Topic #10 - Sports and the Economy

Money Impact on Sports

Shapes access and attitudes to sport, is need for participation. Can help or hinder participation, linked to broader social beliefs. A form of propaganda, using sport to improve reputation, can transform a nation’s sporting interest.

Growth of Commercial Sports

• Market economies, where athletes, team owners, sponsors, and spectators value material rewards.

• Societies with large, densely-populated cities without concentrations of potential spectators.

• High standard of living where people have time and resources to play and watch events.

• Large amounts of capital to build and maintain stadiums.

• Cultures where lifestyles emphasize consumption and material status. Allows everything associated with sports to be sold.

Creation of Spectator Interest

• Must provide opportunities for high emotion and eliminate boredom.

• Youth sports programs, interest often starts in childhood sport experiences.

• Media coverage (newspapers, television, other modern media), makes us believe events are important or controversial.

How to Globalize Sports

Sports need new ways to expand markets and maximize profits through exporting culture, content, and having international games (ex. MLB having a “Seoul Series”). Transnational corporations use sports to introduce products and services internationally (ex. McDonald’s sponsoring USSR tours).

Globalization of Commercial Sports

• Branding; stadium naming rights can sells for million of dollars. Everywhere inside stadiums, on building and on athletes.

• Making action more exciting and understandable through rule changes (ex. Pitch clocks in MLB)

• Seek to increase scoring (ex. Football rules to maximize offense; baseball increase of base sizes)

• Heighten attachment to players and teams (ex. Interviews & documentaries)

Commercialization and Orientation of Athletes, Coaches, and Sponsors

Audiences more entertained by intense action, danger, and drama involving athletes/coaches. Players may “play to the crowd” with controversial personas. Athletes in heavily commercialized sports generally lose control of their own sport participation.

Cartel

A centralized group that coordinates the actions of a selected collection of people or businesses. Team owners band together in sale of media rights, licensing of trademarks, etc. (ex. NCAA in control of football TV rights from 1951-1984). Limits number of franchises.

Monopoly

The one and only provider of a particular product or service.

US Organization of Professional Sports

Cities have sought “major league” franchises as validation since 1960s. Cities compete with each other for franchises, offer tax breaks, public funds to build stadia. Rationale that stadiums will create jobs, commercialization, attract other businesses, national attention, tourism money, and social benefit to a community. Many stadia constructed with large public money.

Studies Of Impacts of Stadia

• Create jobs, but apart from athletes and team exes, most are low-paid, seasonal, and part-time.

• Companies building stadiums are rarely local.

• Do attract other businesses, but mostly franchises headquartered elsewhere. Purchases don’t often benefit local economy.

• Money spent at stadium means less spend elsewhere.

• Feelings of fans often vary with success of team, no impact on non-sports fans.

Sources of Income for Teams

Media rights, gate receipts, sponsorships, and merchandising, and gambling (many stadiums now feature in-house sportsbooks).