1.1 Introduction
Welcome to this text book on the subject of sports marketing. I hope that you enjoy the content and more importantly gain a deep understanding of the issues and challenges that face sports marketers working in this exciting industry sector.
I use the word “exciting” because sport engenders a number of different feelings and emotions among many people world-wide. Passion, enthusiasm, fanaticism, euphoria and despair all feature to a greater or lesser extent in the typical sports fan’s lifestyle.
It is also a sector of industry that is growing in terms of employment opportunities. Increasingly, sports administrators and sports property owners seek out suitably qualified individuals to work directly in this industry. Hopefully, this text will inspire you to take any such opportunities.
Many of you may eventually end up working as brand managers, digital marketing executives, advertising executives, media marketers or in the area of data analytics. While you may not be employed directly by sports clubs, bodies and sports organisation, you could find yourself playing a significant role in terms of working with sports bodies.
This initial chapter attempts to place the sports sector in a global context. We begin by considering some of the key trends that have taken place over the past 15–20 years or so.
We then consider the key themes and dimensions that we address in the subsequent chapters in this text book.
As you work your way through these topics, I would like to add a cautionary note. The sports sector, as we shall see, is a vibrant, dynamic and at times, an unpredictable industry. As I write these introductory notes, we are currently in the middle of the Coronavirus crisis. Sport, in tandem with all areas of business and society in general is undergoing change. By the time you read this text, hopefully, we will have emerged from the worst aspects of its influence.
We should also note that it is critical for us to keep up with the latest developments and research in the sports sector. As part of the support for this text, I will generate regular blogs to stimulate discussion and provide opinion on the latest concepts and theories.
1.2 Sport in the “New Normal”
The term “new normal” has featured prominently throughout 2020. The message behind it indicates that business and society will need to grapple with new challenges and problems, post-Coronavirus.
The sports sector is no exception. Prior to 2020, many sports exhibited varying degrees of success. These ranged from increasing revenue streams and more global popularity, through to more modern stadia. Generally, within the context of the most popular sports such as football, rugby and cricket, sports property owners invested in enhancing the quality of the fan experience and engagement. Increasing revenues led to higher salaries.
Some critics have argued that ultimately this is not good for the overall sport. As we shall see later in the text, many sports organisations and clubs engaged in practices that defied the conventions of prudent business management. While the sport may have generated extremely large amounts of cash that flowed into the organisation, salaries, transfers and agents’ fees have led to even more cash going out.
Such a business model is not sustainable in the longer-term.
The coronavirus crisis brought immediate problems that challenged the efficacy of existing business models. Within weeks, sports property owners were pleading for support from respective governments. While the top clubs were in a better position, the cancellation and postponement of games, tournaments and events, created a cash crisis.
Will sport recover? I have no doubt that it will. However, it may take a number of years before we get back to a situation that existed before the crisis.
As of June 2020, sports such as football, horse racing and snooker made tentative steps to re-start operations. Working with governments, the “new normal” featured games being played behind closed doors, with no fans allowed in, due to restrictions such as social distancing.
The media, who bought the rights to show such games, in many cases refused to make the original agreed payments, if the events did not take place. Even when they did, they paid a reduced fee to take account of the fact that they were getting a “diminished” sports product.
Does this raise the prospect of reduced media rights payments in the future? Who knows?
Overall, some commentators suggested that global sports revenues could decrease by as much as fifty per cent. The major European football teams, between them, could lose over £3 billion.
The reality suggests that many sports had to face up to the unpalatable fact that their original business models might no longer work in a post-Coronavirus environment. The “new reality” began to bite, and bit hard.
1.3 The Global Sports Sector in Context
In this section, we identify the main developments in the sports sector. They are by no means exhaustive, but such trends and drivers have transformed the way in which the sector has evolved and provide us with a background to the way in which sports marketers will have to function in the coming 15–20 years or so.
- Geographic shiftsThe last two decades has witnessed a re-focus in terms of the nexus for sports events. Traditionally, major sports and events evolved in the North American and Western European regions. Across most of the popular sports, these regions staged the major events. However, regions such as Eastern Europe, The Gulf Region, and particular key countries from Asia, have moved “centre stage”.Formula One has widened its base for staging Grand Prix events. Over the past number of years, it has located an increasing number of such events in countries as far apart as Vietnam, Bahrain and Singapore.In the sport of cricket, the nexus has moved from the United Kingdom to India.China has invested heavily in developing domestic football and increasingly many major football teams in Europe have been bought out by Chinese, Thai and Indian conglomerates.Who would have suggested 15 years ago that Qatar would be awarded the rights to stage the 2022 World Cup?
- The emergence of eSportseSports has grown exponentially over the past 15 years or so. We examine this sport in more detail later in the book. Technology has played a significant part in its growth. Among young people, particularly those in the fifteen to twenty-five bracket, it has changed the concept of sports participation and consumption. The notion of physical exercise has, to some extent, been overtaken by the sedentary engagement with electronic games.
- Social media and digital platformsWe have witnessed other transformative developments, particularly in terms of how fans engage with their favourite sports, teams and players. Social media, in particular, has veered away from traditional methods such as TV, Press and Radio. Many fans consume their sport via social media platforms such as Facebook, Twitter, Instagram, to name but a few. Twitch has recently appeared on the scene and appears to be eminently suitable for fans as a mechanism for enhancing the fan experience.Digital platforms, in many guises have also revolutionised the way in which we watch sport. Arguably, fans have much greater choice in terms of the devices they use to engage with their favourite sports. The days of linear TV are numbered.
- SustainabilityIn line with other business sectors, the sports industry has been grappling with the challenges of addressing the issue of sustainability and its impact on the environment. New stadia, in particular, have to reflect such issues as energy conservation, recycling, use of appropriate materials and so on.
- The commercial imperativeThe sports sector, particularly at the top end of the pyramid, has fully embraced the commercial focus on the way in which its operations are run. Instead of relying on well-meaning amateurs to run the sport, property owners have recruited (at senior management level) successful individuals who have performed effectively in traditional sectors such as financial services and retail.
- The ethical dilemmaWhile the commercial focus may create much more significant revenue streams, many sports have been afflicted by the twin problems of doping and match-fixing. Sport is a results business. Success, in many cases, is not defined by how efficiently the club or association is financially managed. For many stakeholders, particularly fans, it is defined by success on the pitch. Some individual athletes, in the quest for improvement and success, make use of illegal drugs to achieve their objective. Sports such as athletics and cycling have experienced many scandals as a result. The problem is compounded by the inability of the drug testers to “catch out” the offenders, particularly in cases where the technology is not sufficiently developed to identify “state-of-the-art” drugs.Match-fixing is another negative aspect of sport that has increased dramatically over the past 20 years, particularly in Asian countries.
- Growth in female sportsWe have witnessed a significant growth in the area of female sports in the past decade. Football, cricket and rugby, in particular, have established leagues and competitions that are increasingly played at a professional and semi-professional level by female players and athletes. This has been made possible by effective marketing. In this case, such sports have attracted the interest of broadcasters. In turn, this improves the opportunities to attract sponsors. All of this is driven by widening and increasing the number of viewers and attendances at such games and events.
- The decline in terrestrial broadcasting coverage and linear TVThe sale of media rights has transformed the way in which sport is distributed to and consumed by fans. Increasingly, fans are moving away from relying on linear TV coverage (scheduled programmes at fix times, with no opportunity to target individual viewers). Fans increasingly watch sport as and when they want to and are more likely to favour personalised content and packages.
- TechnologyThe role of technologies such as Augmented Reality (AR) and Virtu...