sports in specific cultural and geographic con- or lack of finance to fund trips to the stadia). texts: in this case, collegiate NFL (American However collectively they represent a strong football) sport in North America. source of revenue for such clubs. They buy Sadly, dysfunctional fans have a dispro- merchandise and directly influence the amount portionate influence on club owners and of investment TV and media companies lay league administrators. This is evidenced in out to purchase international media rights some European football leagues where alco- (discussed in detail in 7 Chap. 5). Without hol is banned within the stadium to the gen- such commitment and interest, it is doubtful if eral fan or a “weak” beer is only available. the administrators of these leagues and com- Policing is also extensive and intimidating – petitions could attract the level of funding that particular for the well-behaved fan. Clubs are is generated from this source. fined when dysfunctional fans make obscene The ways in which fans consume sport has chants – revolving around religious bigotry or changed dramatically in the past decade or so. racism. In such cases the vast majority of fans It is likely to change even more so over the suffer because of the behaviour of a minority next decade. What has caused this change? of disruptive fans. EVS (2015) produced a report which identifies two major influences. Firstly, we have to acknowledge the role that developments in 4.7 Fans and Their Consumption technology has played. Secondly, such of Sport advances have led to a shift in fans use of media to engage with and consume sport. In the previous sections we considered the We can also identify the role that increas- concept of the fan, fan motivations and fan ing amounts of and access to data has played behaviour in a group or tribal context. We in shaping the fans expectations. now move on to investigate the way in which Let us put this in perspective. Sports fans fans engage with their particular sports. above the age of fifty would have relied on tra- This is essential for sports marketers. They ditional forms of media to engage with their need to understand how fans (virtual and chosen team or sport. Prior to the late 1980s physical) engage with sport in order to develop football fans in most countries had very limited appropriate engagement strategies. access to live games on TV. Media such as the 84 Chapter 4 · Understanding Fans and Their Consumption of Sport

radio and newspapers were the main mechanisms by which fans engaged with their sport. 55 67% (18–24) prefer smartphones when Some of the larger clubs would produce their consuming sport online own in-house magazines. This provided 55 60% do so on mobile devices another closer link for fans to their clubs. The 55 of those who use smart phones: 60% era of the Internet and social media platforms consult sports news, 49% watch TV did not exist until the mid-1990s for many peo- highlights and 41% watch games that ple across Europe and other parts of the world. are streamed live. 4 We witnessed great variation in the adoption of the Internet. Many regions had (and some still Source: adapted from EVS Report (2015) have) poor connectivity and Internet speeds. Sports marketers and administrators were relatively slow to adopt these platforms ini- These general findings indicate the broad shift tially. However, since the early part of this in direction with growing numbers of fans century and allied to the increasing number of making use of technology such as smart professional marketers entering into the phones to heighten their involvement with sports sector, we have witnessed a major sport. growth in the way in which sports organisa- In terms of what they would like to see tions and fans utilise technologies and social happen when attending live events in sports media platforms to consume sport. stadia and arenas, the following points This has led to a major shift in the way we emerged from the survey and are highlighted

consume sport. Let’s explore this in greater in 7 Box 4.2. detail.

Box 4.2 Desired Levels of Engagement 4.7.1 Change in Direction in the Stadium and Focus 55 73% would like to watch multi-angle replays of key activities on their smart The EVS report (2015) was significant because phones it was one of the first major studies to attempt –– 69% of which would like to do so to study the impact of such technological devel- during the live event opments on sports consumption. The findings 55 48% of season-ticketholders would be reveal major changes in sports consumption willing to pay for the right to access and have implications for sports marketers that replays and highlights during the event we will explore more fully in 7 Chap. 5. 55 83% would be prepared to accept adver- The study interviewed over 1500 fans glob- tising on their mobile phones in order ally to explore the following questions. How to access content. they consumed sport? What they consumed? What they would like to consume? Interviews Source: adapted from EVS Report (2015) were conducted within stadia and in public spaces outside. Some of the key findings are

captured in 7 Box 4.1. We can see from these findings that people are indeed showing clear evidence of multi- tasking during the live event and desiring Box 4.1 How Fans Consume Sport greater levels of content and features in order 55 93% of fans follow sport on TV to enhance their in-stadia experiences. 55 51% of 18–24-year olds multi-task We have highlighted the increasing role while watching sport played by social media platforms such as 55 76% follow sports online Facebook, Twitter and Instagram (to name but a few). 85 4 4.7 · Fans and Their Consumption of Sport

respectively). These studies also indicate that Box 4.3 Social Media Platform Usage the most popular area of content is that of 55 75% (18–24) follow sport on social highlights/on demand video followed by live media platforms (Facebook and Twitter video content, team/athlete generated content mainly): and fan generated content. The same caution- –– of which 24% share video clips ary words about the accuracy of such data –– 52% share picture content prevail: we will see variation across different –– 29% share sports news in text format geographic territories. However, these statis- 55 In terms of consuming sport: tics indicate the criticality of content in terms –– 55% consume video highlights of engagement and a perceptible shift away –– 39% follow their favourite team/ from traditional devices such as TV and radio. player/league –– 35% follow sports news in text format –– 22% watch live streaming of the 4.7.2 Connectedness sports event 55 72% use mobile devices in the sta- It can be argued that fans, because of the range dium. of tools and platforms open to them can become more connected and emotionally Source: adapted from EVS Report (2015) attached than was the case in previous decades. Apps and social media mean that they can engage with the club or sports organisation, the player and fellow-fans. This allows them to

7 Box 4.3 highlights some findings from this share experiences and opinions and become an aspect of the fan’s consumption of sport. even stronger part of the community or “tribe” We have to inject a note of caution when that we referred to earlier in this chapter. interpreting these findings. Clearly this study Ironically it can be counter-argued that was conducted in 2015. The pace of change players are becoming more physically remote moves on and we have to acknowledge that wide from their fans. This of course varies across variations in consumption behaviour are likely different sports. In some cases, such as base- to exist across different geographic regions. ball and NFL in the USA, players engage in The general message from this survey is photo and autograph-signing sessions with that fans are embracing the changes driven by fans. However, in the case of the top teams in technology and data. This is reflected in how the major football leagues in Europe, players they consume sport. Traditional media such as are often protected from intrusions by fans at TV, newspapers and radio are still relevant. We training grounds or after games. should recognise that they too are adapting to Back in the day when players were not as the changing communications environment by well remunerated as they are now, fans could developing new features and content to reflect meet them on the bus or subway on their way the needs of sports fans to connect and engage to the game or socialise with them after the with their chosen team/sport/event. match in the pub. While physical connected- The global fan, despite showing some ness may be in sharp decline many fans con- degrees of variation in usage and application nect virtually with players via Facebook and of the technologies and social media plat- Twitter feeds from them. Virtual connected- forms demonstrates these characteristics to a ness is alive and well and growing. much stronger degree than before. More recent studies (PwC Sports Survey 2018 and 2019) indicate that in terms of the 4.7.3 Empowerment devices that younger fans use to consume sport, 96 per cent use the smartphone, 84 per Fans, because of this greater degree of connec- cent use laptops, while TV and radio still tivity and attachment, can arguably become retain popularity (81 per cent and 71 per cent more proactive in their relationship with clubs 86 Chapter 4 · Understanding Fans and Their Consumption of Sport

and sports organisations. In times of discon- action for many fans as they post short mes- tent over a particular issue (e.g. poor on-field sages, photographs or video clips to friends on performance or weak management) they can social media platforms. leverage this mood of discontent to express Secondly, some fans want to be as fully the collective displeasure of the fan-base with briefed about the teams, competitors and so the management and administrators of the on while watching the event. In the context of club. This can force change simply by virtue of a tennis match, a fan might want to call up the pressure and power exerted by the fans. details about a player’s performance during a 4 set. How many first serves have gone in? What degree of success on the backhand shots? 4.7.4 Drive for Enhancements How did both players fare against each other and Data in previous encounters? TV companies increasingly provide such information at vari- The modern fans would appear to have an ous junctures during the match on the screen. unquenchable thirst for more features and However, fans are making use of tablets or enhancements, largely built around content smart phones where they can access such and information. This is captured in two spe- information as and when they want to. They cific areas: second screening and access to are not dependent on the TV producer to put increased information surrounding the sports up information on the TV screen. event. Thirdly, we see the concept of moment marketing occurring when second screens are used. 4.8 Second Screening This is similar to the concept of in-game betting, where fans can place bets during the

As we discuss in 7 Chap. 5, consumers in gen- game or event as the betting companies amend eral and fans in particular are changing the and adjust the odds in light of what is happen- way in which they watch entertainment and ing on the pitch or in the sports arena. In the sport. No longer are people dependent on the case of moment marketing, companies can television as the main medium for consuming interact with the viewer by posting funny films and sport. A report by Accenture (2015) comments or cartoons that reflect what is hap- indicated that at any point in time 87 per cent pening. Some fans react positively to this and of consumers use more than one device when share that message with fans via their smart watching TV, 61 per cent were expected to buy phone connection. Paddy Power, the Irish bet- a connected TV (Internet Protocol TV). The ting company, is a frequent user of moment message tells broadcasters that they need to marketing. It allows them to engage with their develop multi-platform devices in order to sat- target market and ensure that such messages isfy the needs of consumers. are shared across the fans’ communities. The sports sector is no different and argu- Second screening and its continuing popu- ably this sector is even more driven by fans larity in the future will largely be driven by the making use of multiple devices when engag- content that the brander/sports organisation/ ing with their favourite sport. club pushes towards its users as they watch Second screening refers to this practice of the sports event. Irrelevant or intrusive inter- watching sports events, either live or virtually, ventions are likely to irritate fans and poten- while making use of smart phones, laptops, tially encourage them to visit unrelated tablets and so on at the same time. Why would websites or social media groups to alleviate fans want to do this? their irritation or boredom with the main Firstly, by making use of second screens event. fans can share their passions, emotions and Second screening might be a misnomer for excitement during the event. When the team this practice. Fans of the future may use third scores a goal, twitter or Instagram kicks into or fourth screening devices. 87 4 4.9 · Big Data and How Fans Engage with It

How to Make Money From Second Screening

A major challenge for brands is how to turn Currently, social is still the king when it these engaged second screen fans into paying comes to second screen activity during sports customers, a problem admitted by Arsenal’s events, because it offers fans what they most head of marketing Charles Allen. He told The want from the experience while they are watch- Drum: “B2C is an area of incredible opportu- ing the game. For brands wanting to monetise nity for us. We have hundreds of millions of this activity they have to take this into consider- fans around the world but we have around 2 ation, as anything that feels less authentic and million who transact with us on a B2C basis, so more like corporate money-making will struggle how do we drive that transaction, how do we to win over many users. make our offer through our eCommerce plat- Sports and the second screen remain a tan- form, through our stadium tour business, talising potential market to be conquered, but through our ticketing business more attractive now, several years since the term was first than anything else?” coined, we are no closer to seeing a clear-cut The way Arsenal and other clubs and spon- model for success in this area. However, as sors are looking to achieve this is to utilise their with any audience this size, you can bet that exclusive content and access via social media to marketers will keep on trying to capture our offer second screen fans something they can’t fleeting attentions as our eyes flit between get elsewhere: “The real challenge is getting to screens, and someone will find a way to entice the nuggets that people will really like,” he said. us to spend. “In a world of free, most people can get their (Adapted from Digital Marketing Innova- Arsenal fix out there somewhere, so given that tion. (2017) “The Importance of the second all the content originates from here, which are screen in sport.” 22nd March. Available at

the real nuggets that we hold back for our- 7 https://mporium.com/blog/digital-market - selves? What are the really exclusive bits that ing-innovation/importance-of-second-screen- are ours that will then drive numbers?” in-sport/)

??Do you think it is likely that fans would pay GPS trackers and sensors can capture data for such content? Why? If not why not? on athletes in both training sessions and games. The data collected is fed into analytical engines and the results can provide accu- 4.9 Big Data and How Fans Engage rate data analysis on factors such as speed, with It distance covered, endurance and so on. Wearables are devices that the athlete can We highlighted the importance of access to attach to the body or clothing. These allow data and information in the sports context. coaches to monitor the conditioning of ath- This mirrors what is happening in other sec- letes and tailored training programmes and tors of business such as retailing. In the latter regimes can be devised to improve perfor- case, shoppers and retailers can access and mance. make use of information to aid better The use of such big data analytics (BDA) decision-making and provide more person- tools is extensive in all forms of sport. This alised forms of communications. can be evidenced by the number of staff that Sport has also embraced what we refer to are employed by sports clubs to generate and as “big data”. It impacts on many of the key analyse the data with the overall objective of stakeholders in sport. From a coaching per- improving individual and team performance. spective in many sports, trainers and manag- From a fans perspective, big data allows ers make use of data collected on athletes and them to interact with the sporting event more teams to devise relevant strategies to over- closely – particularly in terms of relevant statis- come the opposition. tics and data that are relevant to the teams and 88 Chapter 4 · Understanding Fans and Their Consumption of Sport

players taking part in the sporting event. Some a prominent part here in terms of generating sports such as baseball and cricket are “top– the material to allow a fantasy sports fan to heavy” with statistics on individual players and select teams, develop a strategy, monitor the teams. Some fans enjoy interacting with such opponents and make decisions on transfers data in order to enable them to immerse them- and purchases of relevant players. In essence selves more fully as the action takes place either some of the fantasy games that have been virtually, via main and second screens, or developed allow the fan to proactively play through live participation at the event. the role of the manager or coach and experi- 4 Fantasy sports and leagues represent a ence the joys and despair that managers expe- very significant growth area where fans can rience in the flesh. further expand their immersion into specific We should not underestimate the number sports. Larkin and Fink (2016) in their review of players involved in fantasy sports. For of the extant literature posit the view that fan- instance, in the USA and Canada it was esti- tasy sports sit easily alongside a fan’s identity mated that as of 2014, around 40 million play- with a particular team or sport. Big data plays ers were actively involved (FTSA 2015).

Big Data and Fantasy Sports

Fantasy Sports – Paving the Way for Analytics player related data and making adjustments is It’s not only professional sports that’s generating another use of online data. revenue, fantasy sports are making their name as nearly 57 million players are participating in this Sports Betting – Free Markets at Work activity. Big Data has boosted the growth of fan- Online sports are a billion-dollar industry that is tasy sports, a true skill game based on live statis- becoming bigger and bigger every day. It’s being tics. FanDuel and Draft Kings, two huge players transformed by Big Data and people are trying to in this business have partnered with several win money by betting on sports. This is because a sports organizations. Extracting data from these lot of sports outcomes can be determined by websites is a potential avenue to see how players stats. Sites such as SharkScope gather data from will perform in the future. millions of poker games daily and give data to Suppose a data analyst needed information players all around the world. Websites such as about players to create a fantasy team. The these are about historical data of players and data available could be used to build models for monitoring the overall performance to make pre- the standard performance of players over a dictions in succeeding games, so there will be period of time. You could also use the data to plenty of potential for collecting data. analyse your rival team such as their play his- Source: Adapted from: Sports data: The tory, past tactics and movements. This data can rise of big data and analytics 2017. Available at help to select teams or predict the outcomes to 7 https://www.scrapehero.com/sports-the-rise- a reasonable degree. Reacting to real-time of-big-data-and-analytics/

4.10 The Fan Going Forward Before we address this question, we should acknowledge at the outset that we cannot be In the previous sections of this chapter we predictive about what will happen. We can have examined fan motivations and behav- only consider present evidence and project iours. What about the future? We have forward. The fluidity of social media plat- witnessed major changes in the manner with forms and technology development suggests which fans consume sport, engage with sport that many changes are the order of the day. and connect with their favourite teams, sports Platforms such as Instagram and Snapchat and athletes. Are we likely to see a similar rate did not exist 10 years ago. They are likely to be of change going forward over the next superseded by more sophisticated tools as we 10–15 years? move forward. 89 4 4.10 · The Fan Going Forward

In this section we focus on the fan. We will future we will see much more extensive and explore the implications for sports marketers sophisticated use of personalised camera tech- in far greater detail in 7 Chap. 5. nology. For instance, the viewer, on the first or second screen, will be in a position to stick with a preferred cyclist and focus on that indi- 4.10.1 Key Drivers and Trends vidual. We will see increasing use of 360-degree systems to provide the viewer with person- A detailed report produced by Canvas8 (2016) alised and enhanced viewing. provides us with some insight into the future Smart, internet TV sets are beginning to fan. It identifies the key influences that will increase in sales and popularity (although we shape the fan of the future and in this section, should acknowledge that this varies across we can consider some of the more salient fea- geographic regions). This will extend further tures of this report. over the coming decade and fans will be able to experience more extensive and sophisticated 4.10.1.1 An augmented and degrees of personalisation as to how they use enhanced viewing the features. We will see greater synchronisa- experience tion between the TV and the other devices. For Augmented and virtual reality are presently instance, second screens will provide the viewer used in various industry sectors. We can expe- with more detailed data tracking of individual rience this with retailers in the context of vir- athletes or players throughout the game. tual changing rooms and window displays. In Within the stadia we will also witness greater the context of sport, we will see greater use expansion of tools and technologies to enhance being made of such technologies to enhance the fan experience. Currently, as I write this sec- the viewing experience for the sports fan. tion, the Levi Stadium in San Francisco is argu- Virtual reality refers to the use of com- ably the most connected sports stadium in the puter technology to provide the viewer with a world. For the 2016 NFL Super Bowl it laid simulated experience. In other words, you are around 400 miles of cables to manage the Wi-Fi presented with a totally different reality to the system. During the event it transferred over 10 one that is in front of you. For instance, you terabytes of data across this system. Using apps, could explore the layout and features of your fans attending the event spent an average of $88 favourite football stadium, using appropriate on food and beverage. headgear, within the privacy of your own This level of technology will extend bedroom. to manage and address key issues such as Augmented reality provides an enhanced enhancing the quality and level of atmosphere version of current reality by using computer and passion. technology to add digital information on a The Canvas8 report (2016) notes that sta- particular image that is displayed on your dia of the future will be part of a wider pack- smart phone or tablet device. age that will merge with retailing, tourism, Such tools will be used more extensively by entertainment and leisure. They cite the exam- fans. It will allow them to switch their focus ple of a recent partnership between Major during a game. For instance, when viewing a League Soccer (MLS) and Tinder in the tennis match, the fan can focus on the on-court USA. This focused on an initiative whereby activities and interludes court-side or focus on fans who are single could connect with others, the movement and shots of one of the players. allowing them to meet up with the possibility Advances in camera technology will also of discovering love! augment the fans experience. We already see Fans will also make greater use of tools this in sports such as rugby, cricket, cycling such as FanCams to capture 360-degree angles and horse-racing where TV producers make and send them in real time to their followers use of on-bicycle, stump and drone cameras. via social media platforms. This is already This currently provides the viewer with an happening but will grow exponentially over opportunity to see what the cyclist sees. In the the next decade. 90 Chapter 4 · Understanding Fans and Their Consumption of Sport

4.10.1.2 The proactive fan trend is likely to increase substantially in the Presently, we are witnessing a change in the coming decade. relationship between fans and their favourite Fans will demand more content, features teams. Increasing use of social media net- and engagement from the clubs as they engage works means that fans do not see themselves with their sport. They will no longer be willing as passive recipients of communications and to accept the restrictive subscriptions that decisions that are fed down to them from the they have to take out with Pay-to-view broad- owners and Directors of teams and leagues/ casters such as Sky and ESPN. Currently we 4 competitions. They want to play a more pro- are witnessing changes in how people pay and active role. In the future we are going to see access such material. greater interventions by fans in areas such as As we note in 7 Chap. 5, the fixed monthly ticket price decisions, player and manager subscription, so beloved by Sky is being loos- signings and media rights deals. ened up to include options such as the “day- Fans no longer want to passively watch the pass”, Sky on the Go and pay on a game-by- event, they want to experience it “first-hand”. game basis. This is currently evidenced in many different The arrival of other players such as sports. For instance, large numbers of cycling Amazon, Yahoo, Snapchat and Facebook to fans (who also pursue recreational cycling) this market space is also likely to see changes in want to replicate some of the routes experi- how fans will access games and competitions. enced by the cyclists during the event. We are also witnessing other initiatives. Currently there is a big tourism market for Operators such as WWE Network in the USA, third-party operators who create this oppor- provide subscribers (around $60 per month) tunity for people willing to pay for the privi- unlimited access to all the sports events. lege. Sports such as Formula One, the English In the future such immersive experiences Premier League and UFC are exploring oppor- can be developed through virtual reality tools, tunities to sell their events and fights directly to particularly as the technology improves and fans. becomes more user-friendly. One of the big- Will we see individual teams and/or sports gest obstacles to the greater adoption of VR entity holders continue to cut out the middle- and AR is the need for individuals to place man (TV operators) and go over the top cumbersome equipment on their heads, this is (OTT) and sell directly to their fans? It is likely off-putting to many. However, this is likely to that at some point in the future, fans will pre- change with advances in design. fer to purchase a virtual season ticket from Fans are increasingly looking for extra their club to enable them to watch every one content to supplement their viewing experi- of their regular season games. ence. Many of them want to “go behind the scenes” and learn more about their favourite 4.10.1.4 Goodbye to ordinary: hello players, what happens on the training ground to luxury and so on. Media broadcasters are increas- One of the interesting predictions emanating ingly investing in creating content-based from the Canvas8 (2016) report refers to the material and developing narratives to satisfy probability that the average fan is likely to be this demand. priced out of attending live sport. Hopefully this is inaccurate but even now the evidence 4.10.1.3 The 24/7 fan points to that direction. Fans of the future will be even more disposed Despite revenue streams soaring from and demanding in the context of more con- sponsorship and media rights, ticketing strat- stant engagement with their favourite teams egies are also rising, particularly in the case of and athletes outside of the actual games or the successful team with a large, global fan- competitions. ESPN estimates that two-thirds base. While sports entity-holders are receiving of its audience access its material and sports heavy criticism from many quarters about coverage exclusively via mobile devices. This their apparent indifference to the fan, the real- 91 4 4.10 · The Fan Going Forward ity indicates that with a few exceptions such There is a danger that for the top games and negative comments are being ignored. competitions, the ordinary fan may be priced out The quest for enhanced and unique experi- of the market. As fans with higher incomes seek ences at live sports events is not likely to come ever-more personalised and intense experiences, cheap. As we shall see in 7 Chap. 5, sports clubs and sports bodies will have to make appro- marketers currently (and even more so in the priate changes to their “product”. It will also be future) are investing in the stadia infrastruc- potentially advantageous for them as such fans ture to cope with the heightened demands and will be willing and capable of paying for such expectations of fans. Such investment is likely experiences. Source: adapted from The Future to impact on ticketing prices. of the Sports Fan 2016. Canvas8: Performance We will more than likely see more focus on communications. Available at: 7 https://www. fan segmentation with resulting diverse areas of fotball.no/globalassets/domer/the-future-sports- the stadium to cater for the different categories. fan_spilleregler_english.pdf

Enhanced Fan Experience

In 2017 Manchester City; the English Premier Creative individuals have developed their League team created a £7500 category of sea- own personalities by playing v-games and son ticket. For this princely sum, fans are pro- e-games on channels such as YouTube. They have vided with a much more focused engagement created such a persona that American franchises with the team and coaches at match-day. and football teams in Europe have recruited them Both teams can be observed by these fans to promote them online. The EPL team: West through a glass tunnel as they emerge for the pre- Ham United recruited Sean “Dragoon” Allen to game warm up exercises. Interviews with home represent them at FIFA events. players are exclusively broadcast to this group. As technology and software continue to Members of the Manchester City coaching will develop in terms of sophistication and interac- discuss the rationale behind the match tactics tion, e-games and v-games will continue to also before the game. grow in popularity. They also present even These initiatives together with immersive greater opportunities for revenue streams for VR and 360-degree features highlight the way sports organisations, clubs and athletes (The forward for sports clubs as they try to satisfy Future of Sport Report 2016). the appetite for fans who are willing to pay. We Allied to the growth in e-games and are likely to see further and more sophisticated v-games we can also see the emergence of initiatives over the next decade. new games. Some based on fictional events. 1. The inexorable rise of e-sports For instance, the sport of Quidditch featured in many of the Harry Potter novels which eSports are essentially video versions of vari- were written by J. K. Rowling. Since the suc- ous sports. It is currently (2017) the biggest cess of these novels and subsequently the game in the world with people globally spend- films, the game has evolved into something ing around 1.5 billion hours watching which is played by many people worldwide. It Activision games being played. is a gender-inclusive game – no more than In the USA market for e-games women make four players (in a team of seven) can be up almost fifty per cent of the gamers. This trend males. A case perhaps where fiction becomes was reinforced in 2014 when FIFA added its wom- faction? en’s teams to console play. Within 3 weeks the This development is an example of how American striker Alex Morgan’s alter ego scored sports can evolve from fantasy to an actual over a million goals. sport that is played and watched across many FIFA is the biggest seller across the sports countries. We are likely to see further develop- (as of 2016). In that year over 2.3 million interac- ment in terms of cross-overs from games that tive World Cup qualifiers were played on screen have been devised initially as e-games, to main- and over 9 million games were played per day. stream sports. 92 Chapter 4 · Understanding Fans and Their Consumption of Sport

4.11 Conclusions ing. In essence they want to be part of and connect with their special community of fans. In this chapter we have placed the fan as the As we noted, this is reflected in the shirts they unit of analysis for our discussion. This is wear, their painted faces and tattoos, their critical for sports marketers as they strive to chants and so on. New technologies and social put in place programmes and strategies that media platforms act as enablers to allow such resonate with their key stakeholder. bonding and connecting to occur. Fans, in some ways, behave like typical Going forward, we are likely to see improve- 4 consumers but the nature of sport and its ments in existing technologies and the emer- associated characteristics ensures that certain gence of new ones. Fan expectations are rising facets of behaviour are different. The passion, and centre on more immersive experiences that excitement and fierce loyalty that drives fans bring them ever closer to the action taking to a particular team, competition or sport place in the stadia and arenas. This applies to ensures that for many of them they remain both the fans who attend live events and those loyal come what may. This means that they do who choose to do so from a virtual location not necessarily display the tendency to switch (home, office, with friends or on the move). to another team or sport, as is the case with The convergence of big data alongside the traditional consumers. In the latter case it is use of tablets, smart phones and laptops easier to switch to another brand. encourages a growing number of fans to We assessed the different categories of engage with their sport by making use of sec- fans and considered the importance of fan ond screens. Increasingly, service providers retention and fan development; in the latter are bypassing traditional broadcasters (OTT) case of new segments. and supplying a range of material to heighten We considered the key motivations behind the experience for the fan. We are likely to see fans attendance at live sports events and have more of this over the coming decade. identified some key influences. These ranged The traditional way in which pay-to-view from family influences through the concept of broadcasters sell their sports package will also eustress (a mechanism for enjoying stress and change (we discussed this in more detail in escaping from the everyday pressures that life 7 Chap. 5). Fans are likely to seek more flex- brings to them). ible and less restrictive ways of gaining access We observed that fans are no longer pas- to view their favourite teams and athletes in sive recipients of information and communi- action. The idea of fixed and rigid monthly cation from clubs and sports entity holders. payments to purchase a full package of foot- Instead many fans want to be more proactive ball, cricket or rugby will change. It is possible and take control of aspects of their relation- that in some sports, the sports entity holders ship. may set up their own channels to sell and dis- We assessed the changing ways in which tribute their products to fans globally. fans consume sport. While traditional consumption centred on newspapers, TV and radio, the modern-day fan makes use of a Learning Outcomes range of tools and platforms to engage with 55 Many fans display a degree of commit- their favourite teams, athletes and sports. ment, passion and loyalty that is diffi- The growth of social media and digital cult to replicate in other business sectors marketing has changed the landscape for fans. 55 Fans, in many cases, are no longer seen It is far easier now for them to interact, share as passive recipients of communica- and discuss their experiences with fellow-fans. tions and entertainment: they want to While this is happening in all business sectors, play a stronger role in their participa- it is particularly important within the sports tion and engagement with clubs and sector. Fans in many ways have been the prime athletes practitioners of tribal or community market- 93 4 4.11 · Conclusions

??End of Chapter Discussion Questions 55 Social media has provided the glue to 1. Assess the view that sports fans are allow such interaction to take place not really consumers in the true sense 55 Technology has encouraged further, of the word. Use examples to support more immersive, experiences for fans your point of view. both at live events and in locations 2. Examine why it is important for sports where they engage in a virtual environ- marketers to have a good understand- ment ing of how to segment fans into differ- 55 Modern fans are as likely to view a ent categories. sporting event or spectacle as entertain- 3. Evaluate the extent to which you would ment. This is a broader view than what agree with the view that the overall the traditional fan once held. Sports like entertainment spectacle has overtaken darts and cricket have recognised the the actual sporting event in terms of benefits of investing in additional activ- importance. Use examples by way of ities to complement the action taking illustration. place in the stadium or arena 4. Some commentators argue that 55 Big data and second screening are gain- technology has allowed fans to become ing in popularity with fans globally, more empowered and proactive in their particularly in the case of younger fans relationship with their favourite teams 55 Fans following sports, either live or vir- and athletes. How valid is this perceptually are likely to seek extra material in tion? Use examples to support your the shape of video, multi-angle clips and point of view. picture-on-picture to augment their 5. Second screening has gained in popu- direct engagement with the event. larity in recent years. Examine this Content management will play an concept and assess likely future trends. increasingly strategic role going forward 6. Virtual and Augmented Reality have 55 More and more service providers will not really gained popularity with fans provide material OTT generally. Why is this the case? Discuss 55 New sports in the area of e-sports and how they can be made more relevant fantasy sports will grow further in terms for sports fans in their consumption of of participants and fans over the com- sport. ing years. E-sports in particular, will 7. Television still plays a prominent part overtake and usurp many of the estab- in the way in which fans consume lished “traditional” sports sport. Assess its relevance as we project 55 Shorter attention spans are likely to forward over the next 10–15 years. force changes in the duration and com- 8. Examine the extent to which you would plexity of traditional sports. Possible agree with the view that the ordinary dangers that might accrue from “dumb- fan (lower levels of income) is being ing down” to attract new fans need to priced out of the top sports events and be counter-balanced by making the par- league games. Use examples to support ticular sport or event more relevant for your view. the younger fans. Sports such as golf are grappling with this challenge as membership of golf clubs is declining in many parts of the world. 94 Chapter 4 · Understanding Fans and Their Consumption of Sport

Appendix

Flying Arrows

Introduction 2017 witnessed the tenth anniversary of the The sport of darts has undergone a transforma- event at the Alexandra Palace: more commonly tion since its emergence on the scene as a popu- known as the “Ally Pally”. Key performance lar TV form of entertainment in the 1970s and indicators such as increased ticket and mer- 4 1980s. Back then, despite its popularity with TV chandise sales, increased levels of promotion, viewers, many people queried the status given to higher TV viewing figures and live attendance it as a sport. Sponsorship was dependent on plus increased prizemoney for the players, are tobacco companies. The top darts players epit- testament to its enduring success. omised everything that was not associated with On a wider level the image of darts as a an athlete: such as a large beer gut and no sem- sport has also reinforced its emergence as a blance of taking part in any form of exercise. popular TV sport. A sports integrity index They merely lifted their pint of beer, took a sip undertaken by Portland PR Company indicated and then threw the arrow (dart). Due to the that darts topped the poll in terms of people’s banning of tobacco sponsorship and declining perception of it as clean sport, untainted by TV viewers, the sport appeared to slip into scandals, corruption and cheating. decline as a major TV sport. TV viewing figures rose impressively over It has to be said that it still retained its pop- the past decade since the re-location and re- ularity as a social, pub-based sport throughout vamp of the World Championships. It peaked the 1970s and 1980s in the UK. However, in the in 2016 when it captured a viewing audience in last couple of decades there had been a notice- the UK of 1.7 million. It has also expanded its able decline in darts-playing: many pubs and popularity to other European countries such as bars no longer have a dartboard on their walls. the Netherlands, Belgium and Germany. The In 2007, Barry Hearne, a well-known, emergence of players such as Michael Van London-based boxing and snooker promoter, Gerven (2017 champion) created major interest spotted the potential of renewing darts as a TV in his home country (Netherlands). Successful sport and invested time, money and energy in players on the tournament circuit from rejuvenating the sport. He believed that darts Germany, Belgium and Scandinavia means that could be repackaged as a form of sports enter- TV viewing figures have risen impressively. tainment which could benefit also from the The 2016 championships generated figures razzmatazz associated with boxing (where he of 1.8 million in Germany and over 2 million in originally made his money). He also moved the the Netherlands. In the latter case, the TV view- Professional World Darts finals to the ers constituted around 12 per cent of the popu- Alexandra Palace; an iconic venue for confer- lation of the Netherlands - an impressive ences, concerts and sport in the city of London. statistic by any measure. Around this time, the legislation loosened The capacity at the Ally Pally is 3000. Seats up in the UK to allow betting companies to for the two and a half week extravaganza sell advertise their value propositions on tradi- out in the space of a day for the daily sessions: tional media such as TV. Opportunities also afternoon and evening. The promoters are con- existed to attract such companies to the area of templating moving the event into the main hall sports sponsorship. Darts fitted into this realm: in the venue. This would double the capacity to it was a popular working class sport played by around 6000 for the 2018 championships. people who also liked to place a bet on horses Across Europe Hearn points to the success and football and enjoyed a good night out in of darts, through capacity audiences in 3000 to the pub. 4000 seater venues. Ten years ago he states that 95 4 Appendix

he would struggle to sell fifty tickets in advance Championships which takes place over a two of the event and another 50 might be sold on and a half week period before and after the day as “walk-up”. Further evidence of such Christmas. The competition stops for a couple European interest can be found in the statistics of days over the festive period. which show that 7500 German fans bought tick- The importance of darts in the Sky portfo- ets for the 2017 championship. Likewise over lio is evidenced by the recognition that it 4000 Dutch fans snapped up tickets as well. receives from gaining a “pop-up” channel for TV channels such as RTL7 in the the period, that is a channel that is dedicated to Netherlands, Eleven Sports in Belgium and darts throughout. Sports 1 and Dern in Germany have helped by While audience figures are always subject to allocating space for TV coverage of local cham- debate and conjecture, the British Audience pionships and competitions. Increased viewing Research Board’s figures indicate that darts is figures attract TV coverage. TV coverage the second most popular sport after football on attracts sponsorship. This leads to a virtuous Sky television. circle of increasing revenue pouring into a sport and increased prizemoney for the players. The Fan Experience The sponsorship of the world champion- The success of darts over the past decade, ship by William Hill is perhaps unique in rela- nevertheless, still raises questions about tion to major sports events. While global sports whether or not it is a form of entertainment or competitions such as the World Cup, Olympics a sport or probably a mixture. Let’s examine and so on go for multi-partner sponsorship the way in which the event is shaped and cre- deals (rather than one exclusive one), the ated in more detail. Professional Darts Organisation signed a six- The marketers behind the World year exclusive deal with William Hill. Currently Championships first and foremost regard the it is half-way through a six-year sponsorship, event as an extravaganza of entertainment. which will be reviewed in 2020. When we bear in mind that all of the darts We can witness its growth in countries out- action takes place within a physical space of less side of Europe also. Hearn estimates that than five metres, one has to question how close around 132 countries covered the 2017 event. the spectator can actually get to the action. This He cites examples of ESPN in North America, is addressed by a range of big screens and TVs. ESPN LatAM in South America, CCTV in However, to engage the audience and create an China and Dazn Sport in Japan. In addition to atmosphere, more has to be done to generate a the actual coverage, it can be argued that this positive experience for the fan. ultimately should help to promote the sport The first point to note is that the darts leading to increased participation and ulti- matches are only a very small part of the pro- mately players who can compete and win major cess. When entering the venue, the fan is intro- tournaments. duced to a wide range of eateries: from the The key to the success of darts in the UK traditional burgers, fish and chips through to and the Republic of Ireland has been Sky tele- German sausages. Beer is a crucial part of the vision. event and clearly helps to generate the frenzied Darts does not fit into the typical sport that atmosphere. Beer supply points are clearly Sky covers in its portfolio. It does not have the signposted and comprehensive. Fans can buy week-to-week appeal of sports such as football beer tokens when entering the venue. This or rugby; where there is a definitive season and speeds up the process for ordering and receiv- the story unravels each week in the form of ing beer because no cash needs to be taken at “Super Sunday” games and where a consistent the selling point. Beer is sold in large contain- narrative can be developed surrounding teams ers, again to speed up the process and reduce and players. While Sky covers a number of the number of visits that people have to make darts events, the prime one is the World to the vending points. 96 Chapter 4 · Understanding Fans and Their Consumption of Sport

The sponsor, William Hill (betting com- Typically the evening session commences at pany), activates its sponsorship by engaging 7 pm. However, fans enter the hall for this ses- with fans via competitions around the periph- sion around 5.30 pm: there is plenty of time for ery of the auditorium. Fans can win a tee shirt them to lubricate their throats and create a if they can achieve a certain score by throwing jovial and friendly atmosphere. There is little or three darts. no danger that this could break out into fight- They also dole out thousands of banners ing and rioting (as can happen in other sports). 4 with “one-hundred and eighty” on them: fans It is difficult to be accurate as to why this wave these banners when the darts player should be so. In the main, it is probably due to achieves the maximum score with three darts the fact that nobody takes it seriously. Indeed (an increasingly frequent occurrence due to the fans are happy to be seen to make fun of them- skill levels of the players). They also provide selves and their colleagues. blue Santa hats to all those who enter the venue. As the night wears on, the chanting and Fancy dress is a ubiquitous element of this singing becomes even louder. In between sets event. A very high percentage of fans dress up the music is pumped louder and louder as well. in a bewildering array of outfits. Sky television The big screens act as a point of focus as the plays its part by frequently panning in on fans fans follow the fortunes of the players. This during gaps in the games. ensures that engagement takes place and mark- The venue is laid out in different ways to edly reduces the dangers of fans becoming dis- cater to the different segments of fans who tracted by the singing and other activities. come to the event. There is a family enclosure, Maximum scores are cheered to the echo. The corporate hospitality centres, tiered seats announcer (the person calling out the scores) towards the back of the hall and drinking stands beside the players and also engages in tables for fans to watch the action on the big frantic shouting out as each three-dart score is screen. recorded. This also whips the crowd into a There is also an area where fans can pose frenzy and heightens the atmosphere: especially for selfies with players (both past and present). when a maximum score occurs or when the Pinching concepts from boxing, each final “double” is thrown, to win a leg, set or player, accompanied by female models enters match. the arena via a catwalk, with bright lights flash- All of the action and live viewing takes ing and individual signature tunes to capture place in a situation where it is not visible to the their personalities. Many of the top players are naked eye: the big screens address this issue to allocated a personal piece of theme music to some extent. It allows fans to track the throws emphasise their identity and brand. This is an of the arrows and engage with the match important aspect of marketing, as fans have between the two competitors. The event attracts high levels of recognition and engagement with females as well as males: it is not made up of an individual players. exclusively male audience. Narratives and caricatures are developed. For TV viewers the quality of the coverage We have Phil “The Power” Taylor, “Barney” takes them even more close to the action. The aka Raymond van Barneveld and Gary camera focuses on the board and with technol- Anderson aka “The Flying Scotsman”. The ogy improvements such as HD and Ultra arrival of the players, allied to the glamour, vision, the viewer can replicate the view that the lights and music drives the fans into a frenzy of actual player commands of the board and the passion and excitement. This is further height- shot that needs to be executed. ened by the dress sense: gorillas, teletubbies, Further challenges for the promoters of carrots, and tutus to name but a few of the out- darts revolve around developing key markets fits. The beer encourages the fans to sing and such as North America, China and India. chant, similar to what we might experience in a These regions are vast in terms of population football stadium. and the demographics that darts appeals to. 97 4 Appendix

Will we see a Chinese or Indian World Darts players and one of them has contested the champion by 2025? World Championship Snooker final. Snooker: a sport that Barry Hearn has also At the moment it is a case of “onwards and been instrumental in rejuvenating, has made upwards” for the sport of darts and its flying major inroads in China, India and Eastern arrows. Europe. China has already produced a number (Source: Developed by the author) of players that rank consistently in the top fifty

??Discussion Questions 3. To what extent do you feel that cultural 1. From your understanding of what influences predominate in the case of motivates fans to watch and attend sports darts from the perspective of making it events, how would you assess motives of attractive? the darts fan who attends this event? 4. Can you envisage the sport of darts 2. Assess the view that the event and its gaining in popularity in countries such focus on entertainment means that the as China and India? actual sport plays a peripheral role.

RIO Olympic Games and Fan Consumption Patterns

Introduction product relevant for the younger generation of The increasing emergence of new technologies sports fan going forward into the coming and tools to consume sport is undoubtedly decades. changing the way in which fans will continue to From the survey of fans across the thirteen engage with their favourite sports. This has countries over half of them stated that they major implications for sports marketers and were either interested, very interested or pas- organisation as they try to remain relevant to sionately interested in the Olympics, with the their present and future generations of fans. 25–34 age bracket displaying the most interest. This case is based on a study commissioned More worryingly, those in the 18–24 age group by the SportBusiness Group and the Budapest expressed the least interest. Many people argue 2024 committee. We look at how fans, across that the consumption patterns of this group thirteen countries, engaged with the Olympic will change as they move from teenage through Games of 2016 which was held in Rio de university and then onto marriage and parent- Janeiro. The data was collected from a survey hood. Likewise their interest in sports tends to of 1000 fans (over eighteen) in each of the thir- fluctuate. teen countries. The countries selected were as A key challenge in appealing to sports fans follows: Australia, Brazil, China, France, with respect to the Olympics is that it takes Germany, Great Britain, India, Italy, Japan, place every 4 years. What happens in between? Russia, South Africa, Spain and USA. These With the World Cup, people’s interests are con- countries represent thirteen of the largest stantly being cultivated by the qualifying games sports markets in the world. which runs for 2 years prior to the staging of The Olympic Games is arguably the biggest the finals. Fans are constantly being drawn to sporting event in the world. It is held every these games and the involvement of their 4 years. While the World Cup Finals also has a national team and favourite players. It is diffi- similar global footprint: it focuses on only one cult to connect and build relationships with sport. The summer Olympics caters for around sports fans who are interested in the Olympics. twenty-eight separate sports. The other challenges revolve around the The potential challenge for the International high levels of bad publicity and negativity Olympics Committee (IOC) is to keep their about the various scandals which appear to 98 Chapter 4 · Understanding Fans and Their Consumption of Sport

constantly overshadow the event. Cheating; diversity of different media for communica- mainly through doping has been a constant tions and social engagement. One commenta- over the past 30–40 years (exploding in the tor described the last three Olympics in the 1988 Olympics with the disqualification of Ben following way. Johnson in the 100 metres final). Since then it “Beijing was the first HD Games, London has been proved that six of the eight athletes the first digital Games and Rio was the first who competed in that event failed a drugs test. social Games” (p 26). 4 Many fans have become cynical about On-demand content was very popular many of the events in the Olympics. This has across the thirteen countries. This allows fans to led to a loss in trust and confidence. Are we see- view events not necessarily when they happen ing genuine winners or cheaters? but when they want to see it. In a multi-sports Other criticisms of the event surround the format, this provides fans with the opportunity way in which cities are asked to bid to stage the to catch up with events that are lower down in event. The costs of hosting such an event: with terms of their priorities while focusing attention the requirement for many stadia and arenas to on a particular event that they want to see cover the events, often leads to countries and “live”. The 18–24 age bracket favoured this cities generating large levels of debt. Ultimately, method much more than their older counter- the tax payer has to pick up the bill. The many parts. Also, watching it with friends was most predicted benefits accruing from staging the popular in eleven of the thirteen countries. games often do not meet expectations. While live viewing is still the most popu- It is against this backdrop that the IOC has lar, on-demand is making inroads and going to consider its approach to retaining and build- forward it is likely technological developing its fan-base globally. In order to do so they ments will make it an even more significant need to make an assessment of consumption channel. patterns across the main markets. Live streaming of events will also continue to grow in importance. This is not just confined Channels to tablets, laptops and smart phones. More During the Rio games, seventy-three per cent of advanced streaming also allows it to be used on fans watched coverage of the games on conven- bigger screens. It is also likely that fans will tional TV channels. This was less so in the case of expect a range of extra features to augment the the younger segments - where the smart phone fan experience. These might include multiple live was used to a far higher degree, with forty-three streams, picture-in- picture, in-app alerts, multi- per cent of the 18–24 group using this channel. angle content, synchronised video and data. Ultra HD was seen to be more relevant These developments are shaping the way than Virtual and Augmented reality. people use second screening when they are In the context of digital tools and social watching the main event. Interestingly, it would media platforms, 59 per cent of adults across appear that fans watching sports events on the the thirteen markets found them to be interest- primary screen (e.g. TV) are less likely to ing and compelling during the Rio games. The change channels when the ad breaks arrive. 18–24 segment found these platforms more This does not mean that they passively watch compelling than their older peers: 66 per cent of such messages, they are more likely to engage them found it either interesting and compelling with their second or third screens. as mechanisms for engaging with the games. Fans are more likely now to watch events Facebook was the most used of the social from the Olympics at locations other than at media platforms in eleven of the thirteen coun- their homes. This varies across the thirteen tries. Other popular platforms were Google +, countries. For instance, in China, 59 per cent Instagram, Snapchat and Twitter. watched events from the Rio Games while they The multi-sports feature of the Olympic were travelling. Also in China, 63 per cent Games highlights the importance of having a watched at work. 99 4 Appendix

Over the top (OTT) will also enhance the Advertisers push video content as a key to experience for fans as they engage with second drawing fans to specific sites and platforms. and third screens. This refers to the situations Social media platforms provide them with a where a streaming content provider can sell or rich vein of information on the fans behaviour provide a range of audio and video services to and preferences in real time. They can respond fans without having to go through traditional quickly and intervene with personalised mes- broadcasters and subscription channels. sages and content. This will further the immersive experience for fans. This is a critical consideration in the New Technology Olympics where individual athletes may be rep- The responses of fans across the thirteen coun- resenting a fan’s country in a certain event. tries was decidedly mixed with respect to AR That fan may want to engage exclusively with and VR technology. The main reason for this that event. The introduction of such a wide negativity was based around the headgear and range of material and support data helps fans “wearables” that were required to access and to shape their experience. make use of them. A key issue, which has yet to be fully On a more positive note, around fifty per cent addressed and overcome by technologist, is expressed the view that they would be interested that of synchronisation. OTT material and live in using such tools to watch Olympic events. This coverage on the main screen are not in synch. suggests that if the “wearables” can be improved This is irritating and clearly degrades the expe- then more adoption is likely. The 18–24 age rience. Going forward to future Olympics it is bracket expressed greater interest in using such likely that this will be resolved with more tools than the older segments. However, they sophisticated technology being applied. were the most negative in their responses about having to wear cumbersome headsets and gog- Social Media gles. It is possible that such tools will be seen as The Rio Games pushed social media to the supplemental to those that create and shape the forefront. As mentioned earlier, Facebook experience for fans. Something similar occurred proved to be the most popular channel across when 3D was introduced to sport and cinema. the countries (China was excluded due to some Fans saw little merit in adopting them and of the channels not being available there). instead almost viewed them as obstacles to the Content is key to social media. It provides reality of enjoying the experience. the glue through which people consume, share Gamers are very comfortable with using and discuss with their friends. In the case of the headsets. It is possible that this may expand to Rio games the most popular provider of content the consumption of more mainstream sports was the official Olympic Games broadcaster. such as the Olympic Games. Over 60 per cent of the 18–24 bracket found In summary, the Rio games moved the individual athletes to be inspiring. Their agenda forward for numerous developments accounts proved to be popular sources of refer- including second screening, digital and social ence. Other sources proved to be less popular. media, particularly so in the latter case. These included brands, independent websites Fans expect immersive experiences as they and bloggers. No one form of content domi- engage with the Olympic Games. They require nated across the countries. content in the form of video, extra features and Again the multi-sport nature of the Olympic data to enable this to occur. Second screening is Games poses challenges for those who manage on the rise but there are mixed signals about social media content and channels. Traditionally, AR and VR technologies. a competition is centred on one event. Twenty- (Source: adapted from: SportBusiness eight different sports means that there are Group (2017) The Future of Olympic Games potentially twenty-eight different sets of sports Consumption (2024) produced in association fans: each with specific needs and requirements. with Budapest 2024.) 100 Chapter 4 · Understanding Fans and Their Consumption of Sport

??Discussion Questions Madrigal, R. 2002. Social identity effects in a belief- 1. Are we witnessing gradual and radical attitude-intention hierarchy: Implications for corporate sponsorship. Psychology & Marketing. 18 (2): change in the way in which fans engage 45–165. with the Olympic Games? Performance Communication. 2016. The future of the 2. Assess the implications for the market- sports fan. ers and administrators who work for Pimentel, R.V., and K.E. Reynolds. 2004. A model for the International Olympic council. consumer devotion: Affective commitment with proactive sustaining behaviors. The Academy of 3. In your view is the IOC being proac- Marketing Review 5: 1. 4 tive enough in responding to changes PwC Sports Survey. 2018. How to call the shots in tran- in fan behaviour? sition. Available at https://www.pwc.ch/en/insights/ 4. What recommendations would you sport/sports-survey-2018.html. make to senior management? ———. 2019. Sports industry: time to refocus. Avail- able at https://www.pwc.ch/en/insights/sport/sports- survey-2019.html. Richardson, B. 2004. New consumers and football fandom: The role of social habitus in consumer behaviour. Irish Journal of Management. 25 (1): 88–100. References Samra, Balvant, and Anna Wos. 2014. Consumer in sports: Fan typology analysis. Journal of Intercul- Accenture. 2015. Digital video and the connected con- tural Management. 6 (4): 263–288. sumer. Smith, A.C.T., and B. Stewart. 2007. The travelling fan: Agas, Konstantinos, and Chrysanthi Georgakaraku. Understanding the mechanisms of sport fan con- 2012. Travel abroad internal and external motives sumption in a sports tourism setting. Journal of toward different sport fan types. International Jour- Sport and Tourism. 12 (3–4): 155–181. nal of Business and Management. 7 (3): 111–126. Solberg, Harry Arne, and Inger Mehus. 2014. The chal- Cova, B., and V. Cova. 2002. “Tribal marketing”: The lenge of attracting football fans to stadia? Interna- tribalization of society and its impact on the con- tional Journal of Sports Finance. 9: 3–19. duct of marketing. European Journal of Marketing SportBusiness Group. 2017. The future of olympic games 36 (5/6): 595–620. consumption (2024) produced in association with Digital Marketing Innovation. 2017. The importance of Budapest 2024. the second screen in sport. 22nd March. Available Sports Data: The rise of big data and analytics. 2017. at https://mporium.com/blog/digital-marketing- Available at: https://www.scrapehero.com/sports- innovation/importance-of-second-screen-in-sport/. the-rise-of-big-data-and-analytics/. Accessed 16 Dionisio, Pedro, Carmo Leal, and Luiz Moutinho. Nov 2017. 2008. Fandom affiliation and tribal behaviour: A Stewart, B., A. Smith, and M. Nicholson. 2003. Sports sports marketing application. Qualitative Market consumer typologies: A critical review. Sports Mar- Research: An International Journal. 11 (1): 17–39. keting Quarterly. 12 (4): 206–216. EVS. 2015. Return on emotion: Creating an immersive The Future of Sports Report. 2016. Available at http:// experience for connected sports fans. White Paper futureof.org. 12/2015. The Future of the Sports Fan. 2016. Canvas8: Per- Fantasy Sports Trade Association. 2015. Fantasy Sports formance communications. Available at https:// Trade Association 2015 Media Kit. Available at www.fotball.no/globalassets/dommer/the-future- http://c.ymcdn.com/sites/www.fsta.org/resources/ sports-fan_spilleregler_english.pdf. research/industry-demographics/. Wakefield, Kirk L., and Daniel L. Wann. 2006. An exam- https://www.scrapehero.com/sports-the-rise-of- ination of dysfunctional sports fans: Method of clas- big-data-and-analytics/. sification and relationships with problem behaviors. James, J.D., and S.D. Ross. 2002. The motives of sports Journal of Leisure Research. 38 (2): 168–186. consumers: A comparison of major and minor Wann, Daniel L., Merrill J. Melnick, Gordon W. Rus- league baseball. International Journal of Sport Man- sell, and Dale G. Pease. 2001. Sports fans: The psy- agement. 3: 180–198. chology and social impact of spectators. New York: Larkin, Ben A., and Janet S. Fink. 2016. Fantasy sport, Routledge. FOMO and traditional fandom: How second screen Wann, Daniel L., Frederick Grieve, Ryan K. Zapalac, use of social media allows fans to accommodate and Dale G. Pease. 2008. Motivational profiles of multiple identities. Journal of Sports Management. sports fans of different sports. Sports Marketing 30: 643–655. Quarterly 17: 6–19. 101 5

Sports Distribution and Media Rights

Contents

5.1 Introduction – 103 5.2 The Scale and Scope of Sports Media Rights – 104 5.2.1 The Global Sports Media Rights Market – 105

5.3 Trends and Developments in Sports Media Rights – 105 5.3.1 Emergence of Subscription-Based TV Channels – 105 5.3.2 Exercise – 107 5.3.3 Shifts in the Wind – 107 5.3.4 Further Straws in the Wind – 108

5.4 OTT – 109 5.4.1 Advantages of OTT Operators – 110 5.4.2 Disadvantages with OTT Operators – 110 5.4.3 OTT and Niche Sports – 111

5.5 The Arrival of the Faangs – 112 5.6 Business Models for Selling Sports Media Rights – 113 5.6.1 Exercise – 115

5.7 Live Streaming: Boom or Bust? – 115 5.8 Protected Events – 116 5.9 Piracy – 118 5.10 Periscope and Meerkat (and Others) – 119

Electronic Supplementary Material The online version of this chapter (https://doi.org/10.1007/978-3-030-53740-1_5) contains supplementary material, which is available to authorized users.

© The Author(s) 2020 S. Ennis, Sports Marketing, https://doi.org/10.1007/978-3-030-53740-1_5 5.11 Protecting Sports Media Rights: Legal Responses and Actions – 120 5.11.1 Geo-Blocking – 121 5.11.2 Exercise – 122

5.12 Conclusions – 122 Appendix – 124 References – 126 103 5 5.1 · Introduction nnLearning Objectives reluctance to make available live coverage to tra- On completion of this chapter you should ditional terrestrial (state-owned) public broad- be in a position to address the following casters. The end result for sports fans growing objectives: up in the 1960s and 1970s (as I did) was very 55 To understand the role that media little exposure to the main competitions and rights play in the distribution and con- tournaments across the most popular sports. sumption of sport For instance, in the 1970s the English Football 55 To identify the scale and size of the League did not allow full coverage of a par- global sports media rights market ticular league game on the BBC radio – only 55 To assess the relationship between the announcing shortly after the traditional 3 pm key stakeholders in the process kick-off on a Saturday which game would be 55 To examine the trends and develop- featured. Only the second half of that game ments that are taking place in sports was covered live on the radio. The only games distribution and media rights shown live on terrestrial TV were the FA Cup 55 To understand the various business Final, the European Cup Final (a predecessor models used when selling and purchas- of the UEFA Champions League competition) ing sports media rights and their impli- and the Home Internationals (an end-of-season cations for the stakeholders competition between the four home nations of 55 To evaluate the legal issues associated the United Kingdom). Every 4 years football with sports media rights fans had access to the World Cup and initially 55 To identify the potential impact of OTT some of the European Championships. The first on the consumption of sport live league game in the UK was shown in 1991. 55 To assess the role that technology is Public broadcasters such as the BBC of playing in the consumption of sport course had other critical objectives to address 55 To examine the changing role of social besides the coverage of sporting events. It is media and its implications for the distri- fair to say that sport was not one of the items bution of sport. at the top of their agenda: issues such as news, drama and culture tended to dominate (and probably still do). When sport was covered the 5.1 Introduction attitude among programmers was that sport had to fit in with the scheduled list of other Fans consume sports in a number of different programmes to be covered. ways, as we discussed in 7 Chap. 4. One of Typically, public broadcasters paid very the key challenges facing sports property little for the right to cover such events. Indeed, owners revolves around how their event, com- it could be argued that many sports bodies petition, league or team is distributed to the and property holders were very grateful for wider target market(s). any coverage that could be generated on main- Traditionally, fans accessed their favourite stream television and radio media. team or event through a combination of the For the sports entity holders the main rev- following: attending the event physically, lis- enue stream accruing to them emanated from tening to the radio for coverage, watching it ticket sales. Sponsorship, corporate hospital- on TV (if it was available) and reading about ity, media rights and other commercial activi- it in the newspapers. Over the past 20 years we ties played an inconsequential role in have witnessed a revolution in terms of how generating attendance levels and in their view sport is distributed and how fans consume it. threatened the future of the sport from a Historically, clubs and property owners financial perspective. adopted a posture of protectionism – fearful We have moved on since then. that live coverage on television would have a The arrival of subscription television com- seriously negative impact on the attendances, panies – referred to in this chapter as Pay TV, and by default, the revenue stream from ticket changed the scene totally. When this develop- sales. This was marked in many countries by a ment is factored in against the emergence of 104 Chapter 5 · Sports Distribution and Media Rights

new media, and spurred on by technology innovations, it is not an over exaggeration to .. Table 5.1 EPL media rights deals from 1992/93 to 2019/22 state that a “sea-change” has (and continues to) occur in the area of sports distribution Deal Value (£) and the sale and purchase of media rights. In this chapter we begin by identifying the 1992/97 191 million scale and scope of media rights and discuss 1997/01 670 million the key trends and developments that have led 2001/04 1.26 billion to this transformation. We consider the relationship between the 2004/07 1.024 billion 5 key stakeholders such as sports property own- 2007/10 1.706 billion ers, sports media rights holders, various inter- 2010/13 1.773 billion mediaries, that participate in the buying and selling of sports media rights, and of course, 2013/16 3.018 billion the overall implications for sports fans (both 2016/19 5.136 billion physical and virtual). 2019/22 4.46 billion We assess the thorny issue of who ultimately controls various sports and how this Source: Compiled by the author from various may have changed as a consequence of these sources on the Internet trends and developments. We also look at legal issues surrounding the topic and examine the impact that issues such as geo-blocking and illegal streaming, This table highlights some interesting are having on the economics and financing of points. The deal for the period covering various sports. 2013/16, almost more than doubled. This is In the later sections of the chapter, we most likely reflected by the fact that British review the drivers which have led to a conflu- Telecoms (BT) entered the fray in addition to ence of technology, social and digital media Sky. Prior to that, the latter broadcaster had a and the impact that it has on the stakeholders. monopoly on the bidding rights. Sky clearly We make use of short case studies and increased their bid by a substantial amount to exercises to encourage you to engage with the retain most of the attractive games for the topic and expand the discussion on the issues upcoming period. raised in this chapter. The 2016/19 deal also witnessed a further substantive increase—again driven by competition from BT. It was also heavily rumoured 5.2 The Scale and Scope of Sports that other organisations such as Amazon and Media Rights Facebook might join the bidding process. This did not happen. In order to gain an understanding of the The last deal (2019/2022) produced a global market for sports media rights, it may decrease in the value of the deal. It also saw be useful to consider one of the most suc- the involvement of Amazon. The latter organ- cessful sports property brands: The English isation purchased a small package (two bank Premier League. holiday weekends) where all of the Premier

. Table 5.1 provides us with a historical League games started at the same time and perspective on the value of media rights for the were all available for fans by using the “red English Premier League (EPL) since its incep- button” on the remote control. tion in the 1992/1993 season. The inaugural We should bear in mind that the deals cov-

rights deal generated £191 million for the teams ered in . Table 5.1 only cover the domestic and was negotiated with Sky Television. Since market that is the UK. They do not reflect then we have witnessed eight further deals (each media rights deals with geographic regions one typically covering a three-year perspective). outside of this market. 105 5 5.3 · Trends and Developments in Sports Media Rights

While the domestic deals may be showing 5.3 Trends and Developments evidence of a plateau effect or possibly a long- in Sports Media Rights term decline, the good news for the EPL is that the value of deals across the globe, has In this section we consider the main drivers of increased exponentially. For the period change that have led to the transformation of 2019/2020, international sales brought in a rev- the sports media rights sector. We have noted enue stream of around £5 billion. This gener- previously the emergence of large and power- ated a total of approximately £9 billion in total. ful subscription or Pay TV channels such as While traditionally, and still to this day, Sky, Foxtel, ESPN and Star across different television still features as the most popular geographic areas of the world in the 1990s mechanism for accessing live sporting events. and 2000s. We explore their entry in more This is changing gradually due to the emer- detail in the next section. gence of a number of different devices such as smart phones, tablets and PCs. The pace of the change and the shift to other devices var- 5.3.1 Emergence of Subscription- ies geographically. For instance, in China, the Based TV Channels PC and tablet are in more prevalent use while in India the mobile and smart phone is the Powerful media operators such as Rupert most popular mechanism for accessing live Murdock spotted opportunities in the context sporting events. of the sports industry in the latter part of the Smith et al. (2016) note that the traditional twentieth century. Through his Sky TV opera- term “sports broadcasting” is somewhat of an tions, he was one of the initial entrants into anachronism and does not fully capture the the sports sector. Other Pay TV operators extent and scope of media rights. They prefer quickly followed suit. The rationale for their to adopt the following definition of what entry can be summarised as follows: might be called Sports “media rights” as a 55 Sport is seen as a global activity that term that “encompasses the rights to transmit attracts large and diverse audiences with audio-visual material across all transmission certain sports building up large followings devices” (Asser Institute 2014, p. 62). among desirable demographic groups such as young, mid-to high-income individuals 5.2.1 The Global Sports Media 55 Because of the popularity of sport, the Rights Market acquisition of sports media rights allows TV companies to build up a critical mass The scale and strength of the sports media of subscriptions, thereby creating the rights market cannot be under-estimated. The opportunity to make sizable profits. This overall global value of this sector in 2017 was is encapsulated in the words of Rupert estimated to be worth $49.55 billion. By far Murdock who observed that sports rights the biggest geographic market is the have been used as a “battering ram” to USA. However, the sport of football (soccer) gain access to potentially lucrative Pay TV was the most dominant one, representing markets world-wide around forty per cent of the overall value. The 55 A sense of complicity existed with public, NFL (American Football) however was the terrestrial broadcasters who clearly most valuable—generating media rights sales assumed in many cases that major sporting of around $7.7 billion. The UK market is val- events could be bought cheaply and (prior ued at $4.1 billion. (SportBusiness Consulting to the arrival of Pay TV operators) faced Global Media Report 2018). little or no competition 106 Chapter 5 · Sports Distribution and Media Rights

55 A lack of awareness among sports have seen a major shift in terms of the type of administrators of the real potential value personnel who run sport. Whereas up to the of the sports properties which they owned 1990s many sports in Europe were run by 55 Lack of sufficient marketing expertise enthusiasts or individuals who had worked among sports organisations to exploit the their way up through the organisation, the last value of their assets. two decades have witnessed the arrival of many administrators, CEOs and Marketing Thus, it was relatively easy for operators such Directors who have been recruited from as Sky to acquire the initial media rights for industry. This has led to a much more aggres- properties such as the English Premier League. sive approach on the part of clubs and sports 5 Quite simply they had the resources, scale and bodies in terms of running the organisation as expertise to outbid traditional state broad- a business as opposed to a sport. This has led casters who were reliant on public funding, in to accusations of exploiting perhaps the main the case of the BBC. stakeholder in the process: the fan - particu- The dominance of the subscription-based larly in terms of ticket prices for attending the TV players quickly led to a number of criti- events. We will examine this in greater detail

cisms and accusations. For instance, they have in 7 Chap. 7. This aggressiveness is certainly been heavily criticised for effectively disen- evident in terms of their ability to negotiate franchising sports fans who cannot afford the more and more lucrative deals with the media monthly charge to enable them to receive the operators. channels. This would appear to go against the Depending on the sport and the stature of argument that sport should be for everybody the club or competition, the contribution of and should be accessible for all members of revenue generated from the sale of media society: not just those who can afford it. rights often has overtaken the contribution of By restricting access to certain demo- ticket sales and sponsorship (other key areas graphic groups, some commentators argued of revenue generation for a sports club).

that this would provide a lack of opportunity . Table 5.2 highlights the contribution of to encourage people to take up participation revenue from media rights, as a percentage of in the sport as many people would not see or total revenue, from the top five football become familiar with sports stars. leagues in Europe. Because of the power of subscription- based channels it was feared that this would lead to a quasi-monopoly situation where sports could be controlled and manipulate by .. Table 5.2 Media rights revenue as a % of total revenue one or two key players. In a similar vein, it was argued that control of the sports property League Media rights as a would inevitably shift away from the sports percentage of total revenue property owners and administrators and move quickly to the Pay TV channels. This actually EPL (England) 58.9% became a reality when Sky demanded changes Serie A (Italy) 57.5% to the timing of games to suit their TV chan- La Liga (Spain) 53.2% nels. However, because of the increasingly large amount of revenue falling to the league French Ligue 47.1% and clubs this situation was quickly accepted (France) as the mantra of “he who pays the piper calls Bundesliga 39.4% the tune”. (Germany) In the intervening years, the sports prop- Source: Adapted from Football Benchmark erty owners in Europe recognised that they KMGP (2020) available at 7 https://www. needed marketing and negotiating expertise to footballbenchmark.com/library/will_ott_shake_ enable them to exploit the full potential of up_the_football_broadcasting_industry their respective sports assets. As a result, we 107 5 5.3 · Trends and Developments in Sports Media Rights

5.3.2 Exercise media rights market and made successful bids for sports events. ??In your region, examine the amount of Why has this happened? Smith et al. (2016) sport that is currently shown on terres- highlight the importance of the “quadplay” trial broadcasting channels as opposed to concept in the respective business strategies of PayTV. Assess the view that more should the telecommunication companies. The genesis be done to get a more balanced coverage of of this idea rests on the belief that by building sport. up a subscription base through involvement in sport, it can allow such operators to put together a package bundle that revolves around four main areas: Internet access, digital televi- 5.3.3 Shifts in the Wind sion, smart phones and fixed line telephony. As well as seeking new customers it also provides While fans are adapting to the ways in which an opportunity for a telecoms company to they engage with their favourite sport, we are build loyalty with its existing customers. When also witnessing changes in the nature and BT entered the market in 2012 with a winning structure of the key players involved in bid- bid for some of the packages available from the ding for and winning the right to transmit English Premier League it gave free access to sports events. its games to its existing customers who had a We have seen the entrance of large tele- landline with BT. communication companies onto the scene. Telecom companies can also use subscrip- Companies such as BT (UK), Belgacom tions to lock customers into the deal and (Belgium), Deutsche Telekom (Germany) and make it difficult for them to switch their Telefonica (Spain) have all entered the sports accounts.

BT and Sport

British Telecoms first entered the sports media sum of £900 million for three seasons (2015/16 rights market in 2012 when it made a bid for to 2017/18). some of the packages available from the English It is estimated that this move to the Premier League. It won the right to show 38 European Champions League has helped BT to live Premier League games for three seasons: increase its revenue by seven per cent. beginning in 2013 and ending in 2015. It paid They expanded quickly into the “pubs and around £738 million for this privilege. It also clubs” market by offering personalised pricing bid for media rights in other sports such as structures that were customised around what Premiership Rugby and Women’s tennis. It they could afford. In under 9 months they established two dedicated BT sports channels: acquired access to around twenty-four per cent BT1 and BT2. It provided free access to its of pubs and clubs in the UK, just short of the existing customers and new customer who had Sky penetration figure. switched from other operators. It is estimated It was estimated that by the end of 2013, that the overall cost was in excess of £200 mil- BT had attracted over two million subscribers lion per year. (mostly from its existing customer base) and In 2015 it acquired the rights to show perhaps due to its investment in sport, also UEFA Champions League games. It estab- attracted nine out of ten new broadband lished another channel BT Sport Europe to users. cover this competition and charged its cus- By 2015 BT had reached a market share of tomer base for this product. This cost BT a 32 per cent of the UK broadband market - 108 Chapter 5 · Sports Distribution and Media Rights

giving it a figure of around eight million son for another 3 years - taking them up to subscribers. 2019. In 2015 BT further reinforced its long-term (Source: Adapted from various sources but commitment to sport by paying £960 million to mainly from Smith et al. (2016)). show forty-two premier league games per sea-

5.3.4 Further Straws in the Wind media rights market to further develop its business model. 5 Around the time of BT’s entry to the sports The role of social media platforms cannot media rights market, strong rumours also go unnoticed in this discussion. What better suggested that companies from far outside way for companies such as Twitter and the traditional broadcasting and telecom- Facebook to engage with its customers than munications market were also expressing to become involved in the active transmission interest in this area. Yahoo, YouTube and of sports events? Amazon were foremost in such specula- The ability of companies such as YouTube tion. to stream sports events means that sports fans As we noted earlier, sports fans no longer are not obliged to sit in front of a television in rely on television as the main mechanism for a prone position. Rather, they can access the viewing sport. Tablets, smartphones and iPads sporting event where they want to. All that is now feature prominently in the consumption needed is an Internet connection. of sport. Fans no longer necessarily want to However, the entrance of operators such as watch sport in a fixed position that is sitting in Twitter, YouTube and Facebook into the sports a room looking at television. The broadening sector has fundamentally challenged the way in range of devices means that the likes of which we are likely to consume sport in the YouTube can look carefully at the sports future.

Twitter and the NFL

Twitter is a social networking service that comments and observations as they watch allows its user to communicate with very short movies, TV programmes and sports events. messages (maximum of 140 characters) called This is referred to as second screening; a topic

“tweets”. It was established in 2006 and by that we addressed in 7 Chap. 5. 2012 had acquired over 200 million users In mid-2016, Twitter announced a partner- world-wide posting over 340 million messages ship with CBS News to live stream both the 2016 per day. By 2016 this increased to around Republican and Democratic National 310 million active users. Conventions. In its first move directly into the Over this period, it launched a number of sports sector, Twitter acquired non-exclusive different products and services including a streaming rights to National Football League music app called Twitter Music in 2013. In this broadcasts of Thursday Night Football for the year it was also listed on the New York stock 2016 NFL season. It will simulcast coverage on exchange. Twitter alongside coverage of the games by NBS In 2016 it was rumoured to have received and CBS; two of the US major broadcasters. several offers of takeovers from companies It is reckoned that this development will such as Verison and the Walt Disney Company. allow Twitter to reach out to a potential audi- It also plays a role in making television ence of over 800 million. This includes individ- more interactive-encouraging users to post uals who are not necessarily registered with 109 5 5.4 · OTT

Twitter. It acquired the rights for a figure esti- It certainly surprised many commentators mated to be around $10 million - a bargain who felt that it was more likely to see players price in the eyes of some commentators. such as Amazon becoming involved. Amazon The NFL (American football) as we noted certainly has the scale and resources to make a earlier in this chapter is the most valuable big offer. Yahoo in the previous NFL season sports property in the world. Started in 1920 it paid $20 million to show the first game of the has evolved into a game that is played across season online. the American states. The $10 million paid by Twitter was not the It comprises thirty-two teams overall and largest bid: rivals were estimated to have bid of culminates in the Super Bowl – the final, which around $15 million. takes place in late-January each year. Around For Twitter it presented a potential oppor- 120 million people tune in to watch this iconic tunity to build user growth: since 2014 its num- event annually. Advertisers typically pay bers had been falling. around £5 million for a thirty-second advert NFL shied away from doing a deal with and in total it generates between $350 million Facebook because the latter organisation to $400 million in advertising. wanted to sell all the advertisements that would The three big North American broadcast- air during the football games, essentially cut- ers: Fox, NBC and CBS pay up to $1 billion per ting out the sales relationship between the NFL year for a games package and in a nine-year and marketers. cycle, each broadcaster gets the right to show (Source: adapted from Jackson (2016) three Super Bowls. “Twitter to live stream NFLs Thursday night So, what are we to make of this deal? football” The Guardian, 5th April 2016)

??1. Why would the NFL move in this direc- In essence, OTT providers go direct to the tion by setting up a deal with Twitter customer with their offerings and tend to as opposed to focusing more on deals bypass traditional PPV broadcasters. with traditional media operators? Over the top (OTT) refers to situations 2. How is Twitter likely to benefit from where viewers can watch programmes, movies this deal, apart from possibly building or sports events without a cable or satellite user numbers? subscription. In other words, in the context of 3. Would you say that there is evidence of sport, fans can “cut the cord”. This poten- a “strategic fit” between both the NFL tially frees them up from having to sign up to and Twitter? If so, why? If not, why rigid monthly fees to gain access to a particu- not? lar sport, largely over which they have little control. Let us consider this in more detail. A 5.4 OTT monthly subscription to Sky typically costs around £60 for access to their sports channels. The synonym “OTT” refers to “over the top”. This allows the subscriber to watch the games The advent of Twitter, Amazon and YouTube that are shown weekly at the various times as mentioned in the previous section is and days fixed by Sky. However, typical sports challenging the traditional way in which fans may only watch a small number of these sports media rights packages are sold and games for various reasons: lack of interest in indeed the traditional business models for some games or teams, only wanting to watch buying the rights. In a broader context good the team that they support and so on. They examples of this practice would include have little or no control over precisely what Netflix and Amazon Prime. they want to watch. Live streaming by compa- 110 Chapter 5 · Sports Distribution and Media Rights

nies such as Twitter moves the fan away from 5.4.1 Advantages of OTT Operators having to fully subscribe to the total package. Russo (2016) observes that initially OTT OTT operators offer fans more flexibility in offerings revolved around what is referred to terms of how they engage with their favourite as ancillary programming. This would include sports. The traditional packages from broad- highlights of a game, interviews with players, casters such as Sky and ESPN are quite coaches and managers, previews and features rigid - in terms of expensive monthly pack- on players, past players or historical action ages that do not necessarily offer the person- over the years. However, with the advent of alisation that younger fans in particular deals such as Twitter and the NFL, fans can demand. To be fair, Sky, ESPN and the other 5 move away from the traditional model of lin- PPV broadcasters have quickly moved into ear rights—where the viewer does not have a the OTT business themselves. choice to non-linear rights such as on demand Traditional broadcasters have relied on content. satellite, terrestrial aerials and cable to trans- DAZN, a UK-based operator, was one of mit their broadcasts. OTT transmit their the first OTT companies to branch away and material online and make use of a wide range acquire the rights to live events. In recent of devices such as smart phones, smart TVs years it acquired the domestic rights to show and tablets. Bundesliga league (Germany) and Serie A This flexibility extends to the range of (Italy) matches live. It has also entered into devices that they use to connect with fans. deals in the sport of boxing, with Matchroom. Tablets, smart phones and smart TVs (Internet We are likely to see further movement by enabled) are used to deliver the services. the OTT operators in the area of providing They have the resources to create ancillary live sport. Indeed, the CEO of DAZN, Len services - particularly in the area of content Blanvatnik wants to ultimately position the and material from the archives. company as being similar to the doyen of Arguably, OTT operators only pay for the OTT - Netflix. services they use, rather than having to main- Russo also notes that the streaming of the tain a costly production and marketing infra- Jacksonville Jaguars versus Buffalo Bills NFL structure. This leaves them in a more agile game in October 2015 arguably was the first position to develop content for various sports. instance of a live major sports event being streamed world-wide via Yahoo, without traditional television coverage (except in the 5.4.2 Disadvantages with OTT domestic market). It was estimated that over Operators 15 million unique viewers watched some portion of that game world-wide. The biggest problems occur in a couple of Other sports have introduced OTT offer- areas - mainly due to the capabilities of the ings in the past couple of years. Examples streaming services. In many cases, companies include the following: like DAZN have been accused of failing to 55 The PGA Tour (American Golf) launched provide a service that meets the basic demands PGA Live Tour Service in 2015. This of fans. Buffering and outages happen with allows subscribers access to Thursday and embarrassing frequency. Allied to this is a sig- Friday live coverage of over thirty PGA nificant time delay between the live action and tour events. The subscription costs $4.99 what the individual fans witness on their per month devices. Outages (where the streaming breaks 55 UFC (Ultra fighting) introduced its UFC down completely) are particularly annoying Fight Pass in 2013. This includes live for subscribers. events, archival material and original These problems are further exacerbated by programming at a cost to subscribers of variations in the broadband widths and speeds $9.99 per month. in different countries. 111 5 5.4 · OTT

OTT and the European Experience

The Western European Pay TV market is service in Germany, Austria and Switzerland at undergoing some changes, some of which are the beginning of the 2016–17 season. likely to be far-reaching for the key stakehold- Traditional players have responded by ers involved and of course the sports fan. engaging in a number of mergers and acquisi- Canal Plus, the French premium cable tele- tions. Rupert Murdock has merged his Pay TV vision company was founded in 1984. It quickly operations in the UK, Germany and Italy to became one of the biggest cable channel sub- establish Sky Europe. scription-based operators in Europe and moved Canal Plus entered into a strategic alliance into the sports sector by acquiring the rights to with the Qatari-owned BeIN Media group. a number of properties. These included Pay TV penetration (in terms of new sub- Formula One and coverage of the English scribers) has slowed in recent years across Premier League. Western Europe and is likely to grow only by However, it has had to address a number of about 5 per cent from sixty to sixty-five per cent challenges and threats from groups formed by 2024. It is possible that OTT low-cost provid- through various mergers and acquisitions as ers might capture some of this growth as well, as well as OTT operators. In 2015 it lost over they tempt fans with deals. At the moment large 260 million Euros. OTT players such as Netflix have not entered Examples of such threats are evident from the sports rights market. Facebook has set up a the example of YouTube which in May 2016 product called Facebook Sports Stadium aimed acquired the rights to live-stream the finals of at the platform’s 650 million sports fans. We the UEFA Champions League and the Europa have noted Twitter’s entry earlier. League club football tournaments in the UK Much will revolve around the willingness from the rights-holder BT Sport. of the new player’s to pay the large up-front Also worthy of mention is the emergence of fees necessary to acquire the rights. DAZN (formerly known as the Perform A “full-fat” pay television operator such as Group): a British company established by a Sky Deutschland has already lost out to Russian billionaire. It is using a low-cost provi- DAZN. sion of sports to potential fans. It has acquired If these new potential entrants emerge then exclusive rights to Spain’s La Liga and Italy’s it is likely that the cost of acquiring the sports Serie A as well as the NBA and the NFL. It media events to premium sports events will captured the rights to show the English Premier continue to rise. Football in Germany from Sky Deutschland. It (Source: Adapted from Dunne (2016) also plans to bid for the rights to show the “OTT’s European Power Struggle” Sport Bundesliga games in Germany. It rolled out its Business ~International, June, pp. 16–19).

5.4.3 OTT and Niche Sports One of the biggest challenges for sports marketers involved in niche sports is to build Niche sports could be described as those an audience who will watch and engage with sports that have a limited number of partici- the elite events and competitions. This is nec- pants and receive (relatively speaking) limited essary to spark off what might be called a coverage across the mainstream media, par- “virtuous circle”. ticularly on television. They tend to involve a The mainstream TV companies—particu- smaller sub segment of the population and do larly the Pay TV companies focus largely on not tend to appeal to the wider market the most popular sports. This allows them, if (Miloch and Lambrecht 2006). the media rights are secured, to build their sub- 112 Chapter 5 · Sports Distribution and Media Rights

scription base and thereby increase revenue 5.4.3.1 Exercise from advertising. The small audiences that are ??You have been asked by the International a feature of niche sports are obviously a “nega- Chess Federation – Federation Internatio- tive” from the perspective of programmers. nale des Echecs (FIDE) to come up with However, all is not necessarily lost. Pay TV a set of recommendations as to how the broadcasters have many hours to fill and it is sport could be improved in order to attract not possible to show premium sports proper- more interest from subscription-based TV ties on a “24-7” basis. Hours have to be filled companies. Outline the initiatives that you and companies such as Foxtel, Sky and would come up with. Eurosport may be interested in covering niche 5 sports at certain times and to provide some ??1. Assess the strategy employed by the form of diversity. PSA to expand the sport of squash Terrestrial or public broadcasters, not hav- globally. ing the financial resources to win the media 2. Do you think they have done enough rights for the premium sports, may also focus to convince the International Olympic on minority or niche sports in order to address Committee to include squash in future their social objective of covering sports activi- Summer Olympic Games? ties. Examples of this would be the coverage 3. Identify other initiatives that could fur- of triathlons, canoeing and squash. ther enhance the profile of squash, par- Channel Four, a UK terrestrial broad- ticularly with respect to the value of its caster generated a lot of interest and built up sports media rights. impressive viewing figures from covering poker events during a late hour slot. By using technology and diverse camera angles, they 5.5 The Arrival of the Faangs made it attractive for viewers, who could see the hands of cards of each player and could For the past 5 years or so, the main area of also monitor facial expressions. concern and debate among the key stakehold- OTT provides many opportunities for niche ers in the sports sector in general, and media sports to develop their audiences. By “breaking rights in particular, has revolved around the the cord” with expensive subscription-based way in which major media operators: collec- companies such as Sky. Instead a niche can tively known as the “FAANGs, are likely to either engage with companies such as YouTube, engage with the sports sector. By using this Twitter, Facebook and so on, where it can show term, we are referring specifically to the fol- live streaming of events and/or ancillary pro- lowing companies: grammes. They could also set up their own ded- 55 Facebook icated channel to show events. All that is 55 Amazon required is an Internet connection. Such initia- 55 Apple tives can build up interest and expand the target 55 Netflix market. This in turn attracts advertisers and 55 Google. sponsors and the revenue stream also increases. In order to attract the interest of the tradi- As you might expect, these companies, collec- tional subscription-based channels, niche sports tively and individually have built up major may need to simplify the rules, length and dura- financial reserves. Between them, they have tion of the event and engage more fully with the conquered all of the business space across the concept of “sportainment”: a concept which we music, movies, IT, social media and digital

discussed in greater detail in 7 Chap. 4. sectors. Arguably, they would dwarf the 113 5 5.6 · Business Models for Selling Sports Media Rights resources of traditional operators such as Sky the PGA American golf tour, the NFL games and ESPN, and even more so in the case of and it has partnered with the International high-profile OTT operators such as DAZN. Cricket Board to distribute highlights of The major sports, such as the NFL, MLB, cricket to the Indian sub-continent. In recent NBA and the EPL, have been concerned by years it has made a failed bid of $600 million the likely involvement of these players. to show live games from the Indian Premier What has happened so far? League. The largest and most established OTT Google has recently moved into the eSports operator, Netflix, which has dominated the market by signing a deal with Activision to movies and music sectors, has not engaged in cover leagues such as the Overwatch League the bidding for any of the major sports media and Call of Duty Leagues. rights. Commentators are somewhat surprised It has also been active, through its YouTube that they have not entered this sector so far. subsidiary. Others feel that they are deliberately stepping Other tech companies such as Twitter and back to review the developments and monitor- Twitch are also active in various areas of the ing what the other members of the FAANG sports media rights market. Indeed, Twitter group are doing. was the first such tech company to move into Arguably, the investment required (even this area, when it acquired the rights to show though they can afford it) is unlikely to bring the NFL Thursday night football game, in any significant profit to Netflix. For starters, it 2016. would have to invest in substantial production In summary, the impact of the FAANGs and technology infrastructure to meet the has not been as significant as the experts pre- standards set by the established broadcasters dicted 2 or 3 years ago. Arguably, they are tak- such as Sky and ESPN. ing a measured approach to their assessment Netflix however, has made a documentary of investing in the sports media rights sector. on the English football team, Sunderland. Some of them are “playing the long game”. Called “Sunderland ‘Til I die” proved to be “Let’s wait and see”, would appear to be their very popular with its subscribers. mantra. Amazon Prime has also produced similar As we have noted, some of them are focus- football-based documentaries. These include ing more fully on the area of content manage- “Take us Home” (Leeds United), “All or ment and developing creative and relevant Nothing” (Manchester City) and “Inside packages for the modern fan. We highlighted

Borussia Dortmund”. the fact that “content is king” in 7 Chap. 4. Amazon has been active in recent years. It Younger fans do not necessarily want to watch acquired the rights to the US Open tennis and the full live games. also paid £50 million for NFL Thursday night That is not to say that the FAANGs will football games. In the last round of bids for desist from purchasing the rights to show live the EPL, it paid £90 million for a three-year games. Arguably, they will apply a selective package for two sets of games to be covered approach, with the objective of maintaining over bank holiday weekends. It acquired the their strong positions in their original core rights to show European Champions League areas. Sport may, or may not, play a signifi- games in the German market. cant role in their portfolios going forward. Like Netflix, it has a substantial subscriber base for its Amazon Prime service. In the UK, it has around nine million such subscribers. 5.6 Business Models for Selling Arguably, this has been bolstered by new mem- Sports Media Rights bers joining during the Coronavirus crisis. Facebook has cut back on its budget for Sports property owners have a number of acquiring live events. It has positioned itself options open to them when selling the rights as the distributor of highlights from major for coverage to their competitions and events. sports. For instance, it covers highlights of We consider them briefly here. 114 Chapter 5 · Sports Distribution and Media Rights

1. In-house selling of collective rights: In this son (over a three-year deal) to $1.45 bil- case sports property owners of leagues or lion. competitions seek bids from prospective Presently Serie A is tied into an arrange- buyers for the rights and act as representa- ment with Sky Italia TV and DAZN. Under tives of the individual clubs who make up the proposed new deal, it would distribute the particular league or competition. The its live games through a League-owned final figure achieved by the sports entity network. Individual TV companies would holders may be shared out equally among pay for the right to show games. This is dif- each of the clubs. Another option includes ferent to the present arrangement, where a proportion of the sum shared out equally Serie A sells the rights to the TV Companies. 5 and the rest based on performance. For In terms of distribution of revenue, example, in the English Premier League Serie A adopts the following practice. there is a weighted allocation of part of Fifty per cent is shared equally between the revenue which is merit-based i.e. the the teams in Serie A. Thirty per cent is higher or lower a team finishes in the based on performance. This is broken league, the more or less it gets. down to fifteen per cent over where the The money is distributed as follows: 50 club finished the previous season, ten per per cent is shared equally, 25 per cent is cent over where it finished over the past based on merit (the position in which club 5 years and five per cent on historical con- finishes the previous season) and 25 per tribution to football (measured in terms of cent is allocated on the basis of a facility trophies won). The remaining twenty per fee. This is a standard fee that is paid to the cent is based on the number of supporters individual club, every time it hosts a live each club has (measured in terms of met- game that is shown on TV. Typically, this rics such as season ticket holders, Facebook fee would be around £800,000 per game. followers and social media activity nation- The revenue from international rights up ally and globally). to 2019, was shared equally. The top six Over the years the EPL administrators teams successfully argue that they should have become more proficient at negotiation receive a higher proportion of this, as they and designing the packages that are avail- engender far stronger global appeal. They able for purchase. At the last sale of rights won their argument. in 2015 the EPL put up seven packages. In the Spanish football league (La Liga) These packages were related to the time of up until recently a higher proportion of the week that games were played. These range total sum was allocated to two teams: Real from Saturday lunch-time kick-offs, Sunday Madrid and Barcelona because of their afternoon (Super Sunday), Monday night success and the size of their support. This and more recently Friday night games. has changed since 2015. Now the money is The EPL has used blind auctions, distributed in the following way: 50 per where none of the bidders know what their cent shared equally and the rest is weighted competitors have bid. This probably according to the results of teams over the allowed BT the element of surprise when it past 5 years and the degree of social influ- entered the market in 2012. In the early ence. The latter is somewhat nebulous but days it was rumoured that Sky had an is assessed on the basis of the number of its informal deal with the EPL whereby it had followers, social media activity and global the right to come back with another offer appeal. if it happened to be outbid. In the case of Serie A (Italy), the By designing multiple packages, the administrators are in the process of enter- EPL ensured that it was able to get maxi- ing into a partnership with Mediapro (a mum value for its overall product. Spanish-based TV production Group). The English government became very This would have the effect of increasing the wary of anti-competition practices and revenue from roughly $1.05 billion per sea- involved its regulator Ofcom to monitor 115 5 5.7 · Live Streaming: Boom or Bust?

the situation to ensure proper competition full model. However, it has backed away took place in the bidding process. from the idea because of the costs involved. 2. Using an advisor: In Serie A, the Italian Of course, other factors come into play football property owners have worked in when selling sports media rights. Property the past, in partnership with a large inter- holders may have to take account of gov- national sports media advisor; Infront, to ernment intervention on issues such as the design the package of offerings. This need to make certain elements of the pack- approach works on the principle that it is ages, e.g. highlights available to public best practice to use the services of an broadcasters. Nicholson (2007) discusses expert in the field of sports media rights to some of the reasons as to why there may be extract the best possible deal for the clubs. a need for such intervention. Primarily it is The advisor in this case is paid on commis- about balancing social, cultural and eco- sion. It can be argued that this incentivises nomic objectives. It can be argued that this the advisor to get the best possible deal. is necessary to prevent an over-emphasis A variation on this approach is where on the commercialisation of sport to the the agent may negotiate with the sports possible detriment of stakeholders. It is a property owner before putting the rights moot point as to whether this works in out to tender and guarantee the rights practice. holder a minimum sum in order to acquire the business. UEFA uses a similar approach, in this 5.6.1 Exercise case it links up with two sales agents (again paid on a commission basis). One deals ??Assess the way in which the EPL, Serie A with the club competitions – the Champions and La Liga distribute the media rights rev- League and the Europa Cup and the other enue to their respective clubs. handles the national competitions such as the European Championship. 3. Buy-out of the media rights: Another 5.7 Live Streaming: Boom or Bust? approach is to allow another agency or media player to buy-out the rights from The shift to OTT and the increasing emer- the sports property owner. This may be the gence of players such as Facebook, Yahoo, result of having long-term relationships YouTube and Twitter, allied to the potential with an individual company but may raise involvement of operators such as Netflix, has questions with legislators due to the lack undoubtedly changed the way in which sport of possible transparency with such an is distributed and sold and how fans consume arrangement. Clubs may question whether sports events. this is the best way to maximise the poten- The concept of television and its central tial revenue from the deal. role in sports engagement, while still relevant, When the agency or media player buys is likely to change over the coming decade. out the rights it in turn sells rights to other Joseph (2016) notes that social video is becom- companies in other geographical markets. ing more and more like TV. Whereas up to 4. Set up an in-house model: Some sports now social media platforms have tended to be property owners such as NFL, have estab- used in a second screening manner by sports lished a season pass, which they make fans. As they watch the sports event on TV available to fans (with different bundles of they are also engaging with fellow-fans, col- service) both domestically and globally. leagues and ancillary services provided by the They would partner with domestic and sport administrators or TV companies, via PPV broadcasters to deliver the product. other devices. The EPL has considered the possibility Some of the established companies like of investing in the required production Sky have already formed partnerships with and technology infrastructure to operate a social media companies. Ancillary material 116 Chapter 5 · Sports Distribution and Media Rights

such as “behind the scene” videos and inter- In summary, we are witnessing the end of views with players are shown on social media the rigid, “one-size-fits all” business models platforms. This helps companies such as that have been so prevalent in the context of Facebook and Twitter to provide richer and the way in which companies use their sports more current sports content. This in turn media rights to distribute sport. Increasingly, stimulates further engagement and sharing of fans will access sports events on demand and opinions and experiences. only the elements that they wish to view. In It can be argued that this is of significant essence, control over how we want to watch benefit to sports fans. They no longer have to sport will move more strongly in the direction rely on expensive monthly subscription pack- of the fan. 5 ages from the established Pay TV broadcasters. They can gain a very positive experience from watching sports events that they want to 5.8 Protected Events see ether at home or in other locations via significantly improved picture quality on the Much of our preceding discussion has focused social media sites. on the emergence of PayTV and the arrival of The NFL/Twitter deal arguably was the new entrants into the sports media rights forerunner for further developments between space. As we noted earlier these developments sports property owners and media players. have been criticised by many individuals For the established players such as Sky and because the subscription-based models restrict ESPN, they will have to respond by continu- access to certain demographic groups who ing to enter into partnerships or acquisitions cannot afford the cost. Within the context of with companies who have expertise in this sport and its role in society, it is often argued area. As long as OTT players continue to offer that this can act as a disincentive to people to free or low-cost deals to fans to enable them watch or indeed participate in certain sports. to watch specific games or events, they will Some sports such as cricket, in the context probably make increasing inroads on the tra- of the UK, have sold all of the rights to ditional media players. The established broad- subscription-based TV companies. Critics casters, and indeed terrestrial and state-owned might argue that they are “supping with the broadcasters have rapidly embraced the OTT devil”. This means that at no time is that sport principles and reinvented themselves in the gaining any coverage on terrestrial TV. The past few years. cricket administrators argue that the scale and A report published by Delaware North size of the financial deal means that they can (2016) suggests that the likes of OTT players use the revenue to invest in “grass roots” like Google will gradually outbid the tradi- development of the game. They claim that tional subscription-based broadcasters and this is evidenced in the number of coaches offer the games free, thus placing a major employed and the range of community-based threat to the Pay TV, paywall-based business activities which they promote to ensure that models. the game will continue to be popular and This is a matter of some debate. We have grow. Critics argue that while this may hap- discussed in a preceding section that the entry pen, the bulk of the money is used to pay of the Tech companies (e.g. the FAANGs) has inflated salaries been slower and more selective than predicted Plunkett (2015) notes that Sky claims to in the middle of the last decade. have over 12 million customers across its UK These operators will provide many differ- and Irish markets. However, the combined ent services delivered in many different ways population of both countries is between sev- and the traditional broadcasters will struggle enty and seventy-five million people. Although to catch up with them. The report argues it has grown its business (with a customer strongly that the younger fan expects free and churn of around 9–10 per cent annually), the easy access to all forms of content online and figures indicate that a large majority of the this is no different in the context of sport. populations of these countries do not hold a 117 5 5.8 · Protected Events subscription. The customer base for Sky has Likewise, as successive governments cut most likely decreased in the last couple of back on funding for public broadcasters, the years due to fans preferring to purchase games retention of some of these events came under on demand and the effects of the Coronavirus threat. Public broadcasters such as Germany’s crisis, where no live sport took place for a ARD also encountered the same experiences. number of months. The European Broadcasting Union (EBU) Free to air coverage (FTA) opens up access argued that all member-state European broad- and reach to the general population. This is casters should put together a strong initiative evidenced by the statistic that when Andy for listed sports properties to be protected and Murray won the Wimbledon Championship shown live on FTA television. for the first time in 2013, the BBC (public and In the context of the twenty-seven-member FTA broadcaster) captured an overall audi- states of the European Union, individual ence of seventeen million people. Ninety per members submit their lists of protected sports cent of the population of the UK watched to the Commission for approval so that they some part of that match. can be recognised by the other member states As far back as 1995, the government of the as being in force. These events cannot then be day in the United Kingdom took some action subjected to exclusive broadcasting licences if to protect certain sports properties and events this would prevent the event from reaching a that they deemed to be critical and central to wider interested audience. the sporting enjoyment of society as a whole The UK list was formally approved by the and were of “significant national resonance”. Commission in 2007. In 2009 a list was drawn up. FIFA and subsequently UEFA challenged

7 Box 5.1 identifies the ten major events the validity of these decisions. They argued that must be shown on terrestrial television that at events like the World Cup finals, not all (FTA) in the UK. of the games would be treated as being equally important in a specific country. Their arguments were rejected as it was Box 5.1 Sports Events counter-argued that it would not be practical 55 Olympic Games or possible to establish in advance which 55 Football World Cup matches would turn out to have an impact. 55 Football European Championship There is in fact no uniformity across the 55 FA Cup final Member States of the European Union about 55 Scottish FA Cup final (in Scotland) the practice of submitting lists. Only eight 55 Grand National states have carried out this exercise. 55 The Derby The ability of the European Broadcasting 55 Wimbledon finals Union to continue to try and protect sports 55 Rugby League Challenge Cup final events took a hit when it lost European rights 55 Rugby Union World Cup final. for the Winter and Summer Olympics from 2018 to 2024 to Discovery. This may be a sign Source: Compiled by the author from vari- of things to come. ous sources on the Internet On the other hand, the administrators at Wimbledon still have a strong loyalty to the BBC and are happy to allow it to continue to The problem with such an initiative however show it live. However, the Open golf champi- was that it failed to recognise the right of onship which had been shown for over sports property holders to seek out the best 60 years has been lost to Sky television. possible financial deal for their respective Commercial value and reality are beginning sports. The emergence of powerful subscrip- to hold sway. tion TV channels meant that much more Australia is perhaps the most protective of money was on the table than could be met by all sports markets. Successive governments public broadcasters. have maintained what it calls “anti-siphoning” 118 Chapter 5 · Sports Distribution and Media Rights

laws which cover over 1300 events ranging generate as a result of acquiring sports media from cricket to netball and rugby league. rights and charging high subscription rates to It can be strongly argued that adopting an its customer base. However, this viewpoint overly rigid approach to the concept of pro- ignores the investment needed to provide tecting certain sports disregards other critical access to sports events and the resulting abil- factors which are in play. The extra revenue ity of sports clubs and organisations to attract that can be generated from Pay TV platforms better quality players and provide a higher gives sports property owners more authority quality product for fans to enjoy. and control over their assets and allows them Swains (2015) notes that the people who potentially greater resources to invest in grass are responsible for illegal streaming are not 5 roots sport. Asser Institute (2014) explicitly the classic profiteers but instead are likely to recognises that it is not a one-dimensional be idealistic computer-savvy individuals who legal issue and that it needs to be framed in a see themselves almost as charitable providers broader socio-economic context. of sport to people who cannot afford the subscription fees. It can be argued that the problem is getting 5.9 Piracy worse. In the early days of illegal streaming of sports events the quality of the picture was One of the biggest threats to the various busi- unreliable and poor in terms of definition. ness models employed by Pay TV companies However, as technology moves on, this issue and the newer entrants is that of piracy. Put has been partially addressed: with the picture simply, many sports fans world-wide access quality and the stability of the streaming various sports events, competitions and improving. leagues by illegal means. They make use of a The cost of trying to protect sports media wide range of illegal websites who provide rights on the part of the Pay TV companies live streaming of sport. By utilising such should not be underestimated. Boyle (2015) sources fans can avoid having to make a pay- notes that the Spanish Football League esti- ment for the right to watch their favourite mates that piracy in the Spanish market was teams or events. costing the league 300 million Euro a season. We have witnessed similar experiences in The problem becomes even more complex the case of the music industry going back to as other aspects of distributing and streaming the early days of operators such as Napster. specific elements of a game or event become Legal battles ensued between illegal down- popular. For instance, over the past couple of loaders of music and the large music compa- years vines were very popular on the social nies. We have experienced similar activity in media platforms. These are (6 second) files the sports context as well. which can be shared among individuals via a Swains (2015) highlights the ease with social media platform. In the context of the which illegal platforms can evade the reach of sports sector this became very popular during legislators. One of the most popular plat- the 2014 World Cup in Brazil. Boyle (2015) forms: Wiziwig, closed down in Spain under notes that fans found it easy to pause and the threat of legal retribution. However, as replay live television instances and started was the case with the illegal distribution of posting vines of goals and key moments from music, other such sites open up almost on a games on micro-blogging sites such as Twitter. daily basis to replace them. The English Premier League instigated a num- Supporters of this policy of streaming pre- ber of measures to prevent such activity, argu- mium sports events for free argue that it is a ing that the practice infringed copyright law. justifiable response to the excessive profits However, the law is unclear on this and vines that media operators such as Sky and ESPN continue to be posted. 119 5 5.10 · Periscope and Meerkat (and Others)

The problem of illegal streaming extends By the time you read this they may have dis- to governments. In 2020, the Saudi govern- appeared or been acquired by other compa- ment, via its ruler, put in a bid of over nies. £300 million to take over Newcastle United, Such apps are proving to be very popular an English Premier League. The Qatari-owned with sports fans, particularly in the context of broadcaster BeIN has complained to the EPL viewing sports content. They pose further CEO about the illegal streaming service that is threats to sports media rights owners and add provided by Arabsat (via its network called another layer of complexity to the challenge beoutQ). Since 2017, this service has streamed of trying to protect the value of such assets. EPL games live to the MENA region. At the The reason why the apps are so popular is time of writing, the proposed bid has not yet that they allow fans to broadcast live video by received clearance from the EPL authorities. using their smartphones directly to a social media network platform such as Twitter. These clips tend to be short, such as goal 5.10 Periscope and Meerkat (and action in football, a catch in cricket or a sus- Others) tained rally between two players in tennis. Not just fans use them. Sports clubs can also make Around 2014 and 2015, live streaming apps video clips of interviews with players, shots of that allow people to live stream to their players in training or “behind-the-scenes” Twitter account and their contacts on that shots in, for instance, dressing rooms. This app became hot products. material can draw fans to the club’s website Two main players emerged: Periscope and and help the club to engage more strongly Meerkat. For a couple of years, they enjoyed with the overall fan-base. great popularity and usage among consumers However, the use of these apps by fans for across sectors such as music and sport. Think transmitting live action effectively makes them of its potential attractiveness? You are attend- broadcasters. The phenomenon has become so ing a live sports event and you can broadcast popular that Twitter bought out Periscope in live coverage to your friends. Of course, it is 2015. Of course, problems remain in terms of illegal and you may be prevented from doing the ability of fans to capture smooth and sta- so by security officials. ble video: in many cases there is a “shaky” Meerkat encountered a serious obstacle configuration to what can be seen. However, when Twitter elected to go with the Periscope technology in the form of high-quality cam- version. This app proved to be more popular eras that are in-built in the smart phone can with fans. alleviate this issue to some extent. Both companies faced potentially fatal YouTube scans uploads to check for copy- threats when some of the big tech companies right infringement, which can enable the decided to encroach on this sector. The most rights holder to remove the content. However, prominent was Facebook live and YouTube if the material goes out live it makes it very live. In 2016, Meerkat went out of business. difficult to remove such material in such a Periscope has survived but is struggling to sur- short space of time. vive in relation to the resources of “the big The threat of piracy raises interesting guys”. questions about the legal position and the Both Periscope and Meerkat are live video likely response of sports media rights owners streaming apps and were launched within and the sports property holders who sell on weeks of each other in 2014 (Williams 2015). such rights. 120 Chapter 5 · Sports Distribution and Media Rights

The Fight of the Century

Arguably the most lucrative fight of all time media at their peak. This infringed copyright took place in May 2015. This involved Floyd rules and people who accessed such material Mayweather and Manny Pacquiao. It took place faced exclusion from their Twitter accounts. in Las Vegas and the only official way to view it The right-holders (most likely Showtime) con- was through “pay-per-view (PPV). A record fee tacted Twitter and it was able to act on thirty of of $99 was charged for the privilege of accessing the streams. The rest had either ended or were this fight. It generated over $400 million from no longer available. over 4.4 million customers who paid the sub- It should be pointed out that pre-fight cov- 5 scription fee to watch it “virtually”. This erage, using Periscope included access to one of excludes revenue generated from ticketing sales, the fighter’s dressing rooms was used by one of sponsorship and corporate hospitality. the sports rights-holders. They felt that such However, the term “Periscope” featured a activity helped to build a rapport and relation- lot on the social media chitter-chatter. It was ship with the viewers. mentioned over 90,000 times on Twitter - the Source: Adapted from: Hochberg (2015) highest since the app was launched. “Up Periscope”. SportsBusiness International. ESPN estimated that certain streams of the June, pp. 18–19. fight has more than 10,000 viewers on social

??Who is the winner here? The boxing fans widespread and were carried out more as an who accessed the fight through Periscope attempt to discourage further postings of and Meerkat? The boxing fans who paid such materials. the official fee to PPV? The sports media It can be argued that technology and the right holders such as Showtime? way in which it evolves at a transformational rate means that the sports rights holders and property owners are always at least a couple of steps “behind the posse”. We can draw a 5.11 Protecting Sports Media similar analogy with the sports drug testers. Rights: Legal Responses Many commentators argue that they too are a and Actions long way behind scientific advances in drugs and are failing to provide adequate or appro- The confluence of social media platforms, priate testing devices for potential cheating technology and apps as you might imagine, athletes. has challenged the sports entity owners and In many ways the attempts by the property rights holders. Their responses have been var- owners and rights holders to take legal action ied and reflect their own concerns and confu- is also similar to the initiatives used by author- sion about how they might deal with the loss ities to prevent ambush marketing (examined

of control over the sports content from events in detail in 7 Chap. 10). While legislation can that they in theory own or have purchased the reduce the amount of illegal activity it can rights to. never eliminate it. As is the case with ambush At one end of the scale of response, the marketing, creativity and ingenuity can over- Association of Tennis Professionals (ATP) come the best efforts of many legal provisions. Tour administrators began some legal actions When we relate this to the case of illegal against fans who violated copyright by post- streaming and distribution of sport media ing gifs and vines. This attracted a predictable rights and add it to the way in which technol- level of critical response from fans who com- ogy develops so quickly we can make the plained about the pettiness of such an observation that it will likewise never be elimi- approach (Myles 2015). The ATP subse- nated. If one site or operator is closed down, quently claimed their legal actions were not others spring up almost immediately. 121 5 5.11 · Protecting Sports Media Rights: Legal Responses and Actions

5.11.1 Geo-Blocking organisations with the “deepest pocket” such as Sky, Netflix, and Amazon and so on. For Geo-blocking refers to technology that the moment, however, it suits the likes of Sky restricts the transmission of content to a spe- to continue with the practice of geo-blocking. cific geographic territory and prohibits access It remains to be seen what type of legislation to it from other countries or regions outside will emerge in the coming years. that specified territory. People who argue against geo-blocking For instance, a football fan living in make their case around the fact that it is Portugal cannot take out a subscription to undemocratic and unfair to fans, who have to Sky TV to access football matches that are pay high fees in order to access their favourite transmitted in the UK. That fan would have teams and sports. to make do with whatever coverage of the The European Commission (EC) has EPL is legally available in Portugal. expressed concerns about the restrictions that Geo-blocking protects the rights and inter- geo-blocking imposes on fans. For the past ests of key stakeholders such as sports prop- number of years, it has moved in the direction erty owners and traditional and OTT of what it calls a “digital single market”. This broadcasters and service providers. It is envisages a situation where all citizens living becoming increasingly easier to transmit live within the European Union should have the sports and defenders of the practice argue same level of access to the range of online prod- that it is necessary to deter illegal streaming. ucts and pay similar prices for such services. Of course, it is not totally fool proof. Fans The sports sector has proved to be contro- can use technologies such as VPN to disguise versial and problematic. This is mainly where they are located. As mentioned earlier, because of the high value of the top sports illegal streaming services are prolific and properties and the equally high amount of already pose a threat to the stakeholders. investment that is wrapped up in the sale of One of the key areas that sports rights sports media rights. holders strive to manage aggressively is that Fitzgerald-Morgan (2019) notes that the of territorial protection. For instance, rights European Commission carried out an investi- holders of the EPL in the UK market take gation into the licensing practices of Hollywood legal initiatives open to them to block cover- Studios and Sky TV with respect to the film age in other geographic markets. industry. They were concerned that key players The European Union, in 2014 argued that such as Hollywood Studios and Sky utilised a this was contrary to the spirit of single market number of “blocking clauses” to restrict the that professed to have no boundaries. Indeed distribution of movies across geographic terri- in 2012 the European Court of Justice ruled tories. Both of these companies responded by that it was not possible to enforce copyright indicating that they would be committed in the on a country-by-country basis. However, it future to not imposing such clauses. has rowed back on this view. This of course does not translate automati- The Sports Rights Owners Coalition pro- cally into law. A commitment is simply an duced a paper arguing strongly for the reten- expression to do something and nothing else. tion of geo-blocking which was submitted to However, it indicates a degree of agreement with the EU (2012). They noted that the structure the general sentiments expressed by the EC. and make-up of the European sports market Sport is not included in this report (it (different cultures, different preferences for focused only on the film industry). sports among fans and competitive issues) Houssain and Chan (2019) reported on militated against the introduction of the lift- changes to the EU’s broadcasting rules in the ing of territorial blocking. area of sport. It agreed to allow radio cover- An end to the practice of sports rights age of sport to become pan-European (citi- operators bidding on a country-by-country zens in EU countries can get access to basis would presumably suit the media domestic coverage of live sports events). 122 Chapter 5 · Sports Distribution and Media Rights

Arguably, this is the first move to the loos- competitions via a range of channels and ening of geo-blocking in the area of sport. determine when and where they wish to view We should note that such agreements work it. Access points such as bars and homes have slowly in the context of EU operations. It has expanded greatly. As long as there is an implications for the key stakeholders in the Internet connection available people can view sports sector going forward. It is unlikely in sport where they want to. the medium term that we will see legislation The cost of Pay TV has risen over the being introduced that prohibits the policy of years. Strong debates continue over the effi- geo-blocking. We should however monitor the cacy of this type of arrangement. Some com- situation closely. menters argue that it isolates a large proportion 5 of individuals in society such as low-income people. Others argue that it encourages greed, 5.11.2 Exercise leading to salaries for sports stars that are not deserved and indeed are obscene. ??Assess the impact of geo-blocking on the Counter-arguments put forward revolve sports fan. around the view that the quality of the product has risen exponentially as a result and that 5.12 Conclusions the technology used by TV companies has transformed sport into the most absorbing In this chapter we have examined the impor- and immersive sector within the leisure and tance of sports media rights in the context of entertainment industry. distributing sport to the target audiences and We examined the emergence of operators as a major source of revenue stream for sports such as Periscope and Meerkat and their sub- entity holders. sequent decline, due to the arrival of major We have noted the major transformation players such as Facebook. These apps allow that has taken place world-wide in the way in fans to stream live material from sports events which media rights for sports properties are as they video the action or film direct from TV sold. The emergence and dominance of pow- coverage of the event. In effect fans can erful Pay TV media operators such as Sky, become broadcasters and play a much more Foxtel and ESPN has changed the nature of proactive role in their relationship with key the product that fans witness on their TV stakeholders such as sports property owners screens and other devices. Whereas the tradi- and media rights holders. tional means of distributing sport in many We evaluated the concept of “protected parts of Europe revolved around limited cov- sports events” where governments identify erage by the public (state-owned) broadcast- certain sports property that have national ers, the modern method has spun that model importance and resonance with society and on its head and we can now see virtually all where everyone had the right to have free sport on our devices, albeit at a price (some access to such events. people argue an extortionate price). We also considered the legal response of The sale and purchase of sports media the main players in the sector to illegal stream- rights has evolved hand-in-hand with the ing and transmission of events. However, as emergence of social media platforms and soon as one such operator disappears, others associated technology developments. This has pop up. also heavily shaped the way in which fans con- Even in areas such as geo-blocking in the sume sport. Fans are no longer dependent on context of the European market, it is still limited availability of sport on television. unclear as to the direction the European They can access their favourite teams and Union is likely to follow. 123 5 5.12 · Conclusions

??End of Chapter Discussion Questions Learning Outcomes 1. Assess the view that the fan is victimised 55 Sports media rights play an increasingly by Pay TV companies. Use examples to more important role as a revenue stream support your point of view. for sports property owners 2. Examine the extent to which you agree 55 Pay TV companies are increasingly with the view that governments should coming under threat from new and not become involved in regulating potential entrants to the sports media sports media rights. rights sector. These include telecommu- 3. Evaluate the role played by OTT oper- nications companies such as BT, social ators in the relationship between sports media platforms such as Yahoo and fans and their consumption of sport. Twitter, entertainment media compa- 4. Some commentators argue that it is nies such as Netflix and file sharing impossible to eliminate the problem of apps such as Periscope illegal streaming of live sports events. 55 Some sports properties deemed to be of Assess the validity of this viewpoint. national importance and significance 5. Discuss the perception that technology are protected by governments. This has shifted control of the sports prop- means that they have to be made avail- erty from the media rights holders to able free-to-air to sports fans the fans. Use examples to support your 55 Illegal streaming threatens the business line of argument. models employed by the media players 6. Instead of sports property-owners in this sector. Even fans can transmit negotiating on behalf of clubs, it can live sport by making use of apps such as be argued that the individual clubs Facebook and Periscope should be allowed to capitalise on the 55 Over the top (OTT) operators have seri- value of its own assets by selling its ously threatened the way in which Pay own property rights. Examine the TV companies build their customer extent to which you would agree with base. Such companies ensure that a this argument. Use examples to sup- sports fan no longer has to necessarily port your point of view. take out a monthly subscription to 7. You have been asked by the CEO of access a particular sporting event your National field hockey federation 55 Legal intervention only partially for advice as to how they can make the addresses the problem of illegal stream- sport more popular. In particular the ing and broadcasting. It is unlikely ever Federation wants guidance on using to eliminate this problem social media to enhance its popularity. 55 Practices such as geo-blocking i.e. terri- Detail the recommendations and torial protection, by media rights hold- initiatives that you would make. ers has an uncertain future. Legislators within the European Union have not yet come up with viable proposals for addressing the issue. 124 Chapter 5 · Sports Distribution and Media Rights

Appendix

Squashed. Anyone for Tennis?

The sports of tennis and squash are very differ- market, it has attracted a number of presti- ent in terms of the number of people who par- gious brands as sponsors. These include com- ticipate in these sports, particularly in areas panies such as J.P. Morgan and Delaware such as the popularity of the sports, the level of Investments. exposure that the sports generate in the media The Tennis Channel is an American sports- and the awareness that sports fans have of the oriented digital cable and satellite television 5 top players. Tennis is a global sport (but not at network that is owned by The Tennis Channel, the ubiquitous level of football). Squash is a Inc., and a subsidiary of Sinclair Broadcast niche sport, although played by many people Group. It is devoted to events and other pro- globally. gramming related to the game of tennis, along Squash has suffered traditionally from with other racquet sports such as badminton challenges in making it an attractive sport to and racquetball. watch on television. How can you make it inter- In March 2015, the Tennis Channel part- esting when it involves players repeatedly hit- nered with the Professional Squash Association ting the ball up against a wall? Due to the speed to cover some of the major events and competi- of the action in such a confined space, it has tions. been difficult for TV viewers to sight the ball. Some commentators queried the rationale The 1980s and 1990s could be described as for this partnership. Although both sports its peak period in terms of popularity. come under the general heading of “racquet” Administrators moved to the use of glass walls sports, as we mentioned at the beginning, they which allowed TV cameras to come up with a are quite different in terms of their global reach more diverse and interesting use of cameras and appeal. and angles. It also had very marketable super- From the perspective of the Tennis Channel stars such as Jahangir and Jansher Khan. It programming, it did not disrupt or reduce their continues to be a very popular sport in the coverage of tennis tournaments. It simply Asian market. extended its product line, and in their view, Gaining TV coverage tended to be prob- allowed them to cover a complementary sport. lematic in key markets such as Europe and The deal was designed to cover ten North America over the past couple of decades. Professional Squash Association (PSA) tour- Audiences declined and sponsors dropped out naments throughout the year; covering male and were not replaced to any significant extent. and female events. Despite applying on a regular basis for The Tennis Channel reaches out to thirty- inclusion as an Olympic sport, it has consis- five million viewers globally. This rises to tently failed to achieve this distinction. This around fifty-five million during the four means that the sport misses out on a regular “Grand Slam” tournaments. For the PSA, it opportunity to showcase its merits (a skilful, provides an opportunity to go beyond their tra- strenuous and challenging sport) to a global ditional fan-base and give it more coverage. audience. They also hoped that by acquiring a higher In some key markets (in terms of media profile it would help the sport to achieve its coverage), it is perceived as an elitist sport. For long-running goal of achieving Olympic status. instance in the USA it is a sport that mainly While it is difficult to assess the potential features in the top universities sports arenas financial arrangements, the Tennis Channel has (the Ivy League). stated that the PSA will take a share of any On a positive note, in the US market, advertising that comes from the squash pro- because it appeals to the elite segment of the gramming. This would not initially be very 125 5 Appendix

high, due to the relatively limited appeal and Evidence of how successful their arrange- reach of squash, but both parties are working ments have been is captured in the following on the expectation that this will build over time. quote from the PSA. This raises the issue of balancing the poten- “Six months after taking responsibility for tial revenue that might be generated from such broadcast rights in-house in partnership with a partnership, against the need to build the Broadreach Media, the Professional Squash viewer base and widen the appeal of the sport Association (PSA) has announced record of squash. growth in television exposure during the first The PSA also runs its own online TV chan- half of 2015”. nel: Squash TV. This provides live streaming of The PSA’s global reach has more than dou- events to its existing squash viewers. bled since January with major networks such as In late 2015 the PSA entered into a partner- Astro, BeIn Sport, BT Sport, Fox Sports ship with Eurosport to provide an OTT media Australia, Sky Sports NZ, Super Sports, Ten rights deal. As part of the five-year deal, which Sports and Tennis Channel having already was signed in conjunction with Broadreach signed agreements that sees televised coverage Media, Eurosport will effectively migrate the of semi-finals and finals from the sport’s big- PSA’s Squash TV player onto its own digital on- gest events taken to over 200 million homes demand platform, Eurosport Player. The deal across 88 countries worldwide. guarantees coverage of 500 hours of squash per With that growth set to continue through- year. out the 2015-16 season, squash will be taken to From 1st January 2016, all Squash TV more homes around the world than ever before tournaments will be shown live and exclusively as men’s and women’s professional squash con- in their entirety throughout Europe via tinues to expand its global presence and the Eurosport Player, while selected highlights sport continues to push for inclusion within the from major tournaments such as the British 2020 Olympic Games Programme. (PSA press Open, US Open, PSA World Series Finals and release; August 2015). PSA World Championship will be broadcast Additionally, the PSA has also announced throughout Europe via the network’s main- that squash would become the first racquet stream linear channels. sport ever to be broadcast live in UltraHD in “Eurosport is committed to fuel fans’ pas- the UK. sion everywhere by delivering the best sport’s The historic broadcast occurred during the experience all year round and Eurosport Player 2015 AJ Bell British Squash Grand Prix, which is the perfect platform to deliver on this com- took place in Manchester in September, when mitment to squash fans across Europe.” the semi-finals and final were shown live on BT PSA chief executive Alex Gough said, Sport in HD and UltraHD on Sunday, 13 “Since taking responsibility for TV rights ‘in- September and Monday, 14 September. house’ in January, our global television reach Jamie Hindhaugh, Chief Operating Officer, has more than doubled as we have added major BT Sport and BT TV, said: “BT Sport has networks such as BeIn Sport, BT Sport, Super enjoyed supporting the PSA since our broad- Sports, Ten Sports, Tennis Channel and more cast partnership was announced in January this to our portfolio and Eurosport is the latest top- year. We look forward to bringing squash fans class network to join this growing list. The the 2015 AJ Bell British Squash Grand Prix in agreement will take our product and the exploits ultra-high-definition later this year.” of our players into millions of new homes and The PSA World Tour began a new partner- expose the sport to an entirely new audience ship with production company MOOV.tv in across Europe in what is a massive moment in January introducing many enhancements to the history of squash broadcasting.” the sport’s coverage, including radio and 126 Chapter 5 · Sports Distribution and Media Rights

robotic cameras. However, this latest advance- with the world’s first UHD ChyronHego graph- ment is set to really showcase the sport in a new ics engines offering razor sharp graphics cer- light. tainly adding to the ‘wow’ factor.” “UltraHD is 4 times the detail of the cur- Sources: adapted from: Emmett, James rent HD format and will bring squash to life on (2015) “Eurosport signs landmark squash

television like never before,” said MOOV.tv deal”. Sports Pro. Available at 7 http://www. Director, Nev Appleton. “The picture quality is sportspromedia.com/news/eurosport_signs_ stunning, you feel like you are actually at the landmark_squash_deal. event, giving the viewer the best seat in the PSA (2015) “Record numbers exposed to 5 house is always the objective. It doesn’t stop squash in 2015”. Available at: 13th August. there, The BT Sport UltraHD truck is equipped (Accessed October 2016)

??Discussion Questions Houssain, Elsa Haj and Dickie Chan. 2019. Unexpected 1. Assess the strategy employed by the win for English football enthusiasts around the EU and heavy defeat for rights holders wallets. Sports PSA to expand the sport of squash shorts: Insights on sporting developments. Available globally. at: https://www.sports.legal/2019/02/unexpected- 2. Do you think they have done enough win-for-english-football-enthusiasts-around-the-eu- to convince the International Olympic and-heavy-defeat-for-rights-holders-wallets/. Committee to include squash in future Jackson, Jasper. 2016. Twitter to live stream NFLs Thursday night football. The Guardian. Summer Olympic Games? Joseph, Seb. 2016. Live streaming – the ticking time 3. Identify other initiatives that could bomb for sports broadcasters. The Drum. Available further enhance the profile of squash, at: http://www.thedrum.com/news/2016/04/11/live- particularly with respect to the value streaming-ticking-time-bomb-sports-broadcasters. of its sports media rights. Accessed Oct 2016. Miloch, K., and K. Lambrecht. 2006. Consumer awareness of sponsorship at grassroots sports events. Sports Marketing Quarterly, [e-journal] 15: 147–154. References Available through: Taylor & Francis Social Science & Humanities with Science & Technology http:// Asser Institute. 2014. Study on sports organisers’ rights in citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1. the European Union. Final report for the European 392.4265&rep=rep1&type=pdf . Accessed Oct 2016. Union. Available at: http://ec.europa.eu/sport/ Myles, Stephanie. 2015. Periscope ushers in wild-west news/2014/docs/study-sor2014-final-report-gc-com- era for sports broadcasting. The Guardian. Available patible_en.pdf. Accessed Oct 2016. at: https://www.theguardian.com/sport/blog/2015/ Boyle, Raymond. 2015. Copyright, football and European may/16/periscope-ushers-in-wild-west-era-for- media rights. CREATe Working Paper. sports-broadcasting Dunne, Frank. 2016. OTT’s European power struggle. Nicholson, Matthew. 2007. Sport and the media: SportBusiness International, 16–19. Managing the nexus. Amsterdam: Elsevier. Fitzgerald-Morgan, Ciaran. 2019. The legality of geo- Plunkett, John. 2015. Sky profits rise as it passes 12 million blocking: Could Sky’s recent commitments in the UK and Ireland customers. The Guardian. Available at: Pay TV case impact European sports broadcasting? https://www.theguardian.com/media/2015/jul/29/sky- LawinSport. Available at: https://www.lawinsport. profits-rise-customers-germany-italy. Accessed Oct 2016. com/topics/item/the-legality-of-geo-blocking- Russo, Chris. 2016. Sports and the OTT revolution. could-sky-s-recent-commitments-in-the-pay-tv- Available at http://www.mediaentertainmenttech case-impact-european-sports-broadcasting outlook.com/cxoinsights/sports-and-the-ott- Football Benchmark KMGP. 2020. Available at https:// revolution-nid-39.html. Accessed Oct 2016. www.footballbenchmark.com/library/will_ott_ Smith, Paul, Tom Evens, and Petros Iosifidis. 2016. The shake_up_the_football_broadcasting_industry next big match: Convergence, competition and sports Hochberg, Matthew. 2015. Up periscope. SportsBusiness media rights. European Journal of Communication 31 International, 18–19. (5): 536–550. 127 5 References

SportBusiness Consulting Global Media Report. 2018. Delaware North. 2016. The future of sports. Available at Available at: https://www.sportbusiness.com/2018/11/ http://future-of-sports-2016. Accessed Oct 2016. sportbusiness-consulting-global-media-report/ Williams, Rhiannon. 2015. What’s the difference Swains, Howard. 2015. Free football streaming: How between meerkat and periscope? The Telegraph. illegal sites keep outpacing broadcasters. The Available at: http://www.telegraph.co.uk/technol- Guardian. Available at https://www.theguardian. ogy/social-media/11503574/Whats-the-difference- com/football/2015/aug/01/faster-easier-free-illegal- between-Meerkat-and-Periscope.html football-streams 129 6

Formulating and Implementing Sports Marketing Strategy

Contents

6.1 Introduction – 131 6.2 Placing Strategy in Context – 131 6.2.1 Strategy Defined – 132 6.2.2 Benefits and Limitations of Strategy Development and Formulation – 133

6.3 The Relationship Between Marketing and the Strategic Planning Process – 135 6.4 The Strategic Market Planning Process – 136 6.4.1 Mission and Values of the Organisation – 137 6.4.2 Mission Statements – 138

6.5 Analysis of the Business Environment – 139 6.6 Pestel Analysis and Appraisal – 139 6.6.1 Political Environment – 140 6.6.2 Exercise – 141 6.6.3 Economic Environment – 141 6.6.4 Social Environment – 142 6.6.5 Technological Environment – 143 6.6.6 Environmental Issues – 144 6.6.7 Legal Environment – 145

Electronic Supplementary Material The online version of this chapter (https://doi.org/10.1007/978-3-030-53740-1_6) contains supplementary material, which is available to authorized users.

© The Author(s) 2020 S. Ennis, Sports Marketing, https://doi.org/10.1007/978-3-030-53740-1_6 6.7 SWOT Analysis – 145 6.8 Competitive Positioning – 146 6.9 Developing the Core Marketing Strategy – 146 6.10 Evaluation and Control – 147 6.10.1 Exercise – 148

6.11 Conclusions – 148 Appendix – 149 References – 151 131 6 6.2 · Placing Strategy in Context nnLearning Objectives Plans and strategies explicitly capture how On completion of this chapter you should the rationale is articulated in writing for both be able to address the following objectives: internal and external scrutiny and overview. 55 Understand what is meant by strategy In this chapter we examine what is meant and its relevance for sports marketers by the term “strategy” and assess the role that 55 Examine the different approaches to the marketing function plays in strategy for- strategy development and implementa- mulation and implementation. tion We consider some of the characteristics of 55 Assess the role played by the marketing sports marketing, how they might differ from function in strategy development within businesses in other industry sectors and the the sports sector implications for strategy development. We 55 Assess the pros and cons of strategy de- assess the implications for the successful for- velopment in the context of the sports mulation and implementation of sports mar- sector keting strategy for the specific sports 55 Understand the different level of strat- organisation and the constituent stakeholders egy development that are also involved in delivering the “sports 55 Examine the different components of product” to the target audiences. a sports marketing plan and its link to We look at some examples of how sports overall strategy development and im- organisations develop their approach to strat- plementation. egy development and assess how this takes them forward. One of the key mantras that we revisit in 6.1 Introduction this book is the link between theory and practice. All organisations struggle with planning As we have noted in earlier chapters, the and strategy development. It is not easy to lay sports sector in many parts of the world has out the principles of strategy development recognised that at the elite end it has become a and planning without appropriate analysis business. The arrival of executives and direc- and appraisal. tors from traditional commercial organisa- The sports sector specifically throws up tions has led to a recognition of the importance some unique challenges and issues which of devising plans and strategies in order to arguably make the implementation of plans monetise the business, expand revenue streams more complex. As Mike Tyson, the former and grow the business within the global con- World Heavyweight champion so succinctly text. put it: everybody has a plan until someone Sports bodies closer to the “grass-roots” punches them in the face! domain of sport also have to adopt a business- like approach to planning for their growth and development. It is not just the preserve of 6.2 Placing Strategy in Context elite sports clubs, organisations and bodies. For instance, even the smallest of clubs is The term “strategy” is arguably one of the required to put a plan in place if they apply most overused words in the business lexicon. for sports funding from government bodies or While many commentators argue that it is an when seeking a loan from a financial institu- essential prerequisite for a successful business, tion. Representatives of such organisations it also conjures up many difficulties and demand to see evidence and justification for obstacles in its formulation and implementa- the granting of such funding. Sports organ- tion. It is not our intention in this chapter to isations at every level have to outline the ratio- denigrate the role of planning or strategy nale for funding in general but also to their necessarily. However, it is important that we stakeholders in terms of where they want to place the topic in context and assess the pros be in future years. and cons associated with it. We also need to 132 Chapter 6 · Formulating and Implementing Sports Marketing Strategy

get a clearer understanding of what we mean generate more innovative initiatives that place by the term “strategy”. This is also important the organisation ahead of the competitors. because many people (including the so-called For instance, it can create what is referred to “experts”) put forward many different inter- as “first-mover” advantage that ensures com- pretations of what they understand it to mean. petitors struggle to catch up with that organ- Piercy (2017) provides some useful analy- isation. Crucially it allows the company to sis of what strategy is all about and also what build up scale and expertise in that area. it does not represent. He argues that strategy Such people are often referred to as vision- is not necessarily about strategic planning and aries, in so much as they have a clear picture the adoption of various prescriptive models of where they see the organisation going in and frameworks. Such prescriptive approaches the future. Crucially, they are able to create a were very popular with corporations in the corporate culture where they can drive such 1970s, 1980s, and up to the turn of the cen- change within the organisation concerned. In 6 tury. Indeed, many consultancy groups such essence they are able to take the organisation as the Boston Consulting Group designed out of the mundane, day-to-day operational their own models which they used to develop thinking and infuse senior management with such prescriptive plans and strategies for com- an enthusiasm to drive the company forward. panies. Arguably, strategic thinking is more In hindsight, while companies derived important than simply relying on the formu- some benefits from such a disciplined laic approach that is reflected in complicated approach to strategic planning, they tended to and detailed plans. be overly simplistic and failed to consider the However, we have to be careful in dismiss- complexities and oscillations that typically ing the role of plans and strategies. If a com- occur in many industries. A healthy degree of pany or organisation relies exclusively on the cynicism has existed for many years about strategic thinking and machinations of one their effectiveness. Arguably, the advent of the individual, it can quickly encounter problems. Coronavirus pandemic exacerbated such cyni- For instance, if such thinking is not articu- cism. lated in writing in the form of a plan or strat- It can be argued that many organisations egy then it will inevitably lead to confusion, a such as Amazon, Uber and Google did not lack of transparency and in the worst-case become successful simply because they scenario, potential for fraudulent behaviour. invested in strategic plans. Indeed, many If the so-called “visionary” or “strategic entrepreneurs eschew the use of such frame- thinker” leaves the organisation or dies, then works and rely more on strategic thinking in there is a significant risk that the organisation order to develop their value propositions. will struggle because of the absence of that The concept of strategic thinking is an person’s clarity or communication. important one in the context of strategy Without articulated plans in the form of development and implementation. Arguably documentation, it makes it easier for individu- it is the ability of the company founder or als to operate in a dictatorial manner leading senior executives to assess the future. This to various forms of unethical behaviour. In entails having a grasp of the likely ways and the context of sport, we have seen such behav- directions in which the industry is going to iour in organisations such as Formula One map out. Not many managers have the ana- motor racing and FIFA, to name but a couple. lytical, empathic and creative skills to do this successfully. It can be argued that entrepreneurial types 6.2.1 Strategy Defined and mavericks tend to “think outside of the box”. This allows them to have a “wider” and As is the case with much of the business and more long-term perspective of their respective marketing literature, it quickly becomes clear businesses. Such thinking and behaviour can that there are many alternate and conflicting 133 6 6.2 · Placing Strategy in Context views about what exactly is meant by the term of time, why it is pursuing this approach and “strategy”. It is not our intention in this book how it intends to get there. Incorporated into to spend an inordinate amount of time dis- this way of thinking are specific plans and ini- secting the different interpretations. However, tiatives to address these objectives. In terms of a quick perusal can give us insight into some evaluating the success or otherwise of the of the main lines of thinking. strategy, companies develop various “control” Porter (1996) argues that strategy revolves devices such as key performance indicators, around focusing on how an organisation can metrics and targets. differentiate itself from the competition. A clearly defined value proposition that highlights such points of differentiation will place 6.2.2 Benefits and Limitations of that organisation in a significantly stronger Strategy Development and position than its competitors. Formulation Mintzberg (1994) challenged much of the conventional thinking about strategy. He sug- Before we consider this issue in detail we gested that many commentators viewed strat- should recognise at the outset that the absence egy as a means to an end: getting from here to of any strategy is likely to lead to the demise there; with the focus on how this might be of organisations. Even in situations where it achieved. Others, he argued saw strategy as a has a very clear and differentiated value prop- pattern of initiatives and activities over time, osition, it is inevitable that over time, competi- that reflect that company’s target markets. tion will catch up and new entrants will Some companies focus on the concept of emerge to overtake the organisation. This may position. This revolves around the products it happen with or without clear evidence of a develops and the markets it targets. He also strategy. However, without one it can be identified other commentators who view strat- argued that the organisation is like a ship egy as a position that the company adopts, without a rudder. Without a strategy it is largely based on its vision and direction of the likely to drift along aimlessly and eventually future. disappear. In addition to providing direction In a later publication Mintzberg et al. for an organisation, we can identify the fol- (1998) identified ten schools of thought that lowing potential benefits as well. reflect different perspectives of strategy. These 1. Provides a focus for management: A clearly approaches reflect in some cases a prescriptive articulated strategy which reflects the approach, with the emphasis on formal plan- thinking of the CEO and senior manage- ning. Others, an entrepreneurial approach, ment can act as a point of focus and com- which focuses more on how strategies get monality of purpose for the company. made. He describes a final grouping as the Such a document helps to identify the learning school. This emphasises that strategy agenda for the future and the rationale emerges in incremental steps as the organisa- behind the thinking. tion evolves and adapts to changes in the sec- 2. Provides consistency: A strategy provides tor, the environment and so on. consistency from the point of view of Mintzberg is of the belief that strategies decision-making, across the different emerge over time. They evolve, adjust and business functions in the organisation. It align with the realities of a changing business makes it more difficult for a departmental environment. Formal written strategies cap- plan or initiative to deviate significantly ture such changes and have a role to play in from the overall strategy of the organisa- communicating developments to the key tion if the plan is clearly articulated and stakeholders in the organisation. communicated to the various manage- In essence, strategy can be defined as pro- ment teams. viding direction for an organisation as to 3. Reduction of risk: All businesses are when and where it wants to be, over a period potentially exposed to some form of risk. 134 Chapter 6 · Formulating and Implementing Sports Marketing Strategy

This can fluctuate and oscillate, depend- agility that is often required from organisa- ing on the nature of the industry sector. A tions and their senior personnel. strategy can certainly pinpoint the areas 2. Costly: Unless the organisation employs a of current and potential exposure to risk. disciplined approach to the process of It can identify responses for addressing developing the plan, it is likely that it will such risk. become a costly exercise in terms of setting 4. Helps to refine existing objectives: A strat- up committees and sub-committees. It will egy, when combined with regular reviews also be costly in terms of management and assessment, helps the organisation to time and effort. revise its objectives and alter direction (if 3. Succession: Within most organisations, necessary) in response to potential threats CEOs, Managing Directors and key senior and opportunities in the environment. personnel come and go. They move on to 5. Better allocation of resources: One of the other companies, other sectors in order to 6 strongest arguments in favour of strategic advance their careers. Realistically, strate- planning rests with the way in which an gic plans often take 3–5 years before the organisation allocates resources across its implications of their objectives and deci- product portfolios. Clarity of thinking can sions begin to take effect. By that time the identify priority areas where investment is individual(s) responsible for the formula- needed. For instance, in the context of the tion and implementation of the plan have sports sector, sports administrators increas- moved on. This can create at best, a frac- ingly have to allocate more resources to the ture in the organisation, as new people development of women’s leagues or compe- move into the position. titions. In the case of rugby and football, 4. Legacy: Closely related to succession is some clubs and national associations have that of legacy. New CEOs find it difficult increased expenditure on the establishment to make any significant change to the of full-time professional ladies teams to organisation because they increasingly complement their male counterparts. have to engage in firefighting tactics to address problems caused by the previous Companies can make mistakes from blindly input of the last CEO. accepting the benefits associated with strategy 5. Resistance to change: The arrival of a new development. It might be naïve to suggest that CEO, full of vision and new ideas can there are clear disadvantages involved with encounter major resistance from existing such an exercise. However, organisations can management personnel within the organ- make mistakes and potentially ignore possible isation. This is very noticeable in the sports pitfalls. We identify some potential limitations sector. Many clubs and organisations are as follows. actively recruiting people from traditional 1. Tablets of stone: Some organisations adopt manufacturing and services industries. the view that once the strategic plan is These people bring ideas and theories developed it becomes the mantra for all which have been honed in the “white heat” subsequent activities and initiatives. As a of competitive battle and activity. Clubs consequence, it becomes very reluctant to and organisations, steeped in the heritage make any amendments (either major or and tradition of their sport often put up minor) to the predetermined strategy. This stout resistance to proposed radical can lead to inertia at best, and a dereliction changes in direction. While the new CEO of duty at worst, if the company fails to or Marketing Director wants to monetise adapt in time when something happens that the business by developing new revenue the industry was not expecting. This limita- streams, existing management may express tion is also evidenced in the rigidity which is distain for such proposals. imposed on the strategic plan. This further Another key constituent stakeholder; the exacerbates the lack of adaptability and fans, may also provide some strong resis- 135 6 6.3 · The Relationship Between Marketing and the Strategic Planning Process

tance to such developments. We have seen 6.3 The Relationship Between such resistance in situations where fans Marketing and the Strategic rebel against the club selling naming rights Planning Process for the stadium or where the owner of a club may want to change the colour of the Before we consider the different steps involved team’s shirt or even the name of the club, in the planning and strategy development pro- in order to exploit opportunities in other cess we should examine the role and influence geographic markets. Within English foot- of marketing in this exercise. ball for instance, the Asian owner of From the lense of a marketing practitioner, Cardiff City wanted to change the jerseys it is strongly argued that marketing is central from blue to red, in recognition of the cul- in the development of a relevant and coherent tural importance of this colour in many strategy for the organisation. This is based on Asian countries. The Egyptian owner of the premise that the marketing profession is Hull City wanted to change the name of customer-centric and customer-facing. the club to Hull Tigers, in recognition of Without a clear understanding of the needs the importance of that animal in certain and requirements of the customer base, it is parts of the world. highly unlikely that any subsequent machina- 6. Achieving the correct balance: In sport we tions built around a plan will reflect the reality have to balance the desire to increase rev- of the market and the business environment. enue and widen exposure within new inter- It will fail to track and identify potential national markets with tradition and threats and opportunities and potentially heritage. We also have to take into consid- ignore competitive activities and initiatives. eration the views and perceptions of stake- In essence, without marketing playing a holders such as fans, media broadcasters key role, organisations are likely to misalign and sponsors. In the case of fans, many their strategies with the market conditions prefer to see the club spend money on that prevail. players in order to achieve success - even if The focus on the customer is therefore this threatens the very survival of the club. seen as being the fulcrum or central point for They are resistant in many cases to owners the subsequent formulation and implementa- and management employing strict finan- tion of the strategic plan. cial protocols to ensure that the club is However, this perception of the role of profitable. Entertainment is often placed marketing in overall strategic planning as higher than profitability in the minds of espoused by marketing practitioners and fans. The recent Coronavirus crisis vividly experts, is not necessarily accepted with such highlighted the precariousness of many enthusiasm by organisations in practice. This sports clubs and organisations. is exacerbated by the reality that many large organisations do not select or recruit their Likewise increasing demands placed on sports CEOs from the marketing field. The majority entity owners by the media can often lead to come from the financial discipline. decisions that are not accepted with any fer- Perceptions of the marketing profession vour by fans. This is exemplified in practices are often not that positive. Some companies such as changing the timing of games to suit perceive marketing as a discipline that focuses international time-zones, reducing the length on demanding and spending money on spuri- of the sports event to meet existing TV sched- ous initiatives such as advertising. This per- ules and so on. ception is arguably supported by the In essence, a company without a strategy difficulties of measuring the effectiveness of lacks direction and focus. We now consider such expenditure. Whereas marketers see such the process of strategy development and activities as an investment in the products, implementation. others see it as a cost. 136 Chapter 6 · Formulating and Implementing Sports Marketing Strategy

Other negative perceptions revolve around The term “strategic” implies that the the view that marketers are strong in “style” organisation is taking a long-term view of the (sharp presentations and arguments) but weak business and its operations. The premise for on “substance” issues (providing financial evi- this approach is based on the view that over dence for their proposals). time, business environments change. This can Other organisations do not fully under- occur because of developments in areas such stand the roles and responsibilities of the mar- as technological, social, economic and envi- keting function. Many perceive marketing as ronmental condition. Without a proper being almost exclusively about selling and appraisal and monitoring of such areas, any promoting the brands and products. While specific marketing initiatives run the risk of these aspects are an important component of not reflecting the realities of the marketplace. marketing there is a danger that other dimen- The Coronavirus crisis has introduced the sions are not recognised. This is particularly concept of planning in an era of “radical 6 the case in areas such as customer relationship uncertainty”. management, data analytics and responding A long-term, strategic focus is seen as being proactively to changes in the overall business critical in the overall process of strategic mar- environment. keting planning. This part of the strategy Such perceptions are manifested in the development process provides a rationale for “selling concept” and an obsession with new subsequent specific initiatives and tactics that product developments that bear little rele- feature in the detailed marketing strategy. It vance for the target market(s). also provides coherence and consistency within There is a compelling argument to advo- the planning framework. While we have cate the importance of marketing in the stra- acknowledged earlier that there is a danger of tegic planning process. Everything begins and adopting an overly rigid approach, a strategic ends with existing and potential customers. focus provides boundaries for the organisation Without detailed assessment of the target to adhere to. Any subsequent “drifting” from markets in relation to the overall environ- these boundaries may be necessary on occa- ment, it is unlikely that organisations will sion but requires a strong degree of justifica- deliver a value proposition which is relevant tion on the part of senior management. and which resonates with changing percep- As we move through the next stages in the tions, attitudes and expectations. process we are in effect funnelling down to the In summary, marketing should play a cen- specific operational details contained in the tral role in the strategic planning process. In plan. This takes us into the specific marketing this chapter we use the terms “strategic mar- decision areas. Business schools tend to use keting planning” and “strategy development” the ubiquitous “Four P’s” (product, price, interchangeably. promotion and place), or the extended “Seven Ps” (adding in people, process and physical evidence). We should be careful about becom- 6.4 The Strategic Market Planning ing too prescriptive in terms of how we use Process such frameworks. While they provide a simple way for us to identify the key areas, there is a If you read many of the texts and articles on danger that we ignore some critical dimen- planning you will discover many different sions such as customer relationship manage- frameworks put forward by authors. This can ment, partnership development (with key be confusing. However, most of the stakeholders) and digital marketing. For approaches address the fundamental areas instance, in the case of sports marketing, we that have to be addressed in such an exercise. cannot underestimate the importance of One way of gaining an insight into what sports organisations having a structured constitutes effective planning is that of high- approach for developing and management lighting the strategic and operational dimen- partnerships with stakeholders such as media sions. owners, governments and sponsors. 137 6 6.4 · The Strategic Market Planning Process

MISSION STATEMENT

ANALYSIS OF ENVIRONMENT

Political Economic Social TechnologicalEconomic Legal

ASSESSMENT (SWOT Analysis)

COMPETITIVE POSITIONING

(STRATEGIC DIRECTIONS)

CORE MARKETING STRATEGY

Product Marketing Ticketing & Data Integrated Partnership Management Operations Channel Analytics Communications Management Management Management Management

EVALUATION CONTROL AND REVIEW

.. Fig. 6.1 A framework for strategic marketing planning. (Source: Developed by author)

. Figure 6.1 provides us with a frame- The extent to which an organisation is in a work that can be utilised in the context of position to answer these questions will vary. strategy development and implementation in In situations where it has never undertaken the sports sector context. such an exercise before, it will require the While this is a generic framework for stra- introduction of initiatives to help provide tegic marketing planning (it can be used for answers to such questions. any business organisation), we will link our Typically, this will involve working discussion and analysis to the sports sector. groups, workshops, brain-storming sessions, away-days and review meetings in order to 6.4.1 Mission and Values of the encourage personnel from different depart- Organisation ments to reflect and address these questions. External consultants may be used to provide The starting point for strategic marketing expertise, guidance and an independent “set planning is the identification of the overall of eyes”. direction of the organisation and its core val- For organisations that make use of stra- ues. This can be summed up in the following tegic planning frameworks, such activities questions. would be a regular feature in the process. 55 What are we all about? They may have annual or bi-annual exercises 55 What best describes or core values and in an attempt to monitor changes in the beliefs? overall business environment. This is essen- 55 Where are we now? tial in order to be in a position to proactively 55 Where do we want to be in the longer- anticipate the impact of threats and oppor- term? tunities. 138 Chapter 6 · Formulating and Implementing Sports Marketing Strategy

6.4.2 Mission Statements sentence conveys no sense of what the club is about or its core values. Part of the exercise of assessing and deter- By contrast, effective and meaningful mis- mining where the company is currently and sion statements should address the following where it wants to go in the future can involve issues: the use of a mission statement. This is usually 55 Identify the core purpose of the organisation a “one sentence” statement that attempts to 55 Highlight the core values of the organisation concisely sum up how the company wishes to 55 Indicate its intent as to where it wants to be perceived by its various stakeholders. be in the future. While there is some logic to this concept, it If the mission statement broadly follows has to be said that it engenders mixed and these guidelines then it is likely to have more diverse views across the business communi- resonance and relevance for the stakehold- ties. Detractors suggest that such statements ers. Such short statements sharpen the focus 6 are often trite and meaningless, when actually on the core values of the sports organisa- put to some form of scrutiny. Often, they fail tion. The values of the organisation reflect to capture any relevant concept of the values the core value proposition that it brings to of the company and are treated with some dis- its target markets. Thus, these two elements tain by senior managers. Common mistakes are inextricably linked. While the mission include the following: lengthy and verbose statement might be seen as a useful synthesis statements that add confusion rather than of the values, the latter are central to the clarity, statements which reflect the thoughts overall direction and thrust of the organisa- of the CEO rather than the organisation as a tion. whole and lengthy pontification and reflection - leading to confused and obtuse statements. ??1. Assess the relevance of this statement These are often reflected in “pie in the sky” by the organisation, using appropriate statements such as: “We want to be the num- criteria for this exercise. ber one football club in the world”. Such a 2. What changes would you make to it?

Chicago Bulls

Chicago Bulls is a well-known basketball team comfortable environment – win or lose – which plays in the US National Basketball regardless of their interest level in Association competitions (NBA). Its overall basketball direction is captured in the following mission 55 By helping our sponsors build their brands statement: and grow their business “The Chicago Bulls organisation is a sports 55 By treating our respective constituencies entertainment company dedicated to winning with respect, appreciation, and as we NBA championships, growing new basketball ourselves would want to be treated and fans, and providing superior entertainment, value serviced. In other words, by putting our and service”. fans and sponsors first every single day – We aim to achieve our mission by working and meaning it hard to emphasise the following core values: 55 By making our community a better place to 55 Mutual respect for each other, and a live through our support of worthy social commitment to excellence, innovation, causes integrity and quality in everything we do 55 By involving our guests in the game 55 By providing our guests with superior as active participants – not merely entertainment value in a clean, secure, and spectators 139 6 6.6 · Pestel Analysis and Appraisal

55 By knowing who and where our fans are, 55 By being proactive and accountable in and reaching out to them carrying out our mission. 55 By working hard to make NBA basketball the most popular sport in our community Source: 7 https://www.nba. com/bulls/news/mis - and by selling and humanizing our players sion_statement.html (accessed October 15th, to everyone we meet 2018).

??Exercise One of the key roles of marketers in their Making use of identified sources on the In- customer-facing interaction and engagement, ternet. Assess the way that the sport called is to monitor and identify such trends. This Ultimate Fighting Championship has may lead to mission statements and associ- evolved since its inception in 1993. Its mis- ated value requiring to be changed. Therefore, sion statement is captured in the following there is an on-going linkage between the mis- statement. “To help and promote the sport sion of the sports organisation and the proof MMA evolve into a major world sport”. cess of analysing the environment.

6.5 Analysis of the Business Environment 6.6 Pestel Analysis and Appraisal

The development of the mission statement We now move on to consider the specific ele- and associated values of the sports organisa- ments that make up the overall business envi- tion is meant to reflect its future direction and ronment. I have adopted the approach which its values. While these elements are not likely is often referred to as PESTEL. This trans- to change with bewildering frequency, we lates into the following dimensions: political, should recognise that over time they may need economic, social, technological and legal. to be adjusted to reflect changes taking place When we assess each element of the business in the environment. The role that marketing environment we should recognise that there plays in this exercise is crucial. are macro and micro levels of analysis The sports product has to evolve and align required. For instance, some of the trends, with the changing environment. Very few, if drivers and triggers occur at a global and/or any, sports can remain rigid and unyielding in national level. Also, such influences can occur the face of such changes. Sports fans in par- within the context of a particular competi- ticular change the ways in which they consume tion, league or specific event: likewise, at an sports or change their allegiance to a specific organisational or at club level. . Figure 6.2 sport in light of developments across the dif- highlights the different dimensions for this ferent aspects of the environment. analysis and appraisal.

.. Fig. 6.2 Business environment analysis. Political Economic Social (Source: Developed by author)

BUSINESS ANALYSIS

Technological Environmental Legal 140 Chapter 6 · Formulating and Implementing Sports Marketing Strategy

6.6.1 Political Environment that exists between sports organisations and government bodies. It can be argued that sport and politics are inex- High-profile sports in particular countries tricably intertwined. Others argue that they have a certain level of leverage with govern- should be separate. Whatever your view, the ments. By contrast more peripheral sports reality is that at various levels, sports marketers lack the necessary influence to attract more have to recognise that both politics and sport funding. enjoy a symbiotic relationship. Depending on Sporting bodies can pursue a symbiotic the particular sport and form of government, relationship, for instance, in cases where the the nature of this relationship can be a force for government agencies are addressing wider good or bad. In terms of preparing a strategic issues affecting society, such as obesity and plan, it would be foolish to ignore the changing exercise. Marathons, half marathons and 10 nature of this relationship. kilometre runs are growing in popularity in 6 Government and state agencies play a many countries. By working in partnership number of roles in shaping national sports with government agencies, a sport gains a policy. This is reflected in the level of public higher profile and attracts greater participa- funding that it provides to sports bodies and tion levels. organisations. This can fluctuate. Some sports Within organisations, particularly at a are more dependent on such funding than global level, some countries wield greater others. Some governments, via their sports influence than others. Arguably organisa- agencies, allocate funding depending on how tions such as the International Olympics successful a particular sport is, with respect to Council are heavily influenced by the power winning medals at global sports events. of certain countries. For instance, doping One of the key aspects of strategic market- and cheating controversies surrounding the ing planning is the extent to which a sports Russian Olympic Federation resulted in sus- organisation pursues a policy of active pensions of their athletes from the 2016 engagement and networking with key individ- Olympic Games. However, such sanctions uals in the political arena. Such active net- were eased in 2018 without clear and trans- working and lobbying can lead to that sport, parent evidence that the sports authorities in organisation or club being viewed in a more Russia had fully addressed many of the orig- favourable light by key political personnel. inal concerns. They were re-imposed subse- The nature of such relationships can vary quently as further evidence of cheating was depending on the level of power-dependency uncovered.

Bend the Knee

In 2016 an NFL player by the name of Colin In response the NFL authorities made Kaepernick, who played for San Francisco changes to their overall strategic plan by allo- 49ers, captured global attention when he refused cating over $100 million to be spent on social to stand to attention for the American national justice causes for the next 7 years. anthem. Instead he kneeled down, expressing Some commentators felt that this was a his discontent about social justice in the USA. “knee-jerk” reaction that only attracted criti- The President of the USA, Donald Trump, cism from both conservatives (mainly members took umbrage at this and argued strongly that of the Republican Party) and liberals, who any player engaging in this behaviour should be argued that this was only a gesture and not a sacked. This resulted in well over 150 players long-term solution. This example shows the staging similar protests. importance of a sports organisation being able 141 6 6.6 · Pestel Analysis and Appraisal

to adjust its strategy in light of changing condi- of a volatile president. Subsequent to this case, tions in the political environment. The overall Colin Kaepernick’s contract was not renewed. issue was about social justice imbalances for In 2018 Nike signed him up for involvement in certain categories within the US population. one of their campaigns. This also generated The problem was exacerbated by the reaction controversy.

6.6.2 Exercise “knock-on” impact on the ability of that sport or club to attract sponsors or indeed retain ??Assess the rationale for Nike marketing them. strategists, pursuing this policy of featuring Economic downturns can create major Colin Kaepernick in their advertising cam- problems for sports marketers and not just at paign (make use of material that is available the level of the fan. The global recession of on the Internet to develop your response). the late noughties lasted for approximately 8 or 9 years. Certain sports suffered adversely as Changes in leadership within sporting bodies a consequence. For instance, the NFL can also affect the long-term direction of the decreased its workforce by over ten per cent. sport and has implications for individual Honda pulled out of its involvement with clubs or national sports organisations. Formula One. Vodaphone withdrew its spon- Politics can also play a critical role in the sorships of the English cricket team and the allocation of mega sports events to certain English Derby (horse racing). countries. Arguably the awarding of the 2022 By contrast, it can be argued that certain World Cup to Qatar was made on political sports are recession-proof. For instance, grounds, as was the case with the Sochi Winter English Premier League fans, because of their Olympics. loyalty to their respective clubs will always In summary, political interference and find the money to purchase tickets. This argu- intervention occurs to varying degrees in all ment is bolstered by the perception that sport business sectors. Sport is no different. Shifts in is an antidote to boredom and the mundane policy, changes in political parties and leader- nature of people’s lives. It is a form of escap- ship can affect the long-term direction of ism and as such, some fans are more resistant sport. Sports marketers are obliged to moni- to cutting back on their sporting “fix”. tor such drivers and triggers and factor it into Evidence across various sports is mixed in their strategic plans. terms of assessing the economic impact on sport. Kim et al. (2017) argue that in the context 6.6.3 Economic Environment of Formula One motor racing, the challenge is to attract increasing numbers of interna- Some sectors such as retailing arguably are at tional attendees in order to increase revenue the forefront of any change in economic con- from such events. ditions and performance in a particular coun- It is estimated that it costs over £1 billion try. If the economy is performing creditably to stage a Formula One event. Economic con- then retailing is one of the first sectors to ditions can affect the future participation of respond: people have more disposable income certain countries and cities in this event in the and are likely to spend more in the shops. future. For sports marketers the economic trends The economic environment plays a strong are an important “bellwether” for monitoring role in shaping ticketing decisions by sports the likelihood of attendances either rising or marketers. It is critical that sports clubs and falling, renewal of season tickets and so on. bodies monitor trends in the economic envi- Decrease in attendance can also have a further ronment in order to present pricing strategies 142 Chapter 6 · Formulating and Implementing Sports Marketing Strategy

that are reflective of people’s earning power proactive responses to such changes. Many of

and ability to pay. As we discuss in 7 Chap. 7, the developments in the social environment some clubs and organisation do not pay as do not take place in the shorter-term. Rather much attention to this imperative as one might they tend to be generational in some cases.

expect (discussed in greater detail in 7 Chap. An example of this can be seen in the 7). Without proper research and monitoring it changing way in which some sports fans con- is likely that ticketing strategies do not reflect sume sports. This is manifested in the way in the realities of the market and can also lead to which fans watch sport. In many parts of the unethical behaviour as sports marketers world young fans no longer consume sport via exploit the inherent loyalty of their fan-base. traditional channels such as TV, press and Economic conditions also have a major radio. Instead we have witnessed high levels of impact on investment decisions for sports growth in the use of tablets, smart phones and organisations. For example, weak economic streaming. This has major implications for 6 conditions can make it difficult for such bod- sports marketers in terms of how they con- ies to gain access to necessary loans for devel- nect with their fan-base, sell media rights and oping facilities such as a new stadium, sell tickets for various sporting events. revamping existing or building new infra- We have also seen major change in the structure. This has a resulting “knock-on” preferences of fans for particular sports. effect in terms of being able to cater for larger Sports organisations have to take cogni- attendances and so on. sance of another key trigger in the social and On a more positive note, new and exciting cultural environment: the changing expecta- markets can emerge as a consequence of sig- tions of fans globally. Generally, fans expect nificant economic development and prosper- more from the sports experience. They are no ity. We can clearly see the power and influence longer prepared to put up with inferior com- of countries such as China and India in this fort at sports stadia and arenas. This extends case. Both countries have a very large number into areas such as seating, food and beverage, of middle- to high-income professional peo- parking, toilet facilities and so on. The issue is ple with significant disposable income. Many compounded by the range of alternative lei- of them are interested in sport and want to sure activities that are available to fans. This experience high-quality sport either in their places pressure on sports marketers to create a own country (via staging global, high-profile more positive and relevant sports servicescape events) or by travelling to other geographic that can address such concerns. In terms of regions. Sports such as rugby, cricket, foot- strategic marketing planning many sports ball, basketball and NFL, to name but a few, organisations have placed this driver at the have been developing long-term strategies to heart of their strategies. target such customers. The emergence of “new” sports has also changed the way in which consumers engage with traditional sports. 6.6.4 Social Environment Nowhere is this more evident than in the emergence of eSports. This area of sport is We can broaden the analysis under the head- expected to grow to around $1.5 billion glob- ing “social environment” to include the influ- ally by 2020. The number of players who ence of culture and demographics. Sport is actively engage with this sport was estimated fundamentally a social product: it is con- to be around 400 million globally in 2017. sumed by a vast range of people in a social This is expected to grow by a further fifty per context. It is critical that sports marketers cent by 2020. monitor trends and triggers of changes taking Such figures suggest that this category of place in the way in which fans consume sport. sport is no longer a peripheral activity played Changes in the social environment have by nerds and loners. It has become the standard major implications for sports marketers. The leisure activity for many young people - particu- challenges lie in anticipating and developing larly in key markets such as South Korea. 143 6 6.6 · Pestel Analysis and Appraisal

What is disconcerting for sports marketers areas: enhancing the fan experience and elimi- involved with traditional sport is that eSports nating errors by umpires and officials in the is primarily a static activity played by fans as context of matches and events. they sit in their chairs. Many young people are Enhancing the fan experience is seen as eschewing traditional sports such as football, being critical in taking a sport forward in cricket, and rugby and so on. This social trend terms of evolution. This spans many areas in behaviour is likely to have major implica- including the following (to name but a few): tions for such traditional sports. What is likely 55 Air conditioning in stadia to happen to attendance at live events? What 55 Miniature screen in front of seats is likely to happen to the level of engagement 55 Ticketless pricing strategies with traditional sports? How can such sports 55 Use of Augmented and Virtual Reality respond to these potential threats? How can technologies they build their product to retain their existing 55 Second screening devices fan-base? These questions are easy to pose but 55 Data analytics for fans as they watch the far more difficult to answer. Strategic market event (either live or virtually) planning has to address such issues as man- 55 Increasing the development of smart- agement takes their respective sports forward phones - currently experimenting in some in the future. countries with 5G devices. In the context of the strategic planning process we should acknowledge that sports Sports administrators are making increasing have had and continue to re-focus their use of technology to reduce errors including approach to engaging with fans and building 55 Hawkeye (Tennis and cricket) relationships by investing in such tools This 55 VAR (football) extends across many areas such as website 55 TV referee (rugby) development, social networking and fan 55 Line review systems (Tennis) relationship-building, ticketing policy and 55 Cameras on goalposts (e.g. to determine promotional activities to name but a few. whether the ball has crossed the line) Analysis and assessment of social, cultural 55 Replacement of human referees and and demographic triggers and drivers is an umpires with technology (likely to happen essential part of the strategic marketing plan- more frequently in the future) ning process and should not be underesti- 55 Digital technology which can be used by mated by sports marketers. sponsors to engage more interactively with their fans at events. 6.6.5 Technological Environment

This is an area that has critical implications Broadcasters are also embracing technology for many sports organisations and sports with a vengeance in order to enhance the fan property owners. We have examined various experience. This includes developments in the technological developments in other chapters. following areas: In this section we focus on the need to incor- 55 Augmented and Virtual Reality porate such developments into the strategic 55 Ultra-definition cameras marketing planning process. 55 Increases in Internet speed The most visible impact of technology can 55 Multi-camera use which provide fans with be found in the way in which sports fans and various viewing options sports organisations engage with each other. 55 Digital replacement technology - advances This has fundamentally changed the roles in virtual advertising (for instance on played by both parties in such relationships. perimeter advertising boards) This has been discussed elsewhere. 55 On-player camera feeds (enabling the fan Increasingly, sports bodies and organisa- to watch from the perspective of the tions are utilising technology in two critical player). 144 Chapter 6 · Formulating and Implementing Sports Marketing Strategy

Technology will also continue to play an ever- leaving many tons of rubbish at the end of increasing role in the context of players and the game or event. coaching. Examples include: At competition level major organisations 55 Intelligent pads, helmets and gloves such as FIFA, UEFA and the IOC lay down 55 Monitoring of the performance and extensive (some would say exhaustive) rules on-going health of players in-play and and regulations about how host cities should post-game plan and manage the staging of mega events 55 Electronic medical cards with the protection of the environment at the 55 Increasing sophistication in the area of centre of their plans. “big data analytics”. Sports bodies can take a proactive approach and address such concerns by devel- Sports marketers and administrators cannot oping initiatives and, in so doing, becoming ignore such drivers and impacts. Projecting an innovative operator. Many have adopted 6 such developments into the future is always this approach in their strategic planning. hazardous, given the speed with which tech- Reducing carbon emissions and the car- nological innovations can impact on various bon footprint, designing zero-emission stadia, dimensions of sport. using solar panels to generate sustainable In summary, technology impacts upon all energy, adopting LED floodlighting systems of the key stakeholders in the sports sector: and implementing extensive recycling pro- fans, sports property owners, sponsors, adver- grammes are at the heart of many strategic tisers, media, broadcasters, players and plans. coaches. In the context of sport in the UK for instance, studies on climate change have pinpointed problems for sports such as cricket, golf and football. Campelli (2018) reports on 6.6.6 Environmental Issues the impact that major flooding has had on playing conditions and the amount of time Across all business sectors we have seen available for players to play sport in recent increasing and unremitting pressure placed on years. Sports bodies such as the R&A (golf), organisations to comply with a raft of legisla- the EPL (football) and the ECB (cricket) have tion designed to protect the environment and moved the issue of sustainability to the top of by definition, the planet. The sports sector is their respective planning agendas as a conse- no different. Sports bodies have two choices quence. by way of response. Many businesses however play down the 1. Initiate activities from within the organisa- importance of addressing environmental con- tion proactively. cerns. Sport is no different. However, it has to 2. React to legislation by dint of compliance. be recognised that such an approach is no longer viable as legislation and regulations are The environment spans all aspects of the swamping such behaviour. In essence, sports business of sport: from the use of paper to organisations have no choice but to place the the use of energy, to stadium design, to recy- environment high on their respective strategic cling. Arguably, sport along with the retail agendas and plans. sector is at the forefront in terms of causing In summary, every facet of a sport organ- potential damage to the environment. Large isation’s operations and engagement with stadia need to be heated, lighted and cooled. stakeholders is affected by environmental Turf pitches need to be watered and treated concerns. Going forward, sports organisa- with chemicals to preserve the playing conditions will increasingly have to formally iden- tions to the best effect. Thousands of people tify their initiatives and commitments towards consume a wide range of food and beverages, the protection of the environment. 145 6 6.7 · SWOT Analysis

6.6.7 Legal Environment It is critical for sports bodies to monitor legislative trends and triggers in the context of Legislation impacts on all sports bodies at strategic marketing planning. The issue is various levels. This may be at international, made more complex by changes in govern- national, competition or league level. Most, if ment, influential opinion-forming reports and not all, sports bodies have to address legal studies, special interest groups and lobby issues at all of these levels. groups. The combined initiatives and contri- At international, national and local levels butions of these organisations can lead to the governing bodies of a particular sport will changes in legislation. lay out the rules and regulations to which A good example of this is the disappear- individual sports clubs have to adhere to. ance of tobacco advertising in all forms of Within specific leagues or competitions, sporting activity. Sports such as snooker, darts the same procedures also apply. and Formula One, were largely dependent on While many of these pieces of legislation sponsorship from tobacco companies from relate to the administration and implementa- the 1960s right through to the later 1980s. The tion of the sport, we should also acknowledge combined effect of changing government atti- that further legislative measures can also tudes to smoking, in the context of damaging impact on the future development of the sport the health of citizens, led to its eventual ban. and have consequences for individual constit- This arguably took a generation (20 years or uent clubs. so) to “kick in”. This is likely to involve government agen- We are currently witnessing the increasing cies, either at national or international level tightening of legislation in many countries (e.g. European Union). with respect to alcohol, most notably in

7 Box 6.1 pinpoints an extensive (but by France where sports clubs are not allowed to no means conclusive) list of areas that impact feature alcohol brands on their shirts. It is on the future direction and planning process likely that over the next 10 years or so the with respect to sports organisations, bodies involvement of alcohol in sport will further and clubs. diminish. Betting companies are currently taking over from alcohol brands in terms of prevalence. Box 6.1 Areas where Legislation Impacts on the Sports Sector Gambling legislation 6.7 SWOT Analysis 55 Health and safety - affecting stadium design, players and fans The previous stage in the strategic planning 55 Restrictions on involvement of certain process involved a detailed assessment of the products with sport e.g. alcohol, betting different elements of the overall business envi- companies ronment. The next step is to provide a synthe- 55 Labour laws e.g. salary caps, movement sis of this analysis. This should clarify the of players critical issues that need to be incorporated 55 Intellectual property rights - brand am- into the specific marketing strategy compo- bassadors endorsing brands and mer- nent of the plan. chandise One frequently used tool is the SWOT 55 Image rights - clubs using images of analysis. This refers to the strengths and players to promote merchandise and weaknesses of the organisation (internal game focus). This exercise needs to be linked to two 55 Environmental issues (discussed earlier external dimensions: opportunities and in this chapter). threats. The latter crystalize the critical outcomes that have emerged from the analysis of Source: Developed by author the business environment. 146 Chapter 6 · Formulating and Implementing Sports Marketing Strategy

This exercise, although based on a simple far it has not really addressed. This provides it framework, means that the attention of senior with a potential differential advantage over management is drawn to the issues that will other football clubs who do not have the same have major importance for the future direc- global awareness or exposure and one which it tion of the organisation. can capitalise upon to drive further revenue We should recognise that this is not simply streams from areas such as merchandise sales. a “listing” of points under each of the head- In essence, it lays out the specific directions ings. Strengths refer to specific areas where the that the company will follow over the next few organisation holds capabilities that place it years. It provides the framework for the subse- ahead of potential competitors. Weaknesses quent focal points of the marketing strategy. refer to specific aspects of the organisation which leaves it vulnerable. Opportunities may exist but need to be prioritised in relation to 6.9 Developing the Core Marketing 6 the specific strengths and weaknesses of the Strategy organisation. Likewise, threats will impact on the ability of the organisation to develop its This stage in the planning process takes the business operations going forward. organisation to the operational detail in the In essence, it aligns the capabilities and various dimensions of marketing strategy. As deficiencies of the organisation with potential we saw in . Fig. 6.1, a number of critical deci- opportunities and threats that possibly exist sion areas can be identified. These can be bro- out there. ken down into the following areas. Product 6.8 Competitive Positioning 55 Management of existing product(s) 55 Development and refinement of new prod- The previous steps in the strategic planning ucts process should leave the sports organisation in 55 Brand-building (domestically and interna- a position to identify the most appropriate tionally) way in which it positions itself in the market. 55 Management of product accessories (mer- This is becoming even more important in the chandise, logos). context of the sports sector as it becomes Ticketing and Channel Decisions more competitive and commercially focused. 55 Managing the ticketing process (price lev- Positioning is concerned primarily with els, adoption of relevant technologies) how the organisation’s target markets perceive 55 Managing and implementing changes to the value proposition in relation to other com- the channels through which fans can gain petitive offerings. It is important to note that access to tickets for games and events. it is NOT about how the organisation per- ceives itself, from an internal perspective. To Data Analytics follow this approach would clearly not reflect 55 Managing and implementing procedures the realities of the market and can lead to and technology for collecting, analysing myopic or “tunnel vision” on the part of and disseminating data to relevant senior management. personnel Competitive positioning also pinpoints the 55 Linking and integrating data to Customer target markets. This refers to the markets (fan) Relationship Management where the organisation will compete within, 55 Investing in appropriate technology and its differential advantage and how the com- software to effect progress in the area of pany will compete (Hooley et al. 2017). For CRM. instance, a football team with a strong global Integrated Marketing Communications franchise such as Manchester United, will 55 Implementation of relevant promotional identify further geographic markets that thus strategies 147 6 6.10 · Evaluation and Control

55 Implementation of relevant digital mar- to pinpoint areas where, for whatever reason, keting campaigns targets have not been met. Such deviations 55 Managing social media platforms from target might be explained by events such 55 Managing and implementing changes to as bad weather. This might apply to an event the design of the website. where the projected attendance is 50,000 but only 30,000 turn up. The club has little control Partnership Management over such factors. 55 Implementing appropriate procedures for Senior management has to ask the ques- managing strategic partnerships and relation. Does our plan measure up? Is it doing tionship with relevant stakeholders such as what it is supposed to do? Such questions have sponsors (existing and potential), corpo- become more important in recent years due to rate hospitality, naming rights sponsors, the financial crisis. Key stakeholders have to media (broadcasters, press, radio), compe- be satisfied that the company is going in the tition/league officials, third-party agencies right direction. Without adequate and rele- (agents, media rights negotiators), players vant control mechanisms, such questions are and coaches. difficult to answer. Marketing Operations Management (in Failure to achieve a particular metric may Collaboration with Facilities or Operations also occur because of over-optimistic predic- Management Department) tions or expectations. This will require a re- 55 Implementing systems and procedures for appraisal of targets. managing the fan experience Arguably, sports organisations have 55 Such areas would include: food and bever- become one of the most enthusiastic adopters age, parking, seating and viewing areas of sports metrics. In part, this is driven by the 55 Implementing footfall flow at key points in need to win and perform well across all aspects the stadium (entrance to stadium, queuing of the business. This is evident in the various for food and beverage, access and exit). tools used to monitor the performance and conditioning of the athletes. However, our We discuss these specific areas in various interest in this chapter is more to do with the chapters in this text. Our objective in this sec- evaluation of the overall strategic business tion is to identify the span and scope of the plan. areas that come within the overall umbrella of Let us consider some of the typical metrics marketing strategy. or key performance indicators used by sports We should acknowledge that some of these organisations in one particular area: cus- dimensions may not be relevant for certain tomer/fan relationship management. sports clubs and associations. For instance, Customer/fan relationship management: much will depend on the size of club or organ- 55 Number of season ticket-holders isation and its potential scale and global/ 55 Season ticket-holder churn (numbers lost national/regional involvement. year-on-year) 55 Customer lifetime value 55 Profitability of each fan 6.10 Evaluation and Control 55 Cost of acquiring a new season ticket- holder Key to the success of any plan are the mecha- 55 Number of fans visiting the official website nisms that the organisation employs to assess (website traffic) its effectiveness. It is all very well to set objec- 55 Level of sentiment (percentage of negative/ tives. If there are no benchmarks or metrics positive comments posted online) identified, it is virtually impossible for man- 55 Number of likes, tweets and retweets. agement to measure the effectiveness of the 55 Level of complaints. strategy that has been implemented. 55 Fans by segments (male, female, family, Evaluation measures also allow management age, location, domestic, international) 148 Chapter 6 · Formulating and Implementing Sports Marketing Strategy

55 Level of customer satisfaction (seating, key areas: political, economic, social, techno- food & beverage, parking, public trans- logical, environmental and legal. As is the port, ticket purchase process, website, mer- case with every organisation, irrespective of chandise store) whatever business sector, sports organisations 55 Average expenditure on merchandise by need to have a deep understanding of the the individual season ticket-holder. underlying issues and trends taking place in each of these areas. This list is by no means exhaustive and is for We considered the importance of competi- illustrative purposes only. Our learning point tive positioning. This component of the plan- here is that such targets and indicators help ning process evolves from the previous sports organisations to monitor the progress analysis of the environment and essentially of strategy, identify areas where there are shapes the strategic directions and themes deviations from the original targets and the that need to be subsequently addressed in the 6 subsequent need to refine or make adjust- core marketing strategy. ments. In the final sections we stressed the importance of the role that control and evaluation plays in assessing the effectiveness (or other- 6.10.1 Exercise wise) of the strategy. Without key performance indicators or metrics, it is impossible to ??Identify key performance indicators which undertake such an assessment. would be applicable to measure the effectiveness of a shirt sponsorship deal. Learning Outcomes 55 Without a strategy, the sports 6.11 Conclusions organisation is like a ship without a rudder: it is directionless and drifting In this chapter we have examined the concept 55 Without a customer focus and of strategy and the role that it plays in shaping understanding, any plan is likely to the future direction and progress of a sports ignore the realities of what fans want, organisation, club or body. and will fail to pick up on significant We considered the different stages involved trends and developments taking place in the strategic planning process; noting that in the environment the term “strategic” equates to the sports 55 Mission statements, if used correctly organisation adopting a long-term view of its can pinpoint the future direction of the operations. Organisations can make different organisation interpretations of what constitutes “long- 55 Competitive positioning forces the term”. In practice most organisations would organisation to take account of how take a three to five-year view. fans perceive their core values and how We assess the link between marketing and this compares with their direct and its role in strategic planning. We have argued indirect competitors in their sports that it should play a significant and proactive sector role as it is the one area within an organisa- 55 Sports organisations can benefit tion where it has a direct and on-going inter- strongly by engaging in formal and face with its target market(s). Thus, it is in a on-going analysis and appraisal of the key position to identify the changing trends different aspects of the overall and developments in the market. This in turn environment. should be “fed” into the overall planning and 55 A synthesis of this deep analysis (e.g. a strategy development process. SWOT analysis) can accurately pinpoint We examined the importance of analysing the strategic direction that the sports the overall environment within which the organisation needs to follow sports organisation operates. We identified six 149 6 Appendix

3. You have been asked by the CEO of 55 In shaping specific elements of the the sports organisation that you cur- marketing strategy, we should note that rently work for to justify the need to a simple use of the “4Ps” as a framework undertake a formal appraisal of the is too simplistic. Key decisions in areas environment. Detail the responses that such as partnership management and you would make to this request. marketing operations management are 4. The sports club that employs you is features of the sports sector and ones owned by an individual who is totally which sports marketers need to have a against the idea of becoming involved direct input with betting and alcohol brands. What 55 In an era of “big data” the organisation points would you make to convince also needs to pinpoint key performance this person that the club is likely to lose indicators in the key marketing areas in out on lucrative deals if it continues to order to assess the overall effectiveness reject such partnerships? of the plan 5. Why is it important to develop appro- 55 Where there is a large deviation between priate metrics and key performance the projected targets and the actual indicators when assessing the effective- performance, the organisation can take ness of a strategic marketing plan? remedial action to re-focus the plan. 6. A fans forum group has expressed anger at the focus on generating revenue streams and treating the club ??End of Chapter Discussion Questions as a business at the expense of investing 1. How would you respond to the view in better players and facilities. As a that formal strategic planning can senior Marketing Executive, outline make the exercise of understanding the the points you would make to this market more complicated and lead to group by way of a response. “paralysis by analysis”? 2. Examine the extent to which you would support the view that mission statements are created by academics and Appendix have no connection with the realities of the sports marketing environment.

Twenty-Twenty or One Hundred Vision

In the sport of cricket, we have seen the inter- ing in the more traditional formats of the game. national administrators introduce new prod- Attendances are in sharp decline in the tradi- ucts such as “20:20”. In 2018 the English tional four-day championship product. This Cricket Board (ECB) also proposed a new latter championship is popular with retired product, due to launch in 2020 called the “100 people - who unfortunately over time will liter- ball”. This is a variation of the original “20:20” ally “die off”. and is designed to attract a greater family atten- Globally, perhaps the most traditional of dance, both live and on TV. It will also be based the cricket formats: five-day test cricket, is also on a city by city basis; rather than the tradi- attracting less and less attention from fans. tional format of the eighteen first class coun- With honourable exceptions such as when ties. It has attracted variable levels of response. England play Australia, attendances at some However, the ECB in terms of their long-term international venues barely reach a couple of planning for the sport, see it as an important thousand per day. mechanism for attracting this younger family- Another key stakeholder - the broadcast dominated audience - something which is miss- media, also want a value proposition that fits 150 Chapter 6 · Formulating and Implementing Sports Marketing Strategy

within their overall scheduling. A three-hour Although not due for formal launch until product suits them better. the 2020 season, it currently has a working title Attention spans and levels of younger peo- of “The One Hundred”. The administrators ple are getting shorter and shorter. They no and marketers see it as potentially one of its longer wish to give up a day to watch a test most exciting products. Other products include match or a one-day game, where over 5 days the the following: five-day test cricket, four-day game might not even produce a winner. championship cricket and one-day cricket. The ECB argue that this new product will The intent and strategy of the ECB is cap- provide a relevant experience for fans. The city tured in the following statement. team format for the first time sets up the con- “This is a fresh and exciting idea which will cept of using franchises - very popular in the appeal to a younger audience and attract new context of Indian cricket and other sports, for fans to the game. Our game has a history of 6 example NFL and basketball in the US market. innovation and we have a duty to look for The ECB claims that it has undertaken future growth for the health and sustainability extensive marketing research with fans through- of the whole game” (Tom Harrison: CEO of out the UK. This research has probed fans as to the ECB). their experiences with existing products and (Source: Adapted from Martin, Ali “ECB their perceptions and opinions of this new ven- unveils plans for tournament with 100-ball for- ture. They have road-tested the format by set- mat and 10-ball over special”. The Guardian, ting up trial games with current county players. 8th May).

??Discussion Questions 2. Assess the way in which the ECB has 1. In terms of changing social patterns of brought this product into its overall behaviour among cricket fans, how would strategic planning for the future of the you respond to the view that this new game. product is a panic reaction on the part of ECB administrators and marketers?

Vapourised

In 2019, Nike launched a new running shoe Radcliffe) of 2 hours, 15 minutes and 25 sec- that they branded as “The Alphafly”. This was onds, smashed by Brigid Kosgei by 81 seconds. a further improvement on a shoe that was Average runners have noticed an improve- launched by them in 2016. They labelled this ment of between four to six per cent in respect of shoe as the “Vaporfly”. their performances, because of adopting this shoe. It was a shoe with a spoon-shaped carbon Other brands such as ASICS have wit- fibre blade embedded in a thick midsole made nessed a decline in sales, as runners rush to pur- from hyper-springy Pebax foam. chase the Vaporfly. Enough of the “technical discussion”. Experts state that for elite marathon run- Its product launch created a remarkable ners, they can generate 2 minutes of improve- impact on the sport of running, at all levels of ment in their respective finishing times. For a the pyramid, from the elite end to the casual runner who typically runs the marathon in 2 runner. Why? hours and 4 minutes, it can mean the difference At the top end, we have witnessed the wom- between a Gold Medal at a major event and a en’s world record in the marathon (set by Paula top ten finish. 151 6 References

Runners who have adopted the Vaporfly advantage and denigrates previous records and and who do not want to upset their sponsors performances in long-distance running events. are painting the brand to avoid embarrassing The International Association of Athletics their sponsors. Federation (IAAF) has investigated this shoe This has posed a dilemma for the athletics since 2017. Its president, Sebastian Coe adopts administrators. The rules of the sport state that the view that “his natural instinct is never, in shoes “must not be constructed to give any any sector, try to close down innovation, but unfair assistance or advantage”. It also speci- clearly there is a balance”. The technical group fies that it should “be reasonably available to comprises of two former athletes, alongside all” (runners). experts in science, ethics, footwear, biomechan- The VAPORFLY shoe first emerged in ics and law. 2016. Some athletes sponsored by Nike wore Nike has positioned itself since its begin- them at the Rio Olympics in Brazil, long before nings in the 1960s, as a company that seeks to they reached the shelves of sports retailers. drive excellence in all things that it does. It Some commentators and coaches adopt a argues that the Vaporfly and its successors such positive perspective on such innovation and as the Alphafly are simply manifestations of its improvement in “technology”. Such views are brand essence and differential advantage. This reflected in the argument that innovation is at latter brand will appear in the shops and online the heart of all product development and that from April onwards in 2020. we see it in the design of cars, laptops, tablets In a sport, which suffered from athletes and so on. who use illegal drugs to improve performance, Others argue that major branders such as it will now potentially be the recipient of nega- Nike and Adidas seek improvement as part of tive perceptions among its stakeholders from their reason for existence and that prior to the the impact of technology. Vaporfly, Adidas held a competitive advantage (Source: adapted from Dennehy, Cathal with its “Boost” shoe. (2020) “Nike’s Vaporfly shoe is giving some Other commentators put forward the alter- athletes an unfair advantage in distance native view that such a shoe provides an unfair events”. Irish Independent, December 30th.)

??Discussion Questions news/climate-coalition-calls-on-uk-sports-organisa- 1. You are a consultant who has been tions-to-reduce-environmental-impacts/. https:// www.nba. com/bulls/news/mission_statement. html . asked to advise the main Board of Accessed 15 Oct 2018. Directors of World Athletics. Specifi- Hooley, Graham, Piercy, Nigel, Nicoulaud, Brigitte and cally, they would like a response from Rudd, John M. 2017. Marketing Strategy and you on the following issues: Competitive Positioning. Pearson. Harlow: United (a) What would the implications be Kingdom. Kim, Min Kil, Suk-Kyu Kim, Jae-Ahm Park, Michael for existing sponsors if this brand Carroll, Jae-Gu Yu, and Kyunga Na. 2017. Measuring were to gain widespread the economic impact of major sporting events: The acceptance? case of Formula One Grand Prix (F1). Asia Pacific (b) What are the implications for run- Journal of Tourism Research 22 (1): 1–10. ners of all ages and ability? Mintzberg, Henry. 1994. The rise and fall of strategic planning. Basic Books. (c) How should the governing body Mintzberg, Henry, Bruce Ahlstrand, and Joseph respond to this development? Lampel. 1998. Strategy safari: The complete guide through the wilds of strategic management. London: FT Prentice Hall. References Piercy, Nigel F. 2017. Market-led strategic change: Transforming the process of going to market. 5th ed. Campelli, Francis. 2018. Reduce environmental impacts, London: Routledge. UK Sports Bodies told. Sport Sustainability Journal. Porter, Michael E. 1996. What is strategy? Harvard Available at: https://sportsustainabilityjournal.com/ Business Review 74 (6): 61–78. 153 7

Ticketing Strategies in the Sports Sector

Contents

7.1 Introduction – 155 7.2 Pricing in Context – 156 7.3 Pricing in the Services Sector – 156 7.4 Understanding the Concept of Price – 157 7.4.1 Value Defined – 157 7.4.2 Value Drivers and the Value Triad – 158

7.5 Approaches to Pricing Within the Services Sector – 159 7.5.1 Cost-Based Approaches – 159 7.5.2 Competition-Based Pricing – 159 7.5.3 Demand-Based Pricing – 160

7.6 Ticketing in the Context of the Sports Sector – 160 7.6.1 Characteristics of the Sports Sector and Implications for Ticketing Strategy – 160 7.6.2 Sports Economics – 161 7.6.3 Fan Loyalty and Behaviour – 161

7.7 The Evolution to Ticketing Strategies Based on Demand and Value – 161 7.7.1 Location-Based Ticketing – 161 7.7.2 Variable Ticket Pricing – 162 7.7.3 Bundling Strategies – 162 7.7.4 Exercise – 163

Electronic Supplementary Material The online version of this chapter (https://doi.org/10.1007/978-3- 030-53740-1_7 ) contains supplementary material, which is available to authorized users.

© The Author(s) 2020 S. Ennis, Sports Marketing, https://doi.org/10.1007/978-3-030-53740-1_7 7.8 Other Discriminatory Pricing Tools and Techniques – 165 7.8.1 Product Line Pricing – 165 7.8.2 Premium Pricing – 165 7.8.3 Life-Cycle Pricing – 166 7.8.4 Equitable Pricing Strategies – 166

7.9 Dynamic Pricing – 167 7.9.1 Prerequisites for Dynamic Pricing to Work – 168

7.10 Big Data and Technology: The Glue That Helps Dynamic Pricing Strategies Work – 169 7.10.1 Data Analytics – 169

7.11 Dynamic Pricing: An Appraisal – 170 7.11.1 Advantages – 170 7.11.2 Disadvantages – 171

7.12 The Secondary Ticket Market – 172 7.12.1 Implications for the Various Stakeholders – 172 7.12.2 Problems with Secondary Ticketing – 173 7.12.3 Exercise – 173 7.12.4 Managing the Relationships Between Primary and Secondary Ticket Sellers – 173 7.12.5 Exercise – 175 7.12.6 Primary and Secondary Ticket Markets - Future Trends – 175

7.13 Conclusions – 176 Appendix – 180

References – 185 155 7 7.1 · Introduction nnLearning Objectives While this might suggest to us that revenue On completion of this chapter you should from ticketing has less significance for sports be in a position to address the following bodies, this would be an erroneous presump- objectives: tion. 55 To understand the concept of pricing One of the major characteristics of sport within the context of the services and is that it does not follow conventional finan- sports sector cial management or practice. While many 55 To assess the role played by value-based sports bodies and clubs derive major revenue pricing in the context of developing streams from other sources, the reality is that ticketing strategies salaries, transfer fees and increasing adminis- 55 To examine the challenges of formulat- trative costs, ensure that there are very large ing and implementing ticketing strate- outgoings as well as incoming revenue streams. gies in the sports sector Because of the relatively low net income, mar- 55 To trace the evolution of ticketing strat- keters cannot ignore the importance of gener- egies from traditional approaches to ating as much cash as possible. The strategic demand-based approaches imperative for devising and implementing rel- 55 To assess the effectiveness of ticketing evant and appropriate ticketing strategies is as strategies in the context of overall rev- critical as it ever was. enue streams in the sports sector In this chapter we examine the various 55 To evaluate the use of variable and approaches to ticketing within the context dynamic pricing in the context of de- of the services and sports sector. We focus mand-based pricing on the critical importance of developing 55 To examine the role played by second- what is called a “value-based” approach to ary ticketing operators in the sports sec- pricing. tors. As with other business sectors, technology and “big data” play a significant role in shaping ticketing strategies in sport. As we might 7.1 Introduction expect, these developments pose opportunities and challenges for sports marketers, as In this chapter we assess the importance of they attempt to develop relevant and effective ticketing within the overall context of deriv- ticketing strategies. ing revenue for the sports organisation. We trace the evolution of pricing strategies Pricing (or ticketing as it is referred to in from traditional cost and competition-based the sports context) represents a significant ele- approaches to one which can generally be ment of overall revenue streams for sports described as demand-based. bodies, organisations and clubs. Traditionally This change reflects the importance of rec- (going back in time) it was the main (or only) ognising a key stakeholder: the fan, as being source of revenue. As we have noted in previ- the fulcrum upon which effective ticketing ous chapters, this has changed dramatically in strategies are crafted. the context of elite sports over the past In the later parts of this chapter we specifi- decades. cally address the concept of dynamic pricing. Mainly motivated by adopting a commer- This takes account of developments in the cially driven approach to running sport, twin areas of technology and data. Again, this administrators and marketers have developed poses opportunities and challenges. major revenue streams from sources such as Within the context of sport (as with other media rights, sponsorship, merchandise, inter- sectors such as the entertainment industry) we nationalisation and corporate hospitality. In assess the increasing role played by secondary many cases the contribution of ticketing to ticketing. This phenomenon has led to the overall revenue might only make up as little as emergence of powerful third-party operators thirty per cent of income. such as StubHub and Viagogo. As we shall 156 Chapter 7 · Ticketing Strategies in the Sports Sector

see, perceptions on the contribution of such have significance in particular for pricing operators, raises questions about the impact decisions. on fans (as they strive to acquire tickets for The heterogeneous nature of services means sports events and games). It also queries the that it is very difficult to manage the quality effectiveness of the ticketing strategies of the product and the perceptions that peo- employed by sports marketers and adminis- ple hold about its quality. The company can- trators. Put simply, if they designed and not guarantee that the service that is delivered implemented effective ticketing strategies, actually matches the planned delivery. It can there would be no need for third-party opera- also vary. This is particularly the case with tors to enter the arena. many sports products. For instance, sports marketers have to grapple with the general uncertainly surrounding their products. While 7.2 Pricing in Context a car manufacturer can guarantee to virtually zero defects if it produces 100,000 cars per Pricing in the context of overall business and month off its assembly line, a football club 7 marketing strategy is perhaps the most chal- cannot guarantee that over the course of a lenging and complex decision area for compa- season that a certain quality and style of foot- nies and organisations. It takes on even greater ball can be delivered to its fans. significance because the eventual decisions Perishability is also a feature of the ser- made in this area shape the ultimate revenue vices sector. Put simply, you cannot store a streams that can be generated for the organ- service. Whereas (going back to our car exam- isation. Make the wrong decisions and income ple in the previous paragraph) a manufacturer will be significantly decreased. While other can build up an inventory to meet demand marketing decisions in areas such as product fluctuations, a sports organisation cannot. If development and advertising involve expendi- a stadium has a capacity of 40,000 and the ture, pricing decisions affect revenue. match is due to take place next Saturday, then It is further complicated by the fact that in the crowd that the game attracts, happens on many cases marketers do not fully understand the day. If only 20,000 turn up then that is it. the complexities associated with pricing. A You cannot rewind the tape or replay the failure to understand the views, attitudes and game again in order to attract more fans to perceptions of customers to price can lead to that game. The product dies on the day. serious errors being committed in strategy Maximisation of revenue is dependent on formulation and development. what happens by way of ticket sales. Thus, it is Such errors can lead to companies signifi- difficult to synchronise supply with demand. cantly under-pricing their products and ser- In the case of manufacturing, a company can vices. A failure to recognise and identify assess the demand patterns and adjust pro- different segments can also lead to pricing duction and inventory accordingly. strategies that fail to capture revenue from However, we should recognise that while customers who may be willing to pay more these characteristics pose challenges, it does not than others for the said items or services. A make the task of pricing a service insurmount- failure to analyse data can also lead to able. Fans, by dint of their knowledge and decreased overall revenue. experience of dealing with their club or organisation, can establish references and standards that they expect from their club in terms of per- 7.3 Pricing in the Services Sector formance. Their behaviour with respect to purchasing tickets is shaped by many factors such The services sector (within which the sports as prior experience and the level of affinity or industry sits) exhibits some characteristics commitment that they hold about the club. that are different from the manufacturing Likewise, clubs can use a number of fac- sector. Wilson et al. (2012) identify a number tors to shape their ticketing strategies. For of characteristics of services; two of which instance, they can look at historical atten- 157 7 7.4 · Understanding the Concept of Price dance patterns for different types of games Thus, customers and fans have to make an (mid-week versus weekend, top versus bottom evaluation of the value proposition that is put teams) and predicted weather conditions, to before them. If the benefits outweigh the develop more accurate pricing strategies. monetary and non-monetary costs then it is likely that they will purchase the service at that price. 7.4 Understanding the Concept This, in turn, takes us on to a very critical of Price dimension of ticketing strategy: understanding the concept of value. As mentioned earlier, pricing is one of the least understood aspects of marketing. We therefore need to investigate the concept of 7.4.1 Value Defined price more fully. When an individual (or company) decides to purchase a particular prod- In order to understand the customer’s percep- uct or service, they agree to pay a monetary tion of the price charged for the service, we price. This is captured by the final price that need to understand the concept of value. The the company or organisation charges. actual price is an explicit indication of what However, it is also accurate to state that as the seller feels the service is worth. The well as the monetary costs, consumers also assumption is that the company concerned incur a range of non-monetary costs. Wilson has made a detailed analysis of a number of et al. (2012) identify four such costs or sacri- influences in arriving at that price. These fices in the context of services. They are sum- include costs, competitor prices and research marised as follows. with customers. The latter influence is critical 1. Time costs; which refer to the time it takes in determining a price that they are willing to to acquire the ticket for the event/game, pay and which represents an accurate assess- the length of time it takes to get to the ment of the value proposition that is being venue. This notion of “waiting time” is a offered to the target market(s). sacrifice. How we define value in the context of the 2. Search costs; this identifies the effort customer’s evaluation of a service and its expended in identifying and selecting the price? services that a person requires. Cram (2006) defines value as a combina- 3. Convenience costs; fitting the consumer’s tion of the product/service benefits and emo- schedules around the event or game. In tional associations as an identified price level.

recent years this may indeed involve a sac- This is captured in . Fig. 7.1. rifice, as TV companies constantly change He suggests that there is a tipping point, the time of the game to fit in with their where the perceived benefits outscore the per- schedules and requirements. This might ceived costs (reflected in the actual price). The mean fans having to travel long distances customer is then favourably disposed to spend to see a game on a Monday night. This money on that item. also means costs or sacrifices in terms of Companies are obliged to make a strong taking time off from work and incurring attempt to understand how customers define hefty charges by way of train or bus tickets value. This will point them to a pricing strategy to get to the game. which will be relevant to customers and one 4. Psychological costs; such as the fear people which will resonate with their needs and might have about understanding jargon in requirements. Many people would argue that the case of buying life assurance or pen- this is the essence of overall marketing strategy: sions from financial service providers. In the how to create and develop added value that will context of sport, it may be exhibited in a attract segments to the product/service? reluctance on the part of some fans to pur- If customers see no difference in the value chase tickets from a range of confusing and proposition between competing products or non-transparent ticket options on a website. services then they will buy the item that is the 158 Chapter 7 · Ticketing Strategies in the Sports Sector

Perceived Perceived Perceived Value - = Emotional Beneﬁts + Emotional Associations Price

.. Fig. 7.1 Defining value. (Source: Cram 2006, p. 15)

lowest in price. MacDivitt (2013) pinpoints Revenue this approach to pricing as commoditisation. Gain While it can be argued that it makes it easier for salespeople to focus on price as the key focus for selling, it largely ignores the need to inject some form of differentiation in order to CUSTOMER add value to the product. VALUE The problem with such a focus on price is that it orientates the customer to lower prices: Cost Emotional 7 they expect concessions and reductions. As Reduction Contribution well as demonstrating a lack of creativity with respect to adding value, it will ultimately drive .. Fig. 7.2 The customer value triad. (Source: adapted from MacDivitt and Wilkinson 2012) down profit margins and make it difficult for companies to survive in the longer term. In the context of ticketing/pricing deci- cost them money and a deterioration in mar- sions it can be strongly argued that the onus is ket share and performance. on marketers to study the different segments MacDivitt and Wilkinson (2012) devel- which exist in that market and identify attri- oped an approach which they labelled as the butes and dimensions which can add value to Value Triad to help organisations to identify the service and differentiate it from the com- and measure value drivers and their impact on petition. pricing strategy. This is highlighted in This, we should note, is not about adding . Fig. 7.2. extra features or elements to the service. By applying this approach, it can be argued Unless they are of specific relevance to the that organisations can more closely research segment’s needs and requirements, they will and understand the purchasing influences and not add value. In fact, it will add costs to the motivations with respect to their target mar- delivery of the service and add confusion in kets. Equipped with such information, com- the minds of customers; who see these unnec- panies are in a stronger position to create and essary features as being irritants. adjust the value proposition. On the other hand, value added elements As indicated in . Fig. 7.2 the authors pin- that increase the perceived benefits should point three dimensions to the triad. lead to situations where certain groups of cus- Revenue gains (RG): refers to yield tomers will be prepared to pay a premium for improvements and increases in productivity in that service. This “virtuous circle” should lead areas such as reduced time to market, shorter to extra profitability for the organisation. delivery time to customers and enhanced out- put. These gains can emerge from pinpointing the issues that really matter to segments: clearly they will vary across such segments. 7.4.2 Value Drivers and the Value Cost reduction (CR): identifies areas Triad where costs to customers can be reduced. Aspects include easier-to-use services, helpful Organisations need to have a firm understand- websites and so on. ing of the key factors or drivers that create Emotional contribution (EC): pinpoints and add value to the service/product proposi- areas such as peace of mind, comfort, aes- tion. If this does not occur it will ultimately thetics and risk. Overall it creates a “feel 159 7 7.5 · Approaches to Pricing Within the Services Sector good” mentality and can help to increase what they deem to be acceptable to their trust and confidence in relation to the prod- requirements. This may bear little relation- uct/service. ship to the cost-oriented approach adopted Clearly our focus is on the services sector by the company. As mentioned earlier it is in general but more specifically in the area of not just about the monetary costs incurred sport. Revenue gains and cost reduction may by the customer, it also involved non-mone- be more relevant in the case of manufacturing tary costs. This means that in many cases the physical and tangible products. They are also price charged by the company may not reflect easier to measure in terms of setting bench- the reality of what customers are willing to marks and key performance indicators. pay. It can be argued that the third For services in particular this is critical. dimension:emotional contribution, is intangi- While manufacturers of physical products can ble and more relevant to the services sector. more easily identify and apportion costs, it This combination of conducting research becomes more complex when we are address- with different segments on their attitudes, per- ing intangible services. By definition, they are ceptions and assessment of competitive offer- difficult to quantify and assess in terms of ings will undoubtedly lead to a closer cost determination. We will explore this in a understanding of the core drivers and influ- later section. A typical feature of this approach ences that shape their concept of value. is that service providers fail to identify the It can be argued also that it leads to a more true value placed on the service and make the realistic and accurate pricing structure for the mistake of under-pricing. organisation and one which empathises more fully with the needs of the specific segment or segments. 7.5.2 Competition-Based Pricing

This, as the name suggests, is a pricing strat- 7.5 Approaches to Pricing Within egy which focuses on what the main competi- the Services Sector tors are doing in this area. Again, it has some merits in terms of rationale and simplicity. 7.5.1 Cost-Based Approaches After all, if you maintain a pricing strategy which is broadly in line with your competitors Traditionally, companies and organisations then you cannot go too far wrong. It does not relied on what might be termed a “cost-based” mean that we charge exactly the same price: approach to pricing their services. This is a rather we use the competitor’s prices as a basic although popular strategy. It is popular guide. It implies that the organisation does because it forces the company to isolate the not deviate too far away from those price various cost elements associated with the ser- points. vice. This identifies breakeven points (where The biggest difficulty in the context of ser- the service does not lose money). Many organ- vices is comparing and equating the service isations then add on a margin. This is usually value propositions of the competitors. Some, determined by the industry average and any perhaps the more dominant ones, offer a particular value-added dimensions that may broader and deeper range of services. As a provide the company with the opportunity to consequence, they are in a stronger position to charge a little more (a premium). cross-subsidise certain services. The intangi- Clearly it has the virtue of relative sim- ble nature of services also means that it is dif- plicity. However, marketers would quickly ficult to accurately assess the merits or point out that it does not necessarily repre- otherwise of competitive pricing. Some sent the reality of what happens in the mar- organisations are price leaders or price setters ket-place. The key constituent: the customer, and others are price followers. Each organisa- is not aware of the specific costs encountered tion has its own capabilities and weaknesses. by the company. They will place a value on This is reflected in the nature of the service 160 Chapter 7 · Ticketing Strategies in the Sports Sector

product offering. Blindly following the price 7.6.1 Characteristics of the Sports levels adopted by competitors will more than Sector and Implications likely result in sub-optimal pricing, with a cor- for Ticketing Strategy responding effect on market position, sales and profitability. In previous chapters we focused on the characteristics that feature strongly in the sports 7.5.3 Demand-Based Pricing sector. We do not intend to repeat that discussion here. Instead, we consider those charac- This approach is increasingly viewed as being teristics which have a direct bearing on the most effective way of formulating and ticketing decisions. implementing pricing strategy. For the first In any discussion on ticketing and sport time in the discussion we are beginning to rec- we should recognise at the outset that deci- ognise the importance of the key stakeholder sions revolve around understanding the rela- (the customer) featuring in the pricing tionship between supply and demand. While 7 decision-making process. this occurs in every industry sector, it can be It explicitly identifies the importance of argued that a failure to grasp the fluctuations researching the various targeted segments in between supply and demand will lead to inef- order to gain an understanding of their percep- ficient ticketing strategy formulation and tions, attitudes and opinions about the service. In adoption. carrying out this assessment companies gain a The perishable nature of sports products clearer understanding of the role that price plays means that sports marketers should focus in the purchasing decision-making process. extensively on understanding the equation A key challenge is to identify the compo- between supply and demand. Empty seats in nents of value that customers consider in their sports stadia and arenas are an explicit recog- purchase decision. This will clearly vary across nition of problems in balancing supply with different groups of customers. It will also vary demand. by the situation that faces the customer. For We will see great variation across different instance, in the context of sport, a fan may be sports, competitions and participating teams. willing to pay a high premium for a ticket to a In some instances, supply will greatly exceed critical match for the club (for example a cup demand. The challenge here is to capture the final). In the case of a mid-week game against balance between revenue maximisation and mediocre opposition in the middle of winter, attendance maximisation. In the latter case other factors come into play with respect to sports marketers may have to be very creative whether or not the fan purchases the ticket. about how they attract more fans to the stadium. Is it better to have 20,000 people paying an average of £40 to watch a game? Or does it 7.6 Ticketing in the Context make more sense to have 38,000 fans in atten- of the Sports Sector dance but paying only an average of £25? We examine this dilemma in more detail later. In the previous sections we have assessed the However, it raises questions about the overall concept of price and the various approaches ticketing objectives that a sports club or team adopted by organisations within the overall might set out in their plan. services sector. We also looked at the concept We should also acknowledge that, like the of value and the role that it plays in formulat- airlines business, the sale of tickets is only one ing and implanting demand-based strategies. dimension of revenue generation. Airlines We now move to the specific area of sport, such as Ryanair develop healthy revenue which is the focus of the overall text-book. We streams from what is called “ancillary activi- use the term “ticketing” from now on because ties”. These include charging for luggage, car- this is the phrase that is most commonly used hire and public transport (typically entering within the industry. into agreements with such operators and get- 161 7 7.7 · The Evolution to Ticketing Strategies Based on Demand and Value ting a share of the revenue), income from 7.6.3 Fan Loyalty and Behaviour arrangements with designated hotels and so on. High to very high levels of loyalty to a team is In the case of sport, match-day ancillary a feature of some segments of the fan-base. revenue can be generated from food and bev- At the extreme end of the spectrum we can erage, parking, restaurants and bars, mer- identify what might be termed “fanatical chandising, renting out the stadium for fans”, individuals who attend games come concerts, conferences and so on. what may. At the opposite end we can identify Thus, we can see that decisions on ticket casual fans who attend games occasionally pricing will have an impact on sales that are and who pay as and when they decide to go. generated from such ancillary services and Sports marketers often refer to this group as products. “walk-up”s: people who turn up on the day, with no prior commitment to purchase a ticket. 7.6.2 Sports Economics In the quest to understand how fans determine value, sports marketers recognise the The research on pricing in the sports sector is importance of team identification as a factor comparatively limited. However, we should in influencing fan behaviour. Fans with levels acknowledge that sports economists have gen- of identification can be directly related to var- erated some interesting observations and find- ious facets of perceived value. This covers fac- ings in this area. Some of this research points ets such as functional, emotional and social to interesting approaches to ticketing by (Kwon and Kwak 2014). sports marketers. Drayer and Rascher (2013) for instance, ??What advice would you give to the note that some sports organisations do not Marketing Director of a football team who price their tickets with the objective of profit wants to target fans with high levels of maximisation. This can lead to under-pricing. identification with the club with more rel- However, there are strong arguments for evant pricing strategies? applying this approach. Larger attendances can lead to incremental sales across the ancillary products. Marketers and CEOs are driven 7.7 The Evolution to Ticketing in many cases by performance on the pitch or Strategies Based on Demand court. Winning teams attract higher atten- and Value dances as some fans fall into the “Basking in Reflected Glory” syndrome. If we extend this If we consider how pricing strategies have observation a little further we can see some changed over the past three to four decades relevance in the cliché that “winning teams we can see that sports marketers and organ- create happy fans”. Happy fans are much isations have become more pragmatic in their more likely to be positively disposed to spend- approach. In essence they have moved more ing more of their money on the team, again rapidly towards a form of demand-based across a number of ancillary items. pricing which increasingly recognises the Thus, it can be strongly argued that short- importance of setting prices using real-time term profit objectives are sacrificed in order to data analytics. We shall consider this more build greater revenue streams over a longer fully later in the chapter. period of time. Happy fans are also more likely to return to future games. Apart from generating more revenue, sports marketers 7.7.1 Location-Based Ticketing can take advantage of this phenomenon to build more loyal fans and increase the fan- Traditionally, it has been the practice within base. We discussed the concept of relationship the sports sector to price seats according to marketing in an earlier chapter. location. The closer the seat is to the action, 162 Chapter 7 · Ticketing Strategies in the Sports Sector

the more expensive the ticket. Seats at the cen- can drive incremental improvements in profits tre of the stadium or arena (in the context of in certain segments. Games with strong and most sports) provide better views and bring successful opponents can justify a higher price the spectator closer to the action. By contrast as fans are willing to pay more to gain access seats that are at the very back of the upper tier to such an event. of the sports arena provide a more distant and In the context of clubs operating in the limited perspective of events on the pitch or major sports, we see this evidenced in the court. Naturally these seats tend to be priced adoption of different ticketing strategies for at a significantly lower level. Category A, Category B or Category C games. Location-based pricing was the standard Category A referring to the top teams, for most sports teams and organisations. It is Category B covering mid-table teams and still used in the present era of sport. However, Category C reflecting lesser quality teams. we have moved on considerably from relying VTP injects variety and a move away from on this factor as the only influence on ticket- a rigid and fixed approach to pricing sports ing strategy. events and games. It recognises that price is 7 ultimately driven by the potential demand, and not by the internal requirements and pol- 7.7.2 Variable Ticket Pricing itics of the sports team or organisation. To some extent it takes account of the sports As is the case with service sectors in general, marketers and administrator’s intuition and sports marketers recognised that other factors experience of the likely demand. Increasingly, come into play when fans and spectators are however, it has moved from a judgemental weighing up the pros and cons associated with approach to one which is based on “big data”. purchasing tickets for a particular game. As far back as 1999 the Colorado Rockies, These can be summarised as follows: Major League Baseball Team (MLB) operat- 55 Type of game (top-level, mid-level, ing in the American market was identified as bottom-end, derby opponent) one of the first sports clubs to adopt variable 55 Timing of game (weekend, mid-week, time ticket pricing (VTP) (Drayer et al. 2012). of year) However, we need to enter a note of warn- 55 TV coverage (can impact on attendance) ing. VTP makes a strong attempt to provide 55 Nature of the game (league, cup, play-off, some creativity and recognition of the need semi-final and so on) for different prices. However, the major weak- 55 Weather and its impact on the scheduling ness with such an approach is that the prices of games. are still fixed in advance: typically, well before the beginning of the new season. This means When clubs factor in such options they adopt that it takes little or no account of day-to-day a pricing strategy which can be described as fluctuations and changes in the relationship Variable Ticket Pricing (VTP). This approach between supply and demand. For instance, is based on the practice of setting varied prices prolonged cold weather over the course of the for the schedule of games at the start of the winter may deter significant numbers of fans season. It acknowledges the fact that it is nec- to stay away from games. A pre-determined essary to offer a range of prices to take pricing strategy, albeit a variable one, does not account of the factors listed in the preceding take account of such influences. paragraph. It also recognises that different segments of fans exist, each group having different pref- 7.7.3 Bundling Strategies erences, perceptions and requirements. Variable Ticket Pricing also provides The concept of pricing strategies based on opportunities to increase revenue and profit- bundling various elements of the service offer, ability for the sports organisation. By design- also provides a form of variable ticketing pricing a range of prices, the sports organisation ing. 163 7 7.7 · The Evolution to Ticketing Strategies Based on Demand and Value

Typically, in the services sector, many sector have created a bewildering range of ser- organisations create different value proposi- vices and bundles that have little relevance for tions based in reducing or adding elements of the customer. This could be described as a the service offer to different segments of the “product-led”, product-driven approach. market. Again, this is based on the recogni- While such service providers might see this as tion that customers have different require- an indicator of creativity and innovation, the ments and different interpretations of what reality is that they offer little or no benefit to constitutes value. When using this approach, their respective target markets. no uniform price is applied by the service pro- The opportunity to use pricing bundling vider. Likewise, there is no standard value strategies has increased substantially in recent proposition. Instead the provider will create years for sports bodies. This is due to the con- different “packages” to appeal to different vergence of technology and “big data”. segments. The rationale for this is based on However, we can observe that the shift to the view that offering a range of service prod- smart season cards (instead of traditional ucts provided greater value for the overall paper-based alternatives) allows sports mar- market and as a consequence can lead to more keters to link up various aspects of the “game- revenue and profit. day” experience. This is manifested in features such as merchandise, food and beverage and so on. In addition to offering different categories of seats, special deals or promotions can 7.7.4 Exercise be layered around a price package. For instance, one category of price might ??The owner of a sports gym is concerned include a seat in a particular part of the ground about a decline in membership. This has along with access to a bar or restaurant facili- been a recurring feature of the business for ties. Another ticket might include a free beer or the past 2 years. Without some action she soft drink. Such initiatives in the area of pric- reckons that the business will close. She has ing are becoming more prevalent as across all asked you to put forward some innovative of the major sports, fans are seeking increas- ideas about how she can increase member- ingly more hedonic experiences. The game or ship and revenue. The current pricing strat- match, for some categories of fans may not be egy is as follows: the cornerstone of the experience. While it may £60 per month for access to the gym be important, the overall facilities, food and and equipment. This includes one meeting beverages and the opportunity to socialise at a per month with a fitness expert. Students sporting event, take on greater significance. As (the gym is located close to two universi- a consequence, people are willing to pay a price ties) gain monthly access for £30 and for such an experience that incorporate some retired and unemployed people are charged or all of such offerings. a monthly fee of £25. The average monthly We can see that the concept of a value payment is £35. Total membership is £350. proposition is not necessarily uniform. It can Detail how you would create a pricing mean different things to different people. The strategy that drives up revenue and mem- sport of horse racing provides a good illustra- bership. tion. In the UK, attendances at race meetings have declined over the past couple of decades. Bundling services in the sports sector is a rec- It has also lost its appeal to the younger per- ognition that fans have different interpreta- son. Many race tracks have responded by tions of value. We should note, however, that investing in the facilities and also incorporat- the sports packages on offer must resonate ing music and conferences into the overall and be relevant to specific segments. There is a product portfolio. danger that this exercise follows what might This is exemplified by offering racegoers best be described as a “product-led” approach. tickets that include admission to a music event Many service providers in the financial service after the races have finished. While traditional 164 Chapter 7 · Ticketing Strategies in the Sports Sector

horse racing fans, particularly older people, Sports organisations are only recently recog- might have little interest in such a proposition, nising the benefits that can accrue from intro- the inclusion of a music event has become very ducing price bundling propositions in a more popular with people who have little interest in varied and innovative way. the actual races. They attend to enjoy the There is a danger that sports marketers use atmosphere, meet up with friends, celebrate price bundling as an opportunity to “layer” special events and generally enjoy the experi- the value propositions with a range of discon- ence. Many do not leave the bars and restau- nected features, committing the cardinal sin in rants to watch the horses in the parade ring. marketing of adopting a “features-led” We should note that such strategies are not approach. If this ticketing strategy is to work new in the field of services sectors such as effectively, the various elements of the bundle hotels, leisure and entertainment. Such bun- have to be relevant to the target market. For dling practices have been a consistent feature instance, if there is little or no interest in some of pricing strategies as noted by (Foutz 2017). of the features, then it is unlikely to work. 7 Golf in Crisis as Memberships Drop

The sport of golf is experiencing a decline in Younger people, particularly teenagers, are memberships of golf clubs and a significant put off by the length of time it takes and the decrease in the number of young people taking expensive nature of the sport – in the latter up the sport. While the sport thrives in newer case, mainly experienced when purchasing golf markets such as China, India and south-east clubs, accessories and taking out membership Asia, the bastion of golf: Scotland, is strug- or paying green fees. gling to retain and attract members. Some statistics back up the view that golf is The Scottish Golf Union (SGU) is working in decline. closely with its 576 affiliated clubs to address In 2006, the high water mark for the sport this problem. One in three players have not »» worldwide, more than four million Britons renewed their golf memberships in the UK played golf; last year, that number was just between 2004 and 2016. Why is this happening? 2,785,000. Membership of clubs in Eng- One reason advanced is that it has become land has fallen from 850,000 to 652,000 in associated with “oldies”: mainly retired males the same period, according to England who tend to dominate the clubhouses and are Golf, the governing body for the sport in fiercely resistant to change. the country, with similar patterns reflected Another possible explanation lies with the in Wales, Scotland and Northern Ireland nature of the game itself. A round of golf is and worldwide. (7 https://www.theguard- based on players taking on eighteen holes. A ian.com/sport/2017/apr/07/drive-to-get- typical foursome (four players playing together) people-playing-golf-again) can take anywhere from three and a half to four and a half hours. Many people find it tiring and (Source: developed by author from various difficult to schedule in a crowded diary. sources on the Internet)

??In terms of pricing strategy what would get groups to take up golf and join clubs? you recommend to golf administrators in Focus on teenagers, kids, families and fe- general and golf club management, in par- males in your discussion. ticular about trying to attract different tar- 165 7 7.8 · Other Discriminatory Pricing Tools and Techniques

7.8 Other Discriminatory Pricing tition which has been supported by the affili- Tools and Techniques ated clubs. The women’s league offers female players the opportunity to play the sport at a Variable ticket pricing manifests itself across semi-professional level and one of the biggest different approaches to setting and formulat- challenges is to build up a viable audience for ing prices in sports marketing. This is often the sport and attract reasonable attendances. referred to as discriminatory pricing and hap- In terms of pricing, some clubs have pens where organisations charge different charged nominal prices to attract fans. Others prices for a broadly identical product or ser- have not introduced a formal price for each vices, based on a number of different criteria. game: relying on a bucket collection instead. A good example of this would be the case While other teams have incorporated the of a football club that offers a special price to female games into the overall match-day attract females to a particular category of package by staging them before the main game. Similar initiatives might include a event. “family” ticket or a special price for “military The rationale behind these approaches is personnel”. In such cases the product is iden- clear. Firstly, it has to build up audiences and tical (the game or match) but the price can secondly it involves a form of cross- vary. We consider a range of discriminatory subsidisation in order to take a long-term pricing strategies in the following paragraphs. view of the viability of the product. Without such subsidisation, it is highly likely WAFL is likely to “wither on the vine” and fail. 7.8.1 Product Line Pricing Evidence of its potential can be evidenced from the fact that over 460,000 females are Sports clubs and organisations in common participating in this sport, representing with manufacturing companies and other ser- around thirty per cent of all participants. At vice providers, offer a broad range of prod- the elite end, games are being streamed to fans ucts. In the case of football, the core product via the Internet and TV channels are begin- might be the regular season league games. ning to show interest in covering some games. However, other products might include the women’s football league games, reserve team games, various underage games and so on. 7.8.2 Premium Pricing From a sports marketing perspective, opportunities exist to price certain products for cer- This approach is becoming more prevalent tain segments in order to build interest and across many aspects of services marketing encourage fans to migrate or trade-up to the and also within the sports domain. This is more profitable products on offer from that characterised by offering the fan elements of organisation or club. Many sports at the elite the value proposition which are free and other level, are increasingly attracting more females elements which require a subscription or an to the events and games. This could be stimu- extra payment. In an era of digitalised offer- lated by offering attractive prices in the first ings, this might mean that an app, which can instance to the women’s football games. This be downloaded, is free, along with some basic involves the female segment within the overall content or material but different price tariffs club community and can heighten interest in are applied if the fan wants to use a wider and the core produce in the line: the regular league deeper range of options. games. Within the context of fan engagement, this A form of cross-subsidisation can also might apply to situations where a club offers a occur with such line-based pricing strategies. range of features on its club website. The ele- A good example of this can be found in ments that have to be paid for represent an the sport of Australian Football League opportunity to derive revenue for the club, as (AFL). In 2017 the sports administrators for well as opportunities to offer special promo- this sport established a Women’s AFL compe- tions and offers to fans who are willing to pay 166 Chapter 7 · Ticketing Strategies in the Sports Sector

for the option of being able to take advantage alter in terms of the price label that is placed on of such deals. it. The initial strategy may be to price the prod- It also creates opportunities for the sports uct at a high level – reflecting the practice of marketers to attract advertisers to the website prestige pricing or a skimming strategy and or social media platform that it runs. then lowering the price as initial demand tapers The challenge with premium pricing strat- off. It is not necessarily a form of discrimina- egies is to make the right judgements about tory pricing although as we discuss in the next what people are willing to pay for and to paragraph, opportunities are available. understand their behaviours in terms of using A good example here is the case of the such apps and products. merchandising of football jerseys. We can see this in the case of the newspa- Typically, at the beginning of each season, per industry, and in particular, how fans football teams release details about their new behave with respect to accessing sports mate- home and away tops or jerseys. They are rial and content. Clearly, in the face of the wrapped around high prices. This reflects the Internet, traditional sales of newspapers have desire on the part of many fans to acquire 7 entered into terminal decline. More and more them quickly in order to wear them at the people no longer purchase a newspaper. early-season games. Instead they rely on the online versions or the Psychologically, this is a clever recognition Internet in general for their consumption of of how fans behave. Some would argue that it issues such as news, politics and sport. is also manipulative. For instance, young In response, newspapers have responded children leverage pressure on parents to buy by creating value propositions based on the them the latest strip because they do not want premium pricing strategy. For instance, in the to invite ridicule in the school-yard. However, area of sport, the printed version contains as the season moves on and with unsold shirts some basic coverage of sports. However, to still on the shelves, it makes sense to lower the access extra material, for example video clips, price. In terms of discriminatory pricing, interviews with athletes and so on, the cus- sports marketers can incorporate coupons or tomer takes out a monthly subscription. In special offers together with other elements in some cases, different levels or tiers may exist. the overall price offer to shift the inventory The customer has the choice, if you want and generate some incremental revenue. more than the basic offerings, then you have An example of this might be where the to pay for it. club is trying to attract extra sales of tickets As well as generating additional income, for a mid-week game against poor opposition. companies are beginning to realise that many By offering a ticket at a reduced price, together people are willing to pay a little more for extra with a coupon for a discounted price on a jer- material than simply relying on the basic value sey, it is possible that this will make the price proposition. This phenomenon was first of the ticket more attractive to fans. picked up in the music business, when operators such as Apple and Spotify realised this was happening. By introducing variations in 7.8.4 Equitable Pricing Strategies what is being offered (free and pay-to-use elements) it can generate revenue and still appeal This approach acknowledges that sports clubs to a wider range of segments. should be fair to their fans when it comes to setting their ticketing charges. Clearly, not all fans are equal when it comes to their ability to 7.8.3 Life-Cycle Pricing pay for the privilege of attending sports events. This does not mean of course that This approach recognises the concept of the prices should be priced as low as possible. life-cycle; that over time, the value of the prod- However, it can be argued that pricing deci- uct is likely to diminish. It realises that at vari- sions should try to gain a sense of balance ous points in the cycle the product will need to across the different pricing options for fans. 167 7 7.9 · Dynamic Pricing

This has become an emotive subject in the of dynamic pricing and place it in the context case of many elite sports. It has become rela- of the sports sector. tively expensive to watch baseball, cricket, The first sports club officially recognised in and football and so on at the top level. While the literature as being the pioneer of dynamic revenue from media rights and sponsorship pricing was the San Francisco Giants. They has soared, salary levels of players have expo- introduced a change in pricing policy in 2009 nentially risen, relative to what the “working which was based on the principles of dynamic man or woman” earns. pricing. Before we look at their approach we Supporters associations have become very need to define what we mean by the term vocal and outspoken about the prices being “dynamic pricing” and its constituent parts. charged. They feel that the traditional fan is Dynamic pricing still practices the basic increasingly being priced out of the market principles of variable ticket pricing. However, and that attendance at major sports events while the latter approach offers different and even regular season league games is prices to customers, they are largely set in becoming the preserve of the well-off fan. The advance: before the beginning of a new sea- argument continues, by taking the view that if son. By contrast, dynamic pricing varies certain segments of the market can no longer prices much more frequently, often on a daily attend then there is a real danger that atten- basis and in real time. This means that the dance will decline and that participation rates price of a ticket could alter a number of times will also decrease accordingly. Therefore, the during the day in response to fluctuations in onus is on sports administrators and market- supply and demand. If demand is weak, ers to make some explicit recognition of fair- sports marketers can change the price of the ness and equity when formulating and ticket to stimulate demand. Clearly prices are implementing ticketing strategies. set in advance (as is the case with variable Equity-based pricing has particular signif- ticket pricing - VTP). However, they are then icance in the area of community-based sport. altered and changed on a frequent basis, In this sector pricing strategies for the use of unlike VTP. It is a response to on-going devel- publicly-owned or controlled facilities such as opments on a real-time basis. playing fields, tennis courts and so on are in Let’s explore this concept in more detail. many cases influenced by the need to come up In the case of VTP, tickets are priced, based with policies that do not exclude certain sec- on historical patterns of demand from fans tions of the community. This might include and factor in issues such as timing of the game people from poor or deprived backgrounds (mid-week vs weekend), category of opponent who otherwise could not afford the fees to (strong, average or weak) derby games (the make use of such facilities. opposition being local) and public holidays. In the community sector such facilities This is based on anticipating likely demand. might be subsidised by grants from the gov- Its strengths rest with the fact that it follows a ernment or the local authorities. Thus, pricing rationale that should, in theory, lead to more objectives and strategies may be driven by optimal revenue streams emanating from this wider social objectives such as encouraging source. sports participation or reducing obesity in However, it can be strongly argued that society. because the prices are set so long in advance, this approach does not reflect the real “day- to-day” events that can impact on the up-take 7.9 Dynamic Pricing of tickets and attendance at a specific game. For instance, when the tickets were set before Over the past decade to 15 years sports mar- the start of the season it cannot anticipate keters have taken the concept of Variable how well or poorly the team is playing during Ticket Pricing (VTP) to a new level. This takes the middle or towards the end of the season. us into the era of Dynamic Ticket Pricing A team that finished near the bottom of the (DTP). In this section we explore the concept league the previous season and is experiencing 168 Chapter 7 · Ticketing Strategies in the Sports Sector

great success at the mid-way point of the cur- an upwards direction. This has the effect of rent season, will attract more fans. This could creating conditions for optimal revenue gen- not have been factored into the pricing deci- eration. sion at the beginning of the season. Of course, in sport the reverse approach By adopting dynamic pricing strategies, can also occur. In the case of games that the club can change the prices for up-coming have relatively low levels of demand, sports games by factoring in issues such as perfor- marketers may create a range of discounted mance on the pitch, weather conditions, and prices closer to game-day. Thus, once again local issues such as bus or train strikes and so prices, using a dynamic pricing approach will on. The use of technology and “big data” reflect the fluctuations between demand and allows sports marketers to have a clearer pic- supply. ture of demand patterns and fluctuations and In the airline business, marketers recognise to make decisions in real-time and in a speedy that if customers book well in advance, they fashion. For instance, they can vary prices on can command a lower price. However, many a daily basis in the days leading up to the people do not conform to this behavioural 7 match or game. Although, previously, such trait. Instead, they leave the booking to the factors were outside the control of clubs, they last few days before flying. Airlines can sustain now become controllable to the extent that a much higher price in this instance as they altered prices represent a more realistic know that the potential passenger has little appraisal of demand and supply fluctuations. choice left but to pay the price quoted on the Again, we have to acknowledge that this is website by the airline. To some extent this phe- not a new phenomenon. It has been practiced nomenon can be explained by the behaviour for considerably longer in other service sec- of people who use credit cards. If everyone tors such as retailing, hotel and hospitality paid their monthly bill from the credit card and airlines sub-sectors. company to the exact amount, then the latter’s Drayer et al. (2012) note that during the ability to generate profits would diminish. 2010 season, the San Francisco Giants Reality shows that most people only make (American Baseball team) made full use of part-payment and as a consequence high lev- dynamic pricing, revenue from ticketing els of interest payments on their outstanding increased by seven per cent. bills. In a wider context and in order to gain a clearer picture of how DTP works, we can look no further than Amazon. This company 7.9.1 Prerequisites for Dynamic alters the prices of its items with bewildering Pricing to Work frequency - in some cases on a daily or even hourly basis. This is perhaps an extreme Kimes (1989) identified six prerequisites example of dynamic pricing in action. where dynamic pricing strategies in the con- However, it illustrates the point that responses text of overall revenue management can create to demand and supply fluctuations can be a successful environment. They can be sum- acted upon in real time. marised as follows. Dynamic pricing is often referred to as 1. The ability to segment markets: this creates yield or revenue management. conditions where prices can be varied The practice of yield management ema- across different groups. nated in the airline and hotel sectors. This phi- 2. Perishable inventory: inventory cannot be losophy is based on the principle that companies stored - marketers have to maximise reve- will implement a pricing structure that pushes nue from fixed capacities e.g. stadium size. prices higher as the time of the consumption of 3. Product sold in advance: demand can fluc- the product/service approaches. tuate over time and altering pricing can In the context of sport, for games or events reduce the risks. that exhibit very high levels of demand, tick- 4. Low marginal sales costs: where there are eting strategy will certainly move the price in low costs associated with servicing addi- 169 7 7.10 · Big Data and Technology: The Glue That Helps Dynamic Pricing Strategies Work

tional customers, it makes sense to vary tion of it, to relevant personnel in an organ- prices to pull in new customers. isation. The old cliché of “paralysis by 5. High marginal production costs: where it is analysis” pertains to some extent. difficult, if not impossible, for a marketer Technology in the form of apps and to create additional inventory e.g. extra location-based marketing tools, allied to seats in the stadium or additional rooms in social media platforms, allows sports market- a hotel. You have to work with what you’ve ers to capture data. More importantly tech- got. Varying prices can help to maximise nology allows them to integrate such revenue. information and use it in a strategic way. For 6. Unpredictable demand: in situations where instance, a smart season card linked with a there are high levels of demand fluctua- mobile app can present the sports organisation tion, it justifies the adoption of different with the ability to track and monitor the indi- prices. vidual fan’s engagement, spending and changing perceptions and attitudes across the full Drayer et al. (2012) argue that if the above plethora of behaviour. It is not just about set- general conditions and criteria are applied ting prices. On a more strategic level it is all generally to the sports sector, then it can be about capturing and retaining fans and in the seen that dynamic pricing is fit for the pur- process, managing them in a profitable and pose. (See also Kemper and Breuer 2016) customer-focused manner. In the context of ticketing, big data provides the glue by which sports marketers can develop the variables that impact on success- 7.10 Big Data and Technology: ful pricing. Research by Shapiro and Drayer The Glue That Helps Dynamic (2014) analysed a number of games during the Pricing Strategies Work San Francisco Giant’s 2010 season. They considered ten different variables and found that We can glean from the subsequent discussion the key influencing factors were: seat location, on dynamic pricing that the ability of market- team performance, the home team’s winning ers to make effective use of such strategies is percentage for the past ten games, individual largely based on data. More specifically, the performance (of players), number of all-stars acquisition and ability to analyse large chunks on the opponent’s roster and a number of of data provides the material upon which time-related variables (start-time of the game, pricing decisions can be made. number of days before the game and the par- Big data has implications for all areas ticular stage of the season). within the sports sector; from “wearables” used by coaches and athletes to monitor performance through to the fan. 7.10.1 Data Analytics In the context of ticketing strategies, we can see that comprehensive data on fan’s purchasing Designing relevant price structures for sports behaviour can provide sports marketers with games and events is dependent on understand- invaluable information about their reactions to ing all facets of fan behaviour. This is a “given” price changes, their spending patterns at games and cannot be avoided by sports marketers. As and sports events and as a consequence how to mentioned earlier if this is ignored, then pricing design relevant demand-based strategies. enters the realms of guesswork and intuition and Without such data, sports organisations a focus on internal, supply-based influences. The tend to rely on a combination of intuition and likelihood of coming up with a meaningful and cost-based ticketing strategies. This does not value-focused strategy is very low. mean that the task of setting prices is becom- Deloitte (2014) in a report on dynamic ing any easier. Big data creates its own diffi- pricing practices pinpoints key pricing deci- culties and challenges. Too much data can sion areas where data analytics can provide blind any organisation to effective dissemina- some answers. In theory, this should lead to 170 Chapter 7 · Ticketing Strategies in the Sports Sector

more relevant and customer-driven strategies. They are identified as follows. 1. Dynamic pricing doesn’t mean charging Strategy more for everything: it means charging the right amount for everything. In order to arrive at the right amount, sports marketers need to have an understanding of prof- Organisation Dynamic Pricing Analytics itability, market tolerances, competition Flexible Pricing Strategy to and customer behaviour. Analytics can Optimise Ticket help in this regard. Revenue 2. Fans aren’t looking for transactions: they want an experience. Understanding customer behaviour and expectations is criti- Consumer cal when putting together a value Technology Behaviour proposition for different segments. 7 3. Not all customers are the same. Perhaps it is an obvious statement but as with other .. Fig. 7.3 A holistic model for dynamic pricing. sectors of business, sports marketers need (Source: Deloitte (2014) An Analytics Based Pricing to treat customers differently in terms of Strategy for Sports Franchises) pricing. Think of potential differences in requirements for corporate customers and 7.11 Dynamic Pricing: An Appraisal families at sports games and events. We need relevant data to help us answer such In the preceding paragraphs we have outlined questions. how dynamic pricing works in practice and have 4. Promotional effectiveness matters. This concluded that the characteristics of the sports takes into the realm of communicating sector create a conducive environment for its use. with fans and targeting them with relevant Let us consider the advantages and disadvan- offers and promotions. For instance, mon- tages associated with the use of this technique. itoring comments on fan forums and social media platforms can generate a raft of useful information. 7.11.1 Advantages 5. Analytics can help to generate appropriate ticketing programmes. What will the mar- 1. Real-time implementation: Dynamic pric- ket bear in terms of price structure? We ing allows the sports organisation to make will not know unless we can capture and changes to its pricing structures in real- analyse the data (Deloitte 2014, p. 3). time, in an attempt to stimulate sales or reduce the level of fluctuation between sup- Data analytics play a crucial role when using ply and demand. Alternative approaches dynamic pricing in the context of sport. involve setting prices well in advance. This . Figure 7.3 highlights the important role means that such strategies are difficult to that it plays in the process. Essentially, a num- adjust in response to changing daily or ber of algorithms are utilised to analyse a weekly conditions. number of relevant variables (discussed ear- 2. Increasing revenue: Dynamic pricing when lier in this chapter) which have a critical influ- used effectively, can increase the revenue ence in determining appropriate price stream from this source. As mentioned structures. This analysis generates a price rec- earlier studies consistently show that ommendation for the decision-makers in the sports clubs can generate up to a thirty per sports organisation and form the basis for the cent increase in high-demand situations subsequent implementation of the ticketing and five to ten per cent in low-demand strategy. This process is captured in . Fig. 7.3. conditions (Deloitte 2014, p. 4). 171 7 7.11 · Dynamic Pricing: An Appraisal

3. Reducing the influence of secondary market 7.11.2 Disadvantages operators: Dynamic pricing can counter- act the threat from secondary market 1. Confusion: The use of dynamic pricing can operators such as StubHub (we consider create an array of prices across a regular this issue later in the chapter). A better season for sports clubs. The Major League understanding of demand patterns and Baseball in the USA is a case in point. The fluctuations can create situations where nature of the sport involves each team the club can charge less than such compa- playing 162 games over a six-month sched- nies. This reduces the criticism that clubs ule. Games can take place on nearly a daily engage in price gouging (exploitation of basis. Constantly changing prices can lead fans). to confused fans who are continually 4. Provides a clearer insight into the concept forced to react to the changes that may be of value: Data analytics provides a clear taking place on a daily basis. opportunity for sports marketers to more 2. Damage to the brand: Widespread and fully understand customer perceptions, unrelenting use of dynamic pricing can attitudes and behaviour in the context of potentially damage the brand and the price. In theory, this should allow for brand equity associated with it. As fans value-focused propositions that are rele- become used to the expectation of lower vant to different segments of the market. prices appearing on the website, their 5. Technology and third-party providers: As interpretation of value is likely to change. recognised earlier in this chapter, improve- Constantly varying prices, particularly if ments in technology (for example apps, they involve decreases, can tarnish the mobile and location-based technology) brand. have taken dynamic pricing to a new level. 3. Historical data: While the level of sophis- Many sports organisations who do not tication surrounding the technology and have the requisite skills to operate the pro- algorithms has increased in recent years, cess outsource the activity to specialist much of the analysis is based on historical providers. Companies such as Omnia data. This may not necessarily generate Pricing Software and Qcue work closely the expected level of accuracy required by with clients in the sports field and manage sports organisations. There is no guaran- the data analytics process. tee that the patterns of fluctuation in sup- 6. Increasingly knowledgeable fans: Arguably, ply and demand will continue in the same fans are much more comfortable with the manner into the future, although in fair- concept of dynamic pricing from their ness, much of it will present an accurate experiences with online transactions on picture. various website - most notably, Amazon. 4. Difficulty of quantifying some of the fac- 7. Reducing the risk of under-pricing: One of tors: Arguably more factors come into the dangers of not understanding the con- play in the sports sector than is the case cept of value is under-pricing. Sports mar- with the airlines and hotel businesses. keters will gravitate to this default position Factors such as the expectations of fans, because of a fear that demand will fall. can be difficult to measure or quantify. The reality is that in many cases, deliberate 5. The existence of the secondary ticketing under-pricing makes sense if the overall market: Dynamic pricing does not neces- objective is to drive revenue increases from sarily address the problem of secondary ancillary areas of the business. However, ticket operators making significant prof- the secondary ticket market tends to work its. This is an indication that inefficiencies on the basis that in high-demand situa- still exist in the ticketing system for many tions, fans are willing to pay significantly clubs. In many cases fans have no alter- more than is often estimated, in order to native but to resort to such sources for get access to the event. tickets. 172 Chapter 7 · Ticketing Strategies in the Sports Sector

6. Lack of skilled personnel and budget: By are unofficial and do not have any accredita- contrast to traditional users of dynamic tion from the official sports bodies or clubs. pricing in the hotel and airlines sector, We should note that in recent years many many sports clubs do not have the budget sports clubs and organisations have in fact or internal capabilities to implement established relationships with designated sec- dynamic pricing. Using third-party opera- ondary ticket operators - we discuss this later. tors such as Qcue can get around this Swofford (1999) identified three reasons as problem but to some extent various to why the secondary market exists. aspects of control are ceded to such opera- 1. These ticket brokers may be less risk averse tors. This can potentially lead to tensions. than the event organisers and clubs. The 7. Negative postings on social media plat- latter, as we noted earlier, may prefer to forms: Research by Vale (2017) suggests under-price in certain circumstances to that fans are increasingly making use of optimise revenue from ancillary activities. e-Word-of-Mouth (eWOM) to share their 2. Secondary ticket sellers tend to have a experiences. This potentially raises the lower cost-function due to lower informa- 7 spectre of negative comments that may tion, transaction and lower taxes. Put sim- damage the club’s brand and reputation. ply they have more accurate information about the overall market. In summary, dynamic pricing affords sports 3. Secondary market operators have short- marketers the opportunity to gain a much term profit as their priority. Some clubs clearer perception and understanding of the are perhaps less reluctant to exploit fans fan’s perception of value and willingness to due to the need to cultivate loyalty and pay. It can significantly reduce the extent of avoid negative publicity in the media. inefficiencies often associated with traditional ticketing strategies. Bouchet et al. (2016) observe that most sports clubs do not neces- 7.12.1 Implications for the Various sarily engage in daily or hourly amendments to price. Weekly or less frequent updates are Stakeholders the norm rather than the exception. This Secondary ticket operators effectively fulfil the would indicate that a “common-sense” role of an intermediary between the sports approach is the most favoured approach. organisation and the fans. Like many such Perhaps this is a recognition that more fre- middlemen in the business sector, the primary quent changes can lead to some of the disad- organisation would prefer if they did not exist. vantages highlighted in the preceding chapter. They take potential revenue away, irritate fans and because of the focus on making profit, are often accused of exploiting the fan and trading 7.12 The Secondary Ticket Market on their misery and disappointment if they cannot get a ticket for an event or game. Within the general entertainment markets, Counter-arguments suggest that the exis- including sports, the secondary ticket market tence of such operators highlights the ineffi- has become a significant influence in terms of ciency and incompetence of official primary how fans can source and access tickets. These sports organisations and that they provide a sectors exhibit high levels of demand, with necessary function in terms of clearing inven- typical supply and demand fluctuations. tories of tickets. To this extent, sports market- Purchasing a ticket from the club or event ers view them with mixed feelings: a nuisance organisers may be problematic for many fans. when demand is high but useful when demand Quite simply, in cases where demand exceeds is low and they can sell off remaining tickets supply and where the perishable nature of ser- for the club or organisation. vices “kick in”, fans have no alternative but to We examine these views in greater detail in seek tickets from other sources, most of which this section. 173 7 7.12 · The Secondary Ticket Market

7.12.2 Problems with Secondary a lax environment in terms of accountability Ticketing and monitoring. The government response in the UK could Fans, arguably the most critical stakeholder in be deemed to be equivocal. It proposes to the area of ticketing, tend to suffer from the tighten up on the use of bots by operators but proliferation of unauthorised operators in the is somewhat vague on how that might actually secondary ticket market. happen. It appears to follow a policy of look- Firstly, it appears to have become easier ing to the industry to come up with initiatives for operators to capture a large volume of to respond to the recommendations of tickets for sports events and games. They can Watterson. do this by making use of specialised software - often referred to as “bots”. By applying 7.12.3 Exercise this software, they can automatically purchase very large numbers of tickets the instant that they go on sale. Evidence of this can be seen ??Select three countries of your choice and shortly afterwards when these tickets go on examine the way in which secondary ticket sale on sites such as eBay. Less sophisticated markets are addressed and regulated. How but still effective techniques include the use of does this compare with the approach in the multiple identities and multiple credit cards to United Kingdom? purchase tickets. There is also a lack of transparency in the legal regulations. In some countries such as 7.12.4 Managing the Relationships France and Norway it is against the law to re- Between Primary sell music tickets. It is not as clear in the and Secondary Ticket Sellers UK. However, recent proposed legislation attempted to address some of the problems. The preceding section highlights the areas of A review of secondary ticketing (Watterson tension and conflict that can occur between 2017) recommended, among other conclu- the two key stakeholders in the ticketing pro- sions, that secondary platforms should ensure cess. The former referring to the initial sell- that ticket sellers on their platform be clearly ers - teams, event organisers and sports entity identified and that their details are provided holders, the latter identified as made up of to consumers. It also specified that primary various middlemen such as brokers and even ticket sellers (i.e. clubs and sports administra- fans who acquire tickets and sell them for sub- tors of sports events and competitions or stantial profit on online websites. events) should guard against the possibility of Courty provides a useful comparison mass purchase by individuals or organisa- between the traditional and modern second- tions. ary resale markets. This is captured in

The UK government accepted all of the . Table 7.1. recommendations which took account of the We can see that a number of changes and major negative criticisms made in that report trends have emerged, particularly with the and by other organisations. For instance, the advent of online marketplaces. These essen- Consumer Group Which, launched a cam- tially consist of general auction sites such as paign in 2013 called “Play Fair on Ticket eBay or specialist online marketplaces such as Prices”. It noted that it was wrong to allow StubHub and Viagogo. Brokers tend to use operators to enforce compulsory fees amount- multiple sites to re-sell their tickets. ing to as much as eighteen per cent on top of Fans also make use of what are called the price charged for the ticket. ticket aggregators: operators who provide Such practices indicate strongly that many price comparisons on ticket availability to operators appear to be allowed to operate identify the most economical source for their with relative impunity from the law and within tickets. 174 Chapter 7 · Ticketing Strategies in the Sports Sector

.. Table 7.1 Changes in ticketing practices

Traditional ticketing model Modern ticketing model Primary Secondary

Sellers Teams Brokers, Scalpers Teams sponsor secondary online and Fans marketplaces primary and secondary markets are getting integrated Buyers Brokers and fans Fans Intermediation Ticket Box Office, Traditional Online resale marketplaces and Team Club Season methods, e.g. aggregators reduce search costs. Teams Tickets classified ads sponsor resale marketplaces Tickets Printed tickets with face value physically Electronic paperless tickets can be exchanged (handling and mailing costs) transferred at no cost until the event starts Regulation and Tickets are non-refundable and Resale restrictions are enforceable on ticket restrictions transferrable sponsored sites 7 Regulations restricting the resale of paper tickets are difficult to enforce Price Fixed in advance Brokers price Teams incorporate information from determination and often according to secondary market sales to optimise cost-based. market conditions primary market prices for current and Prices vary little future events and for season tickets with seat location and game’s specifics

Source: Adapted from Courty

Online markets facilitate fan-to-fan sales as everything is digitally logged and controlled or buy from brokers (broker-to-fan). They by the entity holder (club or organisation). compete on a wide range of perceived benefits They also generate useful information about such as price setting options for the seller, the customer that has purchased the ticket - in ticket selection, guarantees over fraud and terms of purchase patterns, how much they counterfeit concerns and so on. Fees (typi- are willing to pay and so on. cally around 35 per cent) are shared between Season-ticket holders also re-sell their the buyer and seller but do not include ship- tickets. Clubs are concerned about this as it ping costs for paper tickets. Typical online provides an opportunity for selling at exces- marketplaces include StubHub, Viagogo, sive prices and damaging the image of the Seatgeeks and Ticketiq. club. In English Premier League and The situation has become even more Championship, clubs such as Huddersfield blurred as sports event organisers and teams Town have set up their own exchange hub. In have begun to manage prices in the primary this instance, season ticket holders can re-sell market. Some have appointed companies such their tickets at the official price, the club gets as Ticketmaster as the official secondary ticket additional income from the sale of the ticket market operator. and the season-ticket holder gets credits or Courty also points to the increasing use of rewards in terms of preferential access to electronic tickets. This approach makes it away tickets or discounts on the renewal of more difficult for operators to commit fraud the season card or ticket. 175 7 7.12 · The Secondary Ticket Market

If You Cannot Beat Them, Join Them: The Case of the NFL

For many years the NFL and the teams that Francisco Giants partnered with 7 Tickets. make up the different conferences complained com. bitterly about the relentless intrusion of preda- At first glance such partnerships and tors and scalpers who were determined to make league-owned marketplaces appear to reduce as much money from the re-sale of tickets for the potential instances of fraud. On a practical regular season and play-off games. level they also reduced the search costs for fans. In 2017 it decided to do something about it. It also improves the quality of data held on Based on the full support and involvement of individual fans, enabling the club or league all of the teams it set up a resale marketplace administrators to more accurately predict site in order to be in a position to control, to demand patterns. some extent, the prices being charged to fans. Some concerns have been expressed about The official ownership, involvement and con- the dangers of such practices reducing brand trol of the club was seen as a clear form of reas- loyalty among fans. Why would fans purchase surance and “peace of mind” for fans trying to season tickets if they can quickly go to a spon- gain access to a ticket. sored marketplace and acquire cheaper Baseball was the first sport in the USA to tickets? move in this direction in 1999 when San (Source: adapted from Courty 2019)

7.12.5 Exercise sports organisations should be in a stronger position to take ownership of the secondary ??Assess the merits of the approach adopted ticketing market, either by working in part- by the NFL. nership with authorised operators or bringing it in-house, via better technology and data management. 7.12.6 Primary and Secondary The onus will be on governments to intro- Ticket Markets - Future duce stronger legislation to tighten up on the Trends prevalence of individual touts or scalpers who are creating problems for legitimate fans. In Further improvements in the areas of technol- June 2018, FIFA filed a criminal complaint ogy, data capture and data analytics should against Viagogo, one of the main ticketing com- lead to more accurate management of the panies, about its deceptive and non-transparent fluctuations between supply and demand. behaviour. Although FIFA operated the only More detailed analysis of transactions is likely official website for the sale of tickets, Viagogo to shed greater insight into fan and competi- was selling a wide range of tickets in the UK at tor behaviour. prices that were far higher than the official price. As teams and competition administrators This instance indicates that familiar problems increasingly take control of secondary ticket- still exist. It is more than likely that the fan will ing (either through in-house or collaborative suffer even more in this case because FIFA have partnerships with middlemen) the risks asso- the technology in place to trace the tickets. Any ciated with fraud and counterfeiting should fan acquiring a ticket from a non-official source reduce: it is probably too naïve to assume that would have it cancelled upon presentation at the they will be eliminated. However, clubs and match-day venue. 176 Chapter 7 · Ticketing Strategies in the Sports Sector

7.13 Conclusions sports marketers. While revenues continue to stream into sports clubs due to increasing We have examined the issues and factors influ- media rights and sponsorship, attendance at encing sports ticketing principles, policy and sports events and games is still critical to the implementation in this chapter. We have overall finances. acknowledged that this aspect of sports mar- Sports marketers still have to face the chal- keting strategy has been somewhat neglected, lenge of attracting fans to events and retain- by contrast, to other elements of the marketing their business. This is not easy, and is likely ing mix. to be more challenging in years to come. The However, the confluence of technology impact of the Coronavirus crisis is likely to and data management has led to a major shift linger with all of us for a number of years. It in approach to pricing in the sports sector. may make it difficult to retain fans in suffi- Sports clubs and organisations, armed with cient numbers than in the past. better quality data, can now more accurately Fans consume sports in an increasingly estimate likely demand patterns for games complex number of ways. Streaming sports 7 and sports events. In essence we operate in an events illegally, accessing games “on the go” era where smarter pricing is the order of the and increased improvements in technology and day. This presumes that sports marketers picture quality mean that many fans no longer make effective use of the technology and data bother to physically attend games. In effect they analytics to engage in such ticketing practices. become virtual fans - watching the games and This does not always happen. interacting with their favourite sports and Some sports clubs can be accused of not clubs, but no longer necessarily interested in implementing smarter pricing strategies. attending games in a “live” or physical sense. Instead, they still adopt a more traditional When developing ticketing strategies, approach which is largely based on cost and sports marketers will have to focus on the live competitor-based pricing. While such strate- experience for the fan. Fan expectations have gies are not necessarily wrong, they ignore the risen in this regard. They no longer expect to reality of the market and specifically the cus- sit in poor quality seats with out-of-date facil- tomer. ities. Experiential marketing becomes much Smart pricing strategies should be value- more strategic to sports clubs in terms of based and reflect the perceptions, attitudes building loyal fans. and behaviour of the fan. This is particularly the case in situations where supply exceeds Learning Outcomes demand and where the sports club or organ- 55 Traditionally, sports bodies and clubs isation is in active competition for the fan. have been very conservative in terms of We have examined the move towards tech- how they approached ticketing strategy niques such as dynamic pricing and the role design and formulation played by secondary ticketing operators. In 55 Effective ticketing strategy should the latter case the emergence of such compa- revolve around addressing the concept nies has often been cited as an example of the of value, as defined by the fan and not inherent inefficiencies that are built into the based only on internal considerations existing pricing policies and operating proce- such as cost dures employed by sports bodies. 55 Effective pricing does not necessarily Going forward, we are likely to witness revolve around charging higher prices. more sophisticated approaches to pricing by 177 7 7.13 · Conclusions

The actual ticket price is just one 55 More needs to be done by sports bodies dimension of the overall experience. It and legislators to regularise practices in may make sense to reduce prices, in order this area, although it will never be to attract more fans and generate more eliminated revenue from ancillary revenue streams such as food, merchandise and so on 55 Due to technology and “big data”, ??End of Chapter Discussion Questions sports marketers are now theoretically 1. Assess the view that basing your in a stronger position to understand pricing strategy on what your demand patterns and fluctuations more competitors charge is a safe way of fully managing the process. 55 The adoption of techniques such as 2. Examine the key drivers of value from dynamic pricing has created situations the perspective of the fan. How can where clubs can generate more revenue this shape and influence the ticketing and fan attendance at certain categories strategy for a football team that is con- of games that are difficult to sell in stantly struggling to stay in the Premier advance League? 55 Ticketing revenue is but one element 3. Evaluate the view that dynamic pricing of overall revenue streams. The overall is the same as variable pricing. Use objective for sports marketers is to examples to support your point of monetise the product and derive view. maximum revenue from all sources. 4. Some commentators argue that sports Ticketing strategy has to reflect this clubs “rip off” fans by constantly “bigger picture” increasing prices and that this will lead 55 Sports clubs have been accused of to many fans not being able to afford exploiting the fanatical loyalty of fans. to go to sports games and events. What This is often exhibited in the high prices is your view on this perception? Use that are charged for events and key examples to support your line of argu- games. In an era of social responsibility ment. and ethical marketing, this is something 5. Examine the concept of equity-based that sports marketers cannot ignore. pricing. How relevant is this concept in They have to consider the issue of the context of ticketing strategy for- equity-based pricing more fully within mulation and implementation? the overall context of ticketing policies 6. Critically assess the view that the exis- and procedures tence of secondary ticketing operators 55 The secondary ticketing market still is an indication that there are great creates many problems within the inefficiencies in the way in which sports sector. For high-profile events it sports marketers set their pricing remains the only source for a fan. strategies. Secondary ticketing operators range 7. Examine the extent to which you would from sophisticated operators such as agree with the assertion that one of the TicketMaster and Viagogo, to scalpers best sports ticketing strategies is to who operate outside the stadia, charge as much as you can get away peddling tickets at exorbitant prices with. Use examples to support your position on this statement. 178 Chapter 7 · Ticketing Strategies in the Sports Sector

The Leaving of Liverpool: Fans Walk Out

Introduction Was this an indication also of a tipping In 2010 Liverpool football club - the English point in terms of how fans view the concept of Premier League team, was acquired by the value for money? Many fans felt that this was Fenway Sports Group. This is an American typical of what tends to happen when foreign sports investment company. It has a portfolio owners take over a club and focus on the key of sports properties which includes the Boston issue (for them), profit at all costs. Red Sox - the Major League Baseball team as Influential supporters groups such as The its marquee brand. Business experts view the Spirit of Shankly (a highly popular and suc- Fenway Sports Group as one of most sophisti- cessful previous manager) demanded meetings cated and strategic players in the sports space with the CEO at the time; Ian Ayre. globally. They threatened to organise a mass walk- Despite initial suspicion on the part of out of the stadium at the next scheduled home Liverpool fans about the possible motivations game against Sunderland: appropriately 7 of the Fenway Group for buying the club, the enough on the stroke of the seventy-seventh owners were seen to be supportive of the man- minute. ager: providing him with cash to purchase players. By contrast to other leading EPL teams The Response to the Criticisms however, many commentators argued that the Ayre met with the various groups and argued owners adopted a more “business-like” that fans should focus on the bigger picture. approach to releasing funds. Liverpool had to be competitive in the market The new owners faced a real initial challenge: if they were to challenge clubs such as its Anfield stadium only had a capacity of around Manchester United, Chelsea and Manchester 46,000. This was considerably below its main City. The onus was on the senior management competitors such as Manchester United - the lat- to generate as much revenue as possible in ter having a capacity of 75,000. They committed order to make this objective happen. However, to increasing capacity in order to make it more he acknowledged that there had to be a balance competitive and generate extra revenue streams in the context of setting prices that were afford- as an issue of immediate priority. able for the fan-base. He felt that the club had The new main stand opened in 2016. This taken this on board when reviewing pricing lev- raised the ground capacity by 9,000 to an over- els for the coming season. all figure of 54,000. In particular, he argued that the proposed increase to £77 only affected 200 seats in the Revised Pricing Strategy for 2016/17 Season main stand. In real terms this only impacted on In early 2016 the club reviewed its ticketing less than a half of one per cent of total capac- strategy for the upcoming 2016/17 season. It ity. proposed to increase some of the seats in the Likewise, proposed increases in season tick- newly designed main stand from £59 to £77. ets only affected a limited number (the lowest This sparked outrage amongst a number of costing £685). In the context of season ticket fans' supporter associations. This was seen as a categories, he argued that in fact sixty-five per step too far and once again a clear signal that cent had remained the same or had decreased football clubs were no longer interested in the in price. In the context of overall ticket prices average working class supporter. Instead they the proposed change would mean that forty- were viewed as being avaricious and unrelent- five per cent would experience a decrease for ing in their quest for more and more revenues. the coming season. 179 7 7.13 · Conclusions

He also made the point that the club oper- Various surveys, most notably one carried ated a scheme whereby 500 tickets for league out annually by the BBC Television games were made available to “local fans” at Corporation called “The Price of Football” the knock-down price of £9. He evidenced this showed evidence that the average season ticket as an example of how the club emphasises its price of a football ticket to the EPL had commitment to the fans and to the community increased by twice as much as the cost of living in the city of Liverpool. rates in the UK. Even the cheapest season ticket had increased by 8.7 per cent since 2012 The Pricing Controversy in Context (£508.55p). The timing of this controversy was unfortu- nate. Around that time the new Sky media Change of Heart rights deal had been announced with much In the face of the mounting criticisms from fanfare and trumpeting. This contract would fans and within the social media in general, the deliver around $5.2 billion to the EPL over the Liverpool Board of Directors decided to keep next three seasons. This figure did not include the prices at £59. further revenue from the sale of international The change in approach was captured in a media rights. This took the total to over £8 bil- quote from comments made by Billy Hogan: lion. This marked a significant increase on the the Managing Director and Commercial previous deal-driven mainly by the increased Director, to a fans forum in December 2017 competition from BT, who acquired some of when he articulated the need to formulate a the available live games packages. The EPL was long-term pricing strategy. literally awash with money. Combined by the He presented the club’s position on ticket reve- perceived outrageous salaries that were earned nues to the 10 forum members present. He said: by players, this led to more condemnation of “Ticket pricing impacts overall club rev- the proposed increases by the fans and sup- »» enue and our goal on the commercial porters groups of Liverpool football club. side is to drive as much revenue as pos- Another negative event also fanned the sible in order to provide the resources flames of criticism. A couple of weeks prior to for Jürgen Klopp and Michael Edwards the announcement about the new prices, EPL to reinvest in the football side. This is all clubs blocked a proposal to freeze away tickets geared towards winning, which is what at £30. This was seen as yet more evidence of everyone wants”. the greed of the clubs. With money pouring in from media rights and increased sponsorship, “The reality at Liverpool is that demand various supporters groups and politicians felt »» for tickets exceeds supply. That creates that this presented an opportunity to make a its own question of how we should price meaningful gesture to fans: given the levels of tickets but we have never gone down economic austerity being experienced in the that route. We have tried to strike a bal- UK since 2009. ance, looking at what people can afford This experience was not confined to English to pay at the lower end and what people Premier League clubs. In Germany, fans of can afford to pay at the higher end”. Borussia Dortmund also expressed their displeasure with the Commercial department by “But we also want to compete and, in throwing tennis balls onto the pitches in one of »» the case of this forum, I think that the Bundesliga games. 180 Chapter 7 · Ticketing Strategies in the Sports Sector

means looking at ways that we can col- »» “This was another positive forum in which laboratively drive revenue while also several issues were discussed in a challeng- addressing some of the issues that we are ing but constructive atmosphere,” said

all aware of”. (7 https://www.liverpoolfc. “While there may not have been a consen- com/news/announcements/284865- sus on all matters, there was a clear com- liverpool-to-formulate-long-term-ticket- mitment from all involved to continue pricing-strategy) working together in the best interests of the club and its supporters”. At the same forum, Phil Dutton, Liverpool’s head of ticketing and hospitality, suggested that That bodes well for the future and, one way forward would be for the club to become »» although there were no immediate solu- more creative in the way that it structures pricing. tions to the challenges faced, the frank- “Nothing should be off the table today in terms ness and thoughtfulness of the discussion of ideas and we will see what we can agree on,” he ensure the ticket pricing structure fans said. “If people can pay to get into the game, forum got off to a good start. It is now 7 they should. But by the same token, if people are crucial that this particular forum recon- struggling, we should look at what we can do. If venes in January prior to the club setting that means giving consideration to stretching the its budget for the 2018–19 season. pricing structure we should do that.” Tony Barrett, Liverpool’s head of club and (Sources: Compiled by the author from various supporter liaison noted that: sources on the Internet).

Appendix 2. Assess the rationale behind the proposed changes to pricing strategy as ??Discussion Questions articulated by the board. How well or 1. Examine the extent to which you would how badly did they handle the change? agree with the view that the role played What could they have done differently? by disgruntled fans and social media 3. How true is it to say that this is a sim- has effectively restricted the club from ple case of foreign owners not under- maximising revenue from its ticketing standing the nature of football and its strategy. fans in the UK context? 181 7 Appendix

The Price Is Right: The Case of Boston Celtics and the NBA

Introduction .. Table 7.2 Valuation of NBA brands (2016) Boston Celtics was founded in 1946 and play in the Eastern Conference Atlantic Division of Team Valuation the National Basketball Association. The overall divisions comprise thirty teams. Boston New York Knicks $3.600 billion Celtics was one of the eight founding members Los Angeles Lakers $3.300 billion of the NBA and over the past 70 years or so it has been the most successful team in the NBA, Golden State $3.100 billion Warriors winning seventeen championships. Like most sports teams it has had peaks Chicago Bulls $2.600 billion and troughs: struggling in the 1990s and recov- Boston Celtics $2.500 billion ering to win the championships in 2008. Source: Compiled from various sources on The Stadium the Internet The team play in the TD (Toronto and indication of the overall financial worth of Dominion Bank) Gardens stadium in the cen- Boston Celtics. tre of Boston. This is the largest entertainment In terms of revenue, . Table 7.3 provides arena in the state of New England and was an indication of what the club generated over opened in 1995. It has an overall capacity of recent seasons. 19,580 and for basketball it has an official capacity of 18,580. The arena stages over 200 events annually. .. Table 7.3 Revenue The Boston Celtics also share the stadium with 2016/17 $257 million fellow Bostonian National Hockey League team; the Boston Bruins. It has three private 2015/16 $200 million restaurants in the stadium: Banners Harbor 2014/15 $181 million View, Legends and Premium Bistro. 2013/14 $173 million The Celtics makes use of ninety executive suites, 1100 Club Seats. It makes use of 360 2012/13 $169 million degree-led technology and operates specific areas such as the Loft, AT&T Sportsdeck and Source: compiled from various sources the Heineken Green Room.

Key Performance Indicators in the NBA Ticket Price Indicators Championships The NBA reveal some interesting trends when Historically, the most successful club in the we consider comparative average prices for a NBA, it has made the play-offs consistently in ticket to watch the fan’s favourite teams play.

the past 4 years without actually winning the . Table 7.4 indicates the average price charged overall prize. by seven of the top teams in the NBA. In terms of comparing the valuation of the The cheapest average ticket to watch NBA

franchises in the NBA, . Table 7.2 gives us an basketball during the 2016/17 season could be 182 Chapter 7 · Ticketing Strategies in the Sports Sector

The NBA and Ticketmaster Partnership .. Table 7.4 Average price of tickets In 2012 the NBA entered into a partnership Team 2016/17 2015/16 2014/15 with Ticketmaster, one of the main third-party operators in the secondary ticket market. The Atlanta $87 $50 $47 NBA identified an opportunity where it could Hawks compete with other key operators such as Boston $103 $72 $95 StubHub. This was not necessarily innovative: Celtics the National Hockey League had a similar Brooklyn $87 $83 $85 arrangement in place with Ticketmaster since Nets 2008. The latter company stated that it had Charlotte $85 $64 $51 twenty per cent of the secondary ticket market Hornets for hockey tickets. The NBA saw this partnership as a mecha- Chicago $97 $105 $101 Bulls nism whereby it could provide a “one-stop- 7 shop” for basketball fans in terms of securing Cleveland $150 $195 $47 tickets for games, as well as selling on tickets Cavaliers that they could not use. The partnership Golden $240 $140 $83 between the NBA and Ticketmaster created State 7 NBATickets.com. This represented the only Warriors official resale marketplace of the NBA. Source: compiled from various sources We should note that NBA does not necessarily control the team rights in terms of set- purchased at the home of the New Orleans ting prices. While the thirty teams all participate Pelicans. This turned out to be $48. on the 7 NBATickets.com website, twenty- The aforementioned figures do not fully four have individual ticketing deals with convey the cost of watching NBA teams. For Ticketmaster. instance, there is a long waiting list for season In the early years of the deal, Philadelphia tickets at the Boston Celtics. A “good seat” 76ers sold all of their tickets through StubHub. would cost around $10,000 in 2017/18. By con- As stated earlier, the individual teams set trast a seat at the top of the arena (referred to their own ticketing strategy. by fans as the “nosebleed seats”), would set you An advocacy group called Fans Freedom back to the tune of $2,000. Project raised some concerns which centred on Loge seats (small areas in the arena that the issue as to whether fans would be allowed can hold a small number of people) can cost to set their own price when using around $7,000. 7 NBATickets.com or if the individual teams Fans who cannot attend all of the games would enforce price floors below which tickets can recoup some money by putting the seat up could not be sold. The NBA argued that there for sale for individual games. They typically should be no price floors, but left it to the dis- make use of Ticketmaster, the official partner cretion of the individual teams. of the NBA when it comes to selling tickets. In early 2018, Ticketmaster announced that In terms of attendance at Boston Celtic it was renewing the partnership for the NBA games, the average in the season 2017/18 was and the WNBA. It was going to focus more 18,600, with an overall attendance of 744,960. fully on enhancing the digital ticketing experi- This effectively meant that each game had full ence for fans, allowing them to focus on the attendances. This compares with an overall actual game. NBA average game attendance of 17,830. 183 7 Appendix

An Insight into the Approach to Ticketing by merchandise, and when the team isn’t perform- Boston Celtics ing quite as well, you have a hedge in place to A 2015 Harvard Business Review interview protect your downside risk. with Richard Gotham, the President of Boston The big revenue drivers in our business are Celtics generated the following responses to a TV media rights - both national and local - and couple of questions on the general issue of ticket sales. The bulk of the variability in our ticketing. annual revenue is in ticket sales, which is most HBR: You’ve been with the Boston Celtics sensitive to team performance. So, it’s a matter for 12 years now. How has the business of run- of trying to keep our finger on the pulse of ning a professional basketball team evolved in demand in order to maximize our return. We that time? monitor pricing and demand in real time using Gotham: “In the years that I’ve been algorithms to help inform our decisions. In involved, things have become exponentially some cases, demand says that you can raise the more sophisticated. These aren’t mom and pop price. In others, it says lower the price to drive operations anymore. Asset valuations in our a higher volume. We have an analytics team league have really grown over the years. For that’s built some models using regression anal- example, Steve Ballmer just bought the ysis to help us with dynamic pricing. It allows L.A. Clippers for $2 billion. We now have us to determine the right price, for the right entire conferences dedicated to the analytics of game, for the right customer - and even factor our business and our basketball operations. in a sudden last-minute snowstorm on top of We’ve hit a point of acceleration in video and that to see how it affects demand. We were wearable technologies that provide us with really the first team in the NBA to say that it’s information that we’ve never had in the past OK to price your tickets differently for differ- about how to optimize player performance. We ent games.” have a global audience that has an unending HBR: I talked to a few families who said thirst for mobile content, and a sophisticated that they’d love to attend a Celtics game, but CRM database that allows us to be a state-of- between the tickets, parking, food and drinks, the-art marketing operation. We talk about it’s prohibitively expensive. What would you things like yield management, demand curves, say to those families? and perishable inventory - factors that dictate Gotham: “Tickets to sporting events can our pricing strategies. We’re working with be expensive. Our pricing, as I mentioned ear- unprecedented levels of data. At the same time, lier, is demand-driven and what the market will so much of what we do is all about the intan- bear, and generally the market will bear a lot. gible, emotional attributes that really drive fan But having said that, we recognize that being passion and engagement - that’s what fuels our accessible and affordable is important for grow- business, and always has.” ing our fan-base, so we have a lot of entry HBR: You’ve been with the Celtics in good points. You can buy a Celtics family pack, years and bad. How do you keep the business which gives you four tickets, concessions and a itself running steadily, when team performance souvenir for $70–$90, which is pretty afford- can change so much year-to-year? able for a professional sports game. We keep Gotham: “You need to have a business about 25% of our inventory in the form of indi- that’s flexible enough to respond quickly. That vidual tickets that are $30 or cheaper. The idea way, when the going is good, you can maximize is that we cordon off a certain amount of our your upside yield on assets like ticket sales and seats so that we’re not pricing people out. That 184 Chapter 7 · Ticketing Strategies in the Sports Sector

math fluctuates from year to year based on often changes daily, based on supply and changing demand dynamics. For as long as I’ve demand, along with other factors,” said Steve been here, we’ve always maintained 300 seats Schanwald, the Bulls’ executive vice president for every game at a $10 price point, but we of business operations, who responded to ques- found that the scalpers were scooping up those tions via email. seats and selling them at higher price points, so It’s becoming similar to other industries we had to combat that a bit. It’s about educat- such as airfares and hotel rooms. Consumers ing the market that those alternatives are avail- typically aren’t aware of the exact pricing until able. In a year when the team isn’t considered they make a specific inquiry. We’ve found that to be a championship contender, we’re doing fans are becoming much more familiar and more marketing of those ticket offers and pro- comfortable with this trend. And they often motions using database-driven marketing.” benefit because there’s much greater ticket

(7 https://hbr.org/2015/03/how-an- nba-team- availability and many more pricing options”.

thinks-about-data-talent-and-pricing) (7 https://www.sportsbusinessdaily.com/ 7 Journal/Issues/2013/04/15/In-Depth/NBA- Concluding Comments Ticketing.aspx) The sport of basketball is right up there with Selling tickets for games in the sport of bas- the other bastions of sport in the USA: ketball is complicated by the fact that any given American football and baseball. As we can see team might have as many as forty different from the statistics it represents a lucrative price points available for seats in different sec- investment for most of the franchise owners of tions of the stadium. This does not provide clubs that play in the national divisions of the much room for manoeuvre - particularly when NBA championships. dynamic pricing strategies are being used. Boston Celtics, as befitting of one of the The days of setting pre-determined prices are a doyens of the sport, almost routinely sell-out thing of the past. NBA teams are becoming their games. Together with the other teams and more adroit at selling tickets for games and the administrators of the NBA, they imple- appear to be making use of smarter tactics in ment a ticketing strategy that arguably is order to maximise revenue. demand-led. By this I mean that the tactics (Sources: Compiled by the author from used are reflective of the nature of the demand various sources on the Internet).

for tickets from the perspective of the fans. (7 https://hbr.org/2015/03/how-an-nba- This is encapsulated in the following quote team-thinks-about-data-talent-and-pricing).

from Steve Schanwald, a Vice-President of the (7 https://www.sportsbusinessdaily.com/ Chicago Bulls. Journal/Issues/2013/04/15/In-Depth/NBA- “Ticket pricing is becoming more fluid and Ticketing.aspx).

?? Discussion Questions 3. Assess the rationale for the NBA 1. Examine the extent to which you would making the decision to renew its agree with the assertion that fans are partnership with Ticketmaster. losing out in the context of the strategy 4. In relation to other major sports, how employed by the NBA teams and the would you rate the strategy employed overall administrative body of the NBA. by the NBA? 2. Does it make sense to have such varying degrees of fluctuation in the pricing of tickets for NBA games? 185 7 References

References Macdivitt, Harry. 2013. Pricing points. Cambridge Marketing Handbook. Kogan Page, Ltd., London: United Kingdom. Bouchet, Adrien, Michael Troilo, and Brian R. Walkup. Macdivitt, H., and M. Wilkinson. 2012. Value-based 2016. Dynamic pricing usage in sports for revenue pricing: Drive sales and boost your bottom line by cre- management. Managerial Finance 42 (9): 913–921. ating, communicating and capturing customer value. Courty, Pascal. 2019. Secondary ticket markets for New York: McGraw-Hill. sports events. In Handbook of sports economics. Shapiro, S.L., and J. Drayer. 2014. An examination of SAGE Publications. London: United Kingdom. dynamic ticket pricing and secondary market price Cram, Tony. 2006. Smarter pricing: How to capture more determination in Major League Baseball. Sport value in your market. London: FT Prentice Hall. Management Review 17: 145–159. Deloitte. 2014. An Analytics-based Pricing Strategy for Swofford, J. 1999. Arbitrage, speculation and public Sports Franchises: Maximise revenue and enhance policy towards ticket scalping. Public Finance fan experience through analytics. Deloitte Review 27: 531–540. Development LLC. Vale, L. 2017. Social media and sports: Driving fan Drayer, Joris, and Daniel Rascher. 2013. Guest editor’s engagement with football clubs on Facebook. introduction: Sports pricing research: Past, present Journal of Strategic Marketing 26 (1): 37–55. and future. Sports Marketing Quarterly 22: 123–128. Watterson, Michael. 2017. Independent review of con- Drayer, Joris, Stephen L. Shapiro, and Seoki Lee. 2012. sumer protection measures concerning secondary Dynamic ticket pricing in sport: An agenda for ticketing facilities. IND/16/7. research and practice. Sports Marketing Quarterly Wilson, Alan, Valarie A. Zeithamal, Mary Jo Bitner, 21: 184–194. and Dwane D. Gremler. 2012. Services marketing: Foutz, Natasha Zhang. 2017. Entertainment marketing. integrating customer focus across the firm. McGraw- Foundations and Trends in Marketing 10 (4): 57–66. Hill. Second European Edition. London: United Kemper, Christoph, and Christoph Breuer. 2016. How Kingdom. efficient is dynamic pricing for sports events? Designing a dynamic model for Bayern Munich. International Journal of Sports Finance 11: 4–25. Further Reading Kimes, S.E. 1989. Yield management: A tool for capac- www.liverpoolfc.com/news/announcements/284865- ity- constrained service firms.Journal of Operations liverpool-to-formulate-long-term-ticket-pricing- Management 8 (4): 348–363. strategy. Kwon, Y., and D.H. Kwak. 2014. Revisiting the team www.hbr.org/2015/03/how-an-nba-team-thinks-abpout- identification-value purchase relationship in the data-talent-and-pricing. team-licensed merchandise consumption context: A www.sportsbusinessdaily.com/Journal/Issues?2013/ multi-dimensional consumer value approach. Sports 04/15/In-Depth/NBA-Ticketing.aspx. Marketing Quarterly 23 (2): 100–114. 187 8

The Sports Product and Brand-Building Decisions

Contents

8.1 Introduction – 188 8.2 The Sports Product – 189 8.2.1 Key Dimensions of the Sports Product – 190

8.3 Innovation and Product Development – 191 8.3.1 Collaboration – 192

8.4 Perspectives on Innovation in the Sports Sector – 193 8.4.1 Exercise – 195

8.5 Branding in the Context of the Sports Sector – 195 8.5.1 Brand Equity – 195 8.5.2 Brand Equity and Keller’s Framework – 195 8.5.3 Brand Equity in the Context of the Sports Sector – 197 8.5.4 Building Brand Loyalty - Sports Team Brand-Equity Index – 199

8.6 The Most Valuable Global Sports Brands – 200 8.6.1 Exercise – 201

8.7 Sports Brands and Brand Extensions – 201 8.8 Co-branding – 203 8.8.1 Pros and Cons of Co-branding – 204

8.9 Conclusions – 205 Appendix – 206 References – 211

Electronic Supplementary Material The online version of this chapter (https://doi.org/10.1007/978-3- 030-53740-1_8 ) contains supplementary material, which is available to authorized users.

nnLearning Objectives dimensions that make up the sports business On completion of this chapter you should environment: political, economic, social, tech- be in a position to address the following nological, economic and legal. objectives: Sports fans in tandem with traditional cus- 55 Understand what is meant by the sports tomers in other sectors, change over time in the product context of how they consume and engage with

55 Identify the components and factors their favourite sports (see 7 Chap. 4 for a full that shape the development and refine- examination of this topic). Sports marketers ment of the sports product have to anticipate and proactively introduce 55 Examine the evolution of new sports strategies and tactics to address such change. products and adjustments to existing As we have repeatedly noted in this text, sports the shift from treating sport as an amateur 55 Assess the role that innovation plays in and idealistic series of ventures (particularly developing the sports product at the elite level) has long since disappeared 55 Examine the interface between technol- in most countries. The arrival of senior exec- ogy and sports product creation and utives, directors and CEOs has brought a development commercialism to sport. This is reflected in 8 55 Understand the concept of the brand in the focus on monetising sport: “working” or the context of sport “sweating” the assets and in particular seek- 55 Evaluate the concept of brand equity ing ever-increasing avenues for identifying and how it works in the sports sector and exploiting revenue streams. Whether 55 Assess the relationship between brand you approve or disapprove of such a devel- equity and fan loyalty opment is immaterial in the greater scheme 55 Examine sports brand extension strategies of things. It is an ongoing reality in the 55 Understand the role that co-branding sports sector. and licensing play in sports product and In the early sections of this chapter we brand development identify what constitutes a sports product. 55 Examine the relationship between the How do we shape and develop a sports prod- sports organisation and other stake- uct? How does this differ from more tradi- holders in managing the sports brand. tional products? We assess the components that make up a sports brand. While this term is a standard 8.1 Introduction phrase in the context of traditional brands, it is only in the last decade or so that it has In this chapter we consider one of the critical become part of the lexicon within sport, as aspects of marketing strategy: product inno- more and more marketers from other industry vation and development in the context of the sectors enter the realm of sport. sports sector. The sports sector in common We evaluate the role of innovation in the with all areas of business operates in an envi- context of sports product development. This ronment which is constantly changing. can range from radical innovation, as evi- It is dangerous to accept that the sports denced by the emergence of “new” sports such sector is more predictable than other more as eSports and Mixed Martial Arts (MMA) volatile sectors. There is a tendency to assume through to developments and refinements in that individual sports, particularly well-estab- traditional, well-established sports such as lished ones (in terms of longevity and heri- rugby, cricket and football. tage) can continue on their merry way, without We address brand-building strategies in having to pay much consideration to the the middle part of the chapter. We initially external environment within which it oper- examine sports brand equity and how this can

ates. In 7 Chap. 6 we hopefully debunk this be developed by using a range of initiatives perception. The reality is that ALL sports are such as co-branding, licensing and brand directly and indirectly affected by the various extensions. 189 8 8.2 · The Sports Product

In the later stages of the chapter we assess for? The core, basic benefits that are the relationships between sports organisa- sought. In the context of sport that is likely tions/clubs and their key stakeholders such as to revolve around the sports event, game sponsors, governing bodies, technology com- or competition. For instance, fans will have panies and sports equipment and accessory a perception of what they expect when companies, in shaping product development. attending a game: basic benefits include having a seat with a reasonable view of the action, acceptable parking and transporta- 8.2 The Sports Product tion facilities, adequate food and beverage outlets and relative ease of entrance and Our first task in this chapter is to understand exit. Such features shape the fan’s percep- what we mean by the term “sports product”. tions and expectations. The sports sector sits firmly within the overall In the sports context, due to the passion “services-dominant” product area. This and commitment exhibited by dedicated, implies that services characteristics dominate “die-hard” segments, it is possible that a and influence the product decisions. For sports organisation can get away with pro- instance, a key characteristic of services is the viding a very basic, even sub-standard core concept of perishability. You cannot store a proposition. For instance, fans may put up service. In the sporting context if a sport with poor performances and uncomfort- club’s stadium has a capacity of 40,000 and a able seating because of their fanatical loy- game is coming up next week, then the sports alty to the club. However, in the longer marketers have to engage in strategies that term this is a dangerous strategy. Eventually attempt to maximise attendance. If only a “tipping point” will come where even the 23,500 fans turn up for the game then that is most loyal fans will desert the club, even if it! You cannot rewind the clock to try and it is only temporary. We can say that this generate a higher attendance. reflects the fact that variation can occur Some products are not service-dominant within the realms of the product. Over in terms of their composition. For instance, time this can range from periods of success companies that supply cement to the con- and euphoria to the depths of despair, as struction sector would be described as mar- the club struggles in its respective league or keting a very “physical and tangible” product. competition. However, even in such a “product-dominant” 2. Expected offer: This element of the prod- situation there are also service dimensions. uct recognises that there are additional Cement manufacturers have to meet delivery benefits that fans would expect. This is schedules and respond quickly to unantici- liable to alter, due to changing perceptions pated orders or problems experience by build- and expectations. For instance, in the case ers. The consequence arising from unreliability of major sports such as football, NFL, can be grave for builders: delays occur, slow- basketball and rugby, fans will expect bet- ing down targeted completion dates and the ter quality food at specific games or events. strong probability that penalty costs will be Likewise, they expect to be able to pur- imposed on them. chase tickets for the game in a straightfor- In the context of sport, it can be challeng- ward manner online. Such elements of the ing to pinpoint what exactly constitutes the offer are additional to the core offer but “product”. We can identify four levels that are are also provided by the competitors. This associated with any product (including means that there is little or no opportunity sports). The challenge for sports marketers is to develop a clear point of differentiation to be able to differentiate their product offer or advantage. from their competitors. 3. Augmented offer: This more advanced level 1. Core product: as the title suggests, this gets takes us into an area where a sports organ- to the heart of the matter. What is the isation can introduce benefits that are not essential thing that they are willing to pay typically provided by competitors (other 190 Chapter 8 · The Sports Product and Brand-Building Decisions

clubs in the league). Like most new bene- the sports organisation and marketers have fits it is unlikely that a sustained competi- little or no control over. They can certainly tive advantage can accrue. This is because invest in better quality players, coaches and other clubs will react and introduce simi- managers to boost the chances of success. lar, if not better benefits, if fans respond However, large cash outlays do not guarantee positively to the new features. A good that this will happen. Players do not live up to example of this was the introduction of expectations or receive career-ending injuries Wi-Fi to the stadia and arenas. Pioneering that can render such investment redundant. clubs were proactive in this area. Other clubs quickly followed suit and, learning from the initial teething problems experi- 8.2.1 Key Dimensions of the Sports enced by the pioneers, in many cases pro- Product vided speedier and more reliable Wi-Fi in their respective stadia Foroughi et al. (2016) provide a useful synthe- 4. Potential offer: this level of product devel- sis of the extant research on the core elements opment is arguably the most difficult one. of the sports product. They can be identified This is because marketers have to apply as team characteristics and player performance. some lateral thinking in terms of how they When we refer to team characteristics, we 8 define their product and how it may oper- are focusing on issues such as the success of ate in the longer-term. In the context of the team in the sports arena. This is reflected sport, some clubs are more forward think- in the current position of the team in the ing in terms of defining their product. For league or competition, the percentages of example, this might mean defining the wins to losses/draws, the history and heritage product as operating in the leisure and of the team in relation to success and current entertainment industry rather than the performance and the quality of player recruit- more limited sports industry. Following on ment and signings. from this view, when developing a new sta- Player performance refers directly to the dium (particularly in a green field site) the perceived ability of the players in the current club may also incorporate a shopping team. How do they measure up to the task of mall, entertainment facilities (cinema, winning: in terms of fitness levels and ability? indoor bowls, and casino), hotel and Do they champion the style of play that apartments. These features are not part of reflects the history of the club and that which the core offer. They are not expected by is demanded by the fans? This is captured in

fans or directly augment the product. They . Fig. 8.1. may however address potential expecta- This can create potentially conflicting per- tions of fans of the future and attract ceptions and expectations. For instance, in the other segments or groups to visit the “lei- case of football, iconic teams such as sure/entertainment emporium” that has Manchester United, Barcelona, Real Madrid, been created by the club. are often successful on the pitch - in terms of winning trophies. However, fans may still have This wider view of what constitutes the “prod- negative perceptions because the team as a uct” encourages marketers to adopt a more whole and the quality of play from individual strategic view. It is not just about the core players does not reflect the history and tradi- dimensions. It also considers factors that drive tion of the club. Specifically, this may be seen the product forward, to take account of chang- in defensive and negative tactics employed by ing conditions in the business environment the chief coach in the quest to succeed. and changing patterns of consumption and Trophies may be won by using such an behaviour on the part of the customer (fan). approach, but it may turn off fans and gener- The sports product is also complicated by ate negative comments and sentiment on the the issue of uncertainty. This is a variable that social media platforms. 191 8 8.3 · Innovation and Product Development

Emotion Anxiety Core Product Quality Dejection Team Characteristics Behavioural Intentions Anger Player Performance Happiness Excitement

.. Fig. 8.1 Team characteristics and player performance. (Source: adapted from Foroughi et al. 2016)

The authors identify the importance of In terms of perceptions, attitudes and emotion in terms of influencing the behav- behaviour towards the team, the highly iden- ioural intentions of the fans. Arguably sport is tified fan is more likely to accept relatively a product which epitomises the full range of poor performance and levels of failure than emotions in fans. They identify five manifesta- those fans who do not display the same level tions of emotions that have been pinpointed of commitment. in the literature: anxiety, dejection, anger, In summary, we need to understand the happiness and excitement. Such emotions are different levels or strands that associate with closely linked to the experiential nature of the the sports product. Like all products there are fan’s consumption of the sport. different layers; ranging from the core element Clearly, success on the pitch (as defined through to what the product might look like by the fans in terms of their expectations) in the future. Sports marketers are faced with and the club (as defined by the approach to the challenge of continuing to make the prod- signing players) can generate positive or uct relevant for the fans. Although they cannot negative emotions in the minds of the fans. control performance and success on the pitch, This will influence their engagement with they can engage with a range of strategies and the team. This is reflected in attendance at initiatives to engender positive emotions across matches, the purchase of merchandise and their fan-base. They need to retain the contin- visits to the website and discussion forums. ued loyalty of their highly identified fans and Poor performances engender potential neg- create a product that attracts new segments in ative perceptions, particularly if this hap- order to further grow that fan-base. pens on a regular basis and in the worst-case scenario, finishing at the bottom of the league or experiencing relegation to a lower 8.3 Innovation and Product league. Development The level of identification that fans exhibit towards their favourite team will influence Many experts argue that a failure to innovate their perceptions and experiences. Funk and is a recipe for death! Unless organisations dis- James (2001) put forward a framework which play a continuous focus on innovation it is identifies the levels of engagement with sports likely that the product will become stale or teams. This involves four stages: awareness, moribund. Existing and new competitors will attraction, attachment and allegiance. As a take up the challenge and bring new ideas, fan progresses through to allegiance, the level technologies and business models to the fore. of identity increases. Highly identified fans The sports sector is no different. Individual fall into the latter stages of the continuum. sports that remain static in terms of the prod- 192 Chapter 8 · The Sports Product and Brand-Building Decisions

uct, its rules and regulations and the way in taken place across all aspects of sport, rang- which it is presented and delivered to its fans, ing from new materials, technologies, regula- cannot rely on history, tradition and the stations and information processes. tus quo, to further advance its cause. This Ratten (2016) notes that sport is viewed by approach is akin to an ostrich sticking its head many commentators as a multi-disciplinary in the sand. It ignores the realities of the mar- field involving a number of different functions ketplace. Change is constant. Even the most and stakeholders. Each of these parties have a successful brands will desiccate and become compelling need to deliver sports products irrelevant. that are relevant and embrace innovations. In the sports sector we see the emergence of sports that were not around (at least in international and global terms) 15–20 years 8.3.1 Collaboration ago. Mixed Martial Arts and eSports are relevant cases in point. Traditional sports have Collaboration is critical in terms of setting to grapple with the challenges of retaining and driving an innovation agenda. interest among its core fan-base and attract- Stakeholders such as the media (electronic ing the millennials and Z-generation to their and broadcasting), sponsors and sports prop- respective value propositions. erty owners have a common desire to improve 8 A perusal of the general literature on inno- the quality of the product and embrace rele- vation indicates that it involves the use of new vant technologies and processes. knowledge to change existing products and Collaboration is also important in terms processes, services or technologies. of driving forward innovations in new sta- Some innovations can be described as rad- dium development. Typically, this involves a ical. These typically represent “game-number of interested parties such as the changers” in so far as they redefine the product sports federation, the national or regional in new ways that were not previously available. tourist board, city planning authorities and Examples might include the “Walkman”, the government agencies. Without such collabo- iPhone and iTunes. ration, it is unlikely that radical and innova- However, most innovations do not have tive stadia would appear on the horizon any the same dramatic effect. In some cases, they time soon. are refinements or adjustments to existing We see evidence of this in terms of the use products. In this respect they can be described of ultra-definition cameras, location-based as incremental innovations. marketing, big data and digital marketing, to Typically, innovations can be driven by deliver the sports product experience to the reducing costs and making the product more viewers and the fan-base. accessible for customers. It can be achieved by Collaboration also occurs in the case of finding applications for existing technologies the networks and relationships with sports or by utilising new business models for intro- equipment and clothing manufacturers. ducing and delivering the innovation. Improvements in clothing for example can The sports sector, driven by the business/ increase the performance and efficiency of commercial imperative is no different. Sports individual performers. This is evidenced in administrators, property owners and market- sports such as swimming, cycling and athletics. ers have to constantly question the validity Legislators responsible for the rules and and relevance of their product and develop regulations of a particular sport play a signifi- innovations to keep it at the forefront in the cant role in deciding whether or not such minds of their target markets. developments contribute positively to the Potts and Ratten (2016) highlight the development of the sport. For instance, at the importance of innovation in the sports sector. Olympic Games in Sydney (2002) one of the This is reflected in the developments that have key sports manufacturers introduced a new 193 8 8.4 · Branding in the Context of the Sports Sector swimsuit that considerably enhanced the perfor- finish with a tie-break if the players are level mance of Australian swimmers. Subsequently at 12–12 games each. Although this might such swimwear was banned as it gave them an sound relatively minor in the greater scheme unfair advantage. of things, this adjustment to the tie-break rule is intended to provide a more comfortable environment for all of the stakeholders. 8.4 Perspectives on Innovation The fashion perspective relates to new in the Sports Sector materials and dress codes. The sport of cricket traditionally was played in white shirts and Birkinshaw et al. (2008) identify four different flannel trousers. The test format still adheres perspectives on the general topic of innova- to this procedure. However, shorter versions tion: institutional, fashion, cultural and ratio- of the sport have long introduced coloured nal. Ratten (2016) attempts to place these garments in order to literally brighten up the perspectives within the context of the sports spectacle and reflect the times that we live in. sector. Better designed golf equipment, which In the context of an institutional perspec- make use of lighter and more powerful mate- tive, the responsibility of the sports bodies rial has radically changed the way that golf is and regulators plays a significant role here. played at the top level. Players are driving the They essentially become the gatekeepers as to ball so far now that some championship whether new processes and developments are courses (and the legislators) have to extend introduced into the particular sport. For the distance of some of the holes to make the instance, the International Tennis Federation game more challenging. is grappling with the challenges caused by The culture perspective addresses the differ- final set matches continuing on, without the ent ways in which society, sports property own- introduction of a tie-break to bring the game ers, clubs and fans react to the concept of the to an end. In 2010 the longest ever match at new innovation and ideas. Technological inno- Wimbledon took place. After 11 hours and 5 vations such as Hawkeye (in tennis, rugby and minutes, John Isner beat Nicolas Mahut. It football) have considerably reduced the errors was spread over 3 days, partly due to weather that have been traditionally made by referees conditions. Commentators complained that it and umpires. Some sports have embraced such put undue physical stress on players and TV technology quickly. Others have done so reluc- companies were annoyed because it disrupted tantly, for example, the Indian Cricket Board. their schedules. Some fans were also discom- FIFA and UEFA (football) authorities were moded when missing train connections. slow to take on the concept of the Video- The problem reoccurred at Wimbledon in assisted referee (VAR). Some fans have been 2018. John Isner (again) was involved in the supportive of it. Some TV companies have semi-final against Kevin Anderson. I guess criticised it for the delays that are caused. With the lesson for players is, do not end up playing sport being so profitable at the elite level how- Isner! This time he lost after starting the ever, it is hard to argue against something that match at 1 pm and finally leaving the court at will minimise (not eliminate) errors. 8 pm. Many people argued that this was unfair The rational perspective refers to the prac- to the actual winner because both players ticality and feasibility of introducing the pro- were physically exhausted and Anderson was posed innovation. For instance, golf in no fit condition to play the final, having authorities are grappling with the need to only 1 day to recover. Inevitably he lost in make some innovations to the traditional way straight sets. in which golf is played. Membership levels are The Wimbledon organisers have ruled that dropping off as people find the challenge of the final set of any match in the future should playing 11 holes too time consuming. This is 194 Chapter 8 · The Sports Product and Brand-Building Decisions

particularly so for teenagers. The authorities ments could lead to the demise of the sport are beginning to introduce shorter versions of over time. the game in order to attract new players. By contrast, relatively “new” sports have Because sport appeals to the emotions to emerged and do not have to deal with such such a strong degree, there is a danger that by issues as history, tradition and heritage. Mixed tampering too much with the essence of the Martial Arts (MMA) has emerged and individual sport, marketers and administra- established itself as a very popular interna- tors have to tread a careful line between upset- tional sport by combining the best of sports ting traditional fans and attracting new such as boxing, karate, wrestling, judo and segments. The more traditional the sport, the kickboxing. Arguably it has conceived a com- greater the likelihood that this may happen. pelling product that has attracted a widespread History, tradition and heritage may have to be audience and fans across many geographic compromised in an attempt to take the sport regions of the world. By using aggressive mar- forward. This can result in alienation of cer- keting, based on narratives around competi- tain categories of fans. While they may be tors such as Conor McGregor and controversy, upset and drift away, the reality may suggest it continues to capture increasing numbers of that a failure to attract younger or family seg- fans and media attention. 8

Whoopy Do

Wearable technology has been the “hot” area via the app, it captures a wide range of data for many people who are involved in sport from analytics on the athlete. So much so that it is grass-roots to elite level for the past decade or the official recovery wearable of the NFL play- so. Since 2004 when the Australian Rules ers association. The administrators of the Football (AFL) teams embraced activity track- Major League Baseball (MLB) sport also allow ing of their players, it has become the “must- it to be used during games. have” for many active sports people. Other products such as the Catapult Sports The Fitbit has arguably been the most suc- Optimeye S5 measure areas such as accelera- cessful and ubiquitous product. Founded in tion, direction and the impact of collisions. 2007, it now has over 12 million users world- Sport has advanced from the days when wide. However, it would be wrong to perceive the someone would run onto the pitch with a Fitbit and its attributes as being the “state-of-the sponge to revive players! art” product any more. At elite level, sports Other technologies such as virtual reality teams have, in tandem with the science and med- and augmented reality offer opportunities for ical profession moved on considerably in terms sports stakeholders to improve the customer of sophistication and areas of application. experience. More work needs to be done how- Whoop is at the forefront of usage. It is a ever to make them more practical and “user- wristband product and performs a number of friendly” for fans and viewers. Large and functions that can help players, coaches and cumbersome headsets being a particular off- nutritionists programme personalised fitness putting feature. and health strategies for their individual play- Sports marketers are looking at the pros ers. It monitors heart rates, sleep patterns and and cons of allowing fans and the media an levels of fatigue. It tells coaches how close play- opportunity to access such data. For the for- ers are to their peak fitness levels and also aids mer, it would mean that fans could gain even in designing customised recovery programmes. closer access to their players. For the latter it It certainly does not win on appearance: it con- would provide more big data on teams and sists of a simple nylon band! Once it is set up tactics. 195 8 8.5 · Branding in the Context of the Sports Sector

8.4.1 Exercise assets and becoming even more profitable. Any decline in numbers from this quarter ??Assess the dangers that might result from inevitably leads to a loss of revenue and mar- widening access to such data on players? ket share. It also puts pressure on the organisation to identify new potential customers – in many cases a very costly exercise in terms of 8.5 Branding in the Context marketing budget requirements. of the Sports Sector

Commensurate with the emphasis on com- 8.5.1 Brand Equity mercialism and monetising the sports assets, it is not surprising that the concept of branding Brand equity refers to the level of goodwill and brand equity has entered the sports sector that the brand has developed over the course lexicon. Respectable sports clubs, organisa- of time. This is typically encapsulated in tions and sports property owners see the strong customer perceptions and attitudes building of the brand as being central to their towards the brand, positive word-of-mouth future ambitions and targets. In this section about it and high levels of brand loyalty. we examine the process of evolving a product For branders there are clear benefits. The to a brand. We first have to ask ourselves what customer exhibits strong degrees of confi- we mean by the term “brand?” dence and trust in the brand. In many cases At a basic level a brand is simply a means they are willing to pay a premium for these of identification. It is a basic point of differ- benefits. They can provide the brander with a entiation that allows people to recognise the cushion in the event of a recession as custom- product from competitive brands. This can be ers are unlikely to switch to cheaper brands. captured in the name, symbol, website or logo. Customers also align themselves closely to However, identification alone means nothing. such brands: they see the brand in many ways Just because a person might recognise your as representing their lifestyles, aspirations and product, does not mean that they will pur- behaviours. chase it or make a commitment to continue buying it in the future. It may not even register as part of the consideration set. 8.5.2 Brand Equity and Keller’s Without proper development of the prod- Framework uct in terms of relevant attributes and benefits that are pertinent to the target market, it is Richelieu and Lessard (2014) argue that the unlikely to move higher in terms of a custom- brand is the most important asset of any er’s perception and assessment of its qualities. sports club, team or sports property. The Making the product stronger and establishing stronger the sports brand, the greater the like- credible associations and credentials is the lihood that it can generate higher revenues challenge facing all marketers. and profit over time. The sports brand values Building a strong brand revolves around a and associations also provide direction for the value proposition that distinguishes it from club, an identity for the fan-base and a point competitors. This is crucial in terms of of interest for the media and existing and encouraging customers to purchase the prod- potential sponsors. uct again and again and fall into that category Keller (2013) developed a framework that that we refer to as “loyal customers”. Brand provides us with an understanding of how loyal customers are critical to any organisa- consumers respond and engage with brands. tion in terms of developing its overall business This is captured in . Fig. 8.2. 196 Chapter 8 · The Sports Product and Brand-Building Decisions

Relationships Resonance What about you and me?

Judgements/Feelings Response What about you?

Performance/Imagery Meaning What are you?

Identity Salience Who are you?

.. Fig. 8.2 Building the brand. (Source: Adapted from Keller 2013)

The model poses four critical questions that brand. They make judgements on issues such customers are likely to raise, either consciously as credibility, quality, and the degree of supe- or sub-consciously about the brand. He identifies riority over competitive brands and so on. six so-called “building blocks” that the brander They may be accurate or inaccurate. has to put in place in order to achieve resonance The extent and level of feelings that cus- (the top of the pyramid). This should lead to a tomers exhibit about your brand is another successful brand. At the bottom we need to cre- important element. Feelings can be positive ate salience that is the basic challenge of creating or negative (or a mixture on a number of awareness. Without this, the brand will make an areas). Typically, such emotions are expressed insignificant impression in the minds of poten- on elements such as: warmth, fun, excitement, tial customers. You are also challenged to iden- security, self-approval and self-respect. Again, tify why the brand is relevant to such customers. branders have to reflect on these issues, assess You need to highlight the attributes that make how well or badly they are addressing the your brand stand out from competitors. key concerns, judgements and feelings, and As we move up the pyramid, we are tasked respond accordingly. with communicating what your brand stands The top of the pyramid is where the brander for - its values and associations: performance ideally wants the brand to reside. Not surpris- relating to how well the brand performs (pri- ingly this is not an easy task to achieve but it is mary characteristics and features, service ultimately worth the investment as customers effectiveness, efficiency, empathy and price). in this category form a very deep relationship We also consider how the brand meets the with the brand. Keller (2013) pinpoints four customer’s experiences either directly or from manifestations of this relationship: word-of-mouth imagery. 55 Loyalty: in terms of visible commitment, The third step in the ladder refers to how measured by repeated purchases of the the customer thinks and feels about your brand 197 8 8.5 · Branding in the Context of the Sports Sector

55 Attachment: extremely positive attitudes if other brands make more appeal and address about the brand, the ultimate being a the needs and expectations of customers more “love” of the brand fully it is also likely that the equity will weaken. 55 Sense of community: a sense of belonging to a Naik and Gupta (2013) have developed a club or community with like-minded people variation of the original Keller model to 55 Active engagement: where customers reflect equity in the context of the sports sec- actively engage with the brand, not just tor. They call this the “fan-based brand equity

when purchasing it. This is manifested in pyramid”. . Figures 8.3 and 8.4 capture their them visiting websites, blogs and discus- thoughts in this “re-worked” model. sion forums, sharing their experiences The authors consider earlier work by online and so on. Gladden and Funk (2002), Bauer and Sauer (2005), Ross (2006), Stockburger-Sauer and Exler (2008) and Villarejo-Ramos and Martín- 8.5.3 Brand Equity in the Context Velicia (2007) in this revamped framework. of the Sports Sector They argue that previous studies only “focused either on the development or mea- Marketers face a continuous challenge to surement of teams’ brand-equity focusing maintain and reinforce brand equity with its only on brand awareness, brand associations target market(s). If standards slip in key areas or brand knowledge. These frameworks had that are relevant to customers and are not also restricted themselves by not taking a addressed, then loyalty will ebb away. Likewise, holistic view of responsibility of teams’ man-

Loyalty Attachment Consequences Commitment Engagement Fan Loyalty Social Responsibility Merchandise Sale Jersey Rights Warmth Media Exposure Quality Fun Excitement Ticket Sales Credibility . Superiority Security Consideration Social Approval Self-Respect

Team Reliability Fan Demographic Factors Team E ectiveness Fan Psychographic Factors Team style . Mode of Sports Consumption Ticket Price History/Performance of Team

Hierarchy of Intent and Needs Satisfaction

.. Fig. 8.3 Fan-based brand equity pyramid. (Source: Naik and Gupta 2013) 198 Chapter 8 · The Sports Product and Brand-Building Decisions

4. Relationship–what about the team and fans?

3. Responses–what about Fans-Team the team? Resonance

2. Meaning–what is the Fans Fans team? Judgement Feelings

Team Team 1. Identity–who is the Performance Imagery team?

Team Salience

.. Fig. 8.4 Building the sports brand. (Source: Naik and Gupta 2013)

agement towards fans and society in order to sions are highlighted. They are in line with attract and retain loyal fans” (p33). the original model as developed by Keller

. Figure 8.4 identifies the four key ques- (2001). They are team performance and team tions which have to be addressed as we move imagery. The former refers to the functional up the pyramid: team identify, team meaning, and performance-related fan associations. fan responses and the fan-team relationship. The latter refer to the abstract and imagina- Let us look at each one in more detail. tion-related issues. Both dimensions relate to the likelihood of fans increasing their loy- Team Identity Much of the earlier research alty to the team. This is reflected in a stron- focused on the identity of the team as opposed ger propensity to make more purchases, for to fan identity. Team identity creates and devel- example, merchandise. They also reflect the ops brand awareness. This in turn builds brand fans perceptions and attitudes to the quality salience as the fan becomes more familiar with the of the team performance on the pitch and the team and its attributes. Brand salience contains level of entertainment which they provide. two dimensions: depth and breath. The former This also relates to the general reliability of refers to the level and ease of recall in the mind of the team with respect to the percentage of the fan, about the team. The latter encompasses games won ratio. Team imagery by defini- some broader issues such as the fans top-of-mind tion is more abstract. Naik and Gupta (2013) and consumption-related behaviour. suggest that “intangible and abstract mean- ings can be broadly classified into categories Team Meaning In terms of building the dependent upon fan demographic factors attraction of the brand to the fan, two dimen- (fans gender, race, ethnicity, income, marital 199 8 8.5 · Branding in the Context of the Sports Sector status), fans psychographic factors (attitude 8.5.4 Building Brand Loyalty - Sports towards sports/life, social issues, posses- Team Brand-Equity Index sions, careers or political interest), mode of consumption of sports (stadiums, television, Building loyal fans is critical to the devel- online, mood of the fans, time or day of the opment of a successful sports team. This is interaction with the team), fans personalities helped to some extent by the presence of pas- and their values, and finally the past history sion and commitment which feature heavily or performance of the team under consider- in many cases in the minds of fans. The chal- ation” (p35). lenge is to build on this passion and generate as many loyal fans as possible. Fan Responses Here sports marketers need In the previous section we discussed the to gain an insight into the feelings and judge- importance of building brand equity. Here we ments that fans hold and make about the team. develop our assessment of the importance of This builds upon the building blocks of perfor- creating scales to help sports marketers gain mance and imagery at the previous level on the a better understanding of fans perceptions, pyramid. Judgements reflect the more rational attitudes and opinions about sports brand. perceptions - based on level of success (win Practical questions include the following. ratio), quality of play and so on. They repre- What are the key measures that we can use to sent perceptions based on what the fans heads provide us with such an understanding? are telling them. By contrast feelings represent Much of the previous work in the area of the softer dimension (perceptions based on the brand equity was based around traditional, “heart”). Such feelings revolve around issues product (as opposed to service-dominant) such as warmth, fun, excitement and so on. brands. Such frameworks and scales failed to This aspect is important for sports marketers adequately address the intangible dimensions. in terms of identifying how fans evaluate the In particular, traditional approaches did not team and its associated products and services address the experiential dimensions that are such as merchandise, stadium facilities and so critical in the context of sport. on. This in turn reflects how loyal they are, or Similar to the research conducted by Naik capable of becoming. and Gupta. Yousaf et al. (2017) have built on Fans-team relationships This takes us to the previous research to develop a measurement top of the pyramid and reflects the strength tool which they call the Sports Team Brand of the resonance or bond between the team Equity index (STBE). They identify four and the fan. They identify a number of cat- dimensions: beginning with brand awareness egories such as behavioural loyalty, sense of and moving towards team loyalty. This is cap- community, attitudinal attachment, and level tured in . Fig. 8.5. of active engagement and so on. The consequences arising from building a Team Loyalty strong brand equity are reflected in a number of positive outcomes. From the perspective of sports marketers, areas such as level of fan loyalty, extent of merchandise sales, value of Brand Associations shirt advertising rights, increased media exposure and ticket sales should generate increased revenue streams as a consequence of building Team Performance the brand. Although not mentioned in the re- worked framework by Naik and Gupta it can also be argued that heightened revenue can be generated from better sponsorship deals, Brand Awareness enhanced stadium naming rights and more lucrative international opportunities to gener- .. Fig. 8.5 Sports Team Brand Equity Index (STBE). ate increased revenue. (Source: Adapted from Yousaf et al. 2017) 200 Chapter 8 · The Sports Product and Brand-Building Decisions

Building on earlier work by of brand perceptions and attitudes in the con- Diamantopoulos and Winklhofer (2001) they text of identifying the strength of the brand. identify brand awareness is the starting point We should however be careful about blindly and reflects the degree of awareness of a par- accepting such frameworks (helpful though ticular team on the part of the fan or viewer. they might be). In this case the authors pin- Team performance addresses two dimen- point some deficiencies. Firstly, it looks at only sions: team performance and team rivalry. In one sport: the Indian Premier League (IPL) the case of the former, it is an amalgamation of within one state in that country. It predomi- past performances, the quality of the playing nantly focused on a male-based respondent squad and so on. Team rivalry explicitly recog- and only analysed the youth segment of that nises the importance of competition and the market. It is difficult therefore to draw generali- resulting intensity, between rivals. Most fans sations to other sports and cultures. However, relate their team to a rival – usually their main it provides a working framework that can be to perceived competitor (could be city-based or the benefit of sports marketers in understand- based on traditional rivalry). Rivalry can also ing the relationships between their respective occur at the individual level (athlete versus ath- fan-bases and the sports brand. lete). For instance, great rivalries can be found 8 in most sports. Examples include Federer versus Nadal and Djokovic (tennis) and Froome Box 8.1 STBE Index Items versus Thomas (cycling). Rivalries can occur 55 The symbol of Team X is unique and I also at team level. Examples include England can recognise it among competing brands versus Australia in cricket, Argentine and 55 Team X is very successful in Event Y Brazil in football and so on. 55 Team X does very well against their rivals Brand associations refer to those features 55 Team X has a history of winning and attributes that fans associate with a brand. 55 Team X has the best coach for the team They also evoke a combination of positive or 55 I am able to see friends because of negative feelings about those associations. Team X’s matches These associations can be both team-related 55 I consider myself a loyal fan of Team X or non-team related. 55 Being a fan of Team X is a large part The relationships that the fan has with of who I am. the team are also supplemented by the level of engagement with other like-minded fans. Source: adapted from Yousaf et al. (2017). Thus, we can see the importance that such engagement plays in shaping the level of identity held by the individual fan. High levels of identification positively influence the degree 8.6 The Most Valuable Global of team loyalty. Sports Brands Yousaf et al. (2017) put forward an eight- item index to identify the range of variables At the time of writing, the most recent figures that impact on the degree of strength of available which identify the top ten most valu- sports brand equity. They are identified in able brands are to be found at the following link:

7 Box 8.1. 7 https://www.investopedia. com/insights/ Using a five-point scale, sports marketers most-valuable-sports-teams/

could use this framework to examine the issue They are as follows (. Table 8.1). 201 8 8.7 · Sports Brands and Brand Extensions

to figure more prominently in their line of .. Table 8.1 Most valuable sports brands thinking. 1. Dallas Cowboys (NFL) $4.2 billion The concept of band extensions flows ini- 2. New York Yankees (MLB) $3.7 billion tially from the success of building the brand 3. FC Barcelona (Football) $3.64 billion in a particular product category. The brand 4. Manchester Utd (Football) $3.6 billion has achieved high levels of success and recall 5. Real Madrid (Football) $3.58 billion in terms of revenue that it becomes feasible 6. New England Patriots (NFL) $3.4 billion 7. New York Knicks (NBA) $3.3 billion to make use of that brand name to associate 8. New York Giants (NFL) $3.1 billion with other product categories or sectors. 9. San Francisco 49ers (NFL) $3 billion Traditionally this involved sports clubs 10. Los Angeles Lakers (NBA) $3 billion opening retail stores in order to create dedicated space to sell club merchandise and para- Source: 7 https://www.investopedia. com/insights/ most-valuable-sports-teams/ phernalia. Theory would suggest that by extending the brand name to other areas, the club can benefit from the high levels of recall and positive brand associations. This It is worth noting that despite the success (hopefully) is reflected in increased revenue of football in Europe and globally, only three from the new product category. such brands reside in the top ten. Four of the Walsh and Ross (2010) draw a distinction top ten brands come from NFL - despite the between brand extension strategies and licens- limited nature of the appeal of this sport ing. In the case of the former it means the globally. The number one brand: Dallas direct use of a pre-existing brand. Licensing Cowboys, has not won an NFL championship on the other hand involves a separate com- since the 1990s. Its value is largely attributed pany making use of the brand image, logo and to its stadium which opened in 2009. It sold so on, for a payment fee and on-going royal- the naming rights for the stadium for $400 ties. Brand extensions DO NOT involve such million in 2013. outside companies. The prominence of 70 per cent of the top Much of the potential success of extend- ten brands from the USA reflects the value of ing the brand into new product categories the three main sports there: NFL, baseball will depend on the level of strategic fit that and basketball. Media rights and sponsorship exists between the established brand and its deals are also reflected in the value of these application to a new product category. For brands. instance, let us go back to our previous example where the sports club opens up some 8.6.1 Exercise physical retail outlets in the home city and in strategic cities globally, where there is evi-

??Update the list in 7 Box 8.1 from sources dence of substantial support for the team. that you can find on the Internet. Reflect on One could argue that there is a reasonably any changes that have taken place on the close fit between the football team brand and list (new entrants and/or absentees). Assess its name on retail merchandise stores. This the potential explanations as to why any should lead to synergies between the two changes have occurred. brands. However, if a sports team places its brand name on a restaurant chain, it could be that 8.7 Sports Brands and Brand there is a distant relationship between the two Extensions brands. This can lead to confused perceptions and attitudes of fans. In some cases, it might As sports clubs, organisations and event prop- anger fans who see such as venture as a waste erty owners further pursue commercial oppor- of time, costing money and leading to a failed tunities in order to monetise revenue, the business venture: where such investment could concept of a brand extension strategy begins be better spent on new players. 202 Chapter 8 · The Sports Product and Brand-Building Decisions

Sports brands with a strong brand equity levels of identification are potentially likely to are in a potentially stronger position to build modify their behaviour. on this. They can leverage the positivity asso- This suggests that marketers can pursue ciated with the brand to such extensions. By brand extension strategies without having to contrast, brands with weaker equity may worry unnecessarily about diluting the original struggle to gain traction in the mind of the brand equity. Such strategies would need to be target markets and run a higher risk of failure. supported by positive marketing campaigns, Sports marketers also have to grapple with particularly in areas of digital marketing and the potential risk of diluting the value of the viral marketing. Fans with high levels of identifi- original brand if it is applied to extensions cation, arguably, are more likely to transfer such that are inconsistent with the original brand positive feelings to a brand extension venture. values and associations. This is often referred If the club moves away too radically from to as the Bookkeeping model. This can create its core brand values and associations then it the effect of fans modifying their beliefs and runs the risk of antagonising some fans with attitudes to the brand. lower levels of identification. Arguably, they Walsh and Ross (2010) also refer to the should focus on product categories and areas Typicality model. This covers situations where that are associated with their product. there is a potentially close strategic fit between Apostolopoulou (2002) identified five 8 the original brand (the football club) and the areas where sports team brands might con- brand extension (retail merchandise stores) sider brand extensions. but where inconsistent associations can still 1. Sports-related (e.g. retail stores selling emerge. In this hypothetical case, if the club is sports merchandise). predominantly supported by fans from a 2. Entertainment-related (e.g. restaurants, working-class background and it begins to sell craft beers). expensive, upmarket merchandise and acces- 3. Media-related (e.g. newspaper, TV sories (e.g. upmarket male and female beauty channel). products), then negative changes in perception 4. Information-related (website, data and behaviour might occur. In this situation it mining). might be argued that the club, in its quest to 5. Low perceived fit extensions (opening cin- generate more revenue and margin is at risk of emas, airlines)! alienating its traditional fan-base. Further research conducted by Walsh and Clearly as we move into category five (above) Ross (2010) indicates that the threat of brand there is a high degree of risk associated with dilution is reduced with brand extension strat- such ventures. As well as alienating fans, there egies. Much will depend on the level of identi- is also a probability of high losses in terms of fication that the fan-base holds with the team investment. brand. Fans with higher levels of identifica- In an era of constant focus on monetisation tion are less likely to change their perceptions opportunities it is increasingly likely that we and behaviour. By contrast, fans with lower shall see more brand extensions going forward.

FC Barcelona: Onwards and Upwards

Barcelona football club is one of the best- Its global popularity is reflected in its known and successful brands in world football. social media following, estimated to be among Founded in 1899 in Catalonia in Spain. It has the biggest in the world from the perspective become a powerful social brand in the context of sports brand. It claims to have over 100 of its importance to the overall Catalonia million followers globally on its Facebook region and its quest for independence. pages and millions more follow them on It is the fourth most successful brand in the Twitter. world and is estimated to be worth over $3.6 It has over forty-seven partners: the main billion. ones being Nike and Rakuten. 203 8 8.8 · Co-branding

It has established numerous product lines In 2015 it opened its own travel agency. and extensions. These include its Megastore This allows fans to book tickets to travel with and Museum. The latter, in particular, focuses the players to away games. on issues such as Multimedia Zone and Museum Space Messi.

??1. How viable is the opening of the FC brand which also exhibits such characteristics, Barcelona travel agency business? for example, a sports equipment brand that is 2. How could this be extended into other perceived by its customers as being the “best- areas related to travel and the club? in-class” and which is endorsed by successful athletes. In both cases the common link is built 8.8 Co-branding around winning, success and top performances. This example is based on two brands Co-branding has become another vehicle for that are clearly sports-related. In situations generating an increased revenue stream for both where sports and non-sports related brands parties in the arrangement. This revolves around come together it may be more problematic if the concept of collaboration between two inde- strong strategic fit can ensue. pendent brands that come together to be used Much of the existing research has focused on a single product or service. This is different on non-sports related situations. Lee et al. from the brand extension concept discussed in (2016) provide a substantive review of the preceding paragraphs. In the latter case it extant research in the sports category. They involves leveraging of an existing parent brand cite the work of Wu and Chalip (2013) who which was used on a new product line or cate- examined two cases of sports and non-sports gory. In essence it is a form of strategic alliance brands becoming involved in a co-branding between two brands. (See Tsiotsou et al. (2014)). exercise. These included Nike and Adidas In the context of sports, a team brand can (sports) and Ralph Lauren and Tommy potentially work well with unrelated brands Hilfiger (non-sports). The male respon- (in terms of sports) but which may have simi- dents did perceive a positive image transfer lar characteristics in their respective brand from non-sports brands to sports brands. personalities. For instance, a successful team However, in the case of female respondents, (in terms of winning trophies and competi- no significant influences came into their tions) could consider co-branding with a assessments.

J’aime Paris

One of the most interesting and long-lasting On the field this ambition was reflected in co-branding strategies involves Paris St over $1 billion being invested in improving the Germain (PSG) and Nike. The former is a squad. In terms of achieving the ambition of French football team which was founded in making it a truly global sports brand, the club 1970. The latter is one of the most successful adopted a strategic perspective in terms of and iconic brands in the world. seeking out global co-branding opportunities. The fortunes of PSG changed irrevocably Its long-term involvement with Nike is reflected in 2011 when a wealthy Qatari consortium pur- in some of these ventures. chased it. Its President, Nasser Al-Khalaifi In September 2018 it entered into a co- immediately declared that he wanted the club branding agreement with the Jordan brand to become a leading global sports brand. (owned overall by Nike). The team wore a spe- 204 Chapter 8 · The Sports Product and Brand-Building Decisions

cially designed kit for its European Champions In 2015 another partnership with the League games during the 2018–2019 season. Japanese street wear label SOPHNET led to a It wore the Jumpman logo on the kits. It range of leather jackets, hoodies and sweat- involved a three-year deal with the Jordan pants being launched. brand – where no other football team could 2017 witnessed two further significant co- feature the brand. On opening day of the part- branding strategies. PSG appeared during the nership it sold out the entire stock of 5000 Paris Fashion week with a set of jerseys that items from its online site. Over the next few were worked into a number of designs by the days it also sold 20,000 items through stores in French label, Koche. Shortly after, as part of Paris, Tokyo and Doha. the Rolling Stone’s World Tour (UK band) it In essence PSG wanted to expand its opera- launched a fashion collection featuring the tions into the fashion sector to solidify its posi- colours of PSG (red and blue) combined with tion as a global sports brand. From the the band’s famous “tongue and lips” logo. This perspective of marketers working with the partnership was set up by Bravado, the brand- Jordan brand they wanted to expand its busi- ing part of Universal Music. ness away from its original basketball roots PSG take the view that such initiatives (Michael Jordan in the 1990s onwards). address a number of objectives. Firstly, it takes 8 Working on the various linkages between the brand away from the football and sports lifestyle, fashion and football also meant that sector to a wider and broader strategic space. the city of Paris could be used. Paris is per- The coming together of football, fashion, life- ceived by many people as one of the most cul- style and so on helps the club to position itself tural, historic, fashion-conscious and vibrant as a global brand. It opens up new audiences cities in the world. This involvement is reflected and in particular a younger target market. in other co-branding initiatives. The club has also made extensive use of In 2015 PSG combined with Levis to celebrities or “influencers” to reinforce its launch the Levi PSG Trucker jacket. The team branding strategy globally. People such as name appeared on the back of the jacket and Beyoncé, Kendall Jenner, Naomi Campbell and its logo featured on the left shoulder. Rhianna have featured prominently. Two years earlier PSG partnered with PSG is a good example of a team brand Hublot, the Swiss watchmaker, to launch a that has sought to expand its awareness and PSG-branded King Power Watch. The players potential to a wider audience than simply the subsequently modelled the watch at a Hong football fraternity. Although lacking the heri- Kong fashion show as part of their pre-season tage and history that is associated with older tour to that region. football team brands such as Manchester Utd, In 2014 Hugo Boss, the German fashion Real Madrid and Bayern Munich, it has tried brand became the club’s official tailor. The to circumvent this by linking closely to the her- players wore the suits at all home games as well itage of Paris and its cultural history. as European Champions League matches. (Source: Developed by the author)

??1. Assess the co-branding strategies em- 8.8.1 Pros and Cons of Co-branding ployed by PSG. How successful do you think they have been? Co-branding strategies share many of the 2. To what extent would you agree with upsides and downsides that are associated the view that the club is entering into with brand extension initiatives. Arguably the areas that they know nothing about. risks are somewhat higher as they bring two Is there a danger that by entering into unrelated brands together as opposed to such co-branding relationships it could extension strategies where the parent brand deflect away from their core business? attaches its name to the new product. 205 8 8.9 · Conclusions

Among the potential advantages include sports. The reality is that fans change over the fact that risk is shared between the two time in terms of their perceptions, attitudes brand owners. It also allows the sports team/ and consumption of sport. Established sports organisation to project its brand values and such as boxing are in danger of being super- associations to a wider audience. This is also seded by Mixed Martial Arts (MMA). reflected in the move away from simply being Cricket, another sport rich in history and lon- positioned in the sports sector. Increasingly, gevity is faced with the challenge of relevancy fans coalesce around leisure, lifestyle and for the younger generation. celebrities as their expectations rise and sport- Faced with this challenge, cricket authori- ing experiences change. ties have responded by creating new versions Provided due care is paid to looking for of the game - in particular the “20:20” prod- synergies and a strategic fit between the uct. This is played over a three-hour period brands, then possible risks of failure can be and has been aimed at the family segment. reduced. As noted previously, too many ven- The English cricket authorities have devised tures can irritate fans who see this as a another product called the “One Hundred”. “money-grabbing” attempt by the club - par- Both versions address the need to shorten the ticularly if ticket prices continue to escalate. duration of the game - international test However, more research on this topic is cricket is played over 5 days! required, before any definitive judgement can We recognised the contribution of key be made. stakeholders in shaping product development and innovation in the sports business. The media, for instance, can shape pragmatic con- 8.9 Conclusions siderations such as the duration of a game and the technology employed to reduce the In this chapter we examined the role of prod- possibility of referee or umpire error. The use uct development and branding within the of pyrotechnics such as fireworks and music context of the sports sector. also increase the levels of excitement among The key driver for the focus on brand fans attending live events. development has come from the inexorable Sports product and equipment manufac- shift towards commercialisation. Sports clubs turers, working in tandem with sports admin- and organisations have to seek more creative istrators and authorities, can also improve the ways of monetising their business operations. quality of performance of athletes and The concepts of brand building and brand heighten the quality of the overall product. equity have seamlessly transferred from the Traditional marketing strategies, such as traditional industry sectors to professional brand extensions and co-branding, have also sport at the elite end. featured prominently - again a manifestation We examined the challenges involved in of the focus on commercialism. building up sports brand equity. One issue is the intangible nature of the brand – common Learning Outcomes to many similar service-dominant products. 55 The sports product needs constant The level of identification of fans with the refinement, adaptation and innovation team is identified as a critical influence in in order to remain relevant to the terms of building brand awareness and mov- changing needs and expectations of ing to active loyalty and strong engagement. fans We acknowledged the importance of prod- 55 The sports product typically falls into uct development and innovation in the con- the “service-dominant” category text of the sports sector. Sports which fail to 55 The core sports product is heavily address the challenges of keeping their prod- influenced by the team characteristics uct fresh and relevant run the risk of losing and player performance their audiences and fans to new and emerging 206 Chapter 8 · The Sports Product and Brand-Building Decisions

4. Identify some of the key factors which 55 Incremental innovation tends to be influence the fan’s perceptions and atti- more prevalent than radical innovation tudes to a sports brand. in the context of sport 5. To what extent would you support the 55 Innovation in sport is characterised by view that sports brand extensions collaboration between the stakeholders divert the club away from more impor- in the industry tant decision areas such as investing in 55 Innovation typically reflects a number the stadium facilities and in the team. of perspectives such as institutional, Use TWO examples by way of illus- fashion, culture and rational trating good or bad practice. 55 Keller’s original brand building 6. Assess the pros and cons of using co- framework can be adapted to the sports branding as a viable marketing strat- sector, reflecting issues such as team egy for sports clubs and organisations. identity, team meaning, fan responses 7. Some commentators argue that suc- and fans-team relationships cessful innovation in the sports busi- 55 Successful sports brand extension ness is all about collaboration with strategies typically involve a close other key stakeholders. How valid is strategic fit and synergies this perception? Support your response 8 55 Co-branding strategies work well where with TWO examples. the values of the unrelated brands have 8. An Asian billionaire has purchased a a close strategic fit. If this does not German football team which plays in happen there is a risk that the outcome the Bundesliga (the premier league in may lead to a dilution in the respective Germany). It has enjoyed moderate brand images. success: reaching the European Champions’ League group stages twice in the last 15 years. It has consis- ??End of Chapter Discussion Questions tently finished in the top half (but out- 1. Assess the view that if sports side of the top four) eight times in the organisations fail to innovate they will past 10 years. The new owner has a die. Use TWO examples to support stated aim of establishing this club as your point of view. a global brand - with particular focus 2. Examine the challenges facing sports on the Asian market. As a sports mar- clubs when attempting to introduce keting expert, what advice would you innovations to their overall sports provide to him? product. 3. Evaluate the view that radical innovation is unusual in sport and that incre-

mental innovation is more common Appendix and appropriate. Use TWO examples to illustrate your views and opinions.

I Want to Ride My Bicycle

Introduction up in 1959 it achieved only one medal at succes- For decades cycling in the UK at the elite level sive games up to the early 2000s. This was to of sport did not exactly generate much success change dramatically at the Beijing Games in at the Olympic Games; arguably the barometer 2008 where UK cyclists won eight of the ten of measuring success (by winning medals). medals available on the track cycling events. Since the British Cycling organisation was set This was matched once again at the next 207 8 Appendix

Olympic Games in 2012 which was held in The Philosophy Adopted by David Brailsford London. The 2004 Games in Athens was actu- Brailsford applied a deeply analytical and strate- ally the beginning: cyclists won two medals and gic approach to his new position at British this marked the change in profile for the sport Cycling. Always an avid reader of management of cycling. This was their best performance techniques and principles, he was particularly since 1908. influenced by the Japanese approach to quality Why have we witnessed such a turnaround management and innovation. Theories such as in the sport? This was not a “one-off” achieve- “kaizen” was prominent in his thinking. Kaizen, ment. In the 2016 Games at Rio de Janeiro the also known as continuous improvement, is a long- UK cycling team once again dominated pro- term approach to work that systematically seeks ceedings by winning 12 medals: eight of them to achieve small, incremental changes in processes in the “gold” classification. in order to improve efficiency and quality. This Likewise, with respect to road cycling, UK approach was used extensively in Japanese manu- cyclists achieved tremendous success in the facturing. Companies such as Toyota were to the Tour de France; the premier road race in the fore in promoting this approach to quality man- calendar. In 2012 Bradley Wiggins became the agement back five decades ago. first UK cyclist to win this event, with another Brailsford analysed the sport of cycling and cyclist. Mark Cavendish also finishing promi- set about working on the “theory of marginal nently. Their team - Team Sky then proceeded gains”. In essence, this was based on the Japanese to dominate subsequent editions of the Tour principles of “kaizen”. From his analysis of the de France. Chris Froome has won the event on sport, Brailsford strongly believed that if you four occasions: 2013, 2015, 2016 and 2017. can break down each element that goes into Another team member of Sky, Geraint making a bike and performing on it in competi- Thomas, from Wales, continued the British tion, you can identify areas for marginal domination of this event by winning it in 2018. improvement within each step in the process. If you can subsequently develop improvements in The Arrival of David Brailsford such areas, this can give up a 1 per cent increase In 2002 British Cycling appointed David in performance. This can make you more com- Brailsford as the overall Performance Director. petitive and allow you to achieve success. In a He had always been involved in cycling and sport such as cycling where the thinnest margin started his career as an export sales manager can lead to success Brailsford argued that this for a bike company in Yorkshire. He also com- could lead to substantial gains overall. peted as a cyclist. He applied this philosophy with rigour. He started with British Cycling as an advi- This was demonstrated in a number of differ- sor when the UK Lottery was introduced in ent ways. Such instances included the following: 1997. This formed the basis for the funding of 55 He experimented with a wind tunnel. Initial sport in general in the UK. Cycling received analysis indicated that the typical bike used substantial funding from this source. It estab- in professional cycling was not sufficiently lished its headquarters in the city of aerodynamic Manchester. As well as locating its offices there, 55 He identified that a simple thing like dust it gradually developed facilities such as a velo- on the floor of training areas undermined drome and training facilities. During this time bike maintenance. He had the floors Brailsford also qualified with an MBA which painted to identify such impurities. This led stimulated his thoughts in the direction of to improvements in the performance of the strategy. actual bikes 208 Chapter 8 · The Sports Product and Brand-Building Decisions

55 He insisted that cyclists used anti-bacterial malised the approach of the organisation to gel to cut down on infections innovation. They worked closely with engineers 55 He worked closely with engineers and and scientists, in particular with the Cervelo scientists from a number of companies to R&D team. This was demonstrated in the derive improvements in the design of the development and launch of the £10,000 bike. This was predicated on the belief that Cervelo T5GB bike which was introduced at better design and more innovative use of the Rio Games. The approach was not to reveal materials in their construction can generate the new bike until “competition time”. This significant improvement in terms of speed ensured that competitors could not get time to and overall performance relative to the study the design and make changes to their competition. bikes. Brailsford argued that such a philosophy A good example of this focus on partnerships would be ineffective if there was insufficient with other companies is demonstrated in an “buy-in” from staff, coaches and cyclists. Thus agreement that British Cycling entered into much of any success would be dependent on with Cervelo, a bike supplier, in 2014. This creating the right culture and environment to occurred long after Brailsford had left British allow such a philosophy to thrive and prosper. 8 Cycling and moved to Team Sky. This partner- This is reflected in the focus on identification ship took the form of a five-year agreement and recruitment of potential cyclists that could where R&D personnel from both organisations eventually be in a position to “medal” at the worked jointly to develop, design and manufac- Olympic Games. A talent team was established ture the fastest bike in the world. Proof of the to develop an under 15 apprentice programme. success of this venture was demonstrated in the From an assessment of talent across the differ- 12 medals won at the Rio Games in 2016. ent geographic regions of the UK, 70 cyclists The following quote from an interview with were signed up as apprentices. This involved Brailsford encapsulates his approach. them taking part in intensive “boot camps” “By experimenting in a wind tunnel, we and training programmes. This number was searched for small improvements to aerodynam- reduced (after assessment of their performance ics. By analysing the mechanics area in the team and potential) to 16 riders who were invited to truck, we discovered that dust was accumulating join the Academy Programme. This group was on the floor, undermining bike maintenance. So then reduced to eight members who were iden- we painted the floor white, in order to spot any tified as having the capability, drive and mental impurities. We hired a surgeon to teach our ath- as well as physical strength to win medals at letes about proper hand-washing so as to avoid future Olympics. On average one medal winner illnesses during competition (we also decided would come from this programme (which not to shake any hands during the Olympics). started out with 70 participants). We were precise about food preparation. We British Cycling also recognised the impor- brought our own mattresses and pillows so tance of the contribution of “Big Data” to the our athletes could sleep in the same posture process of continuing with their strategy of every night. We searched for small improve- producing medal winners. ments everywhere and found countless oppor- It established a “Readiness Index” in 2014. tunities. Taken together, we felt they gave us Twenty of the coaches employed by British

a competitive advantage.” (7 https://hbr.org/ Cycling focused on the development of the 2015/10/how-1-performance-improvements- pathway riders (young riders in the system). led-to-olympic-gold). The index built up a detailed profile of each British Cycling established a unit which it individual rider. Data was collected on such labelled the “Secret Squirrel Club”. This group aspects as physiological changes to their bod- focused on analysis and development to drive ies - a key performance indicator being continuous improvement and essentially for- increased in upper and lower body strength. 209 8 Appendix

Issues such as speed and finishing time improve- never been involved with drugs. He established ments were also tracked and logged. a “zero tolerance” policy in this area - anyone A “playbook” was developed for each rider. caught would be dismissed from the team. This Every 3 months each rider underwent a thor- was implemented and one of the Sky Team ough assessment to see if they were “measuring coaches, Bobby Julich was sacked in 2012 when up”. he admitted that he had used EPO when he The Index also carries out a detailed analy- competed as a rider in the 1990s. sis of competitors and the performance of their Team Sky maintained close connections cyclists in competitions. Patterns are identified with British Cycling and located its offices which might help British Cycling to identify beside their HQ in Manchester. This made areas where marginal gains could be derived. sense given the investment that British Cycling Allegations have been made that the culture has made in the infrastructure and facilities. imbued in the British Cycling organisation This was demonstrated by a velodrome and encouraged a regime of bullying and discrimi- track made of Siberian Pine Wood (which was nation. Female cyclists in particular appeared identified as the best material for training on). to be victims of these practices and high-profile Brailsford continued with his application cases were exposed in the media. of the “marginal gains” theory. The team won The creation of the team was announced the 2012 Tour de France when Bradley Wiggins on 26 February 2009, with the major sponsor- came through to finish first on the podium. As ship provided by BskyB (now known as Sky mentioned earlier this success was flanked in Television). The company were searching for a subsequent years by Chris Froome. sport in which they could have a positive and Team Sky, backed by substantial invest- wide-ranging impact through sponsorship. ment and the strategies of Brailsford quickly British Cycling first began their relationship established itself as the dominant team on the with BSkyB in 2008 with a £1 million sponsor- road-racing circuit since its inception in 2009. ship in the Sky Track Cycling team following Like many successful teams in sport they the Summer Olympics in which British cyclists are not well liked by competitors, the cycling excelled. This launch would hopefully enable media or indeed many of the fans. them to establish credibility and visibility in Brailsford’s attention to detail is reflected in sport which captured millions of “eyeballs” on the use of a “super bus” which has been TV across Europe and beyond. designed to allow riders to recuperate at the Brailsford joined them at the beginning as end of each stage. Again we see evidence of the General Manager, with responsibility for set- theory of marginal gains in operation. ting and implementing the strategic direction More worryingly, the team has been of the team. He set the objective of providing accused of “skirting around the edges” of the first cyclist from the UK to win the Tour de potential cheating. This was evidenced in the France by 2014. case of Bradley Wiggins. He received a thera- The sport of cycling - particularly with peutic use exemption (in effect a medical clear- respect to road racing had been riddled with ance) to take the banned corticosteroid allegations of cheating and doping. Many triamcinolone drug to treat him for pollen cyclists were caught and served terms of sus- allergies. While this technically did not infringe pension or were banned from the sport. The any rules many athletes use it in order to most high profile case arguably involved the improve performance. They get away with it USA rider Lance Armstrong. He dominated due to the medical clearance. the sport for years but was eventually exposed as a drugs cheat. Further Scandals Involving Wiggins Brailsford, in response to these problems and Team Sky with the sport argued that his team would only UK Anti-Doping (Ukad) launched an investi- recruit riders who were totally clean and had gation in 2016 into the contents of a Jiffy bag 210 Chapter 8 · The Sports Product and Brand-Building Decisions

delivered to Wiggins at the 2011 Critérium du like salbutamol in a sample does not result in a Dauphiné. In a written statement to a parlia- mandatory provisional suspension and the body mentary hearing, the medical doctor for Team has asked Froome for more detail. Sky insisted the package contained only the Many cyclists and media journalists felt decongestant Fluimucil but Ukad has still not that if this was any other cyclist, a suspension been able to verify that claim because of the would have been automatic and the cyclist lack of medical records. would have been stripped of the Vuelta win. The doctor subsequently resigned. He Froome stated that he was happy to coop- claimed he was not well enough to be inter- erate with the authorities and reiterated his viewed by Ukad. An enquiry could not get any total horror of using drugs in sport. In May information on the background because a 2018, just before the Giro D’Italia, Froome was Team Sky official claimed that the data was lost cleared of any wrongdoing by the International because of a stolen computer. Cycling Federation. He subsequently went on In November 2017 Ukad admitted defeat to win this tour with some sensational stage and declared Team Sky and Brailsford free of performances. This meant that he was the any doping charges. However, they expressed champion of the three major tours: Tour de serious concerns about what happened and France (2017), the Vuelta (Spanish tour in 8 were especially critical of the lack of proper 2017) and then the Giro D’Italia. This achieve- documentation and recording of data. Without ment, together with his previous wins in the saying so they indicated that this was the only Tour de France, arguably left him as one of the decision they could arrive at. most successful cyclists of all time. However, Team Sky was damaged in the general media. The general public and indeed many Summary cycling fans are cynical about claims that the British Cycling and Team Sky have been the sport of cycling is clean. The case with Wiggins key organisations in driving the sport of pro- only served to exacerbate these perceptions. fessional cycling from being a peripheral sport Wiggins quickly retired from road racing a to a dominant one in terms of medal success couple of years after winning the Tour de for UK sport in the Olympics and the major France. Many people suspected that this was in road-racing events in Europe. response to any possible charges being levelled Sir David Brailsford (knighted by the against him in the future. Queen in 2013) has been at the heart of such In September 2017 Chris Froome was achievements. It can be strongly argued that he caught up in a similar type of allegation. applied scientific and strategy-based principles Four-time Tour de France winner Froome to seek improvements in performance from his had double the allowed level of legal asthma riders in both organisations. In doing so he has drug salbutamol in his urine during September’s made use of technology and data to drive such Vuelta a Espana win. success. However, under governing body UCI’s anti- Sources: (Compiled by the author from doping rules, the presence of specified substances various sources on the Internet).

??Discussion Questions 3. Do you believe that the strategies 1. Assess the approach adopted by employed by Brailsford can be Brailsford. To what extent would sustained into the future? you agree with the view that such 4. To what extent would you would an approach damages sport and agree with the view that the use of encourages bad behaviour at best, technology places too much emphasis unacceptable practices at worst? on medal-winning? 2. What are your opinions on the theory of marginal gains? 211 8 References

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Globalisation of the Sports Product

Contents

9.1 Introduction – 215 9.2 Why Internationalise in the First Place? – 216 9.2.1 Exercise – 218

9.3 Motivations and Barriers to International Expansion – 218 9.3.1 Push and Pull Factors – 218 9.3.2 Internal and External “Triggers” – 219 9.3.3 Barriers to Internationalisation – 219

9.4 Within the Context of the Sports Sector – 220 9.4.1 Potential Inhibitors to the Sports Internationalisation Process – 220 9.4.2 Exercise – 221

9.5 Criteria for Evaluating the Attractiveness of International Markets – 221 9.6 Strategies for Internationalisation – 225 9.6.1 Objectives and Rationale – 225

9.7 International Entry Strategies in the Sports Sector – 227 9.7.1 “Inside–Out” and “Outside–In” Approaches to Internationalisation – 227 9.7.2 Co-partnerships – 228 9.7.3 Samplers, Teasers and the “Real Thing” – 228

Electronic Supplementary Material The online version of this chapter (https://doi.org/10.1007/978-3-030-53740-1_9) contains supplementary material, which is available to authorized users.

© The Author(s) 2020 S. Ennis, Sports Marketing, https://doi.org/10.1007/978-3-030-53740-1_9 9.7.4 Staging Regular Season, Competitive Games in International Countries – 229 9.7.5 Establishing Franchises in International Markets – 229 9.7.6 Licensing – 230 9.7.7 International Distribution through Media Rights Sales – 231 9.7.8 International Development through Season Passes – 231 9.7.9 Developing New International Competitions – 232 9.7.10 Outward and Inward Investment Strategies – 232

9.8 Internationalisation Strategies: The Way Forward – 234 9.9 Conclusions – 235 Appendix – 236 References – 243 215 9 9.1 · Introduction nnLearning Objectives International/global expansion is one such On completion of this chapter you should potential route. In this chapter we examine the be in a position to address the following challenges and opportunities that face sports objectives: property owners in their quest for expansion 55 Understand the trends and develop- and increased revenue streams. ments which have led to the focus on The cliché that the world has become a internationalising sports properties, “global village” is often used (indeed misused) competitions, teams and fans in business texts. This is based on the supposi- 55 To examine the motivations for invest- tion that companies and organisations ignore ing in globalisation international markets at their peril: for fear 55 To identify the criteria for selecting that they may miss out on a welter of oppor- potential international markets for tunities. In this chapter we examine the rele- expansion and growth vance of this view within the context of the 55 To assess the different approaches sports sector. adopted by sports organisations for The counter-argument to this perception, internationalising their respective prod- in general business, is that companies can ucts severely underestimate the challenges involved 55 To assess how approaches to interna- in expanding their operations internationally tionalisation of sports products differs and that the potential risks of failure can ulti- and compares with traditional theories mately lead to a downturn in the fortunes of a of globalisation previously successful domestic business. We 55 To assess the potential inhibitors to test out the validity of both points of view in international sports product develop- this chapter. ment As mentioned in earlier chapters, the sport- 55 To understand the role of the media in ing landscape has changed in a dramatic way facilitating or inhibiting global expan- over the past couple of decades. Whereas most sion of the sports product of the major sporting events and competitions 55 To evaluate how technology and digital took place in geographic locations such as marketing allow sports organisations to North America and Western Europe, this has connect with the international fan now altered significantly. Prior to the 1990s 55 To understand the role of diaspora in markets such as south-east Asia, Latin America expanding a sport globally and the Gulf region were barren and desolate 55 To assess the main geographic areas for areas within the context of staging such events. international growth and development This has changed in a conspicuous way 55 To appreciate the role that psychic dis- over recent years. Now major property owners tance plays in international develop- such as the International Olympic Committee ment of sports products (IOC), Federation Internationale de Football 55 To examine the importance of under- Association (FIFA), Union of European standing cultural differences in interna- Football Associations (UEFA) and Formula tional expansion. One have expanded their operations increasingly towards these emerging regions: some of which have arguably overtaken many of the 9.1 Introduction so-called “developed” economies. The concept of the “virtual fan” has also The theme of sports commercialisation fea- enlivened the appetite of sports clubs to build tures prominently in all of the chapters in this their fan-base and potentially benefit from text. At the elite end of sport, the unrelenting opportunities such as increased sales of mer- focus for sports property owners is to generate chandise across different regions. Even in the increasing levels of revenue from as many most impoverished and desolate parts of the sources as possible. world you are likely to see people wearing the 216 Chapter 9 · Globalisation of the Sports Product

jerseys of clubs such as Real Madrid, Barcelona, benefits by selling it on to another investor. and Manchester United and so on. The geo- They do not want the hassle of dealing with a graphic and cultural boundaries are ever more more complex and complicated set of busi- blurred and sports property owners are increas- ness processes that surely accrue when the ingly availing of such opportunities. More company moves into the international arena. sophisticated and personalised usage of tech- Similarly, lifestyle objective may also rule out nology and social media has further inflamed the willingness of the owner to expand the the marketing activity in such areas. business further. In the early part of this chapter we explore In the context of sport, other issues may the motivations for globalising sports proper- come into play. For instance, some sports are ties and the criteria which can be used to iden- very much grounded in a local, regional or tify priority international markets. We assess national environment and have little existing the challenges involved in designing appropri- or potential appeal in other markets. Sports ate strategies. such as shinty (Scottish), hurling and Gaelic We consider the roles that key stakehold- football (Irish) are successful in their local ers such as the media, sponsors and sports domain. The latter sports attract large atten- property owners play in the internationalisa- dances and TV viewing figures at the top end tion process. of the sport in Ireland. Over 82,000 attend the We assess the different methods used to All-Ireland finals and critical championship expand internationally. games as a matter of routine. 9 We consider the critical success factors Australian Rules football is a good exam- that can help sports organisations to over- ple of a very successful, commercially run come the obstacles to successful global sport. Outside of Australia, however, it cap- growth. tures little awareness or participation. The In the later stages of the chapter we look at respective sports administrators of Aussie key markets such as China and the opportuni- Rules and Gaelic football have established a ties and challenges facing sports property bi-annual “mixed rules” series of games to owners as they attempt to enter such regions. promote their respective sports in the countries of Australia and Ireland. This has led to mixed results. While attendances at the games have been reasonable, they have never pro- 9.2 Why Internationalise gressed beyond the objective of generating in the First Place? interest in the events. Undoubtedly there is overlap. Arguably (historians vary) it was Many people assume that a business only sur- Irish emigrants to Australia that created vives by seeking out as many opportunities as Aussie Rules in the first place. Clearly there possible in order to survive and prosper. are cultural and historic links between the two Certainly, this has some “face value” validity. games. The overall lesson from this example is A failure to identify and exploit such oppor- that some sports find it very difficult, if not tunities leads to the accusation that the organ- impossible, to expand beyond their national isation is short-sighted, risk averse and in environment. It has a national, regional and danger of handing such possibilities to its local focus at its core. direct and indirect competitors. The two sports mentioned in the above The counter-argument suggests that in paragraph are examples of areas that would some cases international expansion may not find it difficult to move up the ladder in terms fit in with the specific objectives of the busi- of exploiting international opportunities. At ness owner/founder. For instance, many entre- best it could be argued that they are limited in preneurs are only satisfied if they grow the terms of expansion beyond their respective business to a certain level and then reap the domestic markets. 217 9 9.2 · Why Internationalise in the First Place?

Sport Event Football World Cup Olympic Games Global

Athletics World Athletics Swimming Championships International Formula one

Baseball NFL National Ice Hockey

Aussie Rules Regional/Local Gaelic Football Judo

.. Fig. 9.1 The sports pyramid. (Source: Adapted from Shani and Sandler 1996)

. Figure 9.1 is an attempt to portray the British colonial times - mainly they are areas different tiers of sports in terms of levels of that belong to the British Commonwealth and awareness, reach, media coverage, participa- historically were occupied by Great Britain. tion and acceptance. Please feel free to debate Sports such as Aussie Rules, judo, and the accuracy of this analysis. In some cases, Gaelic football and so on are grounded individual sports can move up (or down) the in local or regional geographic areas. They ladder depending on circumstances, such as have limited appeal and low awareness outside increased international media coverage of their boundaries. This categorisation is This suggests that at the top of the pyra- only meant to be illustrative and I am sure it mid sports, such as football, have a universal will engender some debate; particularly when appeal across virtually all geographic regions. it comes to very commercially successful This is supplemented by very high levels of sports such as baseball and American football media and existing fan coverage and interest. (NFL). The latter sports are at the forefront As an event, both the World Cup and Olympic of commercialisation in terms of media rights, Games attract the highest levels of viewing attendances and viewing figures in North figures across the globe. America. Both sports have made significant Sports, such as athletics and swimming, attempts to expand internationally (we will maintain a strong global level of participation examine them in greater detail later in this but arguably cannot be classified as achieving chapter). However, in terms of global expan- a global impact because of declining levels of sion they are unlikely to gain significant trac- media coverage. tion in many geographic regions. Sports such as rugby, cricket, baseball, For many sports the answer to the ques- basketball and ice hockey have a strong inter- tion as to why bother to internationalise is national presence, but only in certain regions. largely rhetorical. In order to remain viable For instance, cricket is played in regions and generate further income streams, they from Afghanistan through to Sri Lanka and have to embrace internationalisation. If they Australia. They have a strong linkage to wish to even maintain the status quo (in terms 218 Chapter 9 · Globalisation of the Sports Product

of benchmarks such as attendances, viewing the services and the environment surrounding figures and participation), they are obliged to the event/game (stadium, parking, facilities, recognise that the world has become more food and beverages and so on) and locational global, interactive and in the context of the dimensions such as geographic and physical sports sector, facing more competition from location within the city/country. other sports and phenomena such as gaming Growth, both domestically and interna- (largely the product of the Internet and tech- tionally, can occur across a number of these nology). In the latter case “eSports” is the features. This is in contrast to traditional fastest growing sport world-wide. To ignore manufactured goods which do not necessarily the prospect of seeking growth through inter- have the same layers of complexity surround- national expansion would be foolhardy from ing the product. We should take this into the perspective of sports property owners, account when assessing the motivations for sports marketers and administrators. international expansion. The arrival of proven (in the context of The traditional extant literature on inter- industry experience), professionally qualified nationalisation motives portrays the decision and business-focused individuals to the realm as largely based on a proactive or reactive of sport has also exacerbated the focus on rationale for seeking growth outside of the internationalisation. domestic market. Terms such as “push” and Niche sports such as surfing, equestrian, “pull” are often utilised to further explain the fencing and so on are proving to be increas- logic for international expansion. 9 ingly creative in promoting their sports. By developing their own streaming platforms, 9.3.1 Push and Pull Factors they can build an audience profile. This can lead to a “virtuous circle” when sports broad- “Push” factors tend to revolve around the fol- casters sign contracts to cover the sport, thus lowing issues: broadening the audience reach. In turn, this attracts a wider international audience and 55 A mature market which has little or no ultimately sponsors who are willing to invest scope for further growth and development in the sport to align their brand values with an 55 Weak economic conditions: recessionary attractive demographic. climate where people’s disposable income has been in decline, leading to a fall in demand for the product or service 9.2.1 Exercise 55 Competitive pressures: leading to a reduction in demand 55 A small domestic market which has ??Using material that is available on the reached saturation Internet, choose a niche sport of your 55 A market which is dominated by one or choice and carry out an assessment of its two large companies/brands. approach to widening its audience reach and viewing figures. Such conditions largely work against the company in terms of future growth in the domestic market. By dint of such pressures, companies 9.3 Motivations and Barriers are forced to look elsewhere for salvation. to International Expansion International markets may provide the answer to such a problem. Watanabe et al. (2018) note that the sports “Pull” factors involve the following: product is a complex one which consists of a 55 Stable political structure in the potential number of different levels and tiers. This is country/region reflected in the core dimensions such as the 55 A “pro-business” and “pro-sport” political game/event and the rules and regulations, culture, where foreign investment and allied to the game activities, fan motivations, entry is welcomed 219 9 9.3 · Motivations and Barriers to International Expansion

55 Positive economic conditions, e.g. growth you can join them on the international in income levels, a wealthy “middle- front income” class 55 Working closely with trade associations, 55 Population growth: particularly in attrac- export agencies and Chambers of tive social, economic and age demographics Commerce who can help to identify poten- 55 Familiar cultural reference points tial customers in such markets. 55 A favourable tax regime. Kozma and Andras (2014) suggest that the Such drivers are often viewed as being proac- main drivers ultimately revolve around four tive, reactive or a combination of both. fundamental influences: Reactive motivations refer to situations where 55 Government and economic policy drivers: the company is approached by a foreign com- indicating a positivity about attracting pany or agency and invited to operate in that international companies to that country particular region. Proactive reasons are 55 Market drivers: providing evidence that largely instigated by the company (senior there is a demand for similar products and/ executives/owners) itself and usually involves or services a planned, strategic approach. 55 Cost drivers: that can generate economies of scale or build upon existing competitive advantages 9.3.2 Internal and External 55 Competition drivers: based on competitive “Triggers” initiatives and strategies operating in similar regions. The “triggers” for internationalisation can emanate from internal or external sources. Internal triggers include: 9.3.3 Barriers 55 “Switched-on” management: who proac- to Internationalisation tively seek out potential opportunities and have an open mind on potential collabora- The extant literature on internationalisation tions and networks in an international identifies some barriers to growing the busi- environment ness away from the domestic market. Some 55 Special event: for instance, the arrival of a organisations simply do not have the exper- new Managing Director who is prepared tise, technology or scale of operations to to and has the necessary skillset to insti- enable them to embark on an internationalisa- gate major change in the management tion journey. To pursue such a strategy would structure and operations of the organisa- lead to high levels of risk and exposure in tion markets which they have little or no knowl- 55 Inward/outward internationalisation edge or no connections. activities: either importing or exporting Lack of understanding of the “way of 55 Economies of scale. doing business” locally (in a specific country) can lead to situations where despite the com- External triggers feature the following: pany having a product/service with competi- 55 Market demand (both existing and poten- tive advantages, it will still be doomed to tial): the existence of established demand failure. for the product or the likelihood of such Entry to markets where there are high lev- demand els of political instability can also act as a sig- 55 Contact from, or with, potential network nificant obstacle. partners who are keen to do business with There are dangers attached to rolling out the company or organisation or replicating the business model which 55 The existence of competitors in such mar- worked well in the domestic market to inter- kets: if you can’t beat them domestically national environments. It is not practical to 220 Chapter 9 · Globalisation of the Sports Product

apply a “Think global – Act global” approach traditional channels to pay for them, has anymore. Cultural, social, economic, political driven up the revenue levels considerably. and technological influences heavily militate Coverage of live events by such broadcasters against such a practice. helps to showcase the team, competition or “Think global – Act Local” is a strategy event. Aggressive follow-up marketing by the that is advocated by many business commen- sports property owners and individual clubs tators. This takes account of local preferences further speeds up the process of consumption and practices and can lead to a more realistic on the part of fans. and workable strategy. This is often referred The ease of access to live sport due to tech- to as “glocalisation”. nology, has made it much more feasible and Glocalisation is based on the need to attractive for fans (wherever in the world they undertake appropriate research into the inter- may be) to follow their favourite sport, team national market under consideration, to or player. Not alone does this increase the fan- determine the extent to which the market con- base, it also opens up opportunities for clubs ditions prevail in that region. In addition to to sell merchandise and related items in such detailed research, the basic principle of glo- markets. Arguably, without media coverage, it calisation revolves around the principle of becomes difficult for sports organisations to “learning by doing”. In essence there is a need penetrate international markets. However, as to accept that mistakes are sometimes inevi- noted earlier, it is still possible to build such table, in terms of implementing strategy. audiences by making creative use of dedicated 9 Therefore, the ultimate success of the interna- YouTube, Twitter and other social media tionalisation strategy will be dependent on channels to access potential fans. having an adaptive and flexible approach; Goss (2009) pinpoints three key motiva- where changes can be made quickly in order tors that facilitate the internationalisation to overcome initial errors. process. 55 Development of the live audience size 55 Development of the media-based audi- 9.4 Within the Context ence size of the Sports Sector 55 Expansion of related merchandise, sporting goods and licensed items. The sports sector is similar in many respects when compared to the general literature and Following the above approach should lead to research on the motivations for internationali- a “virtuous circle”. Building the live audience sation. However, there are some aspects that and the global fan-base increases the interna- arguably are specific to sport. We examine some tional attractiveness of the team/competition/ of the similarities and differences in this section. event. This attracts the media, which in turn The maturation of domestic markets allied raises the potential for more sponsors who are to the strategic imperative of developing addi- willing to pay more for the privilege of being tional income streams, is arguably the main involved in the sport. motivator for sports organisations, property owners and clubs at the elite end of the sports spectrum. The full embrace of commercialisa- 9.4.1 Potential Inhibitors tion has speeded up this process across many to the Sports markets in the past 15–20 years or so. Internationalisation Process The role that media plays in the internationalisation process is critical to the success A number of potentially negative factors can of any such process. This is perhaps a unique restrict the process of globalising a sport/club/ feature of the sport product internationalisa- property. Some of these are arguably conten-

tion strategy. As we noted in 7 Chap. 5, media tious areas and are the subject of ongoing rights and the willingness of pay-per-view and debate in the industry and the extant research. 221 9 9.5 · Criteria for Evaluating the Attractiveness of International Markets

One inhibitor to international expansion is requisite levels of investment and “footprint” the obsession with tradition and heritage that in the market. exists in certain areas of the sports sector. Unless the club already holds a strong Sports administrators and owners of proper- brand equity in that market, the reality is that ties and clubs, in some cases, are reluctant to it will take time to develop the brand. embrace internationalisation because they A dependence on the sale of media rights fear that they will offend the existing domestic can lead to complacency on the part of sports fan-base. At best, they will partially engage marketers and administrators. As we dis- with aspects of internationalisation but may cussed in 7 Chap. 5, we can see a situation be unwilling to fully “buy” into the concept. where traditional cosy relationships with For instance, in the football sector in many broadcasters such as Sky, ESPN and Star will European countries, some clubs are not pre- potentially no longer exist in the next few pared in some cases to contemplate a change years. Already sports property owners are of name or a change of ownership which introducing alternative channels to distribute might lead to a loss of control over how the their products and the rise of OTT operators club is marketed and branded. is already challenging the hegemony of PPV Some clubs that have changed from a local operators. family-owned status to one that has been pur- Nepotism and cronyism, allied to a lack of chased by foreign owners have encountered transparency in ownership and poor due dili- resistance from domestic fans. For instance, gence, can lead to poor decision-making at an English club, Hull City, was purchased by best and fraudulent behaviour at worst. As an Egyptian owner, who wanted to change the well as potentially alienating the domestic name to Hull Tigers. This was motivated by fan-base, it can lead to badly thought out the symbol that the tiger plays in Asian soci- strategies in terms of international expansion. ety. By changing the name, the new owner The ego of the new owner and lack of under- argued that this would make the image and standing of the values of the club/sport prop- brand of the club more attractive and relevant erty owner can supersede logical in such markets. Eventually, mainly due to fan decision-making. It can also lead to substan- pressure, the idea did not come to fruition. tial losses in the context of trying to develop the brand in international markets.

9.4.2 Exercise 9.5 Criteria for Evaluating ??Assess the extent to which you would agree the Attractiveness with the view that the Hull City case is an of International Markets example of a situation where the club has missed out on potentially lucrative oppor- In the context of the sports sector, a number tunities in the Asian markets. of criteria come into play when assessing potential opportunities in a global context. Short-termism is another inhibitor to interna- Firstly, and it might appear to be obvious, tional expansion in the sports sector. In the there has to be a compelling reason for sports ever-present quest for additional revenue, property owners to take the focus away from sports property owners can underestimate the their domestic market and seek expansion in challenges involved in building the brand international markets. For instance, if the internationally. As a consequence, this can sports organisation is facing competition lead to a lack of strategic focus on the tar- from other sports in the domestic market and geted markets, and an unrealistic estimate of there are still further growth opportunities future revenue streams. Like most successful there, a shift in focus may deflect attention global expansion strategies, it requires a from immediate challenges that currently longer-term view of the market allied to the exist. 222 Chapter 9 · Globalisation of the Sports Product

An example would be the case of rugby in The following question needs to be addressed. the Republic of Ireland. Over the past decade Is there a sufficiently large and relevant demo- this sport has experienced a significant growth graphic that could generate a revenue stream? in popularity, resulting in an increase in par- Obvious candidates would include China and ticipation rates, growth in areas of the coun- India. Both have very large populations. More try where there had not been a traditional significantly, perhaps, is the size of middle- presence in the context of rugby teams and income, well-educated individuals. These successful participation in European leagues. groupings are more likely to seek out positive Traditional sports, such as Gaelic football leisure experiences such as sports events, com- and hurling, are challenged with the task of petitions and clubs to attend or follow. They maintaining their presence as the premier may wish to consume a new sport or competi- sports in Ireland. Although there is no evi- tion by watching it on TV or through live dence that they want to expand the respective Internet streaming. They may also purchase sports into new markets (they have a small related merchandise, attend pre-season games presence in the USA, Australia, the UK and or tournaments where they can see their the Gulf) any long-term planning would inev- favourite team and players in action, or make itably take the administrators away from occasional trips to see their team play in the domestic competitive pressures, and main- country where that team is based. taining their position in the overall leisure 2. Diaspora market. 9 Assuming that opportunities to increase In many cases the existence of a large demo- revenue, streams and participation rates have graphic profile will not necessarily lead to any reached saturation point in the domestic mar- significant fan-base. However, the number of ket, sports marketers and administrators need “ex-pats” living and working in that country can to consider a number of criteria that can help provide a stimulus to potential growth. Many of them to gauge the attractiveness of potential these people (the diaspora) tend to retain the markets. culture and traditions of their country. This is

. Table 9.1 highlights such criteria. We often translated into organising leagues and briefly examine them in the following para- competitions among themselves, in many cases graphs. gaining the support of the organising body. 1. Evidence of a demographic profile that Social networks between the diaspora and meets with the requirements of the sport local citizens can lead to greater interest and product. involvement among the latter.

.. Table 9.1 Criteria for assessing the attractiveness of international markets

Criteria 1 2 3 4 5 Weighting factor Total weighting score

Demographic profile Diaspora Psychic distance Media interest, coverage, infrastructure Ability to develop networks, partnerships Legislation Political

Source: Author 223 9 9.5 · Criteria for Evaluating the Attractiveness of International Markets

Cricket in Germany

Cricket is a sport that has traditionally been The number of cricket clubs has grown from played in regions that were once part of the sixty (2012) to 370 in 2017. Over 6000 people British Empire. Soldiers and ex-pats introduced play cricket. the game to locals back in the nineteenth century Cricket used to be played in big cities such and the game has grown exponentially in the fol- as Cologne and Frankfurt. It was mainly lowing countries: India, Pakistan, Australia, Sri played by Indian students studying in univer- Lanka, South Africa, New Zealand, Zimbabwe, sities and English ex-pats working in West Indies and Afghanistan. While still a Germany. “small” sport in relative terms, Ireland recently Due to the dispersal of the Afghan immi- gained test status (premier division) along with grants to many small towns and village, partici- Afghanistan. pation has spread across the country. The challenge facing the International In 2017 Germany won the European Cricket Board is to develop the game in other Division One competition and currently play in regions of the world. Division five of the World Cricket League. An unlikely candidate is Germany. We nor- Over one hundred grounds are currently mally associate this country with major sports in use for cricket. Most are “general pur- such as football, hockey and so on. In fact, pose” grounds where matting is used for the cricket has been played there since the nine- wicket. teenth century. However, since the start of this It receives some support by way of equip- decade, it has experienced a sharp increase in ment from English clubs and the English and the numbers playing cricket. Welsh Cricket Board. Ninety-five per cent of this growth has Germany will not be breaking into the come from Afghan immigrants who started “premier league” any time soon. However, the arriving in this country since 2014. It is esti- signs augur well for continued growth and mated that around 47,000 immigrants have development of the sport beyond the tradi- come from this country since then. There are tional colonial countries of the old British now over 300,000 Afghans living in Germany. Empire. Evidence of their impact on the sport of (Source: Developed by the author from cricket can be found in the following statistics. various sources on the Internet)

3. Psychic distance distance are seen to be less likely to be as risky. In this latter case, countries that have low psy- Conventional theories on the process of inter- chic distance would have a number of simi- nationalisation often pinpoint the concept of larities in terms of historical, political, social psychic distance as being a critical factor in and geographic ties. assessing the attractiveness of a particular On the basis of this concept many com- country. This refers to the perceived differ- mentators argue that this plays a significant ences between the home country and the for- role in helping an organisation to select spe- eign country. Such differences refer to cific countries for international growth. language, cultural economic, political and What relevance does it have for the sports economic factors. sector? In situations where the range of differ- Arguably, certain components are less ences are likely to be high, it can be argued important in relative terms than might be the that the risk involved in expanding operations case with other business sectors. For instance, to such a country is likely to be high. By con- in the context of cultural differences, a strong trast, countries with perceived low psychic argument can be made to suggest that sport 224 Chapter 9 · Globalisation of the Sports Product

tends to transcend or cut across cultural viewers who watch initially, and subsequently boundaries. In essence, sport enjoys a common are attracted to that sport. Such audiences are lexicon in different parts of the world. Football by definition going to be narrow. is played in virtually all parts of the world, Selecting a country where there are poor irrespective of religion or race. Other sports levels of speedy Internet access and other such as tennis, golf, Formula One and swim- infrastructure aspects clearly pose problems ming, while perhaps not enjoying the same for sports marketers in terms of developing degree of universal approval and interest, access and audience awareness. nonetheless develop a strong global following. 5. Ability to develop networks and collabora- If this view is accepted it makes it easier for tive arrangements sports marketers and sports property owners to contemplate entry to new markets. Key stakeholders such as the media, sponsors, However, a counter-view might suggest governments, regional policy-makers, entre- that political and legal differences might be as preneurs and potential investors are critical high and non-transparent as to raise the risks players in the internationalisation of sport. involved in market evaluation and eventual This resonates with the traditional literature entry. on the globalisation of business (Johanson The “law of unintended consequences” and Mattsson 1988). also comes into play in such situations. For This theory reflects the view that success- instance, the Formula One strategy of expand- ful international expansion is based on the 9 ing its Grand Prix races globally has led to need to reduce the risk involved in entering major criticism from certain quarters. This was markets where there is a lack of understand- highlighted by its involvement with Bahrain ing and expertise surrounding the way of when civil rights groups and certain govern- doing business and the social and cultural ments argued that it should have no contact norms that prevail there. To some extent, with such regimes, a number of years ago. companies can mitigate this challenge by car- The role that social media plays in sport, rying out internal research on the market. allied to technology (digital channels and live However, the use of networks and contacts in streaming in particular) also provide a strong that market can act as a heuristic in terms of justification for suggesting that the degree of gaining access and developing opportunities. psychic distance is less important in today’s Welch and Welch (1996) emphasise that world than it would have been previously. knowledge of the market is critical. By learn- 4. Media interest, coverage and infrastructure ing from engagement and collaboration with external factors, a company can gain a more

As discussed in 7 Chap. 5, cultivating and strategic view of the issues involved in market developing media interest and coverage is crit- entry. ical to any possibility of gaining traction or a 6. Legislation footprint in a particular international market. Without that, it becomes very difficult for This criterion takes us into the field of legisla- sports marketers and administrators to create tion, particularly with respect to employment awareness or develop interest among potential issues. It potentially affects the recruitment of fans. players and the placement of coaches, market- Realistically, media broadcasters will not ers and administrators in the specific country. initially become enthusiastic about a particu- It also has implications for a range of other lar sport if it has no record of accomplish- issues such as arbitration and appeals, anti- ment or pedigree in that particular country. doping, human rights and welfare, women in However, it is not impossible. The prolifera- sport, gender identity, and in the case of the tion of sports channels and live streaming on European Union, the Lisbon Treaty. There the Internet means that there is a potential are many more areas that we do not have time demand for niche or less well-known sports to to mention here in this chapter. However, fill gaps in the schedules. This can develop sports marketers need to be aware of relevant 225 9 9.6 · Strategies for Internationalisation areas of legislation that have a direct and indi- consider the rationale for such strategy for- rect impact on the ability of sports organisa- mulation and implementation. tions to operate legally in various countries. Any effectively run sports organisation (as

7. Political we discussed in 7 Chap. 6) requires the under- pinning of a planned and strategic approach The nature of the government, in terms of pol- to the shaping of its future development. This icy and stance with respect to sport, plays an naturally extends to decisions about interna- important role in establishing how easy or dif- tional expansion. ficult it might be to gain entry into a particular The starting point revolves around the country or region. At one extreme, there are rationale for pursuing such a strategy. What potential dangers where a government wants are its specific objectives? to use sport as a mechanism for promoting its ideologies or changing its perception globally. This could lead to situations where a sports 9.6.1 Objectives and Rationale organisation/club might find itself in conflict with the policies of its domestic government. We can identify a number of objectives (by no For instance, Formula One has opened up the means exhaustive) that can underpin the move possibility of locating a Grand Prix in Saudi towards greater internationalisation and Arabia. This has drawn criticism from various expansion for a particular sports property. quarters as to the efficacy of this strategy. In early 2020, the leader of the Saudi 55 To create higher levels of awareness and Government, Mohammed bin Salman bin interest. As noted earlier, certain sports Abdulaziz al-Saud (MBS) was involved in a bid properties set out to develop a wider to purchase Newcastle United. The Saudi degree in the sport in different geographic leader, under the guise of the Saudi Public regions. This is a prerequisite if potential Investment Fund, held an eighty per cent stake fans eventually convert to subscriptions to in the bid. The Qatari government wrote to the watch regular season league games. authorities complaining that the Saudi Arabian 55 To increase the global fan-base. Many PayTV Network, BeoutQ, illegally broadcasted sports properties recognise that develop- EPL games in that country. BeIn Sport, owned ing the number of global fans leads to an by the Qatari government, had acquired the increase in revenue. This occurs from rights to show such games across the MENA increased sales of merchandise and widen- region. At the time of writing, the bid still had ing the number of fans participating in the to be accepted by the EPL. The latter organisa- social media platforms. tion expressed serious concerns about the effi- 55 To become more actively engaged with the cacy of allowing the Saudi bid to go through. global fan-base. Social media platforms such At the other end of the spectrum, a gov- as Facebook, Instagram and Twitter (to ernment may place little or no importance on name but a few) present the sports property promoting sport within its society and fail to with a clear opportunity to engage more provide any incentive or positivity to a poten- interactively with fans. Well-crafted web- tial sports organisation that wishes to expand sites and well-maintained social media plat- in that region. forms increase the ability of the organisation to remain relevant to the fan. Additionally, sports marketers can develop trust and confidence in its brand and reinforce the “global 9.6 Strategies community” concept that many fans desire. for Internationalisation 55 To build brand equity. Sports properties that are already well known outside of We examine the alterative mechanisms for their domestic base have to grapple with expanding the sports product globally. Before the challenge of building on this position we move to that stage however, we should of potential strength. Otherwise, they slip 226 Chapter 9 · Globalisation of the Sports Product

into the realms of complacency and leave coaching in relatively under-developed the door open to competitors. As discussed regions such as Africa. Alternatively, they in earlier chapters, the emergence of scout for talent in potentially lucrative eSports presents an existential threat to countries such as China and India. They many sports, both domestically and in a can generate clear benefits from this objec- global context (Singer and Chi 2019). tive, if they are successful. A star player Commercial pressures from owners and from India, who signs for Barcelona or the various stakeholders reinforces this threat: New York Knicks can spark off an imme- revenue will decrease if marketers do not diate boost in popularity for that sport in invest in initiatives to work on further that country. Fans follow the player online, brand-building strategies. take out subscriptions to watch the league 55 To change global perceptions, opinions and games and become more enthusiastic and attitudes. Sports properties can play a sig- participate in the sport. nificant role in a wider sense, by influenc- 55 Successful football teams often go a step ing the ways people in other countries further and establish partnerships with perceive their country’s political and social feeder teams in other countries. This pro- policies and structures. For instance, the vides coaching expertise for players with Chinese worked closely with their sports teams. It also creates a route for talented bodies to influence global perception when players to play with the “big” team in the it staged the 2008 Beijing Olympics. elite leagues in Europe. 9 55 Vladimir Putin, the Russian President, 55 To identify potential investors located out- invested billions of dollars in the staging of side of the domestic market. As we noted in the Winter Olympic Games in Sochi (2014). our chapters on sports governance and Critics accused him of wasting public media rights, the amount of money money to satisfy his own ego but also to use required to develop successful teams and the event to highlight his political agenda. clubs, places pressures on clubs. While 55 To spread the sport to emerging economies. media rights bring in a lot of cash, salaries Sports property owners such as FIFA and transfer fees (particularly in football) and UEFA have taken decisions to host drives a lot of cash out. Foreign investors, hallmark events such as the European in the form of entrepreneurs, conglomer- Championships and the World Cup in ates and governments, provide a potential regions of the world that have never rich stream of cash that can change the staged such tournaments. They argue that competitive position of a club. this objective addresses the criticism that 55 To identify potential partners and collabo- they are elitist and focused on well-devel- rators. In order to expand into interna- oped economies. Poland and the Ukraine tional markets, it is critical that a sports hosted the UEFA European Football organisation accepts that it is almost an Championships in 2012. This represented impossible task unless it can “tap into” a departure from staging the tournament and establish collaborations and partner- in traditional “football” countries. ships with key organisations in the chosen 55 Similarly, the same organisation chose market. Baku, the capital of Azerbaijan, to host 55 To develop certain elements of the overall the 2019 Europa League Cup Final, sports “product”. In an era, which increas- despite criticisms that it did not have the ingly focuses on issues such as diversity infrastructure to be in a position to do so. and gender, some sports seek out opportu- 55 To seek out and purchase talent from nities to promote the female version of selected countries or regions. As sport their sport. This can have the effect of becomes more global, individual clubs, in extending their reach and exposure in sports such as football and basketball regions where women do not play it to any invest heavily in terms of recruitment and significant extent. 227 9 9.7 · International Entry Strategies in the Sports Sector

55 To spread the risk and reduce dependency 55 Evidence of brand development and on on the domestic market. With increasing what basis competition from direct and indirect com- 55 Level of interest expressed by the interna- petitors in the local market, sports organ- tional media isations cannot afford to ignore any trends 55 Level of existing and/or potential interest indicating opportunities “further afield”. by fans outside of the domestic market Clearly much depends on the following 55 Who owns the sports property? Family- issues: owned? Fan-controlled? Public or private –– Whether the sports property is local, company? Conglomerate? Foreign or regional, national or international domestic investors? –– The scale of its operations –– Its resource base The dimensions listed above, combine to –– Ability to recruit relevant personnel. shape the nature of the product offering. They 55 As we noted earlier in the chapter, some interact to influence the potential for explor- sports properties do not meet these crite- ing opportunities outside of the respective ria. This takes international expansion off domestic setting. the agenda, at least in the short to medium term.

9.7.1 “Inside–Out” 9.7 International Entry Strategies and “Outside–In” Approaches in the Sports Sector to Internationalisation

In this section, we assess the alternative Conventional wisdom suggests that compa- approaches to market entry and penetration. nies seek global expansion through some of

It is not our intention in this text to examine the triggers that we discussed in 7 Sect. 9.3.2. the theories and concepts of internationalisa- This could be labelled as an “outward- tion in a generic sense. I recommend that seeking” approach. Individuals within the readers should refer to standard texts such as company recognise potential international (Hollensen 2017) for more detailed reading. markets and instigate a range of initiatives to Before we address specific entry modes, it pursue this goal. They actively seek out poten- is important that we revisit the concept of the tial distributors or collaborators to make this sports product. There are many layers and happen (inside-out). The initial move ema- dimensions to the sports product. They nates from within the company and moves include the following: outwards in terms of its approach. 55 The league, competition or discrete sports Similarly, it may be the case that a company event moves from a domestic setting because compa- 55 Individual teams, players and participants nies in other countries approach them to 55 The history, heritage and evolving patterns explore potential business opportunities (out- surrounding the club, competition and side-in). This occurs in some instances through event third-party organisations such as business 55 On-pitch level of entertainment, strategies, associations or Chambers of Commerce. The player signings, fan experience and coach- move in this case comes from outside the ing organisation and stimulates some discussion 55 Facilities and infrastructure: stadium within the senior directors/managers. design, IT infrastructure, access and egress, We can see evidence of both approaches hotels, retail shopping centres, conference existing in the sports sector. They are not centres, ability to cater for other sports mutually exclusive. Many sports organisa- 55 Size and spread of the fan-base (domesti- tions routinely utilise both, depending on the cally and globally) situation and specific circumstances. 228 Chapter 9 · Globalisation of the Sports Product

As noted earlier in this chapter, sports governments and public bodies such as tourist organisations also have to make distinctions boards also express enthusiasm to work between fans who can attend the event/game/ closely with sports organisations to attract competition physically and those who, due to major events to a particular country, region or geographic and logistical issues become “vir- city. Sports tourism has grown exponentially. tual” fans. They can still watch “live” sports Staging major competitions and events draws events but rely on media or technology to in significant revenue and creates employ- enable them to do so. This creates opportuni- ment. ties for sports marketers and administrators For instance, the Danish government to penetrate markets without having to create established Sport Event Denmark in 2008. It a “physical” presence there. In the following set a specific objective to increase revenue paragraphs, we assess a number of potential from sports tourism. Since then it has hosted entry methods. a number of major events such as the Badminton World Championships (2014), World Archery Championships (2015), the 9.7.2 Co-partnerships European Short Course Swimming Championships (2017) and the World Men’s The cliché that “no man is an island” applies Handball Championships (2019). In 2021, it here. By partnering with key stakeholders, a will host the Tour de France, by staging the sports organisation recognises that little prog- “Grand Depart” (the curtain raiser to the 9 ress can be made in terms of internationalisa- event). Over this period, it has increased reve- tion unless they follow this approach. For nue from sports tourism by a factor of seven. instance, the media broadcasters act as a criti- Co-partnerships and collaborative ven- cal “bridgehead” in terms of introducing a tures are an intrinsic part of any sports inter- particular sport or competition to a new audi- nationalisation strategy. They allow the ence in a particular market. The success of a respective governments and sports bodies to particular sport arguably rests with its ability showcase their facilities and infrastructure to capture and develop an audience. Failure to and can literally place it on the map. do so leads to a quick dissipation of interest and the withdrawal of media coverage. The English Premier League quickly rec- 9.7.3 Samplers, Teasers ognised the importance of partnerships with and the “Real Thing” media broadcasters. “Tie-up” with the likes of Sky television exposed the league and its teams We have recognised the importance of the to many European markets. Partnerships with “virtual” fans: people who cannot attend live broadcasters in other geographic regions games but want to consume the sport in what- reinforced the strength of the “brand” and it ever way they can. Clubs in major sports such is arguably the most successful sports brand as football, basketball and baseball have used globally today. pre-season friendlies, participation in compe- Our case studies on snooker and Formula titions and guest appearances by key players One, highlight the role played by the media in to “connect and engage” with their fan-base building interest in a sport. We can also see in overseas countries. Such initiatives allow the important role played by individuals with fans to watch their favourite teams and play- vision and entrepreneurial skills in the process ers, collect “selfies” and autographs and gen- (for instance Barry Hearn and Bernie erally feel physically close. Clubs also benefit Ecclestone). from increased sales of merchandise and sun- Partnerships and collaborations extend dries by engaging in such events. beyond the media, who have a direct interest However, in recent years, this has not in the sports sector. As we noted in 7 Chap. 3, proved to satisfy the increasing demands and 229 9 9.7 · International Entry Strategies in the Sports Sector expectations of fans. In response, some sports spread and increase the number to other geo- bodies are going a step further. graphic locations in Europe, Central or South America.

9.7.4 Staging Regular Season, Competitive Games 9.7.5 Establishing Franchises in International Countries in International Markets

The NFL (American football) and NBA This strategy builds on the earlier approaches (National Basketball Association) have taken of using pre-season tournament and regular the next leap forward. In the former case, the season games. Sports administrators sanction CEO and his team within the NFL, recog- the establishment of a team franchise in a par- nised the need to play more meaningful games ticular city outside of the domestic market. in selected international cities. Fans want to It is widely anticipated that the NFL will see competitive games that have some mean- follow this approach by awarding a franchise ing for the participating teams. Pre-season to a London-based team who will play in the friendlies are often treated as glorified prac- NFL. This could happen as soon as 2022. tice games by teams. Players do not play at Jacksonville Jaguars, a current NFL fran- “full pace”. Coaches try out new tactics and chise, have expressed interest in taking up this give games to younger squad players. Fans potential franchise. Its owner expresses dissat- have become accustomed to this but seek a isfaction with current attendances at their higher form of engagement and entertain- local stadium and sees much greater potential ment. in such a relocation. They have played a num- The NFL staged its first regular season ber of times in the regular season games staged game in Mexico back in 2005. This generated at Wembley Stadium in the past few years. an attendance of over 100,000. In 2007, they This recognises that every team has an staged their first such game in London. Since existing and/or potential value. This repre- then they have increased the number of games sents an asset that is potentially up for sale to played there. The results produced an average the highest bidder. If potential investors are of over 80,000 in the intervening 13 years. We prepared to buy the rights to the franchise, should note that the comparable average then they acquire ownership of that team and attendance at games staged in the US market gain a number of rights and privileges such as is around 66,000. territorial rights, ensuring that they do not In 2019, the NFL staged four such games encounter a competitor in that region. in London and one in Mexico. The value associated with franchises can This approach resonates with some of the be gleaned from the following statistic. The established theories of internationalisation. It value of NBA teams in the USA increased by recognises the principle of “psychic distance”. 75 per cent from 2015 to 2016 (7 http://www. This encourages organisations to focus on forbes.com/nba-valuations/). markets that are closer to them in terms of Within the US market, franchises have fea- culture, location and social distance. Arguably, tured prominently over the years. They can this reduces the risk involved. switch from state to state. American fans The NFL has also followed a measured appear to be less resistant to the notion of and incremental approach. It has gradually “losing” their local team. By contrast, in the increased the number of regular season games United Kingdom and other parts of Europe, in London from one to four, over a period of such a move would infuriate fans and lead to 12 years. It has avoided the temptation to major resistance. 230 Chapter 9 · Globalisation of the Sports Product

Franchises provide a mechanism for global 9.7.6 Licensing expansion of a particular league or competition. As long as there are potential investors, This strategy involves two parties. The sport then notionally such a strategy can work. organisation (the licensor) enters into an However, there are downsides. Proper due agreement with a company (the licensee) to diligence needs to be exercised to establish the use its name, logo or trademark on the com- credentials of the potential investors. Sports pany’s products in a designated geographic administrators need to be convinced that a territory. viable, long-term market exists for the estab- A club or sports property will create a lishment of such a franchise. A few regular number of such licensing agreements across season games may not necessarily indicate a wide range of product categories. These that there is a demand for a team, which could can range from jerseys, helmets, equipment, generate the necessary support throughout leisurewear and other accessories for men, the full and regular season. women and children. They can also extend The franchise-based approach arguably to a diverse range of other items such as increases the level of risk. It also creates the video games, restaurants, sunglasses and so possibility of some loss of control from the on. perspective of the sports property owners. The licensee agrees to pay a royalty fee for However, the physical presence of a team each item sold. It benefits from access to a in a particular geographic region indicates a proven and recognised brand. The licensor 9 more tangible commitment to internationali- profits from a revenue stream that can boost sation. its overall income.

Bundesliga and IMP

In 2019, Bundesliga International, a subsidiary of nels to connect with potential fans and the Deutsche Football League, entered into an customers. agreement with IMP to be its global representative As well as generating revenue, Bundesliga across a number of different markets in Europe, International feels that it will increase the Asia, the Middle East and America. It will handle global popularity of the brand. It is perceived a wide range of products and will work closely as one of the strongest leagues in Europe and with Bundesliga International. The latter has already has a big reputation for producing high offices in Beijing, New York and Singapore. quality and entertaining football. IMP is tasked with the challenge of estab- (Source: Developed by the author) lishing a diverse range of distribution chan-

Licensing presents sports property owners itoring of licensees in terms of due diligence with a relatively quick mechanism for access- in the first instance. The licensor should ing selected international markets. It also mit- implement an effective approach to quality igates the risk, as the onus is on the licensee to management - in the context of the manufac- generate the sales targets that are usually turing of the items by the licensee. specified by the licensor. Licensing contracts typically run for It ensures that the licensor can focus on its around 5 years. Increasingly, in an era of liti- core business; developing and building the gation, both parties are potentially exposed to brand, while passing on the manufacturing possible risk. The licensee does not receive task to the licensee. any guarantee that it will retain the license at On a negative note, the licensor potentially the end of the expiry period. The licensor may exposes itself to counterfeit items and intel- not gain the cooperation of licensees in terms lectual property theft. It requires proper mon- of being allowed to audit their activities. 231 9 9.7 · International Entry Strategies in the Sports Sector

In summary, licensing provides a low-risk innovation: other football leagues in Europe and low-cost approach to international devel- have introduced similar channels in recent opment for sports property owners. It allows years. them to expand sales of their sports merchan- Such material allows fans to engage more dising and ancillary products quickly. Much fully with the EPL and view material that is will depend on the overall brand perception specific to their teams. and equity that has been established in the The EPL is not allowed to show any live chosen market. games and there are delays as to when they In most licensing contracts, the licensor can post action from recent matches. It also generally acts as the dominant partner in the ensures a degree of protection to those broad- arrangement. casters that have purchased the media rights to show live games in the particular geographic territory. 9.7.7 International Distribution For now, the EPL approach arguably pro- through Media Rights Sales tects the interests of the various stakeholders and can best be described as a hybrid model:

As we noted in 7 Chap. 5, distribution of utilising a number of methods to engage and sport properties through the sale of media connect with a domestic and international rights generates a large revenue stream for fan-base. property owners. However, it also ensures that Clubs also develop their own specific chan- the sport gains penetration or a “footprint” in nels and place them on social media plat- the chosen international markets. Key stake- forms. This provides specific material and holders such as media broadcasters (either content that is relevant to their domestic and terrestrial or pay-per-view) act as the “bridge- global fan-base. As we noted earlier, many head” between the sport property owner and fans desire close engagement with their favou- the potential viewers/fans. rite teams, players and so on. This strategy This allows the sport/club/competition to achieves this goal. gain a much wider exposure to fans across a Threats from illegal streaming of live number of different geographic territories. games arguably heightens the need for more This (hopefully) leads to a “virtuous circle”. It personalised engagement with fan-bases. stimulates awareness in new markets, builds Well-designed channels provide an essential interest, attracts sponsors and adds value to link to fans irrespective of where they are future media rights deals. located. However, other options exist. Increasingly, sports property owners are considering over the top (OTT) alternatives 9.7.8 International Development

(also discussed in detail in 7 Chap. 5). This through Season Passes poses a threat to the PPV broadcasters, as it provides greater flexibility for viewers, who Sports property owners of leagues and com- traditionally have had to take out monthly petitions increasingly see opportunities for subscriptions for access, irrespective of what global expansion by making use of virtual specific games they wish to view. season tickets or passes for fans who cannot Sport property owners can also set up attend live games. Our case study on the NBA their own unique channels to which global highlights the strategic use of such a mecha- fans can subscribe. For instance, ahead of the nism. 2019/2020 season, the English Premier League Other sport properties such as the NFL created its own YouTube channel. They show (American Football) and the GAA (Irish a range of items - covering archived games, football and hurling) utilise similar passes. and specific content from the twenty Premier This approach addresses the objectives of League teams. We should not view this as an making the elite competitions and leagues 232 Chapter 9 · Globalisation of the Sports Product

available to a much wider geographic audi- The sport of football (soccer) highlights ence. It also caters for the diaspora (people the degree of foreign ownership and how it who live abroad and still want to access the varies across the “Big Five” European leagues. regular season, competitive games). The English Premier League (EPL) is As we look to the future, we are likely to arguably the strongest global sports brand. witness wider use of this strategy. Arguably, it Because of its popularity, many potential can eliminate the need for broadcasters and investors seek entry and access to this prod- lead to an even greater revenue for sport prop- uct. At the start of the 2017/18 season, around erty owners. sixty per cent of the twenty clubs making up It also reduces the degree of risk and costs the EPL involved foreign ownership. This pat- associated with physically staging competitive tern has not diminished in recent seasons. games directly in international markets. Similar trends appear in the French league, most notably the purchase in recent years of Paris Saint-Germain by a Qatari conglomerate 9.7.9 Developing New (effectively, the government). We can see a International Competitions slower degree of foreign investment in the Italian league, but it has increased in recent Sport property owners utilise new competi- years. The Spanish and German leagues exhibit tions in international markets to fulfil a num- certain differences. In Spain, traditionally ber of objectives. These include satisfying fans many clubs exhibit a strong degree of fan own- 9 in an international market by bringing teams ership. In Germany this is even more embed- from elite leagues to different geographic ded with the “50+1” rule. In this case, clubs, regions; tying in with media broadcasters to with one or two exceptions, require that fans promote the sport property; building the fan- own more than half of the individual club. base and creating opportunities for selling Investors seek ownership of sport proper- merchandise and ancillary products; rejuve- ties for a number of reasons. Many see such nating the sport property. purchases as a means of making money. For In order to remain credible, sufficient instance, the Glazer brothers (a wealthy US sponsorship and investment is required. business family) acquired ownership of Otherwise, fans in such countries may not Manchester United by purchasing the neces- develop an interest in it. sary shares. They pursued this strategy by tak- For more analysis of this option, you ing out a number of loans, which were should analyse the case called “Rugby: the leveraged, on the club. They have made sig- Scrum Backwards, which can be found in the nificant profits in the intervening years. Critics

7 Appendix at the end of this chapter. argue that this has placed a high degree of debt on the Manchester United brand. Other investors see club ownership as a mechanism for promoting a particular coun- 9.7.10 Outward and Inward try’s vision and place in the overall global Investment Strategies environment. Sport appeals to many people globally in terms of the positive values and As elite sports have become more commer- images that it portrays. Governments view the cialised, it becomes critical that more and sports sector as a useful tool for promulgating more investment is needed to expand the rev- their policies and philosophies. If used in an enue streams and develop the infrastructure at effective manner, it can alter perceptions, atti- all levels (local level, club, league and interna- tudes and opinion, not just amongst society in tional). general, but also with opinion formers. 233 9 9.7 · International Entry Strategies in the Sports Sector

Qatar: The Land of Sport

The tiny Gulf state of Qatar hit the headlines in It has established high-profile sports sponsor- a big way in 2010 when it won the right to stage ships such as collaborating with FC Barcelona. the 2022 football World Cup. It has no history, It also established the ASPIRE Zone heritage or link to this sport. The success of its Foundation in 2003 to develop a sports infra- bid sparked off allegations that it won by structure that can stage global events and employing questionable tactics (such as bribery). encourage locals to participate in sport. Many people found it hard to believe that a In 2011, Qatari Sports Investments pur- country of under two million people located on chased the Paris Saint-Germain (PSG) football a small space in the desert could achieve such team. This organisation represents the Qatari success. Inhospitable weather conditions (tem- government and makes it one of only two foot- peratures getting as high as 50° in summer) ball teams that are owned by a country/state surely would mitigate against staging the sec- (the other being Manchester City – owned by ond most prominent sports event in the world? Abu Dhabi). Not so. As one of the largest oil and gas Since then it has grown to be in the top five producers in the world, the Qatari government teams globally with a value of just under £1 bil- has the funds available to invest in sport. It lion. It retains two of the most expensive players views sport as being a significant sector in a in the world and consistently reaches the final world of the future, where there will be no more stages of the European Champions League. oil or gas left. Chanavat (2017) argues that by acquiring While the World Cup bid and subsequent major sports properties such as Paris Saint- win has captured global attention, it detracts Germain and Paris Handball, it generates a somewhat from the overall strategy of mak- powerful influence at the seat of major sports ing Qatar a significant player in global sport. decision-makers. This is complemented by the Since it staged the Asian Games in 2006, it staging of hallmark sports events and the cre- has invested significantly across a range of ation of a major sportswear brand called sports. These include the following: Indoor Burrda Sport. World Athletics Championships (2010), Qatar’s TV company, Al Jazeera, has been Moto GP Grand Prix, European Tour Golf instrumental in winning the media rights for events, WTA (Women’s Tennis Association) covering sport in the Gulf Region. BEIN Sport Finale, Diamond League Athletics and World also located in Qatar, cementing the strong Athletics Championships (2019). media position of that country globally.

??1. Assess the approach used by Qatar to Gulf neighbour, Bahrain, has offered pass- develop its sports portfolio worldwide. ports to a number of athletes to represent it at 2. Can it sustain its success? such events. In recent years, they won medals for that country. Countries such as Qatar have employed an By seeking out potential foreign investors outward-facing approach to international or attracting approaches from them, clubs can sports development. They have also utilised develop the necessary funds to allow them to an inward-driven approach by recruiting for- improve their competitive position both in eign coaches and athletes into the country their domestic and international competi- with a specific brief of improving standards tions. across a variety of key sports such as football The success of sport properties such as the and athletics. The country expects to see this EPL and other leagues in Europe indicate that investment pay off in the form of medals at they are attractive brands to associate with, hallmark events such as the Olympic Games from the perspective of international inves- and the World Athletics Championships. Its tors and conglomerates. 234 Chapter 9 · Globalisation of the Sports Product

However, this approach has led to accusa- 55 Multinational companies. A combination tions that club owners have sacrificed the val- of state-owned and private investment ues and ethos of their respective clubs and companies are likely to extend their leagues. This is based on the belief that many involvement in sport by acquiring a port- international investors have no empathy with folio of sports properties globally. City local fans and conditions. Rather, they view Football Group (CFG) own or co-own six ownership of such clubs in purely commercial clubs across four continents. As well as and dispassionate terms. This can lead to a owning Manchester City, they co-own lack of engagement with fans and a failure to New York City FC in tandem with the take account of their views and opinions. New York Yankees (Baseball team). They Counter arguments suggest that the hold a minority stake in the Spanish club, inward flow of finance bolsters the quality of Girona. Such developments can lead to the club and the league and presents a more the use of synergies across the portfolio to entertaining “sports product” for fans. leave the organisation in a very strong position 55 Individual clubs investing in other sports. Increasingly clubs are setting up teams in 9.8 Internationalisation Strategies: other sports such as basketball. Football The Way Forward teams for example Barcelona and CSKA Moscow to name but a couple, own for 9 Sports such as football, NFL, NBA and MLB instance, many teams that play in the have pioneered the concept of globalisation European Basketball League and expansion in the last couple of decades. 55 Fans focusing less on domestic leagues and We have noted the strengths of brands such as more on international competitions. In line the EPL. Looking to the future, can we with the focus on global sport, it is likely observe likely future trends? that we will see further growth in interna- Mandis et al. (2018) carried out an exten- tional leagues and competition. For sive assessment of the Italian football league, instance, much discussion in recent years Serie A. They identify likely future trends concentrates on possible initiatives such as that, in their view, may emerge in the future. a European Super League in football. This They might also apply to other sports. is likely to come to fruition at some point. 55 An increasing shift from traditional broad- This may lead to a lack of interest in casters to social media/technology compa- domestic leagues among fans nies. Twitter, Facebook and Amazon have 55 Further growth in the development of acad- already made inroads by acquiring media emies and “feeder-clubs”. The continent of rights for sports events. Netflix are “sitting Africa in particular, represents further in the wings”. It is likely that such powerful opportunities for growth. We will see fur- and wealthy companies as Facebook, Apple, ther expansion in these areas by clubs. It is Amazon, Netflix and Google (FAANG), likely that major teams in the elite leagues with their hefty financial resources, will con- will acquire a holding in leading domestic tinue to acquire media rights teams and use this partnership to identify, 55 Increasing encroachment by governments develop and eventually transfer outstand- and states. State-owned organisations and ing talent to their main teams in Europe or conglomerates now own clubs such as in the USA. Paris Saint-Germain and Manchester City. They do so for a number of reasons, Globalisation of strong global brands brings mainly to do with the promulgation of a number of negative features that are com- their political and economic policies. We monly associated with the growth of transna- are likely to see further investment in tional “super brands” such as Amazon, major clubs in the football sector and in Google, McDonalds, Coca Cola and so on. other sports such as basketball Goldblatt (2019) points to issues such as cor- 235 9 9.9 · Conclusions ruption, human rights infringements and financial misappropriations becoming com- 55 Technology has made it easier for sport monplace in the sports sector. It is unlikely property owners to expand their that we will see any diminution of such behav- operations in an international setting. iour any time soon. Using “season tickets/passes” provides a good example of this practice 55 Sport property owners utilise a diverse 9.9 Conclusions range of strategies to expand their product globally In this chapter, we have examined the issue of 55 Commercialisation and monetising the the internationalisation of sport properties. A brand for sports at the top of the strong “wind of change” blows across many pyramid such as football, basketball, of the elite sports. This is driven by develop- NFL and MLB, is a crucial driver in the ments in technology and advances in social internationalisation process media platforms. This creates a conducive 55 Sports marketers and administrators environment for sports property owners to have to achieve a balance between identify, connect with and build fan-bases increasing revenue streams and outside of their domestic markets. retaining the support of its local fan- The maturation of domestic markets, base. A failure to do so can lead to combined with the strategic imperative of disenchantment in the domestic market increasing revenue streams forces sports prop- and a feeling that the club/organisation erty owners to seek out opportunities globally. alienates local fans We recognised that many of the strategies 55 The growth of state, institutional and pursued by sports organisations and clubs private investors continues at pace and resonate with traditional theories and frame- is likely to lead to further global works of internationalisation. These include expansion of sports properties. collaborative ventures, incremental, staged international expansion and the concept of psychic distance. nnEnd of Chapter Discussion Questions The role played by intermediaries such as 1. Assess the view that internationali- media rights holders cannot be underesti- sation strategies employed by sport mated. They can act as a “bridgehead” property owners are radically differ- between the sports property owners and the ent from traditional frameworks and fans. We identified the potential threat to tra- approaches. ditional broadcasters from illegal streaming 2. Critically examine the use of licensing services through to sports property holders as a mechanism for entering interna- cutting the chord and setting up their own tional markets. OTT platforms. 3. Evaluate the extent to which you would Many global fans desire a more flexible agree with the view that selling media way to consume their sporting experiences. rights is a key element in achieving suc- This may lead to a decline in the traditional cessful internationalisation of a sport monthly contracts currently employed by property. broadcasters. 4. As sports leagues such as the EPL and the NBA penetrate international mar- Learning Outcomes kets, domestic leagues are likely to 55 We can identify a pyramid, which decrease in popularity. How valid is this indicates which sports are more likely to perception? pursue internationalisation strategies 5. Examine the motivations for internationalising a sport. How would you 236 Chapter 9 · Globalisation of the Sports Product

defend the view that internationalisa- 7. Develop a framework that could be tion is not relevant for every sport? used to help sports marketers to assess 6. Examine the advantages and disadvan- the most appropriate international mar- tages of using sports franchises to kets to enter. expand into international markets. Use examples to support your point of Appendix view.

Rugby: Pushing the Scrum Backwards

Rugby is a sport that has its origins in the these regions. They made offers of financial Public Schools of the United Kingdom. Often inducements and exploited rather loose “quali- referred to as a “game for gurriors, played by fication” rules to do so. gentlemen”, it embellished its middle-to upper- In terms of global growth, the sport of class ethos right through the twentieth century. rugby has made little headway. The staging of Like other sports, it became popular in a num- the World Cup stimulates some degree of inter- ber of commonwealth countries such as South est globally and has led to a limited uptake in Africa, New Zealand and Australia. European countries such as Germany. The The first World Cup took place in 1987 and game is popular in the likes of Georgia. This the New Zealand team captured the honours. country has the strongest justification for pos- 9 Rugby underwent a major shift in direction sible inclusion in an expanded “Six Nations” in 1996 when it became a professional sport at competition going forward. the elite level. Prior to that event, some of the Competitions such as the “Six Nations” top players received payments and were often championship (England, Wales, Ireland, referred to as “shamateurs”. Scotland, France and Italy) in the Northern Throughout the past 25 years or so, the Hemisphere and SANZAAR (formally called various countries embraced professionalism, the Tri Nations) consisting of South Africa, some with great success, such as England, New Zealand, Australia and Argentina, in the Ireland, France and New Zealand, and others, Southern hemisphere) prove to be the most such as Scotland, with less impact. popular and commercially successful of the The sport proved to be popular in smaller international tournaments run by the national countries such as Fiji, Tonga and Western rugby organisations. More recently, the Samoa. Rugby also became popular within cer- “November Internationals” (friendlies between tain parts of Italy, most notably in areas such international teams from both hemispheres) as Treviso. This led to Italy joining the (for- were added to the event roster. mally) “Five Nations” in the year 2000. In the In early 2019, the game’s governing body, revamped “Six Nations”, they have struggled World Rugby, proposed some changes to the over the past 20 years. Occasionally they have current international league system. Under this had encouraging wins over the stronger nations proposal, the international teams would play a such as Ireland, France and Scotland. However, maximum of twelve international matches each the sport of rugby has not really developed in year. The existing Southern and Northern the more populous regions and cities. Many hemisphere competitions would double up to commentators query the right of Italy to form the new overall competition (points to be remain in this elite competition. Some argue awarded for wins and draws). The teams would that relegation should be introduced and cite play each other home or away in alternate nations such as Georgia, who arguably have a years. Under this plan, World Rugby proposed stronger claim to a place in the tournament. the addition of Fiji and Japan to make up the Unfortunately, the professional era has led twelve participants. to most of the more powerful countries availing This competition includes the prospect of of the opportunity to “poach players” from relegation and promotion. World Rugby 237 9 Appendix

viewed this innovation as an incentive for of their sports properties. This, combined with rugby-playing countries below the top tier to the need to promote the game globally and improve their competitiveness. increase interest and participation levels, was a World Rugby argued that the following powerful justification for launching the compe- points would also benefit the overall promo- tition. tion, participation and interest in rugby glob- Among other announcements made by ally: World Rugby, the proposed new format would 55 Make the current November friendly inter- be “underpinned by a record commercial part- national more compelling for fans nership” with marketing company Infront, 55 Provide a stronger narrative for rugby fans which they say will guarantee almost £5 billion 55 Avoid a clash with the World Cup (this ($6.6 billion/€5.9 billion) for investment in the competition would not be staged during the sport over 12 years. World Cup year) Of that figure, World Rugby say £1.5 billion 55 Provide a route of progression for the so- ($2 billion/€1.8 billion) would be guaranteed as called “smaller” nations incremental revenue for the game. 55 Attract greater revenue streams from the “The proposed business model covers both sale of media rights media and marketing rights but does not 55 Invest revenue returns into a more profes- include any sale of equity in the competition sional structure for coaching and establish- and therefore full control of the competition ing academies in the peripheral and its revenue redistribution model would be rugby-playing nations retained by the unions, the current major com- 55 Attract greater levels of sponsorship. petitions and World Rugby,” their statement

reads (7 https://www.insidethegames.biz/arti- Overall, World Rugby justified the new pro- cles/1076772/world-rugby-announce-change- posed competition by arguing that it would to-nations-championship-plans-following-crit- provide maximum financial gain for minimum icism). restructuring of existing competitions. The proposal, under the rules and regula- They also expressed the view that it would tions of the governing body, required the unan- be particularly relevant for the Southern imous support of the top nations (England, Hemisphere countries, which had struggled to France, Ireland, Italy, Wales, Scotland, New attract significant revenue from media rights Zealand, Australia, Argentine and South and sponsorship deals. Africa). The launch of this competition would The addition of semi-finals and a final take place in 2022. could be potentially sold to media rights bid- The proposal generated a mixed reaction. ders as a separate element of the overall pack- Some of the leading players expressed con- age. They could also apply the same principles cerns about the addition of another layer of for attracting sponsors. competition, and the impact that it would have Match-day revenue streams vary consider- on player welfare. ably across the different elite countries. The Administrators in some of the countries RFU in England generated around £30 million remained unconvinced about the potential from ticket sales, which equates to around twenty financial benefits that might accrue to them. per cent of the combined ticket sales from the Two of the six nations rejected the proposal. other nations. By contrast, South Africa pro- Other stakeholders such as the administra- duced a revenue stream of £3.6 million (6 per tors of the English and French premier club cent of its total revenue) from its home tests. leagues argued that this would have an impact World Rugby argued that inequalities in on the availability of the top players to play in income generation across the different elite these competitions. nations was an indicator that the sport was In mid-June 2019, World Rugby announced missing potential revenue and the monetisation that it was dropping plans to take the proposal 238 Chapter 9 · Globalisation of the Sports Product

any further in the face of criticism and a lack of and brand equity, continually loses its top support from key stakeholders. players to European club teams. Along with Members of the World Rugby governing some of the other countries, they do not board argued that without proper “buy-in” it select players for their national team unless was not worth taking the initiative any further. they play with teams in the domestic competi- The prospect of private investors pur- tions. chasing a stake in the existing competitions Players from regions such as the Pacific increased as a result. For instance, CVC Capital Islands are lured to the bigger nations in the Purchasing had already made a bid of £500 Southern Hemisphere due to financial induce- million to acquire a 30 per cent holding in the ments and the prospect of playing in a stronger “Six Nations” competition. set-up. World Rugby remain committed to explor- The members of the World Cup governing ing further ideas in order to develop the sport body had many issues to ponder upon, as they globally. They argued that further rejections of looked to the future of the sport of rugby in a such proposals would impede progress in terms global context. of promoting the sports in peripheral nations. (Sources: Compiled by the author from It would be difficult to invest in coaching and various sources on the Internet).

the establishment of academies. 7 https://www.insidethegames.biz/arti- Existing problems within the sport cles/1076772/world-rugby-announce-change- 9 remain. New Zealand, arguably the strongest to-nations-championship-plans-following- rugby nation, in terms of success on the pitch criticism

?? Discussion Questions 3. Examine alternative strategies that 1. Assess the proposed new competition World Rugby could implement to pro- that World Rugby put forward. mote the sport of rugby globally. 2. Consider the reasons why it failed to gain approval.

Snookered

Background the sport and built a strong profile. It was a The sport of snooker evolved from the game of short thirty-minute feature and demonstrated billiards. The latter has a long and distinguished that there was an appetite and more impor- history: it was played in the French court of tantly, a potential healthy set of viewers for this Louis X1 as far back as the fifteenth century. sport. The emergence of players such as John The term “snooker” originated with a British Spencer, Steve Davis, Alex Higgins and Denis army colonel serving in India in 1875. It became Taylor further enhanced its image and popular- popular as a “table” game around that time. ity over the next decade. The game became very popular in the A UK audience of 18.5 million tuned in to United Kingdom from the 1920s onwards. Two watch the 1985 final at 1 am in the morn- brothers, Joe and Fred Davis dominated the ing - perhaps the highest point in the popular- championships right up to the 1960s. While the ity of snooker. sport was popular in clubs and bars in the UK, The further emergence of players such as it failed to make any impression in terms of Jimmy White, Stephen Hendry and Ronnie media coverage from television, which began to O’Sullivan made the sport ever more popular take off in the late 1950s. in the 1990s. Fans recognised them as positive The BBC (UK terrestrial broadcaster) and attractive players of the game. launched a programme called “Pot Black” in Although the sport was played in many early 1970s. This provided a wider audience for countries, it lost its popularity on the main TV 239 9 Appendix

channels. This damaged the sport in terms of also tailed off and prizemoney likewise. The the prize money on offer to players. It had also heydays of the mid-1980s were a long and dis- been dependent largely on sponsorship from tant memory tobacco companies. This disappeared as a lucrative source of income due to ever-restric- What to Do? tive government legislation. The challenges in Hearn had already revitalised the game of attracting new sponsors led to an inevitable darts. Similar to snooker, darts also declined decline in the number of televised tournaments. significantly as a popular TV sport from its Viewing figures declined for a number of peak in the early 1980s. People perceived it as a years - partly due to the lack of “star” quality, game for pot-bellied middle-aged men, redo- entertaining players and the emergence of other lent of pubs and stale beer (see our case study sports, which grew in popularity on TV due to the called “Flying Arrows”). It might be worth- promotion of them by Sky and other PPV broad- while for you to revisit it before moving for- casters. ward with this case. Ironically, the sport of snooker grew in He quickly realised that he needed to reposi- markets such as India and China, but the sports tion the sport of darts as entertainment and a property owners failed to recognise the impor- place of fun. He introduced music, flashing tance of the international dimension. Virtually lights, glamour girls who “walked in” the play- all of the major tournaments were held in the ers, similar to the sport of boxing. Attendances UK and the Republic of Ireland. Likewise, the rose and TV viewing figures also increased. New vast majority of the top players also came from sponsors associated their brands with the sport. the UK, with the exception of one or two from Australia and Canada. The year 2005 proved to be a catalyst for the What Could He Do with Snooker? sport of snooker. Although snooker was popular He identified a number of areas that had to be in China, that year represented the first time that a addressed as a matter of urgency. Firstly, he had Chinese player: Ding Junhui, beat the seven times to develop more tournaments in the calendar world champion Stephen Hendry in a major tour- and expand the location of them to a range of nament in China. In many ways it represented a countries in Europe and Asia. He had to change “changing of the guard” and the emergence of an the image of the sport of snooker as “UK-centric” alternative competitor to the UK players. to a more cosmopolitan and embracing setting. In particular, he saw the value of China as a Renaissance major source for international development. Barry Hearn emerged in 2010 and took over From a population of over 1.5 billion, 70 mil- the administration and marketing of snooker. lion people play cue-based sports. In Hearn’s He had established his credentials much earlier view, it was a ready-made market waiting to be in various sports such as boxing. He became a developed. Although so many people played prominent sports promoter in the 1970s and the sport, they and the media viewed it more as successfully managed snooker players, such as a social activity. The lack of commercialisation Steve Davis, in the 1980s and 1990s. He estab- also indicated to Hearn that opportunities lished the very successful Matchroom Sports abounded there. Company and gradually spun out from snooker He recognised that people could watch the to promote sports such as boxing, darts, tenpin sport of snooker in different ways to that which bowling, pool, golf, fishing and table tennis. existed two decades previously. The emergence When he took over as Chairman of the of PPV channels, Internet-based streaming World Professional Billiards and Snooker sites, and 24-hour dedicated sports channels, Association, he was shocked at the state of the provided him with an opportunity to do what sport. The number of tournaments had declined he was good at: promoting and negotiating significantly from the 1980s. Sponsorship had deals. If viewing figures and new audiences 240 Chapter 9 · Globalisation of the Sports Product

could be developed, then sponsors would investing in snooker tables for their pupils to also want to invest in the sport. play the sport. Over the next 4 years, he set about the task Hearn also initiated a collaboration with a with gusto. rival snooker organisation: the International He created a number of deals with broad- Billiards and Snooker Federation. He recog- casters. These included a 10-year deal with nised that without such interaction it would Eurosport. Quest – a free-to-air channel, agreed take far longer to expand the game globally. to cover the English, Northern Irish and Scottish The two organisations worked jointly on inter- Open ranking events. Now TV, a 24-hour chan- national development through the creation of nel also included coverage of ranking events for multi-sport events with potential involvement the Hong Kong Market. Significantly, Hearn in events such as the Asian Games and ulti- signed a 10-year deal with CCTV, the state- mately, the Olympic Games. owned Chinese channel, to cover four ranking events: the World Championships, UK Onwards and Upwards Championship, the Masters and the Welsh During the first few years of Hearn’s adminis- Open in addition to the World Cup event. tration of the sport, the Chinese market in par- He signed further deals with OSN – the ticular showed spectacular signs of growth. largest PPV broadcaster in the Middle East and Statistics such as the number of tournaments North Africa (covering twenty-five countries in staged in China provides a clear indicator of its 9 total). Timesport HD in Thailand agreed to popularity in that market. In 2008, it staged five take all of the events from the Tour and air events. By 2017, this “mushroomed” to over them. thirty tournaments. Hearn estimated that dur- Cognisant of the need to embrace the social ing this time the worldwide TV audience for media networks, Hearn also set up Facebook snooker had grown to over half a billion people. Live. This allowed the World Professional This growth in popularity was demon- Billiars and Snooker Assocation WPBSA to strated by the increasing success of Chinese gain TV coverage in regions that did not have snooker players in the world ranking tour- TV coverage. Such locations included South naments. This culminated in the first ever America, India, Pakistan, Bangladesh and Sri appearance of a Chinese player in the World Lanka. Championships final in 2016: Ding Junhui. He sold the audio-visual digital media Over 210 million Chinese fans watched the rights to Rigour Media in China. This com- final. Unfortunately for them, their “hero” lost. pany had already been heavily involved as the By expanding the number of ranking and World Professional Billiards and Snooker non-ranking events, Hearn in a “physical sense” Association’s technology and training partner ensured the spread of snooker across different at its main academy in Beijing. parts of the world. This was reflected in the list In addition to a focus on commercial deals and number of events for the 2019–2020 sea- with various broadcasters, Hearn spearheaded son. Locations included Latvia, China, India, the development of academies in the major Thailand, Germany, Belgium and Gibraltar. Chinese cities. It opened its first academy there In 2018, the Chinese Open became the first in 2013. The WPBSA also worked on putting in tournament to offer a £1 million prize fund. place regional structures for coaching and The Asian footprint features prominently in developing local players. They established an the list of ranking players. In 2017, of the 128 annual tour to China, which included some of professional players on the tour circuit, 17 came the top-ranking players and involved emerging from Chia and 12 from other parts of Asia, Chinese players as well. such as Thailand, Hong Kong and India. Hearn Hearn recognised that he had a very recep- predicts that by the early 2020s, half of the top tive target audience. Many children had taken thirty-two players will come from China. The up the sport and schools promoted the sport by Chinese presence increased to 22 in 2018. 241 9 Appendix

In 2018, players from twenty countries par- ers in the world who sign very profitable con- ticipated in the tour circuit. tracts for the privilege. All sports, in order to expand popularity, Could the WPBSA and Hearn achieve any- need narratives. This refers to positive stories thing like this success? about the sport, mainly by building profiles of Arguably, they start with the knowledge players around which (hopefully) fans will that millions of Indians play the sport. A focus on and become motivated to watch them ready-made target exists. Around two and a and take up the sport. Snooker is no exception. half million people play the sport there. Although a couple of Chinese players such From a sports marketing perspective how as Ding Juihui have come close to winning the could they build on this foundation? World Championship, one suspects that Hearn In 2015, it staged the Indian Open, which and his fellow marketers and directors will was the second ranking event to be held there. jump up and down with delight when a player Unlike China, India has so far failed to pro- from that country or elsewhere in Asia ulti- duce a significant player who has broken mately makes the breakthrough. That time can- through to the top rankings. Only two players not be too far off, given his predictions for the have come anywhere near that exalted position. future. Panjaj Advanti is a multiple times world Mainland Europe is also a fertile growth billiards champion. He has flirted with snooker market for snooker. Players such as Luca Brecel and in 2013, reached the quarterfinals of a from Belgium and Lukes Kleckers from ranking event (the Welsh Open). Germany and Alexander Urserbacher from Aditya Mehta reached the 2013 Indian Switzerland are generating wins across the var- Open final and reached a position of 49th in ious ranking events, while not yet in a position the World rankings. Since then he has struggled to win one as at the time of writing of this case. to make any significant impact. Over forty federations across Europe By contrast, to the Chinese market, Indians administer national championships and work perceive snooker as an elitist sport. This is closely with the WPBSA in terms of attracting largely due to its colonial past, where British media coverage. officers played the game in their army quarters. This has changed somewhat in the last decade Elephant in the Room or so. Snooker parlours have opened in many So far, we have made little reference to the of the big cities in India and social club owners Indian market. After all, army officers intro- placed tables in their facilities. duced the sport of billiards and snooker during At recent big tournaments in India, the the occupation of that country in earlier centu- organisers invited Bollywood stars. This avenue ries. to expansion might create the potential for Along with China, India is arguably the future opportunities. most densely populated country in the world. Hearn signed a contract with Leisure Sport The population exhibits an insatiable appetite Management when the Indian Open event was for sport, particularly cricket. launched in 2013. This partnership allocated In this sport, Indian cricket administrators the task of promoting the event, seeking spon- demonstrate their skills and ability to create sors and attracting media coverage to this com- new sport products such as the Indian Premier pany. It resembled the approach adopted in the League (IPL) 20/20 tournament. Focusing on case of China. entertainment, the family, and involving This resulted in significant increases in live Bollywood stars in terms of ownership of fran- broadcasting of snooker in 2015 and 2016 (esti- chises, it has created major profits by acquiring mated to be a viewing uplift of 48%. Companies lucrative media rights. Fans turn out in their such as Sony Six pioneered the concept of PPV millions. The tournament attracts the best play- coverage). 242 Chapter 9 · Globalisation of the Sports Product

Social Media Strategy ket and secondly, to develop some initiatives Hearn and his team decided to use Facebook that could take it further in terms of penetra- Live to provide coverage of the 2017 World tion of existing and new markets. Possible par- Championships to geographic areas not cur- ticipation and involvement in future Olympic rently targeted. This covered forty countries in Games cropped up quite often over the years at North and South America and the Indian sub- board meetings, in player discussions and in the continent, including Pakistan, Afghanistan general media. How could the WPBSA take and Sri Lanka. this forward in future planning and strategy His team employed the Facebook audience development? Although not an expert in social optimisation tool to assess the success of the media and digital marketing, Hearn also felt campaign. The coverage of the 2017 world that the WPBSA was in danger of “missing a championships (over 17 days) generated over 3 trick” by not taking cognisance of an area million video views and 53 million post impres- which was dynamic and volatile and liable to sions. sudden new developments and disruptors. Pakistan generated the highest level of The World Championships has been staged views – 576,005. at the Crucible Theatre in Sheffield (UK) since Hearn estimated that the campaign 1978. It creates a unique atmosphere with its increased the overall global fan-base by over 30 intimate audience. It retains a capacity of 980 per cent and by 42 per cent in the United States. spectators. In 2017, the WPBSA signed a con- 9 Across the regions covered by the Facebook tract that ensured that the event would con- Live campaign, 75% of the video views came tinue at this venue until 2027. This cemented from the under thirty-five segment. the relationship and guaranteed that this venue Hearn expressed satisfaction with the would continue with its iconic atmosphere. It results, citing three goals that he initially set: also closed down speculation that it might be 55 To grow the World Snooker’s audience transferred to China, which could provide 55 To reach and engage with younger fans in greater funding and a much larger arena. new geographic territories Before undertaking such analysis and 55 To grow the US-based snooker audience. appraisal, his initial thoughts revolved around the following perception. At the end of the World Championships in »» A lot done, more to do. May 2019 Hearn sat at his desk and set himself two tasks: to review the current status and posi- (Source: Developed by the author from various tion of the sport of snooker in the global mar- sources on the Internet).

?? Discussion Questions 4. Assess the view that the concept of 1. Would you agree with the view that the snooker becoming an Olympic sport is sport of snooker had “a lot done with far-fetched and delusionary. more to do? 5. Develop further initiatives that Hearn 2. Carry out, using material from this case and his team should take forward. In and the Internet, a detailed assessment this exercise, adopt a short, medium of snooker’s internationalisation strat- and long-range template. egy. 6. Should the WPBSA move the World 3. Has Hearn focused too much on China Championships event to another venue? and India and has he ignored other potentially lucrative markets? 243 9 References

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Managing the Sports Sponsorship Process

Contents

10.1 Introduction – 247 10.2 Sponsorship Defined – 248 10.3 Sports Sponsorship in Context – 248 10.4 Why Is Sport So Attractive To Sponsors? – 249 10.5 Sponsorship Objectives – 250 10.5.1 Awareness-Related Objectives – 250 10.5.2 Image-Related Objectives – 251 10.5.3 Relationship-Related Objectives – 251 10.5.4 Corporate Social Responsibility-Related Objectives – 251 10.5.5 Sales-Related Objectives – 252

10.6 Identifying Potential Partners – 254 10.6.1 Developing a Proposal – 254 10.6.2 Placing a Value on the Sponsorship Deal – 254 10.6.3 Assessing the Value of the Components of the Sponsorship Proposition – 255 10.6.4 Exercise – 255

10.7 Managing the Relationship Between the Sport Property Owner and Sponsors – 256 10.8 Sponsorship Activation – 256 10.9 Sponsorship in the Digital Age – 257

Electronic Supplementary Material The online version of this chapter (https://doi.org/10.1007/978-3-030-53740-1_10) contains supplementary material, which is available to authorized users.

© The Author(s) 2020 S. Ennis, Sports Marketing, https://doi.org/10.1007/978-3-030-53740-1_10 10.10 Tools for Engagement – 258 10.10.1 Content Marketing – 258 10.10.2 Storytelling – 259 10.10.3 Exercise – 259

10.11 Assessing the Effectiveness of Sponsorship Deals – 259 10.12 Evaluation Methods – 260 10.13 The Threat from Ambush Marketing – 262 10.13.1 Defining Ambush Marketing – 262

10.14 Responses to the Threat of Ambush Marketing – 263 10.14.1 What Makes Ambush Marketing Work? – 263 10.14.2 Response of Consumers/Fans – 265

10.15 Athlete Endorsement and Brand Ambassadors – 265 10.15.1 Exercise – 267 10.15.2 Brand Ambassadors – 267

10.16 Stadium Naming Rights – 267 10.17 Conclusions – 268 Appendix – 270

References – 281 247 10 10.1 · Introduction nnLearning Objectives Sponsoring sports properties has become On completion of this chapter, you should critical to their financial wellbeing. Owners of be in a position to address the following ob- clubs and competitions quickly recognised the jectives: value of their product, as the sports sector 55 Understand the concept and role of embraced the principles of commercialisation. sponsorship within the sports sector Likewise, branders identified the enhanced 55 Distinguish between philanthropy and value to their products because of their associ- sponsorship ation with sport, particularly when the chosen 55 Examine the different objectives that entity espoused many of the values and attri- companies develop for their sponsor- butes associated with their respective brands. ship strategy We consider the stages involved in the pro- 55 Establish the pros and cons of using cess of securing and managing sponsorship sports as an avenue for sponsorship deals. In particular, we identify the critical strategy success factors necessary for an effective con- 55 Assess the importance of activating tract. sports sponsorship rights and deals We assess the importance of the concept 55 Identify the key success factors for of activating the sponsorship deal. It is not effective sponsorship of sports proper- sufficient to “throw money” at a sports prop- ties erty and then sit back to reap the perceived 55 Analyse the process of designing and benefits that may (or may not) accrue. Both implementing sponsorship strategy parties in the contract should recognise that in 55 Understand the changing role of spon- order to achieve a successful partnership, they sorship in the digital age should invest in the process. The sports prop- 55 Assess the mechanisms for evaluating erty owners have to assess mechanisms for the effectiveness of sponsorship cam- ensuring that the sponsor, and the target audi- paigns ence, achieve a positive outcome. This may 55 Understand the concept of ambush include sharing data on the event (brand recall marketing assessments, engaging in joint-promotional 55 Evaluate the potential dangers and activities and so on). This allows both parties opportunities associated with ambush to gain leverage from the event/competition/ marketing campaigns club. Sponsors should recognise that they 55 Identify the responses of sports prop- need to invest in “bringing the sponsorship erty owners, government agencies and deal to life”. This is the essence of what we official sponsors to the threat of ambush mean by the term “activation”. marketing campaigns We address the changing demands placed 55 Assess the reaction of sports fans and on sponsors because of the digital era. Factors viewers to unofficial sponsors. such as “big data”, technology, mobile and location-based marketing ensure that the nature of engagement with fans has changed irrevocably. 10.1 Introduction We examine how sponsors and sports entities assess the effectiveness of sponsorship In this chapter, we assess one of the key reveue contracts. streams for sports property owners: sponsor- In the later stages of this chapter we evalu- ship. We begin by defining what sponsorship ate the threats and opportunities arising from means and how it differs from philanthropy. the practice of ambush marketing. Ambush We examine the typical objectives that marketers have been around for over 40 years. both parties (sponsored entity and sponsor) Successful sports properties attract the atten- seek when entering into the process of setting tion of branders who are not officially associ- up a sponsorship deal. ated with the event. They pay no fee to the 248 Chapter 10 · Managing the Sports Sponsorship Process

sport entity owners. They potentially benefit exceptions include a transfer of expertise and from associating their brand (through various technology from the sponsor to the sponsored initiatives) with the event. This can generate entity. Sponsors may also engage in initiatives higher levels of brand awareness and confu- with sports entities in order to address corpo- sion in the minds of targeted fans who attend rate social responsibility objectives. events live or watch from afar.

10.3 Sports Sponsorship in Context 10.2 Sponsorship Defined In order to consider the global expenditure on We should note at the outset of any appraisal sports sponsorship we should consider the of sponsorship, that it is NOT a modern con- total spend globally on sponsorship. This cept created by clever marketers in recent identifies the significance of the sports sector.

decades. It has been around in various guises . Table 10.1 identifies the latest (at the over a number of centuries. Dating back to time of writing this text) global expenditure the ancient Olympic Games in Athens and the on sponsorship. emergence of classical musicians such as Expenditure on sponsorship covers a num- Mozart and Beethoven, individuals and ber of different categories such as sports, arts, organisations have benefited from funding entertainment, causes, festivals and fairs. and support from other parties. In the latter The sports sector is the most dominant cases, artists, composers and poets attracted area for attracting sponsorship. Estimates support and “benefit-in-kind” from royalty, vary, however, the percentage of total expen- 10 wealthy benefactors and entrepreneurs. This diture on average is anywhere between 50 and allowed them to work on their projects in an 70 per cent. The bulk of the rest of sponsor- environment that provided some degree of ship expenditure covers the arts sector. financial security. A survey conducted by Two Circles (2019) Such practices are often referred to as phil- estimated that global expenditure on sports anthropic acts. Essentially this means that an sponsorship would reach a figure of around individual or organisations provide support £35 billion globally in 2019. However, we (financial and/or non-financial) to an individ- should add a note of warning however. The ual or entity, without any expectation of ben- same survey identified a potential deficit of efits accruing to them in return. around £14 billion annually that sport prop- This is a critical point to grasp as it indi- erty rights holders fail to exploit. This is cates the essential difference between philan- caused by poor models for estimating the thropy and sponsorship. In the latter situation, one party (the sponsor) invests in financial and/or non-financial .. Table 10.1 Global expenditure on sponsorship support to a sponsored entity in order to address marketing and business objectives and fully Year Spend expects a return on this investment. The opera- tive word in this definition is “invests”. 2018 US$ 65.8 billion Masterman (2007) reinforces this view of 2017 US$ 62.7 billion investment as being a cornerstone of any 2016 US$ 60.1 billion sponsorship contract. In an era of commercialisation and mone- 2015 US$ 57.5 billion tisation of sports products and entities, virtu- 2014 US$ 55.3 billion ally all sponsorship deals are predicated on a 2013 US$ 53.1 billion return on investment (ROI). In most cases,

this typically involves financial transfers. Source: 7 https://www.statista.com/statistics/ However, there are exceptions to this observa- 196864/global-sponsorship-spending-since-2007/ tion. We explore this later in the chapter. Such 249 10 10.4 · Why Is Sport So Attractive To Sponsors? value of the property rights, largely due to utilising procedures that do not take into .. Table 10.3 Geographic breakdown of sponsorship expenditure account the influence of digital marketing. Rights holders rely on techniques that are Region Percentage based on linear TV. As we established in an earlier chapter, this form of sports consump- North America 36% tion is in decline, as many fans increasingly Europe 26.7% utilise other media channels. We will revisit Asia Pacific 25.2% this issue later in the chapter. We should inject a further cautionary note. Central and South America 7% The impact of the Coronavirus crisis (at the time Other 3.8% of writing this chapter) could not be estimated. As various sports properties were cancelled and/ Source: Venturoli (2019) postponed for a number of months in 2020, it is reasonable to assume that investment in sponsorship declined over this period. It is also likely that the value attached to such sports events restrict the influence of betting companies and competitions may also decline. such as Paddy Power and William Hill. In geographic terms, North America is still . Table 10.2 identifies the most prominent industry categories that engage in sports the largest sector for overall sponsorship. sponsorship. . Table 10.3 examines the breakdown of This table highlights the growing impor- overall sponsorship across the different global tance of the betting industry in the context of regions. sports sponsorship. This is particularly so in The North American market has tradi- major sports such as football in the UK. By tionally been the central focus for the era of contrast, the alcohol sector is likely to decrease commercialisation within the sports sector. in importance in future years, as governments The “big four” sports: NFL, NBA, MLB and in Europe introduce legislation that is more NHL drive sponsorship deals due to their restrictive. This will curtail the involvement of high levels of popularity and the large salaries large companies such as Diageo in the future. of the main players. The figures in. Table 10.3 It is also likely that governments (particularly still reflect this dominance. in the UK), instigate similar legislation to However, we can recognise that the “winds of change” are blowing across other regions. The growth of sponsorship deals in Europe and the Asia Pacific region reflects .. Table 10.2 Industry breakdown (UK Market) this trend. Industry Percentage

Financial services 19% 10.4 Why Is Sport So Attractive Automotive 14% To Sponsors? Airlines 13% The preceding section highlights the domi- Gambling 12% nance of the sports sector in terms of global Alcohol 9% expenditure. Why should this be the case? Soft drinks 7% 1. Sport transcends geographic, cultural and religious borders. Very few, if any other sec- Other 26% tors “cuts through” these divisions in society. Sports such as football, because of its Source: 7 https://twocircles.com/gb-en/articles/ sport-misses-out-on-14bn-despite-growth-year- universality, generates supporters and fans for-sponsorship-spend/ across the globe in the case of successful brands such as Barcelona, Real Madrid, 250 Chapter 10 · Managing the Sports Sponsorship Process

and Manchester United and so on. This quent deal/contract. Otherwise, there is a dis- clearly offers great appeal to branders who tinct danger that it will lose focus. pursue global strategies. Masterman (2007) and Stotlar (2005) pin- 2. Receptive environment. Sport engenders point a number of different categories. They passion, positivity, enjoyable experiences can be summarised as follows. and excitement for fans. This appeals to branders who convey similar values and attributes. This has the potential to create 10.5.1 Awareness-Related synergies as the brand and sports property Objectives holders align their brands in the form of a mutually beneficial partnership. When many companies enter into sponsorship 3. Rich vein of values and symbols. Sports arrangements with sports property owners, mirrors many of the features of tribal mar- the issue of brand awareness features promi- keting. We discussed this concept in nently in the rationale. This may relate to the

7 Chap. 4. This concept argues that indi- objective of building or increasing awareness viduals, in many cases, welcome the oppor- of the brand in a particular country or region. tunity to belong to a wider community of This applies particularly to brands that cur- like-minded groups. Sport, through its rently have a low level of awareness in an exist- combination of rituals, procedures and ing market or propose to enter new markets. behaviour creates such an environment. Sponsorship presents an opportunity to 4. Loyalty. Sport, particularly at the level of associate the brand’s values with the chosen fans supporting and engaging with clubs, sports property. It can then develop appropri- 10 engenders an intense degree of loyalty and ate activation strategies in order to maximise commitment. When “married” to the asso- its effectiveness. ciations and attributes of the sponsor’s It is important to differentiate between brand, this creates a strong bond. It can corporate and marketing-focused levels. The lead to higher levels of brand awareness former refers to a situation where the com- and desire and ultimately a stronger mar- pany or organisation focuses on raising and ket position because of the deal. building awareness levels of the overall com- 5. Media interest and coverage. The advent of pany and not on any particular brands that PPV channels and greater coverage of sits in its product/service portfolio. sports, from elite to niche, attracts the inter- For instance, the Chinese information and est of sponsors. They can “get their message technology solutions provider: Huawei, has out there” and potentially benefit as a result. attracted a lot of attention during 2019— 6. Changing digital landscape. Technology, most of it, negative. Arguably, this company which creates situations where brands can has a very low level of corporate awareness track customer behaviour and consump- among the UK market. Huawei might con- tion, also extends to sponsorship deals. By ceivably increase awareness levels about the activating such a deal, both sponsors and extent of its business portfolio by engaging in property owners can more accurately track some form of sponsorship initiatives. the effectiveness of the initiative. They can Utility companies (gas, electricity and so also engage and interact with target markets on) also find that many consumers have little than was possible in the “analogue” era. or no awareness about them in general and about their range of products and value propositions in particular. High level sports prop- 10.5 Sponsorship Objectives erties present opportunities to become more involved in their markets and can raise aware- In order to develop a coherent and relevant ness levels. sponsorship strategy, companies should iden- Marketing-focused objectives relate to a tify the specific objectives that they wish to specific brand within the product portfolio of achieve. This provides direction for the subse- the company. 251 10 10.5 · Sponsorship Objectives

Many companies combine both aspects and hospitality suites at the venue. Within the when formulating sponsorship strategies. confines of the corporate hospitality tents, companies can entertain some of their stakeholders by providing food and beverage, com- 10.5.2 Image-Related Objectives bined with exclusive seats to watch the unfolding events on the tennis court, the cricket ground Companies may choose a range of objectives or the arena. They can discuss business, engage that directly relate to the image that they hold with them, and cement ongoing relationships. in the market place. For some it may be about Such activities as corporate hospitality reinforcing a strong and positive brand image, attract a strong degree of opprobrium from in terms of perception among its target mar- many quarters. Some view it as a squandering ket and its overall positioning strategy, rela- of corporate resources, particularly in reces- tive to its competitors. sionary times. Others argue that it is a form of For brands that suffer from a negative bribery and a recipe for unethical behaviour. image, a sponsorship contract may be critical However, a cursory look at the sheer scale of in terms of altering stakeholder’s perceptions hospitality tents, villages and so on that are on and attitudes. If it works in an effective way, it display at major sports events indicates that can enhance the image of the brand with the there is a high demand for such facilities and key stakeholders. However, sponsorship is not resulting entertainment. It has become a sig- like conventional advertising. In the latter nificant source of revenue for many sports case, the company can control the message clubs and organisations. and book the space on TV, radio or other However, during recessionary times, corpo- media options. Sponsorship does not provide rate hospitality is one of the first areas to expe- such a safety net. It has to enter into an rience cutbacks in investment. Apart from the arrangement with a sports property, which in costs, organisations want to avoid negative most cases retains a set of values and attri- publicity from the media. This often runs along butes with its stakeholders. When a sponsor the lines of “look at those pampered executives enters into that space, it does not guarantee enjoying themselves, while the rest of us suffer anything like the same degree of control. It is pay cuts and a decline in real income”. a symbiotic relationship in essence. This We should recognise that part of the spon- implies a transference of attributes and asso- sorship objectives may address issues such as ciations between the two parties. This may not building staff morale within the company. By necessarily translate into a successful outcome. becoming a major sponsor or partner of a top-tier sports property, the company can make tickets available to staff through competitions or based on an individual’s contribu- 10.5.3 Relationship-Related tion to the success of that company. Objectives 10.5.4 Corporate Social Companies, organisations and individual brands interact with and depend on coopera- Responsibility-Related tion and collaboration with various stake- Objectives holders such as customers, suppliers, media, shareholders and their own workforce. Companies and brands increasingly work in Sport sponsorship deals present opportu- an era which takes the focus away from the sole nities for establishing and cementing such objective of maximising profit (see Piewa and relationships. Quester. 2011). They have to embrace a wider For instance, companies sponsor sports range of objectives and principles which delve events and competitions in order to reward into areas such as the environment, ethical staff, suppliers or dealers. Part of the contract behaviour and behaving as a “good corporate usually involves the right to a number of tickets citizen”. 252 Chapter 10 · Managing the Sports Sponsorship Process

Social sponsorships have emerged as one may feature to some degree in the sponsorship avenue through which companies can address package. some of these objectives (Ennis et al. 2019). For instance, sponsors of major events will CSR’s importance as a credible marketing activate the deal by making use of promotion tool has risen since 2001 (Crampton and companies and demonstrators to provide Patten 2007), becoming a popular method of samples to fans attending the event. For promotion with corporations supporting instance, Hardys, the Australian wine pro- social causes through sponsorship known as ducer, makes use of high-profile cricket tests social sponsorships (Simmons and Becker- such as the Ashes (played between England Olsen 2006). We examine this concept in and Australia) to entice fans to try out its detail, later in the chapter. wines during the intervals. The likes of For instance, many football clubs seek Callaway and TaylorMade also create physi- greater engagement with companies and cal space at major golf tournaments to allow organisations in their local and wider commu- fans to hit golf balls with the latest golf clubs nity. Companies may provide “financial” and in their portfolio. “non-financial” support for joint projects. An In the digital world, many sponsors devise IT company, located in a town or city, which a number of creative activities on their social has a major football club, may provide tablets media platforms, to encourage fans to pur- and PCs for under-privileged children in chase merchandise and engage directly with selected schools. The club may provide access the brand. to a room within its stadium where the IT We should not underestimate the ability of company can run classes to introduce children sponsors to generate new business and culti- 10 to up-to-date IT systems and tools. Both par- vate customer leads. It is one reason why com- ties in this case address specific objectives. The panies from the financial services sector view football club becomes more involved in its sponsorship as an effective avenue for identi- local community and the company also uses fying potential new business clients. the sponsorship to emphasise that it is a good Sports equipment and clothing companies corporate citizen. The under-privileged chil- such as Nike and Adidas enter into contracts dren also benefit from the training and expo- with major sports property owners to be their sure to up-to-date equipment. official suppliers. This affords them access to the large numbers of fans attending such events. Many of them will purchase items because of 10.5.5 Sales-Related Objectives visiting their allocated tent in the village. Sponsors may also use an event to launch We should note that most sponsorship deals a new product/service and take advantage of are not instigated with the sole objective of the environment, atmosphere and media increasing sales. However, a sales emphasis focus, to maximise the opportunity.

Paddy Power Takes the Shirt Off Your Back

Paddy Power is a well-known betting company the second-tier league: the Championship, sev- operating in many markets. It commenced enteen of the twenty-four clubs were the benefi- operations in Ireland and moved into the UK ciaries of such sponsorship deals in 2019. Within market in recent years. Since its inception in the the Premier League (the top-tier), over fifty per 1990s, it has now established a presence glob- cent of the teams have contracts with the betting ally in European, Australian and US markets, companies. The annual spend on shirt sponsor- mainly through mergers and acquisitions. ship across football in the UK is around £350 Recently it entered the football market in the million. UK. This sport is dominated by betting compa- Paddy Power has positioned its brand on nies in terms of shirt and club sponsorship. In attributes such as funny, irreverent, controver- 253 10 10.5 · Sponsorship Objectives

sial and quirky. In many ways, it is the classic Paddy Power expressed satisfaction with example of a disruptor brand: one that chal- the amount of publicity generated from the lenges conventional thinking. In this case, it campaign. They followed up with a TV, print latched onto the issue of shirt sponsorship. and digital campaign emphasising that it was Some commentators argue that clubs have giving shirts back to the fans, “sold themselves to the devil” by engaging with The TV ad featured glum-faced fans wear- a range of controversial brands such as alcohol ing shirts with stupid branding on the logos, and betting companies. Over the years, Paddy such as “Grumpy Pigeon”, “Little Blue Pill” Power has engaged in sponsorships and adver- and “Mr Softy”. The advertisement was over- tising campaigns that are mischievous in terms laid with an old song by Donovan called “I love of content but grab the attention of people, my shirt”. The strapline at the end of the ad generate publicity, and agitate the social media featured the following: “Wouldn’t it be better if platforms. A quick search on YouTube high- your footy shirt looked less like a billboard”? lights a number of such examples. In the next couple of weeks, Paddy Power This campaign certainly challenges conven- announced further “unsponsorship” deals with tional thinking. In effect “it spun the coin” the four other clubs: Motherwell, Newport County, other way by announcing an “unsponsoring” Southend United, and Macclesfield Town. approach. Instead of blithely replicating what What are we to make of this campaign? other betting companies were doing, Paddy Paddy Power argued that there was a seri- Power stated that it would “give the shirts back ous message behind it. Too many clubs have to the fans”. become dependent on shirt sponsorship deals It entered into a sponsorship deal with with betting companies. Much of the content Huddersfield Town - a team that was relegated of shirt sponsorship shows little or no creativ- from Premier League to the Championship at ity—simply placing the name of the brand on the end of the 2018/2019 season. Just before it the shirt. By contrast, Paddy Power interacts started its pre-season friendlies campaign, the with smaller clubs and engages with “proper” club revealed its new shirt. The Paddy Power fans: those who are genuine in their commit- name was emblazoned across the shirt on a ment to less successful clubs. These fans are far large sash (check it out on YouTube). This removed from those who “support” successful clearly violated the Football Association’s rules clubs and “bask in the reflected glory”. with respect to the appropriate size and width Shirts with no logos emphasises the purity of of logos on shirts. the jersey and brings fans back to the “good old Fans reacted with outrage to the announce- days” when marketers and monetisation did not ment. Within minutes, the social media plat- exist. forms and discussion forums revealed the This sponsorship campaign reinforced the extent of the anger. The media also jumped Paddy Power brand’s campaign of mischievous into the debate. Sky Television and national marketing. newspapers commented on a number of issues In September 2019, the Football about the expanding influence of betting com- Association fined Huddersfield Town £50,000 panies in the football sector. for their part in the campaign. This was because The Huddersfield Town team wore the new it had infringed regulations with respect to the jerseys at their next pre-season friendly against size and width of the logo and the sash running Rochdale. across the shirt. Two days later, Paddy Power revealed that it Presumably, this would not worry the has been a hoax. Huddersfield Town “revealed” Huddersfield Town administrators: Paddy their authentic new shirts for the season, with Power would pick up the bill for the fine and the logo of Paddy Power removed. factor that into its original deal with the club. 254 Chapter 10 · Managing the Sports Sponsorship Process

??1. Assess the sponsorship deal and sub- that you derive an optimal return on your sequent campaign devised by Paddy investment with us? Power. This challenges the sport property owner 2. In your view, what benefits (if any) to provide answers to these questions in order accrued to Huddersfield Town? to make the proposal relevant for the poten- 3. Could this strategy of “unsponsoring” tial sponsor. be more accurately described as a “gim- This requires the property owner to mick” as opposed to a serious sponsor- acquire a full and detailed knowledge of its ship strategy? customers, i.e. those fans that engage with the property in terms of how they consume that sport. The continuing growth of digital mar- 10.6 Identifying Potential Partners keting and social media provides a setting for capturing such data. However, this will not Before we can devise a plan for a specific provide the full answer. sponsorship arrangement, companies should Sport property owners need to carry out identify potential sports properties (from the extensive homework on the targeted potential sponsor perspective) and sponsors (from a sponsors. This requires detailed analysis of all sport property owner perspective). aspects of the company/brand. Assess com- Sport property owners should compile a pany reports. Examine the overall business and list of ideal sponsors. By “ideal”, we mean marketing strategy of the company (by mak- companies/brands that align with the values ing use of published material that is available of the sport property and the audience/view- in the public domain). Determine the corpo- 10 ers that attend or watch the event/team/com- rate culture of the organisation. How closely petition. This becomes a “wish-list” to a large does its culture align with your operation? extent. Some of those on the list may not have the resources likely to meet the scale of the sponsorship deal that the property desires. Others may have already invested in a deal 10.6.2 Placing a Value with similar sport properties. on the Sponsorship Deal Much will also depend the perceptions held by potential sponsors about the sport How do sport property owners determine the property. How well established is the property? value of the deal in terms of what they should Who are the current sponsors/partners? How charge for their package? There is no simple extensively do the media cover it? What demo- answer. The overall “price” of the property graphic profile engages with the property? emanates from a combination of intuition, Of more strategic concern is the answer to referencing and hard data analysis and pre- the following question. What specific value sentation to the potential sponsor. can the sport property bring to the potential The nature and scale of the deal plays a sponsor? This is at the heart of any subse- significant part. At the top end of the scale, quent discussion and negotiation between the we have global properties such as the parties. Olympics, World Cup and so on. As we move down to the base of the pyramid, we are looking at local events within a small geographic 10.6.1 Developing a Proposal area, attracting small audiences. Experience of previous deals provides a Determining the value of the sport property reference point. Property owners can substan- sets the agenda. What can we do for your tiate this by comparing their proposition with brand? How does our proposition align with similar events/competitions/teams that have your brand values and attributes? How can it carried out deals. help you to achieve your specific objectives? For new sport properties, this represents a How can we work closely with you to ensure more difficult challenge. There is very little 255 10 10.6 · Identifying Potential Partners out there to make a detailed comparison. This 55 Provision of tickets to the sponsor for leads to an “iterative” process. It is essential to their distribution and allocation to apply a process of learning from mistakes and employees/suppliers/dealers/management adapting accordingly. We should note that 55 Providing access to players and/or brand this is not guesswork, rather, it is a learning ambassadors during match day process. Properties make use of detailed anal- 55 Provision of access to the players for a ysis on audience profiles, media coverage, and scheduled number of corporate days level of fan engagement on social media plat- 55 Inclusion of perimeter advertising as part forms and so on. This leaves them more of the deal strongly placed to arrive at a “price” that is a 55 Creation of a tiered sponsorship structure more accurate assessment of its net worth to (platinum, gold, silver and bronze). potential sponsors. In relation to the final component (tiered sponsorship), many sport property owners 10.6.3 Assessing the Value create different levels of sponsors/partners of the Components within their package. This is best illustrated by of the Sponsorship the adoption of platinum, gold, silver and Proposition bronze partners. The platinum partners pay more and benefit from a wider range of com- Sports property owners have to assess the way ponents of the package. Those paying propor- in which the different components of the tionately less, receive fewer benefits. proposition can add value for the sponsor. Some commentators argue that this Let us consider what we mean by these approach is a sensible way of maximising rev- components: enue from the sponsorship package: it gener- 55 The event/competition/team (heritage and ates more revenue from more companies. It history, reputation, quality of the players also recognises that potential sponsors hold or teams) different objectives and motives and may not 55 Reach: Global? International? National? wish to buy into a “one size fits all” package. Regional? Demographic profile align- By creating a tiered package, the sport prop- ment? erty owner widens the opportunities for com- 55 Nature and type of media coverage: TV panies to become involved and benefit from coverage (PPV?, OTT platforms?, own their association with the property. channels?, streaming?, National or Others argue that this practice is the epit- Regional coverage?, extent and sophistica- ome of the “greed” mentality. By following tion of social and digital media platforms?) this tiered approach, property owners run the 55 Opportunities for engaging with fans: at risk of diluting the overall value proposition, the event/arena, peripheral areas within create confusion in the mind of fans and ulti- the city that is hosting the event mate subtract value for sponsors. It also pro- 55 Identification of joint initiatives, where vides opportunities for ambush marketers to both parties can enhance the quality of the “cash in” on this confusion. sponsorship (competitions, developing narratives, building player profiles) 55 Provision of data to sponsors (data sharing) 10.6.4 Exercise so that they can maximise their activation strategies such as interactive engagement with fans and/or viewers. ??Select a sport property of your choice. It can 55 Provision of ancillary facilities: corporate be a competition, tournament, club, team or hospitality tents, village space hallmark event such as the Olympics. From 55 Provision of retail facilities: stands or published sources on the Internet, carry out areas where sponsors can promote and sell an assessment of the approach to attracting merchandise sponsors by the sport property owner. 256 Chapter 10 · Managing the Sports Sponsorship Process

Analysing each component provides the sport Lachowetz et al. (2003) strongly argue that property owner with a much clearer under- the benefits of a strong relationship ensure standing of its underlying value. greater degrees of loyalty between both par- It is also important to note that sport ties, at the time of sponsorship renewal. property owners should customise the pro- Strong relationships also confirm the posal so that it resonates with the overall adage that it is less costly to manage existing objectives and values of the potential sponsor. sponsors than it is to recruit new ones. Too many sports organisations develop a Strong relationships lead to a more open standard template for the proposal, which and positive culture between both parties. they circulate to potential sponsors. The chal- This encourages new ideas and initiatives that lenge is to personalise the document so that it can build on previous success in the deal. It stands out from similar proposals that brand- also keeps the relationship “fresh”. This is ers receive. As we mentioned earlier, property critical in an environment where issues such as owners should invest the requisite time to activation and developing narratives play a study the chosen potential sponsors in order significant role. to achieve this degree of individualisation in The challenge for the sponsored entities the content. revolves around seeking areas where it can add value for the sponsor and work collaboratively to achieve mutual objectives. 10.7 Managing the Relationship The challenge for sponsors is to maximise Between the Sport Property the investment by seeking opportunities to Owner and Sponsors enhance the experience for fans and generate 10 scope for interaction. We noted in earlier sections of this chapter that the days of handing over money to a sports property owner and expecting “good 10.8 Sponsorship Activation things to happen” are long gone. Sponsors apply a more professional and strategic The term “activation” has gained increasing approach, with in-built targets and metrics. significance within the context of sport spon- Sport property owners need to work closely sorship in recent years. We should recognise with sponsors across all aspects of the deal. that the fundamental challenge for a sponsor Otherwise, they run the risk of losing the con- is to leverage the investment to the maximum tract. Relationship management lies at the extent. Both parties have to engage in activi- heart of successful sponsorships. ties that energise the deal, engage in a relevant Like most partnerships, there must be a way with the target market, and enhance their high level of congruence between the spon- experiences at the event, or their consumption sored entity and the sponsor. Incompatibility of it, in the virtual world. In essence, both within areas, such as objectives and strategies, parties have to “bring the event to life”. The will quickly lead to a sundering of relation- days of agreeing a deal and handing over the ships. money to the sponsored entity are over, if we We should recognise that the signing of follow this approach. That is merely the first the contract between both parties does not step in the process. represent the culmination of the process. As a general guideline, experts in the field Rather it is the beginning! of sponsorship recognise that for every pound Over the course of a typical sponsorship, spent on the deal, a further two pounds also both parties should adopt a flexible approach needs to be committed in order to maximise to the relationship. Changes in the event/envi- the return on investment. Sponsors can ronment may suggest that the initially agreed achieve this in a number of different ways. objectives may require alteration to reflect Typical activation initiatives include the new opportunities. following: 257 10 10.9 · Sponsorship in the Digital Age

55 Activation at the venue/sports arena. Typical time updates, behind the scenes videos and activities include organising competitions forums for social interaction are all exam- at a stand or organising “fun events”. This ples. This brings fans closer to the event creates an environment whereby fans can (especially if they cannot attend it) engage with the product or try it out. 55 Social responsibility objectives. These are Branders can use the event to launch a new increasingly becoming more important, in product (e.g. beverage or food) or promote the context of sports sponsorship activa- the brand by providing samples to the fans tion. One way to do this is to develop a attending the event in the arena community-based activation strand involv- 55 Employee activation. Involving employees ing charitable causes, schools, clubs or some in activities such as community-based other social strand. It is not always possible sponsorships to calculate the direct financial return from 55 Advertising/marketing activation. Where this kind of activity but that, perhaps, is one sponsors can make use of celebrities or reason why consumers feel positive about brand ambassadors to appear at an event brands that engage in this way to engage with fans, sign autographs, pose 55 Celebrity activation. In this case, compa- for selfies and so on nies can utilise appropriate sports celebri- 55 Retail activation. This occurs where the ties to engage with fans at events. sponsor backs up its sponsorship of an

event/team, by running a special promo- (Source: adapted from 7 http://www. tional offer in retail outlets. This reinforces sponsorship-awards. co. uk/how-activate- the sponsorship and further captures the sponsorship-%E2%80%93-12-basic-ways) attention of the target market. This may Successful activation strategies relate to involve co-promotions with supermarkets the concepts of fun, engagement and creativ- to generate maximum publicity ity. 55 Hospitality activation. As part of the spon- It is also essential that both the sponsored sorship package, sponsors provide hospi- entity and sponsor fully understand the tality for a range of stakeholders, which brand: its values, associations and attributes. may include loyal customers, suppliers, When linked to a full understanding of the dealers or its own salesforce. This can gen- target market, their perceptions, attitudes and erate a number of outcomes such as gener- opinions, both parties are in a stronger posi- ating business leads, increasing business tion to devise effective activation strategies. with top customers and so on 55 Content-based innovation. Consumers must have a reason for engaging with the brand. 10.9 Sponsorship in the Digital Age Using content can be a useful mechanism for capturing their attention, engaging Digital marketing has changed the fundamen- with the content and raising their aware- tal nature of the relationship between the ness levels and purchasing the product three key stakeholders in the sponsorship pro- 55 Business activation. This focuses on rein- cess. As we have noted earlier in this chapter, forcing the corporate culture and values of the traditional model, whereby sponsors the sponsor at the event or engagement transfer money or pay fixed fees to the sport with the sponsored entity. The sponsor- property owner, is largely redundant. ship can be integrated into activities such Digital marketing and the associated tools as away-days that surround it have revolutionised the way 55 Digital and data activation. This captures in which fans consume sport (see our analysis

the benefits generated by the digital age. in 7 Chap. 4). These changes have implica- Sponsors can use material to provide real- tions for sponsorship deals. 258 Chapter 10 · Managing the Sports Sponsorship Process

Fans are no longer dependent on one 10.10 Tools for Engagement medium for watching and engaging with their favourite sport. Although TV is still the most In this section, we briefly examine two critical popular medium in many countries, fans tools that have become very important in increasingly utilise a range of different media. terms of addressing some of the issue raised In countries such as India and China, fans in the previous section. They are by no means make more extensive use of tablets and mobile the only ones that are available. phones. Fans are also less inclined to watch a full, live game, preferring instead to capture the 10.10.1 Content Marketing key moments or closing stages. They also increasingly prefer small “bite-sized” pieces of Traditional marketing communications such a game, e.g. the main action, such as the as TV advertising for instance, pushes infor- scores. mation at a target market in the hope that the Sponsors have to grapple with the fact that message will reach them. That can be a dan- fans increasingly make use of multiple plat- gerous supposition. There is no guarantee forms and use them interchangeably, for that it will reach them. Even if it does, there is example second or third screening. a strong probability that it will not register in Sponsors need to develop a flexible, adap- their stream of consciousness. tive and creative approach throughout the In the modern digital world, customers sponsorship process, together with the spon- decide what media and platforms they will sored entity. Sponsors can make the mistake utilise. In the case of sports sponsorship, 10 of “failing to prepare” - leading to a situation sponsors have to come up with creative mech- of “preparing to fail”. anisms for pulling fans to their website or Perimeter advertising and associated sig- social media platform. Sponsors have to “cut nage will have little impact on viewers or fans through” the fog of messages and communi- attending the sports event. They have to be cations that consumers have to cope with. substantiated with relevant content and One clear area where “cut through” can occur, engagement strategies in order to capture the is through the content of the message or com- minds of the fans and seek out their underly- munication. ing thoughts, views and opinions. The sponsor can generate content, as can The stadia infrastructure increasingly the sports property owner or the user (in the meets the requirements for Internet enable- form of the customer or the fan). They can ment, although the speed of the service con- generate material in a number of different tinues to vary across different countries and ways by typically using a combination of the regions. Certainly the “state-of-the-art” sta- following tools: dium is in a stronger position to enhance the 55 Blogging digital experience for fans in areas such as pro- 55 Social media posts vision of information and data and facilitating 55 Video betting on the result of a game or “in-play”. 55 Podcasts Sponsors, however, run the risk of losing 55 Webinars control over the material posted on social 55 Live streaming platforms. In the traditional models, they con- 55 Infographics trolled the messages and content (while not 55 Email marketing necessarily guaranteeing any success from 55 Social media platforms (Facebook, such strategies). Fans can distort messages, Twitter, YouTube, Instagram and so on). misinterpret content or simply generate a negative atmosphere on such platforms. Bacon In summary, we have witnessed a major (2015) notes that sponsors have to develop the change in the relationships between the key skill of knowing when to engage with their stakeholders: sponsors, sponsored entities target market and when to step back. and fans. Lefton (2017) argues that every 259 10 10.11 · Assessing the Effectiveness of Sponsorship Deals sponsor has now become a content producer respond to and shape their narratives around and every sports property owner wants to be a contribution of and interactions between fans media company. Content and more impor- on social media platforms. In the context of tant, the authenticity behind such material sports sponsorship, such initiatives can help will play a central role moving forward. the sponsor to more effectively manage the experience of the fan and interact in a more focused and targeted manner. 10.10.2 Storytelling

If content marketing is all about capturing the 10.10.3 Exercise attention, imagination and emotions of customers, then the sports sector fits in very well within the concept of storytelling. Sport generates pas- ??Select a sports event, competition, or team sion, excitement, enthusiasm, as well the despair. of your choice. Examine how that body has It is perfectly suited to a tool that can help to used storytelling and narratives to market enhance the experience of the fans who attend itself more effectively. sports events or consume them virtually. Laurell and Soderman (2018) carried out a full review of the extant literature and research 10.11 Assessing the Effectiveness on this topic. They identify a number of roles of Sponsorship Deals that storytelling and the use of narratives play in cutting through to people. How do you evaluate the impact of a specific 55 They create a positive effect in the minds sponsorship deal? This is the biggest challenge of fans facing sports marketers. You have spent a large 55 People like a story, after all we were raised sum of money on a campaign but have you on stories from infanthood received a meaningful return on investment? 55 Narratives provide a structure for people Sponsors can utilise a range of tools and to relate to and organise their thoughts in techniques to address the above questions. a structured manner Some appear to be very superficial and basic, 55 Narratives allow people to connect the self while others employ some degree of rigour. to the brand Masterman (2007) identifies a couple of 55 Storytelling cultivates interest and curios- basic questions that need to be addressed ity. when it comes to sponsorship evaluation: 1. How clear was the objective? Significantly, they argue that storytelling is 2. Who took notice of it? the explicit practice of marketing. No universally accepted mechanism exists for »» Convergence results in stories that are com- assessing the effectiveness of a sponsorship municative and which can be diffused across deal. This is similar in many ways to the chal- digital media. What this means is that these lenges involved in evaluating the effectiveness stories, from the perspective of the market- of any advertising or marketing communica- ing efforts of professional sports organization campaign. tions, are not necessarily defined by the Whichever combination of methods is uti- organizations themselves. Instead, we have lised by companies, they should observe some illustrated how the influence of story cre- basic principles in the first instance. These ation, because of social media to a large provide greater clarity for the subsequent extent, can occur independently from pro- evaluation and they can be summarised as fol- fessional organizations’ control (p. 345). lows: The inference from their view is that sports 55 Clear objectives. These should be stated in marketers, working in organisations, are not unambiguous terms at the outset, other- just creators of narratives, they also have to wise it would lead to confusion. What spe- 260 Chapter 10 · Managing the Sports Sponsorship Process

cific areas does the sponsorship deal set The sponsor can carry out media equiva- out to address? Sales increases? An lency audits of such frequencies. This helps increase in brand awareness? Changes in them to estimate the value of the sponsor- perception? ship in monetary terms. It is based on the 55 Target market specification. Companies equivalent cost that the company would should identify the specific target market(s) have had to pay for such coverage. To some under investigation extent, technology allows companies to 55 The length of the sponsorship deal. make more detailed and accurate assess- Typically, this may run from 3 to 5 years. ment of such coverage. Sponsors should identify any changes in 3. Brand awareness/recall. Sponsors set objec- objectives during this period tives such as increasing the level of brand 55 The need for multi-interventions. Sponsors awareness/knowledge during the course of should adopt a tracking system to assess the sponsorship deal. This consists of car- changes in the responses of fans to the spe- rying out surveys to determine the percent- cific metrics utilised. Such metrics may age changes over time – a longitudinal include some of the following: study that reflects the variations in percep- –– Attitude to brand tions. This is perhaps the most common –– Awareness of brand methodology used in such circumstances. –– Awareness of the sponsorship Some sponsorship deals focus on compar- –– Product sales ative assessments of how fans perceive –– Media exposure generated their brand. –– Positive/negative social media activity 4. Social media assessment. As we have noted 10 –– Degree of sentiment expressed on social earlier, sponsors engage more fully with media social media by running a number of acti- –– Response to sponsorship-related pro- vations. Technology and data analytics motions present opportunities for them to track the –– Lead generation level of sentiment (opinions and posts made –– TV/Logo exposure. by fans about the brand) which can be positive or negative. Sponsors can also track the number and frequency of engagement with 10.12 Evaluation Methods fans and their responses to specific promotions, competitions or “fun” activities. 1. Impact on sales. Although sponsorship 5. Return on sponsorship investments (ROSI). deals focus more specifically on brand- This approach addresses some of the prac- related issues, in some cases sales may fea- tical problem facing sponsors as they use ture as part of the objective for entering multiple media to get across their message. into such an agreement. Typically, spon- By multiple media, we refer to platforms sors may use the deal to introduce a new such as TV, Print, Social Media, Hospitality product or engage in promotions of and so on. This inevitably generates numer- selected items. Measures include aggregat- ous data-sets as the sponsor (and sports ing the number of items handed out to property owner) tracks responses, percep- fans at “live” events. In the context of B2B tions and opinions. brands, sponsors can also identify the number of sales leads that may have been Stegelmann (2017) outlines a model devel- generated at the event. oped by Nielson to take account of these 2. Media coverage. This can range from simple complexities and provide a simpler mecha- methods such as tracking the number of nism for analysing the data to identify one mentions in the press and the frequency overall estimate of the value to the sponsor with which the brand name/logo appears (ROSI) that comes from the deal.

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The model recognises that the costs associ- ter the brand in the minds of fans (attending ated with activating the sponsorship are also the event and more crucially, on TV, across built into the framework (activation mea- the globe). They handed out hundreds of sures). thousands of tee shirts with the same message In essence, the total monetary value is on the front. It achieved high levels of recog- divided by the costs (of acquiring the deal and nition and association. the activation-associated costs) to generate an Many fans assumed that Nike were official overall ROI calculation. If the score is <1, sponsors of the event. This was not the case. then you are investing more in the sponsor- By running this campaign, Nike benefited by ship deal than you are getting from the associating its brand with the event. As we arrangement. By contrast, a score of >1 indi- shall see later in this section, governments and cates that the deal is working well for you and sports property owners have tightened up the you are getting a positive return on your process on what constitutes ambush market- financial commitments to it. ing. However, in this case Nike exploited very This model provides a useful framework loose policing of the event. Arguably, it com- for sports marketers in the quest for an accu- mitted no “crime” at all. It simply associated rate picture of the value of the sponsorship the brand with LA and never explicitly men- deal. It can be adapted to reflect the specific tioned the event. characteristics of an individual sponsorship.

10.13.1 Defining Ambush Marketing 10.13 The Threat from Ambush 10 Marketing Ambush marketing appears in many different guises as we consider the empirical evidence The increasing value of sports events makes from the research and practice in this area. A sports sponsorship an attractive proposition good analogy links to the concept of the for potential sponsors who wish to develop “party poopers”. Such individuals (you may their brand awareness and equity because of be one yourself!) are likely to attend parties gaining an official association with such sport that they have not been invited. They benefit properties. from the food and drink that is available and Inevitably, this attracts attention from typically slip into the background so that competing brands who also wish to link with nobody specifically recognises them. End sports properties, albeit without any official result? A well-fed and refreshed individual, endorsement or the payment of fees. Terms who contributes nothing to the party. such as “ambush marketing”, “parasitic mar- Ambush marketing embraces many of the keting” and “guerrilla marketing”, have been characteristics of the example in the above used by marketing experts to capture the section. essence of this practice. We will use the term Chadwick and Burton (2011) identify “ambush marketing” in this chapter. many different approaches and suggest that While such nefarious practices are likely to such brands try to “capitalise on the atten- have been in operation for centuries, experts tion, awareness, customer equity and goodwill pinpointed the Los Angeles Olympics in 1984, generated by having an association with an as the first occasion when a large, iconic brand event or property, beyond the official or was accused of utilising a strategy to exploit authorised rights of association delivered by such an unofficial association with a hallmark that event or property” (p. 714). sports property. In a later article (Burton and Chadwick In this case, Nike, the global sports brand 2018), they make a number of important ran a campaign based on the phrase “I love observations. Firstly, there is no uniform LA”. This continued before, during and approach to ambush marketing: companies shortly after the games. They invested heavily rely on a wide range of creative mechanisms in TV, press and billboard advertising to regis- to intrude on the event. Secondly, they iden- 263 10 10.14 · Responses to the Threat of Ambush Marketing tify three different types of ambush tive investments, if measures were not intro- marketing: duced to protect them. 55 Incursive ambushing: this form refers to Initially, sports property owners “named aggressive, predatory or invasive activities and shamed” offenders, in some cases listing on the part of the brand. They cite the them on full-page advertisements in the example of Pepsi, who ran campaigns using national newspapers. This had little effect as it the phrases “Refresh your World” and “Oh did little or nothing to compensate official Africa” at the 2010 World Cup (staged in sponsors for their investments. South Africa). We should bear in mind that Another attempt involved the use of iconic its direct competitor, Coca Cola, was the Olympian medal holders. They endorsed a official partner at this event. message, which stressed the important role 55 Obtrusive ambushing: refers to visible mar- played by official sponsors and partners in keting activities on the part of the ambusher delivering a high-quality viewing experience to promote its brand in a situation where it for fans across the globe. Again, this had little has no official rights to do so. Ennis et al. effect. (2013) carried out an observation audit of Eventually (and not a moment too soon in potential ambush marketing at the UEFA the eyes of many experts), stakeholders such European Championships (held in Poland as governments and sports property holders and the Ukraine in 2012). At one such resorted to the drafting of appropriate legisla- match location and despite legislation and tion to circumvent such practices. For policing of the event, unofficial branders instance, the 2012 London Olympics in par- were to be seen on billboards at under- ticular, introduced an exclusion zone around ground stations two stops before the sta- the stadium where no unofficial brander could dium subway station. Many fans alighted use any form of visual manifestation of its at such stations because they could attend logo, message or form of words to promote its fan zones. Outside of such fan zones, rep- brand. Earlier hallmark events such as the resentatives of unofficial branders handed World Cup in South Africa also introduced out free samples, tee shirts and caps. similar measures. 55 Associative ambushing: this method focuses In addition, legislators protected the use on creating an illusion that has a connec- of various words directly associated with the tion with an event. The Telstra case event. This meant that only official partners (included in the cases section) provides a could incorporate them in their communica- good example of such an initiative. This is tions messages. arguably the most subtle and effective form The impact of legislation has arguably of ambush marketing. It is not as obvious minimised the dangers of obtrusive and incur- or as crude as the other two types and cre- sive ambush strategies. However, the Telstra ates difficulties in terms of proving any case highlights a number of problematic infringement of legislation in a court of aspects where legislation may fail to address law. the concerns of key stakeholders.

10.14 Responses to the Threat 10.14.1 What Makes Ambush of Ambush Marketing Marketing Work?

Since the 1984 Los Angeles Olympics, the var- Ambush marketing thrives in conditions ious stakeholders in the sponsorship process that encourage confusion and ambiguity. have revised their approach to dealing with Increasingly, with major sports property ambushers. As the increasing value of sports events, the practice is for property owners to sponsorships continued to increase, official create different tiers and levels of partners/ partners expressed serious concerns about sponsors. It is unusual to have one sponsor. gaining any significant returns on their respec- While there is an inherent logic for pursuing 264 Chapter 10 · Managing the Sports Sponsorship Process

such an approach (such as the principle of Successful ambush marketing campaigns the more sponsors you have, the more revenue make use of humour and creativity to capture accrues), the downside is that it creates confu- the minds of fans. sion in the minds of fans. In another example, Paddy Power made For instance, if there are over thirty spon- use of humour to achieve this specific objec- sors associated with a hallmark event, is the tive. The company inserted its brand during fan more or less likely to recall many, some, or the Giro d Italia in the 2014 event. The third a few of these brands? Confusion is further stage started in Northern Ireland and finished enhanced if ambush marketers engage in in Dublin. Paddy Power spotted an opportu- some form of strategy that associates their nity and devised a witty message (albeit with a brand with the event. For instance, if Heineken sting in the tail). is the official beverage sponsor to a particular Picture the scene; three cyclists are passing sports property and Carlsberg engages in through one of the many towns and towns on ambush tactics. What is the likelihood that a the stage. What do we see? Well in a promi- significant percentage of fans will mention nent position, beside the road, we see a make- Carlsberg as the official sponsor? Even if a shift stand or stall. On top of the stand, we relatively small number mention Carlsberg, it can see the following message. “Clean Urine damages the investment made by Heineken. Swap Stand”, with Paddy Power displayed Ambiguity also creates a positive environ- prominently underneath. On the table we can ment which works for ambushers. Courts of see a large number of water bottles. In front law like clarity when it comes to a case involv- of the table we see the following message. Get ing potential breaches of legislation in respect clean urine here. Again, Paddy Power is dis- 10 of ambush marketing activity. The following played beneath this exhortation. example illustrates this situation. The messages on this stall poke some gen- Paris hosted the World Athletics tle fun at the issue of doping and testing, Championships in 2003. Reebok, the sports which is a recurring feature of the sport of equipment and accessories brand, booked professional cycling in Europe. On the surface space very near the Eiffel Tower (a landmark it is witty and highlights a common percep- part of Paris). Every day it ran a press confer- tion about the sport of cycling. At a deeper ence outlining its products. In particular, it level, it is a clever and creative way of imple- launched a new running shoe at one of these menting ambush marketing. The message is events. It was not an official sponsor of the clear and unambiguous. Paddy Power is NOT championships. It staged these events well involved in the sponsoring of the event. away from the stadium. Within minutes of this picture appearing on It is obvious that Reebok wanted to asso- social media, it went viral around the globe. ciate its brand with the event (albeit in a non- The cost of staging this stunt to Paddy Power directional manner). It also used the press was negligible, yet the publicity was signifi- conferences to insinuate its brands into the cant. minds of passing athletics fans (most of whom Koenigstorfer and Uhrich (2017) reinforce would make it their business to visit the Eiffel the value of using humour in ambush market- Tower as part of their trip to the ing campaigns. Most of us respond to some- Championships). However, it would be very thing that makes us laugh. Less of us respond difficult to prove, with any clarity, that Reebok to obtuse, fact-based messaging. engaged in nefarious activities. Ambush marketers have to recognise the It requires another leap of faith and judge- importance of being flexible and adaptive ment to associate ambiguity with misleading when designing specific campaigns. Every sit- the public or engaging in an act of deception. uation creates different obstacles and chal- This takes us to that “grey area” that does not lenges. You cannot employ a “one-size-fits-all” work well in a court of law. strategy. 265 10 10.15 · Athlete Endorsement and Brand Ambassadors

10.14.2 Response of Consumers/ vides succour for brands who want to capital- Fans ise on any loopholes that allow them to exploit sports events. Arguably, the most important stakeholder is As mentioned earlier, all brands, irrespec- the fan who watches or attends major sports tive of whether they are official or “unoffi- events. Is there any evidence that fans hold cial”, have to break through the “fog”, strong views, either positive or negative, about lethargy and information overload that peo- the impact of ambush marketers? Is there any ple generally (fans in this case) face on a daily evidence that they register official sponsors in basis. Ambush marketers thrive on confusion their minds either? and ambiguity. No legislation will eliminate The extant research on these questions is such practices: they are a fact of life, in the sparse and somewhat inconclusive. Sports context of sponsorship. property owners, usually in tandem with host governments employ counter-ambush marketing initiatives. These typically involve 10.15 Athlete Endorsement “naming and shaming” offenders or deploy- and Brand Ambassadors ing legislation to take them to court. Cornwell et al. (2012) conducted research, which indi- In tandem with sponsorship, many companies cates that such measures can influence fans utilise the services of athletes to endorse and cultivate some negative perspectives brands and act as brand ambassadors. This about ambushers. practice builds on the principle that well- Burton and Chadwick (2019) point known and well-loved sportspeople play a towards research, which suggests that the very strategic role in influencing consumer’s influence of ambush marketing is situational. decision-making process. In some cases, fans are influenced by the We only have to look at the emphasis that nature of the brand or industry that relates to consumers and the media place on the con- the specific situation. For instance, so-called cept of celebrity. Many people appear to be “controversial” brands from the alcohol or captivated by the utterances and lifestyles of betting sectors may engender specific percep- celebrities from the film, fashion and sports tions and attitudes on the part of fans. world. They also provide findings from research In the context of the sports sector, success- conducted with European football support- ful athletes are revered by their fans. By ers, which indicates that around 53 per cent endorsing a brand, they can play a direct role believed that the practice of ambush market- in increasing the awareness levels and ulti- ing is unethical. This would appear to be simi- mately sales. lar to other studies on the same topic. Around The basic principles with regard to select- 45 per cent of those surveyed expressed the ing appropriate athletes are similar to that of view that ambush marketing is annoying. identifying potential sponsors. The personal- It can be argued that such findings are ity, values and attributes of the athlete should inconclusive and can be interpreted in a cou- be aligned with the brand values and associa- ple of ways. From the sport property holder tions. Without that alignment, it is unlikely and sponsorship perspective, they lend sup- that such an endorsement of a brand will be port to the view that the measures employed effective. to highlight the evils of ambush marketing, Emmadi (2017) highlights the dangers of work to some extent. They encourage fans to using athletes to endorse brands. For instance, think about the moral and ethical fallout from a decline in performance by the athlete or a the practice of ambush marketing. scandal, can generate a change in perceptions. However, a sizable proportion of fans Such negative publicity embeds itself in would appear to attach little significance to potential changes in attitudes to the brand by the threats from ambush marketing. This pro- fans. 266 Chapter 10 · Managing the Sports Sponsorship Process

The role and rise of celebrity endorsers has comments and endorsements. Fans may be been heightened by social media. Such plat- gullible in many ways, but many are now forms have opened up the way in which con- becoming cynical of claims about brands that sumers, in general, and fans, in particular, are made by athletes. engage with athletes, players and clubs. Many Credibility is at the heart of successful ath- sports players and athletes have very active lete endorsement of brands. Without that Twitter, Facebook and Instagram accounts. facet, any attempts by branders to design a They use them to connect with their followers, communication strategy will fail. post messages and promote brands. In Research on credibility is encapsulated in essences, social media has added another layer the Source-Credibility Model (Ohanian 1990). to the role and contribution of athletes to This framework identifies three variables: engagement with their fan-base. The power of the Internet and social 55 Attractiveness (attractive, classy, beautiful, media is also reflected in the exponential rise elegant and sexy) of “social influencers”. These are individuals 55 Trustworthiness (trustworthy, dependable, who are active users of social media platforms honest, reliable, sincere) and who have established credibility in a spe- 55 Expertise (expert, experienced, cific industry. A social media influencer has knowledgeable, qualified and skilled). access to a large audience and can persuade others by virtue of their authenticity and This framework provides a useful guide for reach. branders in the context of evaluating the suit- In the context of the sports sector, well- ability of athletes for endorsing their respec- 10 known and successful athletes fit neatly into tive brands. this genre. They have established credibility by Malik et al. (2018) develop some of the dint of their performance in their sport. They themes from the source-credibility model, to have established “reach” with their fan-base: highlight three management-based factors. at the top end, in a global context. Celebrity-product congruence: this dimen- For instance, Ronaldo, one of the most sion relates to the closeness of alignment successful footballers in the world, over the between an athlete and the brand. The closer past 15 years has over 197 million followers on the alignment, the stronger the degree of con- the Instagram platform alone. Other high- gruency. profile athletes such as Roger Federer, Lionel Celebrity-multiplicity: this relates to the Messi, Rory McIlroy and Serena Williams, number of athletes a brander may use to also have a very large global following. Their endorse the brand. Arguably, by using multi- ability to shape and influence consumers can- ple athletes, the brander can promote diver- not be underestimated. sity within the brand and appeal to different The beauty of social media platforms segments of fans. Gillette makes use of ath- revolves around the interactions between athletes such as Tiger Woods, Roger Federer and letes and fans. It creates a dialogue, not a Thierry Henry. monologue. Both parties can communicate Celebrity activation: this dimension essen- with each other. This builds a rapport and, by tially refers to the highpoints of an athlete’s so doing, increases the credibility of the ath- success and how the brander can activate this lete. in a positive way. Winning a major tourna- The dangers of social media in general and ment or event triggers higher levels of positiv- influencers in particular, revolve around the ity among fans with respect to their potential that athletes see in monetising their perceptions of a brand. The reverse also hap- involvement in this area. Critics argue that in pens. A decline in performance can stimulate many cases, athletes are prepared to endorse lower levels of confidence in the brand. This anything, as long as they can make money out highlights the ephemeral nature of sport and of it. This challenges the credibility of such sports athletes. 267 10 10.16 · Stadium Naming Rights

10.15.1 Exercise We have seen, in this chapter, that the sponsorship process has fragmented into specific sub-areas. These include shirt sponsor- ??Select ONE of the following athletes: Roger ship, sleeve sponsorship, shorts sponsorship, Federer, Naomi Osaka or Serena Williams. individual stand sponsorship, fan zone spon- By making use of sources from the Internet, sorship and so on. assess their endorsement of brands and the Stadium naming rights has become a sig- underlying strengths and weaknesses of us- nificant asset from which sports clubs can ing them by the branders. generate a significant revenue stream. This occurs where a company purchases the right to place its name officially on the stadium. 10.15.2 Brand Ambassadors However, we should ask the following question? Are clubs making sufficient use of Brand ambassadors are (in the case of sport) this asset? athletes who are recruited by branders to repre- A recent study (Duff and Phelps 2019) sent their brand in the most positive way possi- investigated the prevalence of European foot- ble and to underline the values and attributes of ball teams who have sold the naming rights that brand. In essence, brand ambassadors go for their respective stadia. The findings indi- beyond the practice of simple brand endorse- cate that of the ninety-eight teams playing in ment. In the latter case, the athletes appear in the “Top Five” European Football leagues various advertisements. By contrast, ambassa- (England, Spain, Italy, Germany and France), dors are embedded more fully in the brand. In only twenty-seven per cent have naming rights many cases, branders (as part of the contract) deals in place. The Bundesliga is the most will involve them in activities such as engage- developed in terms of such deals, with eighty ment days with fans, corporate events, engaging per cent having sold the naming rights. with the company’s employees and so on. This study suggests that a considerable For brand ambassadors to work success- number of clubs are potentially missing out a fully, the brander needs to invest much time in significant revenue stream. assessing the attitudes, personality, athletic How is the value of the naming rights traits and values of the potential ambassador. established? Like the general sponsorship of a Otherwise it is possible that the closeness of team or club, there is no “magic formula” in alignment between ambassador and brand existence to facilitate this exercise. will break down and lead ultimately, to failure. Clubs generally would use a combination Brand ambassadors, by definition, are of the following factors: opinion formers and carry the perceived 55 The level of fee paid by its overall partners weight of expertise and credibility to make and sponsors (shirt and technical sponsors) positive statements about the brand. 55 The level of income the club generates We highlight the importance of visualising from TV deals a brand as having a distinct personality. A suc- 55 The level of transfer expenditure (reflect- cessful brand ambassador becomes embedded ing the quality of players) in the personality of this brand. By dint of their 55 Attendance levels at games own attributes and personality, they, in effect 55 Performance on the pitch (over the past “become” the brand, in the eyes of the fan. 3–5 years) 55 Number of social media followers, (domestically and globally) 10.16 Stadium Naming Rights 55 The going rate for clubs of a similar standard and status. In the quest to generate as much revenue as possible from as many assets as possible, stadium Duff and Phelps (2019) estimated that the naming rights presents an attractive option for total value of the English Premier League sports property holders and marketers. increased from £135.5 million in 2018 to 268 Chapter 10 · Managing the Sports Sponsorship Process

£142 million in 2019. The “Big Six” teams Going forward, we might see one or two (Manchester City, Manchester United, scenarios playing out. In the first case, the Tottenham Hotspur, Chelsea, Liverpool and value of naming rights may decrease (as might Arsenal) accounted for around eighty-two sponsorship and media rights) in light of the per cent of this estimate). Fourteen clubs did Coronavirus crisis and the impending reces- not have any naming rights sponsor. Only six sion that is likely to ensure. clubs had a naming rights deal that was separate from the shirt sponsor. Taking a European perspective, the study 10.17 Conclusions indicates that the top six teams, in terms of the potential value of a naming rights deal (it In this chapter, we assessed the role that does not necessarily mean that they have one sponsorship plays within overall sports mar- in place) are as follows. keting strategy. We argued that the sports Real Madrid - Euros 36.5 million per year sector provides a fertile environment for Barcelona - Euros 36.5 million per year branders to link their product’s values and Manchester United - Euros 30.5 million per associations with a relevant sports property year (competition, team or hallmark event). Sport generally develops positive thoughts and Manchester City - Euros 24.95 million per experiences for fans. It engenders passion, year excitement and euphoria, which is almost Bayern Munich - Euros 20.4 million per year impossible to replicate in other business or Tottenham Hotspur - Euros 19.95 million service sectors. 10 per year As the sports sector focuses increasingly on commercialisation, sport property owners We should exercise caution when interpreting (employing experienced personnel from the such figures, particularly in light of the traditional business sectors) recognise the Coronavirus crisis. It is likely that the values value of their respective products. This has led may decrease initially as the football industry to significant increases in global expenditure struggles to re-establish itself. on sports sponsorship globally. We should also note that many clubs are We acknowledged that some negative wary of selling naming rights to their stadium. aspects surround sport. Scandals involving The history, heritage and role in the local individual sportspeople, cheating and corrup- community, in many cases, supersedes the tion constantly damage the image of sport. desire to make money. Sports property owners From the perspective of sponsors, this can may fear the opprobrium and criticism that lead to a reluctance to commit to certain they might receive from fans. In extreme situ- sports. However, the power of sport appears ations, they risk alienating certain categories to overcome such reluctance: while some of fans, such as the older demographic. sponsors may withdraw, others are prepared The challenge is to get the right balance. to step in and take their place. Like general sponsorship principles, it is We recognised that sponsorship has moved important the potential naming rights spon- on from the era of simply handing over money sor should be representative of the values and to the sponsored entity (with certain excep- ethos of the club. Any brand that attracts neg- tions, such as philanthropic arrangements) to ative publicity in the general and social media, an expectation of a return on investment. may create difficulties. This problem appears Sport property owners recognise that they to be less of a concern in the North American play an equal part in the management of the market. Arguably, this is due to the role that sponsorship process in order to extract the franchises play in terms of club ownership. maximum benefit and create an environment There is also less emphasis placed on history that also allows the sponsor to achieve its and heritage in that market. objectives. 269 10 10.17 · Conclusions

We stressed the importance of activating the sponsorship deal. Typically, such initia- same values and attributes of the spon- tives will add significantly to the original sorship entity investment in the sponsorship contract. 55 Activation is the key to creating oppor- The digital era has transformed the way in tunities for optimising a sponsor’s which all of the stakeholders engage with return on investment sponsorship. Fans and sponsors can engage 55 Sponsorship is a process that has to be and interact to an extent that was not possible managed as a partnership between both “pre-digital”. Such engagement allows spon- parties sors, in particular, to activate their sponsor- 55 The digital era has also increased the ship in a focused and personalised way. likely effectiveness of sponsorship Both sponsors and sport property owners deals, if managed successfully by both can also make use of data and relevant tech- parties nology to capture accurate data on the 55 Sponsorship objectives vary around a responses and behaviour of fans. This pres- number of areas including building ents opportunities for more accurate and brand awareness, sales, changing per- “real-time” evaluation of the success (or oth- ceptions and social responsibility erwise) of the sponsorship deal. 55 Ambush marketing represents an on- In the latter part of the chapter, we assessed going threat to official partners of the dangers that emanate from ambush mar- sports events keting. We drew an analogy with the “party 55 Despite the introduction of legislation, poopers”. They are not invited to the party ambush marketers can still find mecha- but they insinuate themselves into the party nisms to circumvent such restrictions and benefit from the drink and food provided. 55 Ambush marketing thrives on confu- Ambush marketers also benefit by associating sion and ambiguity their brand values and associations with a 55 Some sports fans express anger when particular sports event, without paying for the asked about their perception of ambush benefits that accrue. brands. However, it is difficult to gener- Evidence suggests that ambush marketing alise and most studies indicate that as works, despite the introduction of legislation much as half of fans (depending the and other measures to eliminate the threat. situation) express little concern about Such initiatives by sport property owners and such activities government have reduced the impact, but can 55 Successful ambush marketing cam- never properly make ambush marketing dis- paigns make effective use of humour. appear. Successful ambush marketing usually involves the use of humour and creativity to ??End of Chapter Discussion Questions capture the attention of fans. Effective use of 1. Assess the view that as sport becomes social media platforms and viral marketing also more commercialised and competitive, feature prominently in successful strategies. issues such as corruption and doping threaten the viability of sports sponsorship. Use examples to support Learning Outcomes your point of view. 55 Sponsorship involves an investment on 2. Examine the reasons why companies the part of the sponsor. It is no longer are increasingly looking at sports sufficient to hand over money to the sponsorship as an effective way of sponsored entity meeting social responsibility objectives. 55 Successful sponsorship deals involve 3. Some commentators argue that the close alignment of a brander’s val- successful sponsorship deals are ues, attributes and associations with the dependent on the concept of a partnership between the sponsor and 270 Chapter 10 · Managing the Sports Sponsorship Process

the sports property holder. To what marketers, then there is no reason to extent do you agree with this view? Use focus too much on this issue. Examine ONE detailed example to support your the validity of this perception. opinions and observations. 7. Social media and technology have 4. A colleague of yours is a Marketing made it much easier for sponsors to Director of a soft drinks company. optimise their investments in sports This person expresses cynicism about properties. How accurate is this view? the effectiveness of sports sponsorship. Use examples by way of illustration. How would you convince this 8. Effective ambush marketing campaigns individual that this is not the case? depend on humour to register with the 5. Critically assess the view that legislation target market. Assess the accuracy of is the only realistic mechanism for this perception and develop one preventing ambush marketing. Use detailed example to support your line examples to support your observations. of argument. 6. Some commentators argue that if there is little evidence to support the view Appendix that fans are angry with ambush

Pie in the Sky: Anatomy of a Sponsorship Deal

Introduction Three” events: Tour de France, Giro d’Italia The Union Cycliste Internationale (UCI) gov- and the Vuelta (Spanish). 10 erns the World Tour series in the sport of Throughout this period, Sky Television (owned cycling. This tour comprises thirty-eight road- by the Murdock Media organisation) initiated racing events and runs from January through funding of this team in 2010. Spurred on by the to October. It begins with the Tour Down success of British Cycling since the Beijing Under in February and ends with the Tour of 2008 Olympics and the level of interest gener- Guangxi in China. ated in the UK, it saw the opportunity to put Currently, eighteen teams compete across the Great Britain “on the map” by establishing a range of events. They represent all parts of the team that could compete and win the major globe, ranging from Bahrain, Kazakhstan and cycling events. It recruited the “brains” behind the United Arab Emirates, through to more the success of British Cycling, David Brailsford, established “cycling” countries such as France, to lead the team. He developed and imple- Spain, Switzerland and the Netherlands. The mented the strategy in subsequent years. 2019 season witnessed the emergence of a team from Poland. End of the Deal Sponsorship deals are at the heart of this sport. At the end of 2018, Sky decided to terminate Consider this point. It is perhaps the only elite the sponsorship of Team Sky at the end of the sport out there that is almost totally dependent 2019 season. Some commentators expressed on sponsorship for its revenue. For instance, shock at this sudden announcement. After all, the road-races across the globe are free: people the relationship appeared to run successfully who watch the event as the cyclists pass by, do and seamlessly for the best part of a decade. not pay any entry free for the privilege. Apart Similar sponsorship deals lasted between 3 and from prize money and fees for appearing in 5 years. Why should they end the “perfect rela- events, sponsorship funds the costs associated tionship”? with each of the competing teams. The US media company, Comcast, acquired For the past decade or so, Team Sky has domi- Sky for around £30 billion and it’s CEO, James nated proceedings by winning many of the Murdoch stepped down. He was an enthusias- events on the World Tour, in particular the “Big tic fan of cycling and was seen as the “Product 271 10 Appendix

Champion” for the ongoing investment in Typically, around eighty to ninety per cent Team Sky over the years. of the costs revolved around salaries and con- Over the decade of Team Sky, it dominated tracts. The top teams operated with a “vast the sport of cycling. Prior to the emergence of army” of experts such as coaches, nutritionists, Team Sky, Brailsford generated much hilarity psychologists and so on. Much of the wages when he posited the view that they would win one were paid to the “talent”: the top cyclists that of the “Big Three” events within a couple of anchored the team. The remaining costs cen- years. No British rider had every won any of these tred on travel and transport. events. By 2018, Team Sky had won every one of Sponsorship generated around ninety per these “majors” and produced the winner of six of cent of the revenue coming into the teams. the last seven Tour de France events. They also In the case of Team Sky, the Sky dominated the other events on the World Tour. Corporation invested £21.3 million in 2017. It Cynical observers argued that recent scan- owned eighty-five per cent of the team. Twenty- dals associated with the sport of cycling and First Century Fox (which owned the remaining the team, such as doping and accusations that fifteen per cent) put £3.8 million into the ven- Team Sky made use of questionable drugs to ture. These sums reflected the levels of owner- boost performance, led to this decision to with- ship. The cycling industry referred to this as the draw sponsorship. investment needed to claim the Title Sky put forward the view that there was Sponsorship of a team. nothing mysterious or sinister about the deci- Performance sponsorship referred to income sion. It simply represented the culmination of a derived from companies such as Pinarello, detailed, strategic review of its range of com- Castalli, Ford and Kask. These organisations mercial partnerships - a logical step in the were suppliers to the team of various pieces of acquisition process. equipment. They paid Team Sky for this privilege. Whatever the reason, Brailsford and his Value-in-kind related to the value of items team faced the challenge of replacing the title provided to the teams such as bicycle frames sponsor by August 2019. They had one year to and cars.

achieve this task. . Table 10.4 identifies the cost of running Team Sky over a period of 8 years. Financing Professional Cycling Teams For the casual spectator of cycling events, it is difficult to relate to the actual costs of “putting a team on the road”. The average annual World Tour team budget .. Table 10.4 Team Sky budget is around £15 million. However, this figure hides Year Budget the disparity in funding available to teams. Team Sky has skewed the picture over the last decade. 2010 £14.6 million In 2017 the cost of running the team was esti- 2011 £16.7 million mated to be just under £35 million. Competing teams such as the Russian-owned Katusha, were 2012 £21.4 million not far behind (£32 million). Others, such as 2013 £22.1 million BMC (£28 million), Tinkoff (£25 million), and 2014 £24.5 million Astana (£20 million) also generated high costs. At the other end of the spectrum, teams 2015 £24.5 million such as Fortunes-Vital Concept operated on a 2016 £31.1 million budget of £3 million. 2017 £34.5 million This reinforces the principle of success in elite sports. The strong get stronger and the Source: adapted from 7 http://inrng. weak get weaker. com/2018/09/team-sky-budget-2017/ 272 Chapter 10 · Managing the Sports Sponsorship Process

The figures reflect a small decrease for 2015. als providing patronage to talented artists, Currency fluctuations caused this change poets and composers in past centuries. because the sterling currency was strong at that Such patronage, while providing much time. Teams pay their staff in Euros. For Team needed finance to support the large costs of Sky this generated some savings. Signing new running professional cycling teams, is not with- talent and adjusting salaries of existing cyclists out potential dangers. caused any other spikes in these figures. If a team becomes a “play thing” of an individual, it runs the risk of suffering from Motivations for Sponsoring Cycling Teams sudden changes in mood or attitude. A team Cycling does not conform to many other sports, called Tinkoff experienced this issue when its in terms of how it is run and also with respect owner suddenly withdrew sponsorship. to sponsorship. This also threatens the long-term sustain- We have argued in this chapter that the ability of the business model. If a team is nature of sponsorship has changed dramati- dependent on the mood swings of such indi- cally over recent years. It has moved away from viduals, it makes it difficult to plan strategically. the concept of “handing over money” to a Ever-increasing salaries and contracts demand for a proper return on investment, on ensure that budget requirements will only rise the part of existing and potential sponsors. in the longer-term. However, cycling would appear to deviate For smaller, less financially endowed teams, away from this practice. the pressure is on to attract such individuals. Powerful (in terms of financial influence) Alternatively, they have to allocate a higher pro- 10 individuals and institutions are a common fea- portion of their budget to salaries as they attempt ture of the typical sponsor of a professional to sign young, emerging talent, in the hope that World Tour cycling team. success on the road will follow. This takes them Countries such as Bahrain, established into the “high-risk” end of the spectrum. their own cycling team. This was partly to It also extends the gulf in standards enhance the image of Bahrain as a tourist des- between the “have’s” and the “have-not’s”. It tination. Cynical commentators argue that it is replicates what has happened in many other an attempt to deflect the media away from high profile sports globally. charges that it infringes human rights. Oligarchs and multi-billionaires also fea- Enter Jim Radcliffe ture prominently in the ownership of many When Sky announced the termination of the teams. sponsorship arrangement at the end of 2018, In such cases, it is difficult to see how such commentators held different views about how vast outlays of money on teams could reason- easy or difficult it would be to acquire a similar ably be expected to generate realistic returns sponsorship deal going forward. on such expenditure. A combination of per- Notionally, Brailsford and his team had a sonal egos and treating the sponsorship as a year to identify and sign up a new sponsor. “play thing”, are probably the main drivers However, in practical terms, many people for such initiatives. Cycling captures much argued that the longer it took to do so, the media attention in key markets, most notably more likely existing talent would seek contracts Europe. Independently wealthy individuals from other teams. and oil-rich countries see this sport as an In March 2019, Brailsford announced that opportunity to keep their respective profiles in they indeed had identified a new sponsor and the public eye. signed a new sponsorship deal with Jim Radcliffe. This suggests that the days of philanthropy Who he? are not over. In many ways, it reflects the tradi- Jim Radcliffe is reputed to be the richest tional concept of royalty and wealthy individu- businessperson in the United Kingdom and 273 10 Appendix

among the top thirty richest people in the ments in a number of different areas, then world. He owns a company called Ineos, which overall, this will drive improvement in perfor- is one of the largest plastic manufacturers in mance and lead to success. In a precision sport, the world and is reputed to be worth over £21 such as cycling, where success in measured in billion. Commentators attribute his business “Nano seconds”, such improvement, in theory, success to a combination of innovation and a should lead to success. Subsequent success in hard-driven desire to succeed. the London 2012 Olympics further reinforced He is a controversial figure and has been this concept. accused of deserting the UK by moving his When Sky set up Team Sky, they identified headquarters to Switzerland in order to benefit David Brailsford as the obvious person to lead from tax allowances. He is a committed and the charge to global success in cycling. enthusiastic cyclist and holds a high level of Brailsford stated that Team Sky would pro- interest in many sports. duce a winner of the Tour de France by 2015. He expressed an interest in acquiring Many commentators laughed at this notion. Chelsea football clubs but baulked at the value He easily achieved this target. of £2 billion placed on it by their owners. In Brailsford attracted criticism from various 2017, he purchased the Swiss team called FC quarters about his methods. These included Lausanne-Sport. Sadly, for him, they were rel- allegations of bullying and pushing the use of egated from the Swiss Super League in 2018. performance enhancing drugs to the limits of Radcliffe invested over £10 million in Sir what was deemed to be legal by the authori- Ben Ainslie, an Olympian sailor, in his quest to ties. Despite such claims, his team generated a win the Americas Cup in 2021. Interestingly, he great deal of success. insisted, as part of the deal, that Ainslie cancel In 2017, a member of the team and Tour de all other sponsorship contracts and focus on France multiple winner, Chris Froome, failed a winning the Americas Cup. Ratcliffe argued dope test. This generated negative publicity. Six that other deals would deflect Ainslie away months later, the authorities declared that from enhancing his performance. Froome was innocent. However, commentators Radcliffe stated that he was attracted to still questioned the ethics and attitude of cycling because of its associations with positive Brailsford and his team. issues such as fitness and health. He also felt He never compromised on the desire to that it provided a “clean” option to cars, as a drive improvement. Over the past couple of form of transport, in heavily polluted cities and years, he has invested much time investigating regions in the world. how improvements could be driven from smart clothing technology. He visited companies in David Brailsford Silicon Valley to explore such developments. David Brailsford competed in professional He has also examined experiments in cranial cycling but only with modest success. He moved stimulation and how it can override the brain into the area of coaching. He also studied for to enhance the capacity for endurance and pain an MBA and some of the concepts learned on tolerance in athletes. that course developed his skills in the areas of He still appears to be on a quest for con- innovation and strategy development. tinuous improvement in order to cement exist- He revolutionised British cycling, perceived ing success. He resolutely denies any accusations by many people as a peripheral sport in the of impropriety and abuse of power. Specifically, UK. In 2008, British Cycling finally registered on he refuses to believe that he has “crossed the the global stage by winning numerous medals. line” with respect to any of his decisions. Part of his theory revolved around the concept of seeking “marginal gains”. This pro- Team Ineos moted the idea that if you can identify a Prior to the start of the 2019 season, the new number of very small incremental improve- sponsorship deal led to a change in the name of 274 Chapter 10 · Managing the Sports Sponsorship Process

the team. From now on it would become known particular had been accused of ordering as Team Ineos. banned drugs, without any clarity as to how Information about the precise financial they might (or might not) be used. nature of the deal are not available in the public In the sport of cycling, many teams domain. However, it is reasonable to assume expressed concern about the dominance of that Radcliffe, through his company, will con- Team Ineos. Some claimed that they were tinue to match the existing budget and incre- unable to compete on a “level playing field”. mentally increase it, in order to maintain the Some found it difficult to attract sponsors due position of Team Ineos at the top of profes- to a lack of success in winning events on the sional cycling. World Tour Series. Ineos became the sole owner of the team. It Despite the doping scandals of the 1980s agreed to honour all existing commitments to and 1990s, and the exposure of Lance Armstrong its riders, staff and partners. It formally took as a drugs cheat, it would appear, superficially at over ownership on 1st May 2019. any rate, that the authorities have got a grip on By the middle of September 2019, it has the issue. Very few cyclists failed drug tests on won numerous stages in the World Tour events. the World Tour series in 2018. More importantly, it won eight overall events, More encouragingly, TV viewing figures including the flagship event: Tour de France. appear to be stronger than ever. In 2017, Eurosport Success continued apace. reported that the figures were up by ten per cent in The future for Team Ineos: as of the end of 2017. Tour de France authorities claimed that the 2019 season, Jim Radcliffe committed to the around 3.5 billion viewers in 190 countries tuned 10 provision of funding for the foreseeable future into the 2017 Tour de France. It was the most in the sponsorship deal. The emergence of the watched Tour since the 2009 version. young Colombian cyclist, Egan Bernal, who In terms of spectators, Tour de France offi- won the Tour de France, and Geraint Thomas cials estimated that around 12 million people (2018 winner) who finished second, ensured turned up on the mountain and roads to watch that there were replacements available to super- the cyclists. sede established members such as Chris Froome. This suggests that professional cycling has Since its creation in 2010, the team cap- regained the initiative and trust of fans and has tured around 330 wins and 9 Grand Tours - a re-established itself as one of the most popular testimony to its success. The 2019 season sports in key geographic territories such as proved to be a successful one, further cement- Europe. ing this view. It would appear that a second “perfect mar- A new chapter had begun. riage” took place with the union of Ineos However, clouds still gathered overhead. (Radcliffe) and Team Ineos (Brailsford). Brailsford still received much criticism from the Happy days! media about his relentless pursuit of success, to Source: Developed by the author from the extent of pushing (or going over) the sources available on the Internet

boundaries. Further enquiries ran with respect Adapted from 7 http://inrng.com/2018/09/ to the behaviour of its medical team. One in team-sky-budget-2017/

??Discussion Questions 2. If you were a senior marketing 1. Assess the motivations and reasons why administrator with a smaller, less Jim Radcliffe committed his company to financially endowed team, develop a sponsor the old Team Sky. In particular, list of points that you would use to address the issue that the decision was make a pitch to prospective sponsors. based on sentiment and ego as opposed 3. Evaluate the view that the approach to a hard and objective reason. used by Brailsford is likely to lead to 275 10 Appendix

problems in the relationship with believe that it is sustainable in the Ineos, as the sponsorship deal develops longer term? in the coming seasons. 5. Examine why the sport attracts 4. Identify the business model that is countries and independently wealthy used by professional teams competing individuals as opposed to well-known on the World Tour series. Do you brands such as Nike and Coca Cola.

Siemens: Knowing Me, Knowing You

Introduction on innovation and its engineering capabilities. Siemens is one of the world’s largest compa- For life refers to the company’s role in and nies. Founded in the mid-nineteenth century by commitment to society. Werner von Siemens, it has evolved into a Siemens had already established a strong German multinational conglomerate company position in the B2B sector. Its future sponsor- with global operations. In 2018, it generated ship activities reflected this perception: it did over eighty-three billion Euros in income, not have to focus on the building of brand spending around five billion euros on research awareness. Instead, it focused on cementing its and development. relationships with key stakeholders such as Its tentacles spread across many industry existing and potential customers, opinion sectors. These range from gas and power, smart formers and employees. infrastructure technology and financial ser- Any future sponsorship engagements would vices, through to energy management, building reflect this mission. For example “showcasing” technologies and real estate services - to name its innovative technologies and applications but a few. would reinforce its image as being innovative and In the 1990s it entered the consumer goods capable of differentiating itself from competitors. domain by launching a range of mobile phones; most notably the “slider” phone in 1999. It Partnering sponsored Real Madrid and also became As part of the reorientation process, Siemens involved the sport of Formula One. In the early reshaped the traditional approach to sponsor- part of this century, it encountered major losses ship. Instead of basing any deal solely on finan- in the mobile phone sector and eventually with- cial sponsorship fees (payments) it would, in drew. Senior management made the decision the future, include the sharing of mutual busi- on the basis that Siemen’s DNA was based on ness assets between both parties to the partner- its capabilities and expertise in the heavy engi- ship agreement. neering sector and that, in the longer term, this Siemens operates through its headquarters provided the future direction for the company. in the city of Munich in Germany. Quite simply, it lacked the wherewithal to oper- In the context of sport, one of the most ate in the consumer goods sector. successful football teams in Europe, FC Bayern Munchen, bases its stadium in this city. Over Change in Focus the past decades, FC Bayern Munchen, has Originally perceived as a strong engineering consistently dominated the domestic league company with a penchant for innovation and and has won the European Champions (or its invention, it re-orientated its business as a B2B equivalent competition in the past) five times. brand. In the 1970s it won this competition on three Its mantra of “ingenuity for life” captures consecutive occasions - a rare feat. the ethos and mission of Siemens. This sets the Since the 2005–06 season, it has staged its standard for all of its subsequent investments games in the Allianz stadium in Munich. This and developments. Ingenuity refers to its focus is one of the most modern stadia in the world. 276 Chapter 10 · Managing the Sports Sponsorship Process

Siemens forged a number of initiatives with This relationship has evolved over the Bayern Munich since 2008. Senior manage- years. Creating an unforgettable fan experience ment saw this relationship as a significant in the stadium has been the driver for both opportunity to address its strategic direction organisations in the past couple of years. For going forward. Both organisations exhibited instance, in 2018, Siemens teamed up with the similar values. Siemens, as an innovative and Economist Group and Bayern Munich to study forward-thinking organisation, focusing on the impact of sound data to assess its impact. “solutions provision” for customers. Bayern Siemens provided the acoustic sound technol- Munich, as a successful club, playing in one of ogy for this initiative. the most technologically advanced stadia in the The data will then be mapped onto a 3D world. Customers and fans perceive the respec- »» model and used to bring to life the story of tive organisations as being leaders in their sec- the fans, and their emotions, through tors. Thus, there is a strong alignment across visual data, and will also track the relation- their attributes and core values. ship between fan energy and its interplay From the perspective of Siemens, they saw with on-pitch performance. (7 https:// a number of opportunities. Firstly, to use the www.thedrum. com/news/2018/08/30/ partnership to demonstrate their latest tech- siemens-sound-maps-fan-energy-bayern- nologies and innovations in a live setting. They munich-games-explore-12th-man-effect) provided solutions for Bayern Munich in areas such as lighting, ticketing, heating and air con- This ongoing partnership between Siemens ditioning. and Bayern Munich provides a good example 10 From the perspective of Bayern Munich, of a sponsorship deal that is not predicated on such initiatives continued to place the Allianz the traditional model of transferring money stadium as a leader in innovation with respect from one party to another. It is based instead to stadium design and infrastructure. on the principle of mutual benefits to both par- Siemens could develop relationships with ties (a win–win situation). customers by using the corporate hospitality For Bayern Munich, it allows them to play part of the deal. On match-days, they could in a state-of-the-art stadium. For Siemens it entertain clients in their corporate box (the Sky “opens the door” to future clients from many Box). By becoming the “official Technology of the key sectors from which it operates. It Partner” with Bayern Munich, it gained the also operates on the principle of both parties exclusive worldwide communications rights to knowing the strengths and weaknesses of their all language and media channels. In essence, respective value propositions and assets. As both parties blended their respective assets to governments and policy-makers place an leverage a strong synergy: access to technologi- increasing importance on general areas, such as cal solutions for Bayern Munich, showcasing to the environment and social responsibility, there clients for Siemens, access to players and man- would appear to be plenty of areas that both agement for Siemens, ongoing technological parties can explore in the future. developments for Bayern Munich and so on. Sources: Compiled by the author from vari- Perhaps the most important benefit accru- ous sources on the Internet

ing to Siemens lay in the “credibility” factor. 7 https://www.thedrum.com/news/ Siemens can demonstrate in a “live” and high 2018/08/30/siemens-sound-maps-fan-energy- profile setting, the latest innovations and solu- bayern-munich-games-explore-12th-man- tions. effect. 277 10 Appendix

??Discussion Questions 2. What, in your view, are the likely ele- 1. Do you see any potential weaknesses ments that have made this partnership with this ongoing partnership between appear to work over the past number Siemens and Bayern Munich? Carry of years? out a search on the Internet to see if 3. Does this approach by Siemens chal- there are any other comparable lenge any of the conventional theories sponsorship arrangements. of sponsorship?

Telstra and Its Loose Connections

Introduction This infuriated the AOC who saw this cam- Telstra is an Australian telecommunications paign as a naked attempt to latch on to the company and is the leading provider of phones, Olympics and in so doing, deliberately mislead devices and broadband in that country. It has viewers and sports fans to believe that Telstra been very active in the area of sports sponsor- was an official partner of the AOC. ship for the past 15 years and, indeed, was a In response to the complaint made by the long-term sponsor of the Australian Olympic AOC, Telstra decided to make a modification Committee (AOC). It has also been involved to its advertising. Originally it tagged all of the with companies such as Channel 9 and Foxtel advertisements with the slogan “Official in earlier Olympic Games such as Beijing 2008 Technology Partner of 7’s Olympic Games and London 2012. Coverage”. The specific relationship with the AOC took It amended this to include the following mes- the form of a 10-year partnership. The partner- sage which revolved around the issue that it was ship ended in late 2015 when the AOC signed a not an official sponsor of the Olympic Games, new deal with Optus, one of Telstra’s main com- the Australian Olympics Committee or the petitors. This partnership made Optus the offi- International Olympic Games Committee. cial telecoms partner of the AOC. Optus paid a This did not mollify the AOC. It sought imme- multi-million dollar sum to achieve this posi- diate recourse to the law courts. In view of the tion. proximity of the Games, the Federal Court of Australia fast-forwarded the case and ulti- What Happened Next? mately found that Telstra had no case to Telstra, keen to maintain its involvement in the answer. The failure to gain an injunction to pre- area of sports sponsorship, clearly viewed the vent the campaign meant that Telstra was up-coming Rio Olympic Games in 2016 as an cleared to run its “I Go To Rio” campaign opportunity to keep its brand fresh and live in leading up to and during the games. the minds of Australian sports fans. The AOC was shocked by this legal decision To this end, it entered into a sponsorship and decided to take the case to the Full Federal deal with Channel 7, one of the main Australian Court by way of appeal. It based its case on the TV broadcasters. Under this arrangement following arguments. Telstra became the official technology partner 1. It was a clear case of deception - based of Channel 7. on misleading viewers. As part of its campaign, to capitalise on the 2. It played on the fact that many people Rio games, Telstra launched a number of activ- generally have poor recall of official ities largely built around TV, online and social sponsors and previous research in this media. Telstra ran an advertising campaign in area demonstrated that many people the lead-up to the Games featuring footage of associated non-partners (ambushers) as sports enthusiasts set to the sounds of Peter being the official sponsors. Allen’s “I Go To Rio” and the phrase “Get free 3. The AOC had a clear duty to protect premium access to the ‘Olympics on 7’ App”. the investments made by its official 278 Chapter 10 · Managing the Sports Sponsorship Process

sponsors. If Telstra was allowed to get ship with Seven and did not suggest an away with this campaign it would dis- affiliation with the Olympics”, the spokesman courage other companies to become told Australian news agency AAP. official sponsors/partners in the future. “We have always maintained that our They emphasised the importance of »» advertising complied with the law and this because they do not receive any today’s decision has again confirmed that. funding from the Government and rely We were disappointed that this dispute totally on sponsorship from companies. even made its way to court, especially after 4. The AOC argued that the campaign we proactively changed our advertising to implied that Telstra was a partner with make it even clearer that we were not an them. official sponsor of the Olympic Games”.

Telstra argued that (7 https://sponsorship.sportbusiness. com/ 1. It had every right to use the Olympic news/australian-olympic- committee-loses- Games in its campaign provided it did out-in-ambush-marketing- case/ ) not make any false claims about being The AOC’s view is captured in the following an official sponsor to the event, the statement: organisers or the AOC. It argued that it The AOC receives no government funding did not infringe any of the existing leg- and relies entirely on sponsorship to send our islation with respect to the protection Olympic teams to the Games. It will continue to of official sponsors and partners. prioritise protection of the investment our spon- 2. It was reinforcing its new official partner- sors make and to take action against those seeking 10 ship with Channel 7 and the main objec- to capitalise on the Olympic movement without tive was to emphasise this connection. authority. (7 https://sponsorship.sportbusiness. End Game com/news/australian-olympic-committee-loses- Over a year later, in late-October 2017 the Full out-in-ambush-marketing-case/) Court of the Federal Court ruled in favour of Telstra. This was encapsulated in the following The AOC in December 2015 entered into a statement: 10-year partnership with Telstra’s rival operator Optus. The deal, which named Optus as the Telstra had entered into an agreement »» official telecommunications partner of the with Channel Seven, the exclusive Austra- AOC, was hailed as one of the body’s “biggest lian broadcaster of the 2016 Rio Olympic ever”. The agreement became effective last year Games and Telstra’s conduct was held to and runs until 2026. be permissible in that context. The Court Further quotes from the judgement of the viewed Telstra’s ads as suggesting spon- Full Court are captured in this note. sorship of Seven’s Olympic broadcast rather than of the Rio Games. Full Federal Court Decision Telstra responded in the following manner. The Full Court upheld the Federal Court’s Responding to today’s ruling, a Telstra finding that a hypothetical reasonable person spokesman pointed to the fact the company viewing the advertisements would not necessar- had updated its television commercial with a ily know about or recollect Telstra’s previous disclaimer that it was not a partner of the sponsorship of the Australian Olympic team, International Olympic Committee or any let alone turn his or her mind to that fact when national association or team. viewing the advertising. Furthermore, it found “We’re delighted the appeal court today that: ‘As to Seven’s advertisements, he (Justice confirmed the original decision that our adver- Wigney) found that they simply confirm that tising did no more than promote our relation- Telstra’s sponsorship arrangement is with 279 10 Appendix

Seven. Those findings of fact were open to the advertisement misleading or deceptive under

primary judge. 7 https://www.minterellison. the Australian Consumer Act. com/articles/aoc-loses-full-federal-court- Sources: Compiled by the author from var- appeal-for-telstra-i-go-to-rio-advertisements ious sources on the Internet, including the fol- Justices Greenwood, Nicholas and Burley lowing:

also agreed with Federal Court and the com- 7 https://sponsorship.sportbusiness. com/ ments of Justice Wigney who, in regards to the news/australian-olympic-committee-loses- data plan advertisement found that “the only out-in-ambush-marketing-case/

hint that the advertisements related in any way 7 https://www.zdnet.com/article/aoc-loses- to the Rio Olympic Games is the ‘I go to Rio’ court-battle-over-telstra-olympics-ads/

soundtrack” Their Honors found no error in 7 https://www.minterellison. com/articles/ Justice Wigney’s conclusion that the Peter aoc-loses-full-federal-court-appeal-for- Allen soundtrack reference did not make the telstra-i-go-to-rio-advertisements

??Discussion Questions for the ability to protect official partners 1. To what extent would you agree or and sponsors in the sports sector. Is this disagree with the decision found in an accurate perception in your view? favour of Telstra? 3. What advice would you give to a 2. Some commentators argue that this potential sponsor about the problem legal decision has serious implications of ambush marketing?

Women's Sport: Catching The Eye

Women’s sport has traditionally fallen well As sports channels grow, the sports indus- short of the coverage and general interest in tries have shown a tendency to fragment. Chan- male sports. Media coverage, until recently has nels such as Eurosport and Sky increasingly been very low. Commentators estimate that widen the sports portfolio. This creates greater sponsorship of female sports has been as low as opportunities for coverage of niche and wom- 0.4 per cent of the overall spend on sponsor- en’s sport. The BBC (UK publicly funded ship. It has risen to around eight per cent of channel) has found that it can no longer bid for spend in the United Kingdom by 2017. the high profile sports events and competitions, On a more positive note, we have witnessed due to its relative lack of financial resources. the emergence of women’s leagues in many tradi- This encouraged them to seek opportunities in tionally male sports such as football, cricket, other areas. Women’s sports such as football rugby and Australian Rules (to name but a few). and rugby received extended attention. Gender equality has risen to the forefront In addition, women’s sport administrators in many countries. Governments and policy and marketers seek creative ways to “get their makers increasingly introduce appropriate leg- sport” out there to the world. Some stream live islation to redress imbalances that have existed games and competitions on social media frame- for many years. However, more than half of the works such as YouTube and Facebook. sports organisations and bodies in the UK fail This has created a virtuous circle. Coverage, to meet the target of thirty per cent female rep- particularly on channels such as the BBC, have resentation on their boards. Some still contain the effect of creating a larger audience. This in no female representation at all. turn stimulates interest with brands. They On the other hand, the sport of tennis has, sponsor such sport properties and this creates a for a number of years agreed to pay equal “win-win” situation for all of the stakeholders. prize money to male and female players at the The Women’s World Cup 2019 was staged four “Grand Slam” events. in France and generated record-breaking TV 280 Chapter 10 · Managing the Sports Sponsorship Process

viewing figures and attendances. Arguably, this 15s Women’s rugby premiership in the UK). was the pinnacle of success with respect to Women’s hockey has built on the success of women’s sport so far. the Great Britain team winning the Gold Over 200 broadcasters covered the compe- Medal at the 2016 Olympics in Brazil. As well tition. FIFA reckoned that it attracted over one as stimulating participation in the sport, brands billion viewers for the first time. Similar view- such as Vitality and Investec committed to the ing records for women’s football were regis- sport. The latter has been a main sponsor of tered in the USA, Germany, France and China. women’s hockey since 2011. Vitality became The UK recorded the highest viewing figures the headline sponsor for the Women’s Hockey ever with 11.7 million people tuning in to the World Cup. semi-final between England and the USA. In a further show of confidence and trust, The prize money doubled from $15 million BT sport signed a 4-year deal with the Interna- to $30 million for this tournament. While this is tional Hockey Federation (FIH) to cover all impressive, it is still small, compared to the major World Cup and Pro League matches. $400 million that was available for male players Similar developments have taken place in in the 2018 Men’s World Cup. netball. Vitality is the title sponsor for the 2019 Recent studies show that almost sixty per World Cup, staged in the UK. In July 2019, cent of the UK population express an interest organisers announced the involvement of Bet- in at least one women’s sport while eighty-seven fred as a sponsor. per cent claim an interest in both men’s and Sky sport provided coverage of the event women’s sport. and developed a partnership with WSJ called 10 Consumers see women’s sport on the fol- #showup. This was a social media campaign lowing dimensions: encouraging British people to support women’s 55 Competitive (48%) sport by watching, attending or playing in a 55 Inspiring (36%) sport. It generated 92 million impressions in 55 Successful (33%) the first week. 55 Progressive (30%) Other trends also work well in support of a 55 Clean (21%). growing interest in women’s sport. In many countries, we can see a growth in the area of Interestingly only eight per cent perceive sports- fitness and health. This resulted in many women as money-driven, compared to thirty- females taking up a sport or making use of

nine per cent for sportsmen. 7 https:// gym memberships. The fashion and leisure www.bbc.co.uk/sport/45737718 clothing sectors have come together to create Other positive indicators reveal that the growth in sports apparel that are worn at work number of sports sponsorship deals increased or at exercise. by forty-seven per cent from 2013–17 in the Women’s sport has grown significantly in the female sports category. The average size of the last decade or so. Arguably, it still has a long deal also increased by thirt-eight per cent. way to go to attract sponsors to make significant A number of key brands have invested in investments in respective sports properties. different areas of women’s sport. These Source: Developed by the author from vari- include SSE (Women’s World Cup), O2 (Eng- ous sources on the Internet

land’s Red Roses - rugby), Tyrells (Premier 7 https://www.bbc.co.uk/sport/45737718

??Discussion Questions in sponsorship. What in your view are 1. The case generates a perception that the obstacles that may prevent further women’s sport has enjoyed strong levels of growth in the future decade? periods of growth in terms of 2. You have been asked to address a con- popularity, audience and viewing ference on the following topic. increases, media interest and increases “Women’s sport: the only way forward”. 281 10 References

Detail the issues that you would cover https://practicalsponsorshipideas.com/sponsorship- in your presentation on this topic. pricing/ 3. Assume you have been recruited as a https://twocircles.com/gb-en/articles/sport-misses-out- on-14bn-despite-growth-year-for-sponsorship- “sponsorship development manager” spend/. Accessed 8th Sept 2019. with your national federation for https://www.ispo.com/en/trends/sports-sponsorship- Women’s tennis. Detail the issues that marketing-trends-2019 you would cover in your proposal seek- https://www.statista. com/statistics/196864/global-sponsor - ship-spending-since-2007/. Accessed 8th Sept 2019. ing sponsorship for the federation. https://www.thedrum.com/news/2018/08/30/siemens- sound-maps-fan-energy-bayern-munich-games- explore-12th-man-effect References Koenigstorfer, Joerg, and Sebastian Uhrich. 2017. Consumer attitudes toward sponsor’s counterambush marketing Bacon, Jonathan. 2015. How sport sponsorship is join- ads. Psychology & Marketing 34 (6): 631–647. ing the digital age. Marketing Week, 22nd April. Lachowetz, T., M. McDonald, W. Sutton, and Burton, Nicholas, and Simon Chadwick. 2018. Ambush D. Hedrick. 2003. Corporate sales activities and the marketing is dead, long live ambush marketing: A retention of sponsors in the NBA. Sports Marketing redefinition and typology of an increasingly preva- Quarterly 12 (1): 223–245. lent phenomenon. Journal of Advertising Research Laurell, Christofer, and Sten Soderman. 2018. Sports, 58: 282–296. storytelling and social media: A review and concep- Burton, Nick, and Simon Chadwick. 2019. European tualisation. International Journal of Sports football supporter attitudes towards ambush mar- Marketing and Sponsorship 19 (3): 338–349. keting. International Journal of Sports Marketing Lefton, Terry. 2017. Movement toward content changes and Sponsorship 20 (1): 143–162. strategy for sponsors. Sports Business Journal. Chadwick, S., and N. Burton. 2011. The evolving sophis- Monday, October 30th. Available at: https://www. tication of ambush marketing: A typology of strate- sportsbusinessdaily.com/Journal/Issues/2017/10/30/ gies. Thunderbird International Business Review 53 In-Depth/Sponsorship.aspx (6): 709–719. Malik, A., B.D. Sudhakar, and D.S. Dutta. 2018. Cornwell, T.B., M.S. Humphreys, E.A. Quinn, and Management-based factors of sports celebrity A.R. McAlister. 2012. Memory of sponsorship- endorsement and effect on brand image. IM Kozhikode linked marketing communications: The effect of Society & Management Review 7 (1): 75–87. competitor mentions. SAGE Open 2 (4): 1–14. Masterman, Guy. 2007. Sponsorship for a return on Crampton, W., and D. Patten. 2007. Social responsive- investment. London: Elsevier. ness, profitability and catastrophic events: Evidence Ohanian, R. 1990. Construction and validation of a on the corporate philanthropic response to 9/11. scale to measure celebrity endorsers’ perceived Journal of Business Ethics 81 (4): 863–873. expertise, trustworthiness, and attractiveness. Duff and Phelps. 2019. Are football stadium naming rights Journal of Advertising 19 (3): 39–52. under-valued? A European Analysis. Available at: Plewa, C., and P. Quester. 2011. Sponsorship and CSR: Is https://www.duffandphelps.com/-/media/assets/pdfs/ there a link? A conceptual framework. International publications/valuation/european-stadium-naming- Journal of Sports Marketing and Sponsorship 12 (4): rights-report-2019.ashx 22–38. Emmadi, R.S. 2017. Celebrity endorsement: A literature Simmons, Carolyn J., and Karen L. Becker-Olsen. 2006. review. International Journal of Research in Social Achieving marketing objectives through social Sciences 7 (7): 424–435. sponsorships. Journal of Marketing 70 (October): Ennis, Sean, Vadims Saripo, and Michael Marck. 2013. 154–169. The impact of ambush marketing on a Hallmark Stegelmann, Lars. 2017. Why brands love ROSI. Available event: The case of euro 2012. In Anzmac Conference at: https://nielsensports.com/brands-sponsorship- Proceedings. December. strategy-roi-model#null Ennis, Sean, Calum Paul, Michael Marck and Anita Stotlar, David K. 2005. Developing successful sport spon- Radon. 2019. Social sponsorship in sport: Context sorship plans, Sport management library. 2nd ed. and potential. In ANZMAC Conference Proceedings, Morganstown: Fitness Information Technology. Wellington. 2nd – 4th December. Venturoli, Emanuele (2019) The growth of sponsorship: http://www.sponsorship-awards.co.uk/how-activate- Global spending, geography and future. Available at sponsorship-%E2%80%93-12-basic-ways https://rtrsports.co. uk/blog/growth-sponsorship- https://new.siemens. com/global/en/company/topic- global-spending/ areas/ingenuity-for-life/fcbayern-munich.html 283 11

Sports Marketing in an Era of Radical Uncertainty

Contents

11.1 Introduction – 285 11.2 Key Drivers and Trends Revisited – 285 11.2.1 The Shifting Sands Within Revenue Streams for Sports Organisations – 286 11.2.2 Potential Threats to the Existing Business Models for Managing Media Rights – 286 11.2.3 Shifting Positions in the Area of Governance of Sports – 288 11.2.4 The Changing Nature of the Relationship Between Fans and Stakeholders – 289 11.2.5 The Confluence of Sport, Entertainment and Leisure – 289

11.3 Future Trends and Developments in the Global Sports Sector – 290 11.4 Developments in Medical Science – 291 11.5 Sustainability, the Environment and Sport – 292 11.5.1 Exercise – 293

11.6 Technology and Its Impact on Sport – 294 11.7 Future Developments in the “Wearables” Sports Technology Sector – 295 11.8 General Directions in Sports Technology – 296 11.9 The Fan and Changing Consumption Patterns in the Future – 296

Electronic Supplementary Material The online version of this chapter (https://doi.org/10.1007/978-3-030-53740-1_11) contains supplementary material, which is available to authorized users.

285 11 11.2 · Key Drivers and Trends Revisited nnLearning Objectives erally stopped - frozen in time. Sports events, On completion of this chapter you should competitions and leagues, activities that we be in a position to address the following have taken for granted, ceased to run. For objectives: many people who watch and participate in 55 Assess the relevance of the sports sector sport, there was a large void in their lives, com- post-COVID pounded by the impact on our daily lives. 55 Examine the role of tradition and val- By the time you read this chapter and book, ues in the sports sector and their rel- I hope that we will have moved out of this mal- evance in a changing environment aise and returned to some form of normality 55 Evaluate the future of “new” sports across our daily lives. I also hope that sport will 55 Assess the future role that developments have returned, refreshed and reinvigorated, to in science, technology, IT and medicine our lives as well. It is possible that sport will can play in the sports sector return, with some changes to the pre-Coronavi- 55 Understand the potential changes in rus position. We consider the potential changes sports and club ownership that might occur post-Coronavirus. 55 Evaluate the future role of physical and We have noted throughout this text that sci- virtual space and its impact on sport ence, engineering, technology, IT and medicine 55 Examine future trends in the context of have played an increasing role in shaping and media rights influencing the sports that we consume. Some of 55 Assess the future relationship between these impacts have been positive and have led to fans, athletes and sports organisations. enhanced performances from the perspectives of individual athletes and sports organisations. They have also enhanced the quality of the 11.1 Introduction sports product and the fan experience. Some of the impacts have led to negative As we come to the final chapter of this book, consequences such as doping, cheating, push- I suggest that we use it to look ahead and con- ing the boundaries of ethical behaviour and sider what the sports sector might look like so on. We assess likely future developments over the next 15–20 years. To some extent, we across these areas and the resulting implica- are likely to drift into the realms of fantasy tions for the key stakeholders. and fiction. However, it is equally valid to say Hopefully, during this exercise, we will that some of our observations are likely to avoid becoming to “fantastical” in our prog- happen, given the way in which sport has nosis about future developments and trends. developed over the past 20 years or so. Futurology attracts many critics and naysay- Much change has occurred across the sports ers in other areas of life: many of its advocates sector, as we have noted in the earlier chapters of have certainly veered into the field of spurious this book. In the initial section, we briefly revisit and groundless speculation, with no attempt the main drivers of change and their impact on to provide any evidence-based support for sport, in general, and within certain sports, in their suppositions. particular. We assess the impact on the key stakeholders in the sports sector such as sports organisations and clubs, the fan, the sponsors, 11.2 Key Drivers and Trends the sports entity holders and the athlete. Revisited As I write this chapter, we find ourselves in the middle of the Coronavirus crisis. For virtu- In this section, we briefly reprise the main ally all of us, we have experienced something issues that have shaped and directed the way which has never happened before: a virus that forward for sport (for good or ill), over the past has literally closed down the world. All aspects couple of decades or so. This will place our of our lives have been affected: education, subsequent prognostications about the future socialisation, work, leisure and so on. Sport lit- in clearer context. 286 Chapter 11 · Sports Marketing in an Era of Radical Uncertainty

11.2.1 The Shifting Sands Within generate greater interest and popularity than Revenue Streams for Sports others. The English Premier League (EPL) is Organisations seen by many commentators as the “Crown Jewel” of football in the global market. This is reflected in the high level of revenue that it The contribution of match-day revenue for generates. The above figure does not include many sports organisations and clubs has media rights generated from regions outside shifted over the past three decades or so. of its domestic base. Clearly, the extent of rev- Where once, revenue from match-day atten- enue drops considerably, with respect to sales dance was, by some margin, the most signifi- generated from what might be called “periph- cant contribution to revenue generations. eral leagues” such as Sweden and Scotland. Now, it has been overtaken by revenue gener- As we look ahead, we need to consider the ated from media rights sales. implications arising from statistics such as Clearly, however, we have to enter a caveat those contained in . Table 11.1. when considering such data. The reality is that it varies from sport to sport, from country to country and from individual competition/league to individual competition/league. 11.2.2 Potential Threats

. Table 11.1 graphically illustrates this level to the Existing Business of variation. Models for Managing Media We can see from . Table 11.1 that in terms Rights of match-day attendance revenue, great variation occurs across the European premier foot- As we noted in our chapter on media rights, ball leagues. The “big five” leagues (England, the original business model operated by Spain, Germany, Italy and France) receive subscription-based broadcasters such as Sky, 11–17 per cent of their revenue from ticketing 11 has come under threat. OTT operators have sales. By contrast countries such as Sweden provided sports fans with greater flexibility in and Scotland generate a far higher proportion terms of how they engage with live and of overall income from such a source. deferred coverage of sports. As one might In the context of media rights sales, we expect, the terrestrial and subscription broad- also see a good deal of variation. This is not casters have responded by also creating more surprising, given the fact that some leagues flexible packages and alternative options. Some operators, without any specialised expertise in sports broadcasting are currently .. Table 11.1 Top five European Premier making tentative steps or noises, about enter- Football Leagues ing the bidding for elite sports. Netflix, in particular, has the financial resources, but has Match-day income as a % Broadcasting deals mainly kept away so far from this area. Amazon of revenue (millions/Euros) acquired a small portion of the last EPL media Russia 6.4% England 3.21 rights deal. This allowed them to test out the Denmark 7.56% Spain 1.609 market and introduce them to the field of France 11% Italy 1.294 sport. Even with such a limited entry, Amazon Italy 11.2% Germany 1.248 England 14% France 791 was the first PPV broadcaster to provide fans Germany 17% Turkey 376 with the opportunity to see all of the games in Spain 17% Holland 89 the EPL at the same time, via the red button. Holland 24.2% Scotland 64 Netflix and Amazon have made documen- Sweden 29.7% Poland 39 taries on specific sports and sports stars. They Scotland 45% Austria 22 have received acclaim for the quality of their Source: Deloitte: 2017/2018 season. (Adapted production. We are likely to witness more from The Times: April 23, 2020) movement in the area of sports media rights from such operators going forward. 287 11 11.2 · Key Drivers and Trends Revisited

Sports property owners, most notably the One possible downside for fans revolves EPL, NBA, and NFL, have moved to a posi- around the cost of gaining access to their tion where they sell season cards or passes to favourite sports. Although the increasing their global fan-base. This allows them to view number of entrants to the broadcasting mar- live coverage of their favourite team’s games ket arguably provides greater competition. It during the season. Will some of them go one also has the effect of increasing the range of step further and set up their own broadcasting charges that fans will have to pay for access. and production infrastructure? This may not Instead of subscribing to one channel, they happen due to the associated costs of develop- will have to take out separate subscriptions to ing the infrastructure to allow this to happen. a number of such broadcasters. Intermediaries such as Sky have also fol- The relationship between the sports prop- lowed the logical path put forward by strate- erty owners and the media also provides an gists and sought out areas where they can interesting focus for discussion. Cynics have provide a relevant and differentiated range of argued that administrators of elite sports have services. Content development and manage- “sold their soul to the devil” by allowing the ment, combined with techniques such as sto- broadcasters to make decisions about when rytelling, and multiple camera angles, provide live games are scheduled, providing poten- the fan with material that heightens their tially intrusive access to players and coaching enjoyment of sport. Evidence appears to sug- programmes, allowing them to influence the gest that this is an area that younger fans in structure and duration of games and so on. particular, actively seek out. During the ongoing Coronavirus crisis, the Illegal streaming of live sports events con- level of influence from broadcasters has never tinues to grow globally, without any obvious became more obvious. As football, cricket and way of eliminating such practices. Recourse to rugby competitions were frozen and games the law has had a minor impact. Once one postponed, some commentators argued that operator is closed down, others pop up within the competitions should be voided. The govern- a matter of days. ing body of some leagues actually implemented As developments in areas such as much this option, for instance, Belgium and Holland speedier broadband (such as 5G) will enable in the football sector. However, in the cases of operators to offer fans a richer and more the more lucrative leagues, with high levels of immersive experience through techniques expenditure by the broadcasters on the media such as AR and VR. Fans will increasingly be rights, we witnessed a different response. The able to view their favourite sport through the EPL was left with the prospect of either voiding lens of the athlete as opposed to what the pro- the remaining nine games for each club, or ducer decides is best for them. going ahead with the objective of fully complet- Arguably, the sands have shifted to some ing the season. They were strongly motivated to extent, in favour of the sports fan. The tradi- take the latter approach because they were tional business models surrounding the acqui- faced with the prospect of losing over £800 mil- sition of media rights for sports events has lion from the broadcasters who demanded their loosened. Whereas previously, once the broad- “pound of flesh”. As I write this piece, the EPL caster acquired the rights, they then dictated administrators agreed to restart the competi- terms to the fan. This was reflected in the rigid tion by the middle of June 2020. monthly payments, the timing of the individ- Even when the games took place: behind ual games or competitions and little or no closed doors and with no fans admitted, the flexibility in terms of how the event was dis- broadcasters were expected to deduct a per- tributed. As we have noted earlier, they have centage of their payment because the nature adapted to changing fan consumption pat- of the product they had purchased had terns by creating sports on demand, sports on changed. In terms of the power-dependency the go, increased content surrounding the position, it raises interesting questions about sport, and packaging the event into “bite- the nature of the relationship between each sized” highlights. stakeholder. 288 Chapter 11 · Sports Marketing in an Era of Radical Uncertainty

11.2.3 Shifting Positions Ownership patterns have changed over the in the Area of Governance past 20 years or so. In the case of football, of Sports clubs were traditionally owned by successful, wealthy businesspeople. Their involvement existed in an era where players, relatively One of the inevitable consequences of the com- speaking, earned very little. It did not require mercialisation of sport is that more and more large amounts of money to ensure that clubs pressure is placed on sports property owners survived. However, once sport became com- and administrators to address the issue of per- mercialised and attracted the interest of medi- formance. This translates into success on the ators, the financial demands dramatically pitch/arena. There is a mantra that is often used increased. Ownership of clubs became the in a sporting context. “winners are grinners”. If preserve of multi-millionaires. As salaries rose a team or individual athlete does not perform to dramatically, ownership moved to a higher increasingly higher levels of expectations, it is level, in terms of financial commitment. likely to lead to a decrease in the fan-base, with Over the past 20 years, owners of football a consequent drop in revenue. Less revenue leads teams, particularly in the EPL, fell into the to less opportunity to make a profit. arms of multi-billionaires and conglomerates. The problem is compounded by the fact However, a shift in ownership patterns came that many sports property owners are happy to at a price. While such individuals and organ- flout basic financial rudiments for running a isations were prepared to make the requisite business. In traditional business sectors, bal- investments, they also ran the club on more ancing the books is a critical factor. In some business-like expectations. Owners such as the sports, the opposite is the case. For instance, in Glazer brothers in the case of Manchester the top leagues, clubs are the recipients of very United, loaded the club with debt in order to large sums of money flowing into the opera- make the acquisition. They regularly take out tion. However, many owners are happy to have 11 payments in dividends and run the business as much more money going out of the operation part of their overall corporate portfolio. than is coming in. Some clubs are happy to pay More recently, we have witnessed the arrival salaries and transfer fees that outstrip the of governments investing in football clubs. A actual income that comes into the club. If you number of high-profile acquisitions took place think about it, this would appear to be a per- over the past 15 years or so. For instance, in verse way of doing business. Yet in many cases, 2008 Sheikh Mansour, a member of the ruling it is the norm to have over 80–100 per cent of family in Abu Dhabi (part of the United Arab revenue spent on salaries. In extreme cases, Emirates) acquired, as part of a consortium, some clubs pay in excess of 100 per cent of rev- ownership of Manchester City. enue on salaries. The prime motivation for Likewise, Qatar Sports Investments, under engaging in this practice is to generate success the backing of the Ruler of that state, Tamin on the pitch. bin Hamed Al Thani, purchased the leading Such practices lead to poor governance. French football club, Paris Saint-Germain. Sports property owners have been accused of As of mid-May 2020, the Saudi Public not conducting due diligence on individuals Investment Fund, fronting the main person, who wish to invest in the organisation. the Crown Prince of Saudi Arabia, Mohammed This quest for success is not driven solely bin Salman have put forward a bid of around by financial issues. £340 million for the right to purchase Newcastle Some organisations would appear to con- United, an EPL team. This latter bid has done cheating and doping. This ranges from caused some controversy, and not just within deliberately disguising the results of drug the football industry. Many people feel angry tests, to taking a haphazard approach to that a regime that operates within a very auto- implementing penalties for drug offenders. In cratic system, and which has been accused of many cases, not enough money is invested in human rights violations, should be allowed to developing more up-to-date testing proce- purchase a high-profile football team. dures to catch offenders. 289 11 11.2 · Key Drivers and Trends Revisited

Irrespective of the controversy, and it is potentially 5 days to play a game of cricket? not our role here to become involved in such Are the rules of the game too complex to discussion, it will be interesting to see the way understand? Why is a round of golf struc- in which ownership patterns will shape out in tured around playing 18 holes, typically tak- the coming 20 years. Will we see iconic brand ing anywhere from three to four and a half such as Coca Cola acquiring high profile hours, if four people play together? I am not sports clubs and organisations? As sports glo- saying that sports should make changes for balises (discussed in detail in an earlier chap- the sake of it. However, if the evidence sug- ter) will we see individual clubs forming part gests that people are turning away from some of a global product portfolio? We are witness- sports, then it is a strong signal that change is ing early signs of this trend in the case of needed. Manchester City (discussed in our chapter on Some sports have responded. Cricket (per- sports globalisation). ceived by many as a conservative sport), for A brief examination of the extent of for- instance, has introduced a couple of new foreign ownership of EPL clubs reinforces this mats such as “20/20” and the “One Hundred”. trend. Rugby has introduced the video referee and In some cases, the sports administrators football has experimented with VAR. However, deliberately ignore such findings, when com- is this enough? Going forward, will more dra- pleting cursory due diligence, in case official matic changes need to be introduced? sponsors and partners might withdraw their The emergence of eSports in particular, is a investment in the sport. We have seen this in reflection of the direction in which fans are the case of sports such as football over the moving for their entertainment and engage- past 20 years. In an era where increasing pub- ment with sport. In a short number of years, it lic attention focuses on the issue of business has grown exponentially world-wide. By 2023, governance, the sports sector would appear to it is estimated that it will be worth over $2.5 fall behind many of the cases of good practice billion in revenue. This will place it well ahead that are out there. We assess the implications of traditional sports and competitions such as of these observations later in this chapter. Formula One and the UEFA Champions League (Ayles 2019). It already attracts 433 million viewers globally. This is greater than 11.2.4 The Changing Nature the audiences for American Football and of the Relationship Between rugby combined. Fans and Stakeholders As you might expect, brands are becoming increasingly more attracted to this sport. Will We noted in Chapter 4 that the way in which they retain the same enthusiasm for the estab- fans, in general, and young people in particu- lished sports going forward? There is no doubt lar, engage with sport has changed in a trans- that over the past 10–15 years, eSports has formative way. They watch less live sport, evolved from something that appealed to focus more on areas such as content, use a nerds, to a full-blown global industry. Despite number of devices to engage with the event the fact that many people still do not accept and prefer highlights or key moments of a that it is a sport, it already has outpaced many game or competition. They exhibit less inter- of the traditional sports. Sports administra- est than their forebears in traditional sports. tors and marketers ignore this at their peril. This challenges sports owners and administrators to focus on where their respective sports are going to go in the future. Many 11.2.5 The Confluence of Sport, shibboleths such as the basic rules and dura- Entertainment and Leisure tion of a game or sport are coming under increasing scrutiny. For instance, why is foot- Many sports have had to change their value ball a slave to the notion that a game should proposition over the past number of years. be of 90 minutes duration? Why should it take This is in response to changing expectations 290 Chapter 11 · Sports Marketing in an Era of Radical Uncertainty

and demands from the fans. People, relatively individual sports in particular, might look like speaking, have greater disposable income and in 10–20 years hence. greater choice as to how they spend their lei- To some extent we are potentially entering sure time. Overall, fans have more sophisti- the realms of fantasy. Critics might say that cated expectations and individual sports have this is fruitless. I disagree. If we failed to addressed the challenges in different ways. We undertake such an exercise, we would be in noted in an earlier chapter that sports, such as danger of becoming complacent and failing cricket and darts, have fully embraced the to pick up signals and future trends. How notion that they are in the overall entertain- many formerly successful companies have fol- ment business. lowed this approach and subsequently gone This contrasts with the traditional and out of business? narrower perspective that they are in the As I mentioned earlier, at the time of writ- sports business. ing this chapter, global society is battling its Darts, for instance, has made strategic use way through the biggest crisis in our respec- of atmospherics, such as music, lighting, fan tive lifetimes. Every facet of life and industry participation and fancy dress, in order to has had to react to the implications arising bring the sport to life. This is reflected in from this crisis. higher viewing and attendance at major events Kay and King (2020) in their prescient on the tour schedule. text, which happened to be published in the In some parts of the world, cricket has middle of the Coronavirus crisis, introduced changed irrevocably. The Indian Premier the concept of radical uncertainty. Some of League (IPL): the most popular version of the their ideas are indeed relevant for all busi- “20/20” cricket format, has combined cricket ness sectors, including sport. This is because with Bollywood. In the latter case, many famous sport administrators and marketers are likely Indian celebrities have purchased franchises. to face unprecedented challenges in the short 11 Special effects, such as dancing girls, lighting to medium terms, as it tries to recover its pre- displays, fireworks and loud music stir up the vious position in terms of its fan-base, view- passions and excitement among the fans. The ing figures, connecting with its stakeholders phrase “Sportainment” has gained popularity and so on. and credence in an attempt to describe this phe- As we discussed in Chapter six, the era of nomenon. Will we see further developments in prescriptive and rigid planning tools (popular this area, going forward? in the 1980s and 1990s) were already in decline. Instead, the sharper and more agile corporations placed greater emphasis on a more flexi- 11.3 Future Trends ble, contingency based approach. Intuition was and Developments given more credibility. This, allied to industry in the Global Sports Sector knowledge, was recognised as being a more pragmatic and realistic alternative. In the previous sections, we have focused on Kay and King (2020) argue that while the the key drivers of change that have taken prescriptive, model-based approach still offers place in the global sports sector over the past some benefits, such as providing some insight couple of decades. Most of them have trans- and direction, they cannot fully provide accu- formed many of the individual sports and led rate forecasting and prognosis on which to to significant changes in the way in which base the future strategy of an organisation. clubs are financed, the nature of fan engage- This, in my view, has significance for many ment, ownership patterns and the way in sports organisations and property owners. which sport is distributed to the fan-base via In the “new normal”, post-Coronavirus, the media. there is no doubt that sports bodies will have In the following sections we look into the to learn to become more agile, responsive and future and consider what sport in general, and creative, if they want to succeed in the future. 291 11 11.4 · Developments in Medical Science

So, what does this future hold for sport? In drugs are not, by default, illegal. They can fall the next sections, I put forward some views within the parameters of what is allowed by about how key areas such as science, technology, the sports administrators. Brailsford pushed medicine, infrastructure and the environment, the boundaries and attracted much criticism can possibly change the direction of sport. for doing so. However, he avoided any formal prosecution for using illegal drugs. Clearly some athletes and coaches use 11.4 Developments in Medical banned drugs. Science Dr. Michele Ferrari was the person behind the programme that catapulted the cyclist, If we look at the evolution of individual sports, Lance Armstrong, to the dominance of that it can be argued that one of the defining prin- sport in the 1990s and 2000s. Much of his pro- ciples is that of continuous improvement. gramme was based on the usage of banned Sport at a competitive level generally strives for drugs. improvement. Individual athletes, players and It is generally accepted, by many com- coaches embrace this principle. They have to, if mentators, that doping has been, and contin- they want to succeed. This may be measured in ues to be, the dominant feature of individual terms of “coming first”, “winning gold”, “win- sports. ning the league”, and so on. For many athletes, While the conventional view is that ath- it may not be possible to come first. Instead, letes and clubs that break the rules and cheat, success may be measured in terms of beating should be severely punished. There is a your personal best time (if you are a runner), counter-argument that many fans are not as or moving a team from the bottom to mid-way negative about drug use: they want to watch in the league (if you are a coach). compelling, historic and record-breaking Sport is a performance industry (at the sporting events and competitions. elite end at any rate). The quest to be the best This problem is compounded by the fact that leads to athletes and teams setting new stan- the testing procedures for identifying illegal dards and driving this curve upwards. drugs, appear to be well behind what has been However, as we noted in our chapter on produced by the pharmaceutical companies. sports governance, there is a downside to this Looking to the future, we can identify two quest. In order to win, some individuals, club possible scenarios. In the first scenario, fans owners and indeed governments, are prepared may become more intolerant of such prac- to cheat. The degree and extent of cheating var- tices. This might be driven by an enhanced ies across individual sports. It is also not as clear perspective on ethics, social responsibility and cut as it might appear. Some coaches and ath- sustainability. In such a scenario, we might see letes “bend the rules” or “skirt around” the a tightening up on doping, with more invest- boundaries of what is, or what is not, acceptable. ment by sports property owners and greater For instance, in our case study on British collaboration with pharmaceutical companies Cycling, Sir David Brailsford sought every in developing more robust and modern sys- potential avenue to achieve success with his tems to identify illegal drugs. cycling teams. This led to accusations that he The second scenario might follow the used drugs that were not on the official “banned” opposite direction. Fans will become bored list, but were challenging the boundaries. with individual sports such as athletics, when More cynical observers note that it is dif- records are no longer capable of being bro- ficult to separate the pharmaceutical industry ken, and where athletes will need to use drugs and the sports industry. The top athletes, for to succeed. In this scenario, the majority of instance, arguably get access to “state-of-the- fans may condone the use of drugs in sport, art” drugs. This can provide a differential or remain neutral or ambivalent about the advantage (in many cases, significant) over practice. In such a scenario, pharmaceutical competitors that do not have the resources to companies will play an even greater role in the purchase such items. We should note that such sports industry. 292 Chapter 11 · Sports Marketing in an Era of Radical Uncertainty

At present, (allowing for the flaws in test- risk than currently exists. In a scenario where ing) the general approach is to impose a ban such practices become more commonplace, on athletes who cheat. However, some sports people’s attitudes are more likely to shift to a property owners attempt to circumvent the more benign view of athletes, working with rules, and support cheats, because they want coaches and scientists pushing the boundaries. to ensure that the sport stays popular and At a less “fantastical” level, it is likely that maintains and grows viewing figures in order we will see a combination of robotics, and to retain the interest and support of broad- Artificial Intelligence addressing specific inju- casters and sponsors. ries, such as concussion and brain damage. At Genetics will play a more strategic role in present, physical sports such as American the development and performance of athletes Football and rugby are grappling with the over the next 15–20 years. We are likely to see dangers of concussion and “big hits”. Some developments in the ways in which injuries are athletes have encountered long-term problems treated. For instance, if you can reduce the as a result of such injuries. Some parents are timescale for athletes to recover from injuries, reluctant to encourage their children to then you can maximise performance on the become involved in these sports. It is entirely pitch/arena from that individual. In crude possible that developments in medical science commercial terms, this will allow sports prop- and AI can alleviate the side-effects and erty owners to maximise their return on reduce the dangers in the future. investment (in the context of salaries and transfer fees). It is likely that athletes can also signifi- 11.5 Sustainability, cantly extend their careers. As medical science the Environment and Sport moves forward, athletes will recover more quickly from serious injuries and avoid the If we look at society in general, we have wit- 11 aging effect. This challenges the conventional nessed major developments in the areas of sus- view that the older you become, the more dif- tainability, respect for the environment and a ficult and longer it takes to recover. heightened sense of corporate social responsibil- If we take genetic engineering further, we ity. This varies, in some cases, dramatically, can easily see a situation where you can create across different geographic regions. Governments a “super athlete”. If we combine genetics with and policy leaders have introduced a raft of leg- robotics, it may be possible to achieve this islation that is slowly but surely, impacting on the position. Under this scenario, body parts can way in which we live our lives. While consumer be replaced, regrown or strengthened. This sentiment about these issues has been slow to has implications for setting new records, per- pick up, it is likely that, in a post-Coronavirus forming faster, more flexibly and developing setting, many of us may change our views. For greater strength and endurance. instance, it is very noticeable that in many cities Clearly such a scenario will be shaped by where lockdowns occurred, the air was fresher, ethical considerations. At present, I suggest less pollution occurred and reductions in emis- that sports fans and non-fans would react sions were recorded. All combined to create a with negativity to such a situation. However, I more sustainable environment. would not rule out a shift in this view, going In the context of the sports sector, we are forward. If it is to happen, it is likely to be already witnessing the impact of sustainabil- towards the end of our 15–20-year view of the ity across many facets of the operations of a future. sports organisation or body. From reductions By then, we are likely to see more common and elimination of paper-based ticketing sys- replacement of body parts, due to develop- tems to the design and re-building of sports ments in science and technology. People can stadia, it is accurate to say that we will see replace key body parts such as livers, hearts even greater focus on sustainability going for- and kidneys much more quickly and with less ward. 293 11 11.5 · Sustainability, the Environment and Sport

11.5.1 Exercise reuses battery packs provided by Nissan, the car manufacturer. This provides for a more sustainable ecosystem for its immediate needs. ??Select a new sports stadium that has been It sells this system to the grid operator and can built within the last 20 years (either in your shift it back when it stages games or music own country or elsewhere). From second- concerts and so on. It also works closely with ary sources on the Internet, carry out an the urban planning authorities in the city of analysis of the role that environmental, so- Amsterdam. cially responsible and ethical factors have Mercedes-Benz stadium, the home of the influenced the design of that stadium. NFL team, Atlanta Falcons, is also held up by sustainability experts as a pioneer of sustain- The design, structure and layout of stadia has able and eco-friendly stadium development. major implications for the sustainability agenda. What could we see in 15–20 years time? Over the past couple of years, we have seen Campelli (2019) makes the valid point that state-of-the-art stadia which have been built for many sports stadia developers, the focus with a particular focus on the sustainability has been on fan engagement, with an overall agenda. emphasis on improving the fan experience. He The English Premier League team, suggests some potential initiatives that, in the Tottenham Hotspur opened their new sta- future, could reinforce this objective, but also dium in 2019 at an estimated cost of around address wider social and environmental con- £1 billion. From a sustainability point of view, siderations. it pursued the following strategies: For instance, we may see some stadia creat- 55 It sought to eliminate all forms of single ing what he calls “electromagnetic hospitality use plastic in the stadium. This included pods” that move around the stadium. This pro- the non-use of plastic cutlery, glasses, vides the guests with different views of the straws and stirrers action taking place. Arguably, this creates more 55 It introduced a state-of-the art waste variety and sophistication than might be the management system to deal with waste case in the traditional corporate hospitality storage and disposal areas: a fixed and rigid view of proceedings. 55 It entered into a power supply deal with What about viewing platforms that over- Schneider Electric. This initiative focused look the stadium? He suggests that this might on boosting the stadium’s energy and provide fans with a unique view of the action, operational efficiency. Schneider embedded as they take part in the traditional tailgate its Eco structure platform across the arena party, a staple feature of many NFL and in order to monitor usage patterns and deal Collegiate games in the USA. The transparent with maintenance issues such as controlling design of such platforms affords an excellent temperature and lighting conditions. “big picture” view for the fans who are willing to pay for such an experience. Price (2019) points to the example of Arsenal What about a retractable roof, holding FC (EPL club). It introduced a battery stor- trees, wind turbines and a vegetable garden? age system for the club and the region in We are likely to see a redefinition of what a which it operates. This battery system is sup- stadium means to the club and community/ plied by Octopus Energy (generated from regions surrounding it. For instance, we have solar power). It proves to be efficient because seen new stadia that have incorporated hotels, battery storage guarantees availability of the residential apartments, retail malls and even necessary energy for matches by storing elec- schools, that form part of the concept of the tricity for when it is needed. “extended stadium”. In a similar vein, The Johan Cruyiff Arena The Tottenham Hotspur stadium features in Amsterdam (home of Ajax FC) operates a a sixth Form College, a 180-bedroom hotel comparable system to Arsenal. The arena and over 550 residential flats. 294 Chapter 11 · Sports Marketing in an Era of Radical Uncertainty

Some of the above concepts are futuristic It is difficult to be precise about the overall and may not happen for some time. However, impact in individual regions. In the case of the initiatives such as those implemented by United Kingdom, it has been launched, with Tottenham Hotspur, Ajax and Atlanta limited access in a number of the larger cities. Falcons reflect the challenges of addressing However, it would be realistic to note that as the customer experience and the concomi- of the middle of 2020, the level of roll-out and tant need to become part of the community access is still very negligible. For instance, and region from which the club draws the China has stated that it expects to have around bulk of its support. 36 per cent of its mobile users signed up to 5G The stadium of the future, in many cases, by 2025. I suspect that it will be towards the will play a more central and strategic role in end of this decade before we see widespread the community. By virtue of its extended adoption and use of the 5G technology in a range of facilities, entertainment, hospitality global context. and retail mix, it will become a “365 day” What are the benefits that accrue from 5G? operation. It’s retractable and flexible pitch They can be summarised as follows: design will open up opportunities to stage 55 Speed: much quicker in terms of uploads other sports and cultural events to a greater and downloads (up to ten times the speed extent than what happens currently. associated with 4G) Many of these developments will be shaped 55 Lower latency: less delays and problems in by the sustainability agenda being pursued by terms of transmitting and receiving governments and legislators. We can only specu- communications late, but part of the fall-out from the post 55 Higher bandwidth (the speed with which Coronavirus crisis, will be an escalation in sus- you can get information across to the user) tainability initiatives and legislation. This is 55 Greater scope to create richer and more likely to extend to a growth in the use of electric detailed games on mobiles. 11 modes of transportation, combined with more focused transport to and from the stadium. What are the implications for the sports sector? The answer to this question is multi- faceted. However, in essence, it revolves 11.6 Technology and Its Impact around speed of transmission of data and on Sport much greater reliability in terms of streaming matches, games and events. In this section, we examine the potential It will also allow sports property owners to impact of various aspects of technology on use 5G as a facilitator. By this, I mean that it the way sport will be delivered to fans over the creates a situation where tools such as next 15–20 years or so. Augmented Reality (AR), Virtual Reality Arguably, the technology that is most (VR), Holograms and “Big Data” can be inte- likely to have a transformative impact in the grated in order to provide a number of distinc- next decade is the growing adoption of tive advantages for key stakeholders such as the 5G. This technology is the next generation of fan, the athlete, the coaches and sponsors. mobile networks, replacing 4G (which previ- In the previous section on the stadia of the ously replaced 3G). As of mid-2020, it would future, we stressed the importance of fan be accurate to state that the adoption and roll- engagement and improving the fan experi- out of this technology varies greatly across ence. As we project forward, we can see how different geographic regions. 5G can enhance the experience of the fan. For instance, China, USA, South Korea, If we take VR as a case in point, it will UK and Germany have been identified as the allow fans to “place themselves” in the front pioneers in terms of developing and rolling out row, or behind the coaches, at a football game. the technology. Countries such as Switzerland, At present, VR is not that popular, largely due and the Nordic countries are also investing in to the cumbersome nature of the headset. moving it forward. This will change. 295 11 11.7 · Future Developments in the “Wearables” Sports Technology Sector

Fans can capture data in real time about As we move to the elite end of sport, the their favourite players. Statistics on perfor- range and sophistication of “wearables” mance can be tracked as the game progresses, it increase dramatically. Coaches make exten- will update immediately. As fans become more sive use of such devices to monitor perfor- “data-driven”, this will add significantly to the mance and seek out aspects from the captured way in which they can connect with players, data in order to drive improvement and give coaches and so on, in real time. It will create a the athlete a potential competitive edge. Other deeper and more immersive experience. benefits from using “wearables” include the Coaches and managers currently make use potential to track and anticipate potential of data and technology to monitor heart rates, injuries and instigate appropriate treatment in reflexes, speed, passes, acceleration and so on. order to speed up the healing process. Already, they can package this data and go This is critical for all sports, but particu- through it with individual players during the larly those involving strong elements of physi- half-time interval. They also use statistics to cality and impact. The ability to reduce create personalised training and nutrition pro- injuries can mean that key players on a team grammes. In the era of 5G, this will increase are available for more games. As a conse- appreciably in terms of the richness, sophisti- quence, they are more likely to influence the cation and speed with which they can develop result and put the team in a stronger position the players and athletes. to be more competitive in their respective For athletes, 5G will also enable them to leagues and championships. develop more sophisticated training and per- We are also familiar with players wearing formance programmes, usually working in small devices attached to their jerseys which tandem with their coaching staff. capture data. This data is fed back to the At the elite level of sport, such develop- coaches and enables them to change tactics ments will lead to enhanced performances, and strategy. extend careers and drive improvement in In the future, we are likely to witness even terms of breaking records or raising the over- less intrusive “wearables”. Instead of watches all skills levels. or relatively bulky devices, we will see a move We should note that the focus on 5G as the towards the use of chip technology, embedded way forward is not to assume that it is the end of in the body of the athlete. Such tools will pro- the journey. While it may be a few years before vide coaches and individual athletes with there is general access to and adoption of this deeper and richer data on all aspects of their technology, it is equally likely that the next gen- training and performance regimes. eration of such technology will also evolve. Stammel (2019) identifies companies and As was the case with 4G, by the time 5G products that are likely to become common- receives such a level of penetration, early place in sport in the short to medium-term. adopters will have moved on to the next level. These devices include LED light patches that emit blue and red lights to reduce pain and improve tissue recovery by altering blood cir- culation. 11.7 Future Developments Another start-up company has developed in the “Wearables” Sports a winter sport digitizer which helps cross- Technology Sector country skiers to capture information about snow temperature conditions on the course Many of us who take part in some form of and performance-related data on individual physical sporting activity use “wearables” on members of the team. our bodies. This can range from monitoring The “wearables” sector is arguably one of the number of steps we take each day to mon- the most innovative and prolific sports tech- itoring heart rates, blood pressure and so on. nology sectors. Fitness trackers and Apple watches are com- If we project ahead over the next 10–20 mon accessories for many people. years, we can be relatively safe in the assump- 296 Chapter 11 · Sports Marketing in an Era of Radical Uncertainty

tion that more sophisticated and creative platforms, eSports and streaming. Basketball devices will continue to emerge on the market. and eSports were identified as the sports that They will have relevance for every person who are at the forefront of technology use and participates in some form of sports activity, adaptation. from recreational exercise to the elite/profes- While we must always take a cautionary sional sportsperson. approach to such surveys (this one clearly is Designers and technologists, in my view, USA-grounded), it provides some indication will continue to be creative in terms of how as to the likely direction in which sports tech- they engineer such products. For instance, the nology will evolve over the next decade or so. sports shoe branders such as Nike and Adidas, This survey echoes the view that ultimately, up to now, have tended to focus on the mate- if any form of technology is to be appropriate, rial used in such products, as points of differ- then it must resonate with the physical and entiation. I would anticipate that “wearables” virtual sports fans. Otherwise, it is unlikely will be embedded in the shoes, and indeed that it will have any long-lasting impact. other items of clothing (shorts, jerseys, socks The survey identified three inhibitors to the and so on) to drive further improvement and adoption of sport technology. Not surpris- innovation. ingly, they are similar to the typical obstacles We can “buy into” the view, at the top of that most technology innovations encounter. the sports pyramid, that anything that contrib- They are as follows: utes to potential improvement and enhance- 55 Unqualified decision-makers ment, will be adopted with alacrity by the key 55 Risk aversion stakeholders. 55 Cost.

Proman suggests that businesses who are at 11 11.8 General Directions in Sports the forefront of innovations in this field need Technology to broaden their business model to outside of the sports sector. This is essential if they are to Moving outwards from the “wearables” sec- earn a sufficient return on their investments. tor, what trends can we anticipate in the future decade or so? Our examination of the “wearables” sector 11.9 The Fan and Changing reinforces the message that such developments Consumption Patterns and innovations are centred on the principle in the Future of driving improvement in athlete performance, monitoring, and injury reduction. In one of our chapters, we considered the However, if we widen the lens and consider ways in which fans engage with and consume other areas where sports technology has an sport. We noted that changes in the past impact, we can identify other areas of focus. decade revolved around a number of issues. Proman (2019) examines the result of a sur- These included, exponential adoption of vey of sports technology experts, investors and social media and digital platforms, second professionals in the US sports industry. They and third screening, and a desire for more were asked to identify which areas, in the future, engagement with their favourite athletes, would be the focus for investment. Nearly 78 per clubs and sports, and an increasing desire for cent of the respondents pinpointed fan engage- more data. ment technologies as the sector which would We are unlikely to see any diminishment of have the most impact. Sixteen per cent high- these platforms in the coming decade or so. We lighted “athlete performance”, while only 6 per may see some social media platforms disap- cent nominated “stadium experience”. pearing, to be replaced by new ones. For Within the category of fan engagement, instance, TikTok has gained popularity among respondents highlighted areas such as content social media users in the last couple of years. 297 11 11.9 · The Fan and Changing Consumption Patterns in the Future

We could cite Instagram before that. We will 55 Ability to choose different camera angles certainly see new platforms coming through in to watch the match the future. 55 Match predictions where fans can compete The rate of acceptance and adoption of with an AI bot social and digital platforms varies across dif- 55 Using one half of the screen to watch the ferent geographic regions. Much of this is match and the other half to watch and driven by practical issues such as the speed of share reactions with friends Internet connections and access, government 55 Viewing the match as your favourite player legislation and so on. Demographics also play watches it (micro-cameras embedded in a significant role. the athlete’s match attire Perhaps the key issue going forward, is the 55 Competing virtually with players to assess receptiveness of young children to the adoption one’s skills using VR sets. of new developments in these areas. Those that are currently in the age bracket between 5 and 10 Studies such as the Capgemini survey indicate years will be the teenagers and young adults in that fans are receptive to the adoption of the year 2035. They have grown up in an envi- emerging technologies in a physical and vir- ronment where social media and digital plat- tual location. forms have been embedded in their upbringing We can identify some challenges that sports and across all facets of their life. In essence, they marketers and property owners will have to are fully comfortable with existing technologies. address as we move forward. A strong argument can be put forward that they Firstly, they will have to achieve a delicate will most likely embrace future technologies. balance between how they use the data cap- This will apply to sports technologies as well. tured from fans and the extent to which they In the context of fan engagement, Capgemini intrude on their privacy. This is currently the Research Institute (2020) note that fans indi- case with how companies in general, use data cated that technologies such as AR, VR, AI and collected from social and digital platforms. In biometrics have enhanced their viewing experi- my view, the legislation, across different geo- ences both inside and outside the stadium. graphic regions, has still not fully caught up In a survey of over 10,000 fans, drawn from with the potential implications arising from nine countries (India, Singapore, Hong Kong, issues such as privacy and intrusion. USA, France, Germany, Canada, UK and Secondly, sports bodies will need to build the Australia), 69 per cent agreed with this view. technologies more seamlessly and efficiently Inside the stadium, fans are increasingly into the overall fan experience. Otherwise, as making use of the following features: they introduce more technology to in-stadium 55 Regular updates from other games on and out-of-stadium situations, there is a danger mobiles that fans will not be able to assess where indi- 55 Access to high-speed Wi-Fi vidual technology development fit in to their 55 Ordering food and beverages and getting experience. them delivered to their seats There is also a danger that sports marketers 55 Wristbands which contain features such as fall into the trap of “over-promising and under- an electronic ticket to enter the stadium delivering” on their promises. For instance, 55 Information on players, statistics, in-game sports clubs will have to recognise the need to performance and so on commit major financial resources in areas such 55 Biometrics - such as fingerprint identifica- as 5G Wi-Fi enabled systems that actually tion to gain entry. work and deliver. My experience of watching sports events Outside the stadium, the study highlights the (in a 4G, never mind 5G environment) is very following features: mixed. Typically, the available Internet con- 55 Streaming matches live on VR headsets to nections are variable, slow, and tend to crash. simulate the in-stadium experience Many stadium operations underestimate the 298 Chapter 11 · Sports Marketing in an Era of Radical Uncertainty

impact that large attendances in a small physi- (when a goal was scored). Some also intro- cal space have on Wi-Fi capabilities. duced fan noises, clapping and so on. For instances, some fans see in-play bet- It will be interesting to see if this has any ting as an important feature of their match- implications for future attendance at games. day experience in the stadium. If connections are slow and crash out on a regular basis, it makes it difficult for fans to participate in this 11.10 eSports: One More Time activity to any significant extent. with Feeling In summary, as we move forward over the next decade or so, fans will experience a wider Any discussion on eSports must begin by range of technologies which are designed to engaging with the views of many people that enhance their experiences. Equally, the sports it is not a sport at all! Some argue that in order clubs and organisations will need to carefully to qualify as a sport, it must have some degree assess the cost implications of introducing of physicality surrounding it. This has to be such initiatives and balance that against the supplemented by skill and dexterity. It also likely receptiveness from fans for these service must exhibit an element of competitiveness. I enhancements. argue that eSports meets all of these prerequi- In my view, younger fans will be increasingly sites, apart from physicality. Although even in receptive to such developments. The question is that context, elite gamers expend a great deal whether they will follow such sports and more of energy playing the game. However, eSports importantly, wish to physically attend sports display strong evidence of mental dexterity. In events. We should not underestimate this obser- this context, it is similar to sports such as vation. darts and snooker which rely on mental rather A recent study (Cushen et al. 2019) com- than physical elements. pared fans from traditional sports (Tsports) If you are still cynical and dubious about 11 and eSports across areas such as motivational its right to be categorised as a sport, then I am behaviours and general dimensions of fan- about to blow away your argument. No less an dom. Interestingly, it indicates that there are organisation than the International Olympics similarities across a number of dimensions Committee designated eSports to be a demon- such as group affiliation and self-esteem. We stration sport at the scheduled Paris 2024 discussed such dimensions earlier in Chapter Olympic games. four. While more research in this area is While its president, Thomas Bach, expressed needed, in order to make a more accurate pre- some concerns about the violent nature of some diction, nonetheless, this study provides an of the games, it gained approval. If it proves to early indication that the general values and be popular with viewers, it will most likely gain behavioural motivations of eSports and recognition as an official sport at the 2028 tsports fans have some degree of similarity. Olympic Games scheduled to be staged at Los If, as we assume it will happen, technologies Angeles. such as 5G transform the streaming and view- eSports featured already as a demonstra- ing experience for fans, arguably some will lose tion sport at the 2018 Asian Games in the interest in attending games. If it is possible to Indonesian cities of Jakarta and Palembang. do all sorts of clever things with technology, as Popular battle games such as League of you sit in the comfort of your own home, why Legends and Honour of Kings were used for bother dragging yourself to the stadium? this purpose. During the Coronavirus crisis, many sports In the lead-up to the doomed 2020 Tokyo elected (with due consideration being paid to Games, Intel sponsored the Intel World Open, health and safety) to stage events and games a tournament worth $500,000 in prize money. “behind closed doors”. Some placed card- Let’s face it, eSports has arrived and as we board faces of fans on individual seats. Others noted in an earlier section of this chapter, it is introduced loud music at appropriate times the fastest growing sport in the world and 299 11 11.11 · Conclusions already rivals many traditional sports in terms new technology, using the existing infrastruc- of participation and viewing figures. ture. This innovation generated an Internet Projecting forwards, over the next 10–15 speed of 4.2 terabytes per second. years, it is clear that eSports will continue to To put this in perspective, it is the equiva- grow in global popularity. Advances in tech- lent of being able to download around 10,000 nology (discussed earlier in this chapter) will HD movies in under a second! create an environment for more sophisticated The researchers note that this can be games, with richer quality of picture and low- achieved, using existing systems and infra- latency transmission – mainly driven by 5G. structures. It could service 1.8 million people It is more difficult to gauge the impact in Melbourne at this speed, at the same time. eSports will have on traditional sports. The key While such a development is at an embry- challenge for sports marketers involved with onic stage, it is not unreasonable to assume such sports is to attract and retain the interest that in a decade or so, this will be commer- of younger people: many of whom are only cialised by various companies and will become interested in electronic-based games. Arguably, part of our everyday lives. While 5G is poten- developments in technology that we have high- tially a “game-changer”, this level of speed lighted in this chapter can aid them in height- and latency will drive radical improvements to ening the fan experience. This observation, in that system. my view, is pertinent for “live” events at which We concluded that fan’s consumption pat- people attend. Provided the fan experience at terns will embrace the improvements in social “live games and sports events” is relevant to media and digital platforms. The fan experi- fans and is supported by appropriate technolo- ence will increase, both at “live” games and in gies, it can be argued that it is difficult to repli- virtual situations. cate this in a “virtual context”. For sports property owners and marketers, they will be challenged to utilise the new technologies to create a relevant experience for 11.11 Conclusions fans that reflects the changing consumption patterns and higher expectations that are In this final chapter, we have taken the oppor- likely to exist. tunity to cast an eye to the future of the sports We shall wait and see! sector. We do so at a momentous time in our lives. By the time you read this, we will (hope- nnEnd of Chapter Discussion Questions fully) have emerged from the Coronavirus cri- 1. To what extent would you agree with sis. The term “new normal” appears frequently the view that eSports should not be in the media. Some of our observations and included in the Summer Olympic predictions may fail to take into account any Games? changes in the way in which fans will consume 2. While 5G technology will provide a sport in the new environment. Will people number of advantages for fans when return to watch “live” sport to the same extent they consume sport, it is likely to lead to a as before? How will new health and safety leg- decrease in attendance at “live” sports islation operate? What will be its impact? It is events. Assess the validity of this view and too early to make any accurate forecast. use examples to support your position We have highlighted areas which will have on this observation. an impact on the future direction of sport. 3. Some commentators note that some For instance, we have targeted 5G as being sports will die if they cannot engage a “game changer”. However, it is equally pos- more fully with their fan-base. What sible that it will be quickly superseded by a advice would you provide to the CEO stronger and more robust technology. In this of the World Tennis Federation, in light of context, researchers from three Australian potential technological developments universities based in Melbourne, have tested a going forward? 300 Chapter 11 · Sports Marketing in an Era of Radical Uncertainty

4. Medical science is likely to play an tinue to innovate. Accessed on May 20, 2020. https:// increasingly strategic role in the devel- sustainabilityreport.com/2019/07/10/the-sustain- opment of sport in the next 20 years. able-stadium-of-the-future-an-ambitious-and-feasible-vision-if-we-continue-to-innovate/. Identify the areas where this may hap- Capgemini. 2020. Emerging technologies in sport: pen. Select ONE sport of your choice Reimagining the fan experience. Capgemini Research and assess the implications arising Institute. Accessed May 21. https://www.capgemini. from this observation. com/wp-content/uploads/2020/02/Report- 5. To what extent would you agree with %E2%80%93-Tech-in-Sports.pdf. Cushen, Peter J., Sean C. Rife, and Daniel L. Wann. the view that most fans in the future 2019. The emergence of a new type of sports fan: will gain a greater fan experience by Comparing the fandom, motivational profiles and NOT attending “live” events? What identification of electronic and traditional sports implications does this have for sports fans. Journal of Sports Behavior. 42 (2): 127–142. property owners and key stakeholders? Deloitte: 2017/2018 season (adapted from The Times: April 23, 2020). 6. Genetic advances are likely to destroy Kay, John, and Mervyn King. 2020. Radical uncertainty: the concept of sport as we know it. Decision-making for an unknowable future. London: Critically appraise the validity of this The Bridge Street Press. perception. Use TWO examples to Price, Sam. 2019. The Modern stadium: A hub for sus- support your line of argument. tainable development. Accessed on May 21, 2020. https://sustainabilityreport.com/2019/02/10/the- modern-stadium-a-hub-for-sustainable-development/. References Proman, Michael. 2019. The future of sports tech: Here’s where investors are placing their bets. Ayles, James. 2019. Global eSports revenue reaches Accessed May 21, 2020. https://techcrunch. more than $1 billion as audience figures exceed com/2019/10/01/the-future-of-sports-tech-heres- 433 million. https://www.forbes.com/sites/jamesay where-investors-are-placing-their-bets/. 11 les/2019/12/03/global-esports-revenue-reaches- Stammel, Christian. 2019. Sport start-ups you should more-than-1-billion-as-audience-figures-exceed- know in 2019. Accessed May 21, 2020. https://www. 433-million/#79859e761329. ispo.com/en/trends/sports-wearables-5-innovations- Campelli, Mathew. 2019 The sustainable stadium of the will-disrupt-sports-industry-2019. future: an ambitious and feasible vision – if we con- 301

Supplementary Information

Index – 303

Index

A British Telecoms 104, 107 Bundesliga and IMP, licensing 230 Acquisition 33, 54, 105, 169, 271, 287, 288 Bundling strategies 162 Adidas 17, 65, 67, 68, 151, 203, 252, 296 Business models 2, 3, 5, 109, 114–116, 118, 191, 192, Ajax FC 293, 294 286, 287 Alphafly 150, 151 –– threats to existing business models for media Amazon 53, 90, 104, 108, 109, 112, 113, 121, rights 114, 115 132, 168, 171, 234, 286 Ambush marketing 120, 247, 262–265, 269, 270 Analytics 169 C Apple 112, 166, 234, 295 ARD 117 Campbell, N. 204 Argentine 200, 237 Canal Plus 111 Arsenal FC 87, 268, 293 Cardiff City 135 ASICS 150 Channels 57, 71, 91, 92, 95, 98–99, 105–107, 109, Associative ambushing 263 112, 117, 122, 125, 142, 146, 165, 220, 221, 224, 230, Athlete endorsement 265, 266 231, 239, 249, 250, 255, 279 –– source credibility model 266 Chicago Bulls 138, 184 Attendances 4, 82, 103, 141, 142, 149, 161, 163, 165, China 3, 14, 15–18, 25, 36, 54, 70, 72, 80, 95–99, 105, 142, 182, 217, 218, 229, 239, 280, 298 164, 216, 222, 226, 239, 240–242, 258, 270, 280, 294 Australian Rules Football (AFL) 36, 194, 216 Chinese 3, 15–17, 18, 29, 55, 65, 78, 97, 226, 239, 240, 250 Co-branding. pros and cons 204 B Coca Cola 65, 234, 263, 289 Comcast 270 Barcelona 233 Commercial imperative 4–6, 192 BBC Television Corporation 179 Communities 22, 24, 30, 36, 60, 61, 62, 64, 82, 86, 138 Behaviour 5, 12, 18, 19, 23, 33, 34, 40–42, 46, 47, 49, 63, Community 20, 22, 25, 26, 31, 33, 41, 57, 60–62, 76, 81, 67, 76, 77–79, 81–83, 85, 92, 99, 132, 140, 143, 144, 82, 85, 92, 116, 138, 139, 165, 179, 197, 199, 250, 252, 156, 161, 168, 169–171, 175, 176, 190, 191, 198, 202, 257, 268, 293, 294 221, 235, 250, 251, 269, 274 Community-based sport 167 BeIn sport 125, 225, 233 Connectivity 84, 85 Benetton 22, 25 Consumption 5 BeoutQ 119, 225 Consumption of sport 5, 76, 77, 83, 85, 108, 123, Beyoncé 204 199, 205 Big data Coronavirus 2, 7, 113, 117, 132, 135, 176, 249, –– dynamic pricing work 170 268, 285, 287, 290, 298, 299 –– fans engage with 87 Coronavirus crisis 136 –– and fantasy sports 88 Corporate social responsibility 248, 251, 252, 292 Blogging 258 Cricket 2–4, 17, 19, 35–37, 42, 54, 55, 60–64, 77, 88, 89, Book-keeping model 202 92, 93, 113, 116, 118, 119, 141–144, 149, 150, 167, Borussia Dortmund 113, 179 188, 193, 200, 205, 217, 223, 241, 251, 252, 279, 287, Boston Celtics 181, 182, 183, 184 289, 290 Brand ambassadors 145, 255, 267 Cricket in Germany 223 Branding Culture –– brand equity and Keller framework 195 –– DAZN 110 –– brand equity 195, 197 –– definition 18 –– building brand loyalty– sports team equity –– norms and values 20 index 199 Customer/fan relationship 147 –– co-branding 203 –– sports brand extensions 201, 202 –– sports brands, most valuable 201 D British Cycling 206–210, 270, 273, 291 Broadcasters 4, 5, 20, 42, 43, 70, 86, 90, 92, 99, 103, Data analytics 136, 143, 146, 161, 169–171, 176, 194, 260 104–106, 108–110, 112, 113, 115–117, 119, 121, 122, David Brailsford 207, 210, 270, 273, 291 143, 144, 147, 218, 220, 221, 224, 228, 231, 232, 234, DAZN 95, 110, 111, 113, 114 235, 238–240, 277, 278, 280, 286, 292 Deloitte 169, 170 304 Index

Digital marketing 2, 32, 87, 92, 136, 147, 192, 202, 215, FC Bayern Munchen 275 242, 249, 254, 257 Federation Internationale de Football Association Digital platforms 3, 76, 297, 299 (FIFA) 7, 28, 32, 47, 49, 50, 51, 53, 54, 59, 64, 65–67, 91, 117, 132, 144, 175, 193, 215, 226, 280 Federer, R. 266, 267 E Female sports –– Gatlin, Justin 52, 53 ECB 144, 149, 150 –– growth 4 English Derby 141 Fenway Sports Group 178 English Premier League (EPL) 6, 15, 20, 42, 45, 46, 54, FIFA. See Federation Internationale de Football 82, 83, 90, 91, 104, 106, 107, 111, 114, 118, 119, 141, Association 174, 178, 179, 228, 231, 232, 267, 286, 293 Fiji 236 Environment 3, 6, 7, 14, 18, 23, 26, 33, 35, 36, 40, 41, 45, 5G 4, 143, 287, 294, 295, 297, 298, 299 47–49, 61, 80, 85, 93, 133, 134, 136, 138, 139, 144, Formula One 3, 27, 29, 54, 68, 69, 70, 71, 90, 132, 141, 148, 149, 170, 173, 188, 208, 216, 218, 235, 248, 250, 145, 215, 224, 228, 275, 289 251, 256, 257, 264, 268, 276, 285, 291, 292, 297, 299 Future trends and developments Environmental issues 144, 145 –– developments in medical science 291, 292 EPL. See English Premier League –– 5G 294 Errors 193 –– sustainability and the environment 292 ESPN 43, 90, 105, 110, 113, 116, 118, 120, 122, 221 –– technology and its impact on sport 294, 295 ESports –– “wearables” technology 295 –– emergence 3 –– inexorable rise of ESports 91 –– One more time with feeling 298, 299 G Ethical dilemma 4 European Broadcasting Union 117 Galloway 252 European Commission (EC) 121 Geo blocking 104, 121, 122 e-Word-of-Mouth (eWOM) 172 Georgia 236 Girona FC 234 Global sports sector 3 F –– golf in crisis 164 –– In context 3 FAANGS 112, 113, 116 Glocalisation 220 Facebook 3, 84, 85, 90, 98, 99, 104, 108, 109, 111, 112, Google 53, 112, 113, 116, 132, 234 113–116, 119, 122, 123, 202, 225, 234, 240, 242, 258, Guerrilla marketing 262 266, 279 Fan-based brand equity pyramid 197 Fandom H –– changing nature of relationships between fans and stakeholders 289 Hallmark (major) sports events –– characteristics 77 –– benefits from staging such events 33 –– enhanced fan experience 91 –– bidding for 26, 27 –– fan empowerment 85 –– criteria for assessing bids 31, 32 –– fan engagement technologies 296 –– definition 14 –– fan motivation 79, 80 –– losing its appeal 32, 33 –– fan typologies 78, 79 Hardy’s 252 –– fans and affiliation 81, 82 Hawkeye 143, 193 –– fans and augmented and enhanced viewing Honda 141 experiences 89 Huawei 250 –– fans and changing consumption patterns in the Hublot 204 future 296 Huddersfield Town 174, 253, 254 –– fans and fandom definition 77 Hugo Boss 204 –– fans and how they consume sport 83–85 Hull City 135, 221 –– fans and luxury 90 –– fans and the drive for enhancements and data 86 –– fans as consumers 77 I –– proactive fans 90 –– 24/7 fans 90 Incursive ambushing 263 Fan engagement technology 296 India 3, 25, 54, 61, 63, 72, 80, 96, 97, 105, 164, 222, 223, Fans and dysfunctional behaviour 82, 83 226, 238–241, 258, 297 FC Barcelona 201–203 Innovation and product development 305 D–P Index

–– collaboration 192 M –– culture perspective 193 –– fashion perspective 193 Manchester United 83, 146, 178, 190, 216, 232, 249, –– innovation perspectives 193, 194 268, 288 –– institutional perspective 193 Marginal gains theory 209 –– rational perspective 193 Marketing strategy Instagram 3, 84, 86, 89, 98, 225, 258, 266, 297 –– analysis of the business environment 139 Intel World Open 298 –– benefits and limitations 133–135 International Association of Athletics Federation –– competitive positioning 146 (IAAF) 48, 52, 53, 151 –– developing the core marketing strategy Internationalisation strategies 146, 147 –– bend the knee 140 –– evaluation and control 147, 148 –– fans focusing less on domestic leagues and more –– marketing operations management 147 on international competitions 234 –– mission statement and Chicago Bulls 138 –– further growth in the development of academies –– mission statements 138 and “feeder-clubs” 234 –– PESTEL analysis 139 –– increasing encroachment by governments and –– strategy defined 133 states 234 –– strategy in context 132 –– increasing shift from traditional broadcasters to –– SWOT analysis 145, 146 social media/technology companies 234 Mayweather, Floyd 120 –– individual clubs investing in other sports 234 McDonalds 65, 234 –– multinational companies 234 Meerkat 119, 120, 122 International Olympics Committee (IOC) 28, 32, 47, Merchandising 17, 161, 166, 231 48, 50, 53, 59, 97, 98, 144, 215 Mission statements 137–139, 148 International Tennis Federation 193 Mixed Martial Arts (MMA) IOC. See International Olympics Committee 188, 192, 194, 205 Ireland 15, 21, 35, 82, 95, 164, 216, 222, 223, 237, 239, MMA. See Mixed Martial Arts 252, 264 N J Napster 118 Jenner, K. 204 National Basketball Association (NBA) 6, 7, 47, 111, 113, 138, 139, 181–184, 229, 231, 234, 249 K National Football League 108 NBA. See National Basketball Association Kaepernick, Colin 140 Netflix 109–113, 115, 121, 234, 286 Kaizen 207 New Zealand 223, 236–238 Keller Brand equity model 196 Nike 17, 141, 151, 202, 203, 252, 262, 275, 296 Key performance indicators 28, 57, 58, 94, 133, Now TV 240 147–149, 159, 181, 208 Koche 204 O

L Obtrusive ambushing 263 Olympic Games 7, 14, 15, 22, 25, 27–31, 46, 50, 52, 54, Legacy 55, 97–99, 117, 125, 140, 192, 207, 208, 217, 226, 233, –– definition 28, 29 240, 242, 248, 298 –– drawback 30 OSN 240 –– elements 29 Over the top (OTT) Legal environment 145 –– and the European experience 111 Leisure 89, 142, 164, 222, 241, 280, 285, 290 –– and niche sports 112 –– confluence of sport, entertainment –– Pacqiato, Manny 120 and leisure 290 Leisure time 54 Linear TV 3, 4, 249 P Line review systems 143 Lisbon Treaty 224 Pacquiao, M. 120 Liverpool 178–180 Paddy Power 249, 252, 253, 264 Location-based marketing 169, 192, 247 Paris Fashion Week 204 306 Index

Paris St Germain 15, 203 –– Sky Television 104 Periscope 119, 120, 122, 123 Secondary ticket market PESTEL analysis –– future trends 175 –– advantages 110 –– implications for stakeholder 172 –– economic environment 141 –– managing relationships between primary and –– environmental environment 144 secondary ticket sellers 173 –– legal environment 145 –– problems 173 –– political environment 140 Social influencers 266 –– social environment 142 Social media 170 –– technological environment 143 Social media platforms 3, 76, 84–86, 116, 120, 123, 191, Pharmaceutical industry 291 225, 253, 255, 259 Piracy 118, 119 Sponsored entity 247, 248, 256–258, 268, 269 Pot Black 238 Sponsorship Pricing –– activation 256, 257 –– competition-based approaches 159 –– assessing effectiveness of sponsorship –– concept of deals 259, 260 –– cost-based approaches 159 –– assessing value of components of sponsorship –– demand-based approaches 160 proposition 255 –– dynamic pricing 167, 168 –– attractiveness of sports to sponsors –– in context 156 –– changing digital landscape 250 –– pricing and the concept of value 157–159 –– loyalty 250 –– Pricing bundling 163 –– media interest and coverage 250 –– pricing in the services sector 156, 157 –– receptive environment 250 –– value drivers and value triad 157 –– rich vein of values and symbols 250 –– variable ticket pricing 162, 165, 167 –– transcends geographic, cultural and religious Product 6, 14, 26, 35, 43, 46, 69, 76–78, 91, 97, 107, 111, barriers 249 114, 115, 118, 122, 124, 125, 134, 136, 143, 146, –– in context 248, 249 149–151, 156–160, 163, 165, 166, 168, 177, 189, 190, –– definition 248 191, 192, 194, 195, 199, 201, 202–205, 218, 219, 227, –– developing proposal 254 230, 232, 235, 247, 250, 252, 257, 260, 268, 287 –– in digital age 257, 258 Psychic distance 215, 222–224, 229, 235 –– evaluation methods Putin V. 226 –– brand awareness/recall 260 –– impact on sales 260 –– media coverage 260 Q –– return on sponsorship investments 260, 262 Qatar, land of sport 233 –– social media assessment 260 –– identifying potential partners 254 –– managing the relationship between the sports R property owner and sponsors 256 –– objectives R&A 144 –– awareness-related 250, 251 Radical uncertainty 7, 136, 285, 290 –– corporate social responsibility-related 252 Ralph Lauren 203 –– image-related 251 Real Madrid 114, 190, 204, 216, 249, 268, 275 –– relationship-related 251 Revenue streams 2, 4, 6, 20, 55, 58, 59, 91, 103, –– sales-related 252 123, 146, 155, 161, 167, 170, 177, 178, 203, –– placing value on sponsorship deal 254 221, 230, 235, 237, 247, 267 –– tools for engagement Rhianna 204 –– content marketing 258, 259 Ronaldo 266 –– storytelling 259 Rugby 4, 8, 17, 19, 22, 26, 27, 35, 37, 42, 46, 60–63, 77, Sport 89, 92, 95, 107, 117, 118, 134, 142, 143, 188, 189, 193, –– and culture 18–20 217, 222, 232, 236–238, 279, 280, 287, 289, 292 –– China 16–18 –– concept of 12 –– educational–commercial configuration 14 S –– evolution and organisation of 13 –– funding of sport 20 Scotland 82, 117, 164, 236, 237, 286 –– funding, UK approach 25, 26 Seatgeeks 174 –– government attitudes and policies 15, 16 Second screening –– purpose and value of 12 –– making money from 87 –– in society 12 307 P–T Index

–– voluntary– governmental configuration 14 –– scale and scope of media rights 104, 105 Sport and globalisation Sports pyramid 5, 217, 296 –– barriers to internationalisation 219, 220 Sports product –– criteria for evaluating the attractiveness of –– augmented offer 190 international markets –– core product 189 –– ability to develop networks and collaborative –– expected offer 189 arrangements 224 –– key dimensions 190, 191 –– demographic profile 222 –– potential offer 190 –– diaspora 222 –– Sports team brand equity index 199–200 –– legislation 224 Sports tourism 25, 26 –– media interest, coverage –– city-based branding 26, 27 and infrastructure 224 Spotify 166 –– political 225 Stadium naming rights 199, 267–268 –– psychic distance 223, 224 Stakeholders 4, 5, 18, 20, 23, 26, 27, 30, 40–46, 50, 51, –– internal and external “triggers” 219 57, 58, 59, 63, 70, 71, 87, 103, 104, 111, 112, 115, 121, –– international entry strategies 122, 131, 133, 135, 136, 138, 144, 147, 151, 172, 173, –– co-partnerships 228 188, 189, 192–194, 205, 206, 216, 224, 226, 228, 231, –– developing new international competitions 232 237, 238, 251, 257, 258, 263, 269, 275, 279, 285, 289, –– establishing franchises in international 290, 294, 296 markets 229 Strategy 5, 6, 7, 26, 27, 32, 34, 40, 41, 47, 48, 51, 54, 58, –– inside-out” and “outside-in” approaches to 88, 131, 132–137, 141, 147, 148, 150, 156, 159, 166, internationalisation 227 189, 201, 204, 207, 208, 210, 219, 220, 224, 225, 228, –– licensing, Bundesliga and IMP 230 229–233, 242, 254, 262, 264, 270, 273, 295 –– media rights sales 231 StubHub 155, 171, 173, 174, 182 –– outward and inward investment strategies 232 –– samplers, teasers and the real thing 228 –– season passes 231 T –– staging regular season games in international markets 229 TaylorMade 252 –– motivations and barriers for 218 Team Ineos 273–274 –– potential inhibitors to 221 Team Sky 207–210, 270–273 –– push and pull factors 218 Technological environment 143–144, 148 –– strategies for 225, 226 Technology 3–7, 26, 32, 35, 45, 76, 78, 83–85, 88–91, 93, Sport Event Denmark 228 96, 99, 103, 104, 112, 113, 115, 118, 119, 120–123, Sports governance 143, 144, 146, 151, 155, 163, 168, 169, 171, 175–177, –– accountability 49 181, 188, 189, 193, 194, 205, 215, 216, 218, 219, 220, –– Anglo American cultures 54 224, 228, 235, 237, 240, 247, 248, 250, 260, 269, 270, –– criteria for effective sports governance 48, 49 273, 275–277, 285, 291, 292, 294–299 –– definition 41, 42 Television 25, 69, 70, 71, 79, 86, 93, 95, 96, 103–105, –– European culture 54 107, 108, 110, 111, 115, 117, 118, 122, 124, 125, 126, –– framework for effective sports governance 57, 58 179, 199, 209, 228, 238, 253, 270, 278 –– global perspectives 53, 54 Ticketing strategies –– governance 42 –– based on demand and value 161, 162 –– impact of different cultures and behaviours –– bundling strategies 162 on sports governance 55, 56 –– discriminatory pricing tools and techniques 165 –– legal response 56 –– dynamic pricing 167, 168 –– role and remit 43, 44 –– advantages 169 –– shifting positions 288, 289 –– disadvantages 171, 172 –– transparency 50–52 –– to work 168, 169 Sports media rights –– equitable pricing strategies 166, 167 –– business models 114 –– fan loyalty and behaviour 161 –– emergence of subscription-based –– implications for 160 channels 105, 106 –– life cycle pricing 166 –– English Premier League rights deals 104, 107 –– location-based ticketing 161 –– Global sports media rights 105 –– premium pricing 165, 166 –– media rights revenue 105 –– product line pricing 165 –– Pay TV (PPV) 111, 118 –– secondary ticket operators 171, 172 –– protected events 116–118 –– sports economics 161 –– protecting sports media rights, legal response 120 –– variable ticket pricing 162 308 Index

Ticketiq 174 V Ticketmaster 174, 177, 182 Timesport H.D 240 Value drivers 158–159 Tommy Hilfiger 203 Value proposition 6, 133, 136, 138, 146, 157, 158, 163, Tonga 236 165, 166, 170, 195, 255, 289 Tourism 11, 13, 25–30, 33, 34, 89, 90, 228 Value triad 158–159 Tottenham Hotspur, FC, stadium design 293 Vaporfly 150–151 Tsports 298 VAR. See Video-assisted referee TV referee 143 Video-assisted referee (VAR) 143, 193, 289 Twenty-Twenty or One Hundred Vision 149–150 Viagogo 155, 173, 174, 175, 177 Twitch 3, 113 Twitter 3, 84, 85, 108–111, 113, 115, 116, 120, 202, 225, 234, 266 W Typicality model 202 Wales 164, 207, 236, 237 Wearables 87, 99, 169, 295–296 U Western Samoa 236 Whoop 194 UEFA. See Union of European Football Associations Wimbledon 28, 117, 193 Ultra-definition cameras 143, 192 WPBSA 240–242 Ultra Fighting Championship 110 Union Cycliste Internationale 270 Union of European Football Associations (UEFA) 27, Y 32, 33, 64, 65, 103, 107, 111, 115, 117, 144, 193, 215, 226, 263, 289 Yahoo 90, 108, 109, 115 Universal Music 204 YouTube 91, 113, 220, 253, 258, 279