The Merging of Marketing and Sports: a Case Study Marber, Wellen and Posluszny
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The Merging of Marketing and Sports: A Case Study Marber, Wellen and Posluszny THE MERGING OF MARKETING AND SPORTS: A CASE STUDY ALLEN MARBER, Fordham University PAUL WELLEN, Roosevelt University SUSAN POSLUSZNY, Fordham University The New York Yankees are a perfect example of the merging of marketing and professional sports. But why are the Yankees such a financial and secular success? Why does this team generate more revenue from ticket sales, merchandising, advertising and other sources than any other American sports franchise? Indeed, the Yankees, whether wittingly or unwittingly, appear to be a perfect ex- ample of effective marketing management. This paper examines how the Yankees, and their princi- pal owner George Steinbrenner, utilized the 4Ps and, as a result, developed a highly successful global marketing program. INTRODUCTION promotion and distribution efforts, both nation- ally and internationally, have allowed it to gain A brand, as marketers know, is a name, term, considerable attention and loyalty. This organi- symbol, sign or combination intended to iden- zation has had a global marketing orientation tify or differentiate it from its competitors. for a long time now. It’s the New York Yan- Linked to the brand is its assets and liabilities kees. This paper attempts to explain this suc- called “brand equity.” It is the prime responsi- cess and will show that if an organization, any bility of management to enhance brand equity kind of organization, truly understands classic through their domestic and/or international marketing principles it, too, can emulate the marketing efforts. success of the Yankees and expand their brand globally. Global branding and sports marketing have al- ways been intertwined. There are many organi- HISTORICAL PERSPECTIVE zations in the sports arena (i.e., Nike, Wilson, Reebok, Manchester United to name a few) that New York Yankee owners have been “savvy” market their product internationally. The recent marketers since Col. Jacob Rupert purchased Olympics so vividly brought together sports, Babe Ruth from the Boston Red Sox in 1920. business organizations and brands. Though the Yankees typically have had very good management on the field, we must not This paper highlights a sports organization in minimize the role of ownership in their success. the process of expanding its well-regarded do- The Yankee organization has been a highly mestic brand into the international marketplace. marketing-oriented one since that eventful day when Ruth put on pinstripes. During the 1940s This same organization has enjoyed success 1950s and 1960s ownership consisted of a part- long before the terms “global branding” and nership between Dan Topping and Del Webb. “sports marketing” came into vogue. Its prod- These men created the “Yankee Dynasty”, uct has a reputation for excellence; its pricing teams that never seemed to lose a World Series. has added considerably to its profitability; its In fact, Del Webb continued to prove his mar- keting skill by building a multi-billion dollar real estate business. Apparently, George Stein- The Marketing Management Journal brenner inherited the genes of previous owners Volume 15, Issue 1, Pages 162 - 171 Copyright © 2005, The Marketing Management Association who have exhibited great “marketing savvy”. All rights of reproduction in any form reserved This paper attempts to explain the success of Marketing Management Journal, Spring 2005 162 The Merging of Marketing and Sports: A Case Study Marber, Wellen and Posluszny the Yankees and the role of George Steinbren- publicity through widespread media attention ner in its success. This paper will also show (Allen 2000; Linn 1982; Lyle and Golenbock that if an organization, any kind of organiza- 1979). tion, truly understands classic marketing princi- ples it, too, can emulate the success of the Yan- Billy Martin carved a special place for himself kees. in the annals of baseball. Steinbrenner named Martin manager of the Yankees five times GEORGE STEINBRENNER (1975-77, 1978, 1983, 1985 and 1988). Were AND MARKETING all of these hirings and firings part of Steinbren- ner’s grand publicity plan? Who knows? But Marketing can be studied in college or graduate such machinations led to headlines across school, and then successfully applied in the America’s sports pages. business world. Still many people who may not have learned the “4Ps” in academia are ac- To fill the ballpark in this modern age takes complished marketers. both winning and publicity, which no owner, even George Steinbrenner, can easily afford. George Steinbrenner is just such an example. It As one can see, Steinbrenner was clever enough is our feeling, based on extensive research, that to generate unusual amounts of free publicity much of the Yankee’s success can be attributed for the first fifteen years of his tenure, to keep to Steinbrenner’s innate sense of marketing. the Yankees in the New York (if not American) There are precious few other answers to explain media nearly on a daily basis. Again, it was his his achievements. For example, Steinbrenner use of free agents, The Bronx Zoo and the Billy was the first to use “free agents”, once free Martin episodes that showed that Steinbrenner agency was established; there was the phe- knew how to keep the Yankees on the “back nomenon known as the “Bronx Zoo” of the late pages.” The “back pages” refers to the newspa- 70s and early 80s; the manipulations of Billy per tabloids such as, The New York Daily News, Martin; there was the Seinfeld TV show; the The New York Post and The Chicago Sun MSG cable deal and the creation of the YES Times. It is on these pages where most fans Network. Let’s review these events in more obtain their sport news. It was this constant detail. turmoil within the Yankees organization that made those back pages. It was also such con- Once free agency was established, George sistent attention paid to the Yankees that en- Steinbrenner saw it as a marketing tool. The abled Steinbrenner to secure the lucrative MSG enormous publicity surrounding the acquisition Cable deal in 1988, even though it had been ten of famous and “high-priced” ball players like years since the Yankees won a World Series. Reggie Jackson and Jim “Catfish” Hunter MSG Cable “signed” the Yankees, rather than helped George Steinbrenner off the field (in their successful cross-town rivals, the Mets, terms of PR) and the Yankees on the field. His because of this year-round media and fan atten- free agents catapulted the Yankees to three tion. World Series in the late 70s, winning two of them (1977 and 1978). Another example of Steinbrenner’s marketing savvy related to the most popular program on The “Bronx Zoo” was a phase coined by ball- TV during the 1990s -- The Seinfeld Show. An player Sparky Lyle in the late 1970s to label the unseen Steinbrenner character appeared in the internal dissension caused mainly by Steinbren- show between 1994 and 1998. One of the stars ner’s hirings and firings. Still, the Yankees of this series was Jason Alexander, who played won five division titles, four pennants and two George Costanza. Costanza was also employed World Series between 1976 and 1981, and by the Yankees. Thus, you have the promotion helped themselves to enormous portions of free of both Steinbrenner himself and the New York 163 Marketing Management Journal, Spring 2005 The Merging of Marketing and Sports: A Case Study Marber, Wellen and Posluszny Yankees. In addition, Steinbrenner has person- Hot dogs and soft drinks would be half-price. ally appeared on many other TV shows as well All of the net proceeds of the game ($150,000) (TVTome 2004). would benefit the Red Cross Relief Fund. The game was played to a standing room only The $486 million dollar deal with the MSG ca- crowd of 55,000 fans. This event garnered na- ble network in 1988 came at an opportune time tion-wide attention. as the Yankees’ on-field fortunes had waned. This deal broadened their media exposure to The above events were not created because now include cable as well as broadcast TV, and George Steinbrenner was trained in the 4Ps; it gave Steinbrenner the financial means to re- rather, Steinbrenner had the marketing savvy to cruit the ball players that field management use various situations as opportunities to be wanted. When the MSG agreement expired in capitalized upon. In fact, whether he knew it or 2001, Steinbrenner was already thinking of ex- not, Steinbrenner followed classic marketing panding his media reach. He reasoned that if principles. The result was that he now owns the Ted Turner, then owner of the Atlanta Braves, most successful sports franchise in history. could control his own media network, so could he and the Yankees. Thus, the Yankees Enter- The following sections will detail how George tainment and Sports Network (YES) was born. Steinbrenner was able to blend the four compo- In short, it was a way to directly benefit from nents of the marketing mix into a meaningful, all the sponsorship and advertising revenues and very successful, marketing program. that had eluded Steinbrenner in his earlier deals. This YES Network has become very popular PRODUCT since its introduction in 2002. In addition to broadcasting Yankee games, the YES Network The Yankees have, for the majority of their his- airs shows on Yankee history, including inter- tory, been a team that has been able to achieve views with present and past Yankees as well as success because of the product they have put on other prominent sports figures. Other teams the field. such as The New Jersey Nets, New Jersey Dev- ils, University of Oregon, Manchester United It is believed that the team brings in around and the Yomiuri Giants are, or will be, broad- $330 million in total revenue, although this cast via the YES Network (McMains 2002).