Reason for an ejection in fifa nyt crossword

Superbowl Discussion Board

1) Discuss which environmental factors most influenced your involvement in the Superbowl. If you are not interested in the Superbowl, then discuss which environmental factors most influenced your disinvolvement.

2)List the steps in the decision making process for sport consumers. Reconstruct your most recent decision to attend a sport event. How did your experience compare with the decision making model?

Sport Marketing

Fourth Edition

Bernard J. Mullin, PhD

Aspire Group

Stephen Hardy, PhD

University of New Hampshire

William A. Sutton, EdD

University of South Florida

Human Kinetics

3

Library of Congress Cataloging-in-Publication Data

Mullin, Bernard James.

Sport marketing / Bernard J. Mullin, Stephen Hardy, William A. Sutton. -- Fourth edition.

pages cm

Includes bibliographical references and index.

1. Sports--Marketing. I. Hardy, Stephen, 1948- II. Sutton, William Anthony, 1951- III. Title.

GV716.M85 2014

338.4'3796--dc23

2013031098

ISBN-10: 1-4504-2498-8 (print)

ISBN-13: 978-1-4504-2498-1 (print)

Copyright © 2014, 2007, 2000, 1993 by Bernard J. Mullin, Stephen Hardy, and William A. Sutton

All rights reserved. Except for use in a review, the reproduction or utilization of this work in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including xerography, photocopying, and recording, and in any information storage and retrieval system, is forbidden without the written permission of the publisher.

The web addresses cited in this text were current as of December 2013, unless otherwise noted.

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Check Out the Web Study Guide! You will notice a reference throughout this version of Sport Marketing, Fourth Edition, to a web study guide. This resource is available to supplement your e-book.

The web study guide features exclusive video interviews with leaders in the sport industry, offering insight into how they incorporate marketing strategies into their daily work. Activities built around these clips guide you in using core concepts from the text to answer questions about the applied situations in the interviews. Web search activities also provide opportunities for you to compare strategies found on sport organization websites, YouTube, and other online locations.

Follow these steps to purchase access to the web study guide:

1. Visit www.tinyurl.com/BuySportMarketing4EWSG. 2. Click the Add to Cart button and complete the purchase process. 3. After you have successfully completed your purchase, visit the book’s

website at www.HumanKinetics.com/SportMarketing. 4. Click the fourth edition link next to the corresponding fourth edition

book cover. 5. Click the Sign In link on the left or top of the page and enter the e-

mail address and password that you used during the purchase process. Once you sign in, your online product will appear in the Ancillary Items box. Click on the title of the web study guide to access it.

6. Once purchased, a link to your product will permanently appear in the menu on the left. All you need to do to access your web study guide on subsequent visits is sign in to www.HumanKinetics.com/SportMarketing and follow the link!

Click the Need Help? button on the book’s website if you need assistance along the way.

6

Guy Maxton Lewis, 1926-2013

Photo courtesy of Special Collections and Archives, University of Massachusetts, Amherst.

We dedicate this book to the memory and legacy of Professor Guy M. Lewis, a true genius and visionary. Guy was a key founder and builder of undergraduate and graduate programs in sport studies and sport management at both the University of Massachusetts and the University of South Carolina. Throughout his long and active career, he constantly searched for ways to integrate the theoretical with the practical, scholars with practitioners. His professional contributions include the North American Society for Sport History, the Sport Management Arts and Sciences Conferences at UMass, and the International Sports Business Conferences at South Carolina. We happily consider ourselves among the many students, colleagues, and professional associates who have benefitted from his wisdom and counsel. He will be missed. His contributions will endure.

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Contents Contributors

Foreword

Preface Web Study Guide Instructor Resources

Acknowledgments

Chapter 1: The Special Nature of Sport Marketing The NBA and Global Marketing Strategy Weathering Recessions The Competitive Marketplace Sport Marketing Defined Marketing Myopia in Sport Change in the Profession Uniqueness of Sport Marketing Wrap-Up

Chapter 2: Strategic Marketing Management Sport Strategy Is More Than Locker Room Talk Marketing Planning Process Strategic Step 1: Develop Vision, Position, and Purpose Strategic Step 2: Develop Strategic Goals and Objectives Strategic Step 3: Develop a Ticket Marketing, Sales, and Service Plan Strategic Step 4: Integrate the Marketing Plan Into a Broader, Strategic

Resource Allocation Strategic Step 5: Control and Evaluate Implementation of the Plan Eight-Point Ticket Marketing, Sales, and Service Plan Model Wrap-Up

Chapter 3: Understanding the Sport Consumer Socialization, Involvement, and Commitment Environmental Factors Individual Factors

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Decision Making Wrap-Up

Chapter 4: Market Research in the Sport Industry Sources of Information Users of Market Research in Sport and Entertainment Application of Market Research in the Sport Industry Performing the Right Research Wrap-Up

Chapter 5: Market Segmentation What Is Market Segmentation? Four Bases of Segmentation Integrated Segmentation Strategies and Tactics Wrap-Up

Chapter 6: The Sport Product What Is the Sport Product? The Sport Product: Its Core and Extensions Grassroots Ideas Key Issues in Sport Product Strategy Wrap-Up

Chapter 7: Managing Sport Brands What Is Branding? Importance of Brand Equity Benefits of Brand Equity How Brand Equity Is Developed Wrap-Up

Chapter 8: Sales and Service Relationship Between Media, Sponsors, and Fans and the Sales Process What Is Sales? Direct Data-Based Sport Marketing and Sales Typical Sales Approaches Used in Sport Pricing Basics Secondary Ticket Market Aftermarketing, Lifetime Value, and the Importance of Retaining

Customers Wrap-Up

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Chapter 9: Sponsorship, Corporate Partnerships, and the Role of Activation

What Is Sponsorship? Sponsorship in the Marketing Mix Growth of Sponsorship What Does Sport Sponsorship Have to Offer? Corporate Objectives Sponsor Activation Selling Sponsorships Ethical Issues in Sponsorship Wrap-Up

Chapter 10: Promotion and Paid Media The Catchall P: Promotion Advertising Advertising Media for Sport Promotional Concepts and Practices Promotional Components Ultimate Goal: Keeping Consumers on the Escalator and Moving Them

Up Putting It All Together: An Integrated Promotional Model Wrap-Up

Chapter 11: Public Relations What Is Public Relations? Public Relations in the Sport Marketing Mix Sport Public Relations in the Digital Age Public Relations Functions Sport, Television, and Entertainment Influence on Sport Public

Relations Wrap-Up

Chapter 12: Social Media in Sport What Is Social Media? Building an Audience Engaging Fans Driving Behavior Social Media Platforms Avoiding Pitfalls Leveraging Players and Talent

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Wrap-Up

Chapter 13: Delivering and Distributing Core Products and Extensions

Placing Core Products and Their Extensions Theory of Sport and Place Facility Marketing Channels Product-Place Matrix Wrap-Up

Chapter 14: Legal Aspects of Sport Marketing Intellectual Property Trademark Infringement Copyright Law and Sport Marketing Patents Sport Marketing Communications Issues Ambush Marketing Right of Publicity and Invasion of Privacy Contractual Issues Involving Consumers Promotion Law Issues Emerging Issues Wrap-Up

Chapter 15: Putting It All Together Cross-Effects Among the Five Ps Controlling the Marketing Function Wrap-Up

Chapter 16: The Shape of Things to Come From Our Crystal Ball From Our Crystal Ball Redux: By the Year 2020 Wrap-Up

About the Authors

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Contributors Leigh Buwen

Manager of Consumer Research

Turnkey Intelligence

Kathy Connors

Principal and Founder

KMC Consulting, LLC

Kirsten Corio

Vice President, Team Marketing and Business Operations

NBA

Jaclyn Cranston

Senior Manager of Sales and Service

Turnkey Intelligence

Evelyn Dwyer

Manager of Consumer Research

Turnkey Intelligence

Jay Gladden

Dean and Professor

School of Physical Education and Tourism Management

Indiana University–Purdue University Indianapolis

John Grady

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Associate Professor

University of South Carolina

Haynes Hendrickson

President

Turnkey Intelligence

Steve McKelvey, JD

Associate Professor

University of Massachusetts Amherst

Nikolay Panchev

Vice President of Consumer Research

Turnkey Intelligence

Steve Seiferheld

Senior Vice President of Consumer Research

Turnkey Intelligence

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Foreword As my 30 years as NBA commissioner comes to an end, I can’t help but reminisce about just how far the sport industry has come during this period. Perhaps nowhere is this growth more evident than in sport marketing. It is hard to believe that just 30 years ago when the authors of Sport Marketing, Fourth Edition, wrote their original manuscript, the term sport marketing was rarely used. Now, the term is common and regularly used to encompass all of the activities in this book—activities that accurately depict the evolution of the sport industry as I have experienced it during my tenure at the NBA. I have had the good fortune of working with many of the most talented executives in the industry. As the industry has evolved, so have the leadership and business capabilities of the teams. Now, most of our teams have more than 100 employees who sell tickets and sponsorships; provide great customer service; develop marketing, advertising, and branding strategies; activate platforms for marketing partners and sponsors to drive their businesses; produce TV and radio broadcasts locally; service the media and place proactive messages; develop and produce the shows; and do meaningful work in the community through innovative and socially responsible programs. This latest edition continues to place those activities in a comprehensive framework, showing how the moving parts work together to develop the sport business locally, nationally, and globally; and it refreshingly illustrates where the use of new technologies now play their essential part. Particularly insightful are the data collection, aggregation, delivery, and targeting technologies used in ticket marketing and sales and for increasing fan engagement using content delivered predominantly via mobile devices.

The principal authors have a combination of academic and professional experience that is extraordinary. Their education and experience as university professors provide them with unique perspectives. Their research and analytical skills lead to objectivity and an ability to identify key industry needs. The theoretical framework they have created into which every marketing strategy is set—the marketing planning process— leads to a consistency in all branding, sales, and marketing strategies. Better yet, the authors have practical experience in the field in senior executive capacities covering several segments of the sport industry, which has given them a wealth of knowledge on best practices and the understanding of what actually works and what doesn’t. Collectively, they

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have implemented just about all of the best practices firsthand for leagues, sport conferences, and the most challenging of all situations, start-up teams and turnarounds.

I have observed the work of the authors for almost fifteen years as they contributed to the way NBA teams conduct their business. Clearly the most significant contributions were the substantial increase in the sharing of best practices and real data, increased adoption of direct marketing techniques, focus on the customer "driveway to driveway" experience, and the basis of teams’ business strategies on the authors’ landmark work—the attendance frequency escalator. As a result, most NBA teams today have much more sophisticated database-building and customer relationship management (CRM) capabilities. The teams more effectively use proactive outbound fan relationship management centers or telemarketing sales and intelligently targeted e-marketing programs that are designed to increase trial, improve retention, and drive attendance. These successful teams focus on the stepping-stone approach to fan development: Encourage more people (particularly youth) to play the game, connect players and coaches more favorably with the community, get more fans to watch or listen to broadcasts, progressively encourage fans to get off the couch or off the computer or mobile device and sample the NBA game in person, and offer a full menu of full- and partial-season ticket plans designed to move fans up the attendance frequency escalator. The greatest benefit of this approach has been a significant increase in the lifetime value (LTV) of fans in the respective team markets, and ultimately, the league itself.

Mixing in their unique intellect and personalities, the authors use their vast academic and practical experience to make this book a must-read for future generations of sport marketers, managers, and perhaps even commissioners in their “retirement.”

David J. Stern

Commissioner, National Basketball Association

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Preface There is only one way to describe the massive changes in the sport world since the first edition of Sport Marketing came out in 1993: “Holy cow!” as the late Harry Caray always put it. In 1993 most people would have thought that the Internet was a spy ring and that a web page was something in a newsletter of Ducks Unlimited. When our second edition appeared in 2000, the Internet was old hat, but it was still the most innovative medium of the age. File sharing was just beginning in 2000. And what of the concept of social media? In 2000 Internet nerds would have thought that YouTube was a phrase deriding old media. Hardly. By 2007 YouTube.com had become the hottest site on the Internet. More than a million video clips were viewed each day, many of them sporting events. In 2014 we can add Facebook, Twitter, Instagram, and other social media as both products and experiences that have transformed the way that consumers engage sport. And just about everything has gone wireless, especially with the explosive growth of smartphones. Marketers have adapted. Executives throughout the sport world get their industry news and data through online services such as SportsBusinessDaily.com and SBRnet.com, and trade publications, such as Street & Smith’s SportsBusiness Journal and Athletic Business, have online versions. But they all employ social media and wireless technologies to gather and dispense information. We have incorporated many of the latest marketing ideas in this edition, but new products and services are emerging daily.

Some things haven’t changed much. The competition for the sport and entertainment dollar is as heavy as ever. Sport marketing is a competitive business involving as much front-office strategy, risk, discipline, and energy as that shown by the players and coaches who figure so prominently in the public’s imagination. The fourth edition of Sport Marketing offers abundant examples of the latest issues in the competitive marketplace.

As academics, we have been studying changes in the sport industry for over 40 years, long before Forbes and Fortune began to take sport seriously with regular coverage. When we started out as graduate students in the early 1970s, few scholars were willing to accept sport as a serious topic of study. Now leading academics in marketing, management, law, and economics (to name only a few disciplines) are rushing headlong for

16

book contracts on sport. We have both followed and helped build this growing body of literature. More important, each of us has also worked inside the industry, trying to make sense of the ways that fans, players, coaches, the media, equipment companies, and others interact to make the game tick. We have planned, administered, or consulted on literally thousands of events across just about every sport considered mainstream and at just about every level. This book emanates from our own fusion of experience as academics and practitioners. We have written a survey that we hope is as useful for the classroom student as it is for the athletics director of a college or high school or the marketer of a professional franchise.

We have tried to balance theoretical models with case studies from the rinks, fields, courts, slopes, gyms, tracks, and other venues that make up the sport marketplace. If theory is the skeleton that gives structure to thinking, then case studies put meat on the bones. Although most of our examples are from the United States, we have added considerable material from sports in other countries and cultures.

\INSERT bookstore e-book icon here\

Readers of past editions will find both continuity and change in this book. Chapters 1 through 3 provide an overview of the sport market and sport marketing as an area of study and as a process. Chapters 4 (by Haynes Hendrickson, Steve Seiferheld, Nikolay Panchev, Jaclyn Cranston, Leigh Buwen, and Evelyn Dwyer of Turnkey) and 5 consider conceptual tools and steps of preliminary market research and market segmentation, which are critical to overcoming a tendency to equate promotions with marketing. Chapters 6 through 13 explore the nuts and bolts of marketing plans—the five Ps of sport marketing: product, price, promotion, place, and public relations. But these Ps are conceptually robust, so readers will note special chapters or chapter sections on branding (Jay Gladden), sales and service, engagement and activation, community relations (Kathy Connors), and social media (Kirsten Corio). The last three chapters offer some important elements on legal issues (Steve McKelvey and John Grady), control, evaluation, and projecting the future. The book is filled with sidebars written by other industry and academic leaders. We thank them all for their contributions.

The world of sport marketing continues to challenge and excite us. We only hope that this edition is as enjoyable to read as it was to write.

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Web Study Guide

A new and exciting addition to the fourth edition is the web study guide (WSG), which gives students the opportunity to listen to sport industry leaders talk about how they incorporate marketing strategies into their daily work through exclusive video clips produced by David Perricone, who has experience as an academic and practitioner. Activities are built around these video clips, asking students to do what these industry experts already do: integrate core concepts and strategies from the textbook into applied situations.

Besides the video-based exercises, the web study guide has web search activities in which students will assess and compare strategies that can be found on sport organization websites, YouTube, and other online locations. These two activity types ensure that students will have even more opportunity to engage in the material found in these pages. Throughout the book, students are directed to the web study guide with cross-references like this:

Activity 1.2 The Global Marketing Strategy

College sport marketing has traditionally been centered in the United States. In this WSG activity, you will learn how a globalized marketplace is changing college sports.

The web study guide is available at www.HumanKinetics.com/SportMarketing.

Instructor Resources

A full array of instructor resources are available:

Presentation package plus image bank: The presentation package includes more than 400 slides that cover the key points from the text, including 30 select figures and tables. Instructors can easily add new slides to the presentation package to suit their needs. The image bank

18

includes all the figures and tables from the book, separated by chapter. These items can be added to the presentation package, student handouts, and so on. Instructor guide: The instructor guide includes a sample syllabus and ideas for semester-long activities and case studies. Individual chapter-by-chapter files include a chapter summary, chapter objectives, chapter outline, and classroom ideas, which include the suggestion of case studies from the online journal Case Studies in Sport Management. Test package: The test package includes more than 200 questions in true–false, multiple-choice, fill-in-the-blank, and short-answer formats. These questions are available in multiple formats for a variety of instructor uses and can be used to create tests and quizzes to measure student understanding. Chapter quizzes: New to the fourth edition are chapter quizzes. These LMS-compatible, ready-made quizzes can be used to measure student learning of the most important concepts for each chapter. More than 150 questions (8 to 10 questions per chapter) are included in true–false, multiple-choice, fill-in-the-blank, and short-answer formats.

Instructors can access these ancillaries by visiting www.HumanKinetics.com/SportMarketing.

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Acknowledgments Our chapter notes acknowledge the sources that we have used. In addition, we offer special acknowledgments to a number of people. The first is David Stern, one of the premier sport marketing minds in the world. We thank David for giving two of us the opportunity to work in the NBA as well as for sharing his insights and providing daily inspiration through his strategic marketing initiatives. We also recognize the contributions and value of the late Bill Veeck, whose writings and innovations continually remind us of the importance of the fans and sport consumer behavior. Likewise, we appreciate Mike Veeck because he has done the same and has forced us to examine our own practices and approaches when we forget about the fans. On the academic side, we are indebted to Philip Kotler for his numerous contributions to the field of marketing, which have influenced our thinking in terms of sport marketing. We have dedicated this edition to Dr. Guy Lewis, who has been instrumental in shaping the academic coursework and program content for many of the undergraduate and graduate programs in sport management. Matt Levine of SourceUSA, one of the original and leading sport marketing consultants who helped shape the study of sport consumer behavior, has also continued to inspire our thinking. We acknowledge the many academics who contribute to Sport Marketing Quarterly and are members of the Sport Marketing Association (SMA). The research of our academic colleagues and their tireless preparation of the sport marketers of tomorrow provide constant inspiration and motivation to us.

We also offer special thanks to our chapter and sidebar contributors: Melissa Rosenthal Brenner, Leigh Buwen, Ward Bullard, William Carafello, Catherine Carlson, Leigh Castergine, Kathy Connors, Kirsten Corio, Jaclyn Cranston, Lou DePaoli, Ari de Wilde, Evelyn Dwyer, Jay Gladden, John Grady, Shane Harmon, Adam Haukap, Chris Heck, Haynes Hendrickson, Jeff Ianello, Dae Hee Kwak, Amber Lilyestrom, Jordan Maleh, Amy Jo Martin, Steve McKelvey, Brian Norman, Nikolay Panchev, Dave Perricone, Sarah Sceery, Jared Schoenfeld, Susan Schroeder, Steve Seiferheld, Chad Seifried, Dr. Alan Seymour, Peter Stringer, Jennifer Tobias, and Eric Woolworth.

Many other people helped us obtain, organize, and develop materials for the book. Mia Ramer, Madison Southerlin, and Ben Holmes at the Aspire

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Group did research work to update data on participation, demographics, and other sidebar facts. University of South Florida graduate students Kristine Carcione, Kayla Chesanek, Katie Hatch and Amanda Puccinell also contributed their expertise. Abe Madkour and the staff at SportsBusiness Daily (now an essential resource for anyone trying to make sense of the sport industry) have been ever gracious with their help and permissions. Abe also contributed his views on the future in our last chapter. Others who have given constant support and inspiration include Dot Sheehan, Steve Metcalf, and Marty Scarano of the University of New Hampshire and Roger Godin of the Minnesota Wild. Thanks also to Kirstin Kay and Tanya Downey at the University of Massachusetts, Amherst for providing us with the picture of Guy Lewis on the dedication page.

This book could not have been done without the help and dedication of our editors from Human Kinetics—Myles Schrag and Amanda Ewing. They whipped us, encouraged us, and coddled us as the time and case required. They are outstanding professionals.

In our capacities as sport administrators and consultants, we have worked with hundreds of dedicated executives, marketers, coaches, salespersons, customer service professionals, public and community relations personnel, and sports information directors who have inspired us with their energy, dedication, and passion. As academics, we thank and salute our colleagues and students over the years at the University of Washington, Robert Morris University, Ohio State University, the University of Massachusetts, the University of New Hampshire, the University of Central Florida, and the University of South Florida. These colleagues and students have challenged, stretched, reshaped, and indulged our thinking on all the topics in this book. We hope that we can convey to our readers their wisdom, their enthusiasm, their wonder for learning, and their passion for moving the field forward.

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Chapter 1 The Special Nature of Sport

Marketing

© Human Kinetics

Objectives To understand the market forces that create the need for enlightened marketing strategies in the sport industry To understand marketing myopia and other obstacles to successful marketing strategy To recognize the components of the sport product and the sport industry To recognize the factors that demand a different approach to the marketing of sport

Linsanity and the Global Sport Marketplace

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Sports Illustrated was clear in its assessment: “Nothing, anywhere, has ever resembled the ascendance of Jeremy Shu-How Lin, a legend seemingly pulled from the imagination of a goose-fleshed David Stern, if not Disney’s most hyperbolic global marketing exec.” And this was only five games into Linsanity or Linmania or . . . Linmarketing. Overlooked out of Palo Alto High School, taunted with racial slurs while playing at Harvard, undrafted and twice cast off by NBA teams, Lin made the most of his February 2012 chance with the New York Knicks. He was an early Valentine gift for his team, for Madison Square Garden, for the NBA, for the world of basketball, and for sports fans everywhere. Oh, and don’t forget marketers. Nine games into the drama, Lin had led the Knicks to an 8-1 record as he threw up all-star numbers by averaging 25 points, 9.2 assists, and 3.8 rebounds per game. Both Lin and the Knicks cooled off a tad by the All-Star break at month’s end. By mid-March they had suffered a losing streak that mirrored the earlier run of wins. The team changed coaches. And then Lin went down with a season- ending injury, fueling an equally strong conversation with a long lineage in sport. Would he last in the league, or would he flame out? In July 2012 the Houston Rockets ensured the story’s extension when they signed free agent Lin to a three-year, $25.1 million deal.1

Time would tell whether Jeremy Lin endured in the NBA. But action on the court was only half the story. Linsanity, regardless of how long or short the run, offered a miniseries on the world of sport marketing in the early 21st century. Jeremy Lin was both a player and a product to be branded, monetized, and distributed in a global system. He embodied key ingredients of the successful sport brands of the era.2

Stickiness

Jeremy Lin and his performance held the public’s imagination because they contained all the elements that Chip and Dan Heath claimed were crucial to the “stickiness” of any product or idea:

Simplicity—Basketball statistics are simple. Unlike the economy or the political landscape, basketball did not require observers to unravel or parse complicated formulas or polls in considering Lin’s performance. Unexpectedness—Few basketball experts predicted that Lin

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would even play in the NBA, let alone be a phenomenon. Concreteness—No conceptual fuzziness was involved in watching a YouTube clip of Lin highlights. Credibility—This question would loom large over time, as it does with every player in every sport, at every level. Jeremy Lin was the real deal in February 2012. Would he hold up? Emotion—One look at the way Lin played or the way that fans responded in Madison Square Garden revealed great depth of emotion. Narrativity—Lin’s background, his struggle to succeed, and his triumph (however brief) were the fodder for endless stories.

International Reach

As with David Beckham in world football and Alex Ovechkin in ice hockey, stories about Jeremy Lin played up his following across continents, in this case to China. One mid-February report from China noted that “The clearest sign that Jeremy Lin’s appeal has spanned the Pacific to mainland China may lie not in the 1.4 million Chinese microblog [Twitter-like] messages mentioning him in recent days, but in a rare failure to meet demand here in the heart of one of the world’s largest centers of pirated garment manufacturing.” As one store clerk near Shanghai noted tellingly, “His jerseys have sold out, even including the counterfeit ones.” A Chinese friend of Lin reported that Lin highlights were streaming out of mounted video monitors along the Beijing subway. “Everyone thinks it’s crazy in the U.S.,” said Cheng Ho, “but it’s a much bigger storm here in China.” For two decades, sport properties (players, teams, leagues, events, venues) had expanded their market horizons from the national to the global. China was on everyone’s mind, especially in basketball. After all, 65 million Chinese viewers had watched their national team play a preliminary match against Greece in the 2010 FIBA World Championships held in Istanbul. That figure far exceeded the 24 million who watched Butler versus Duke in the 2010 NCAA Men’s Basketball Championship. Jeremy Lin might not solve America’s trade imbalance with China, but he was surely contributing.3

Link to Social Identity

Lin was a symbol of many things to many people. He was hope to

24

underdogs of any nationality, especially those of Chinese heritage, and especially on the Chinese mainland, where a Communist party chief posted a microblog focusing on Jiaxing—the home of Lin’s maternal grandmother. Xi Jinping, vice president of the People’s Republic, happened to be visiting Barack Obama when Linsanity was at an apex. He told the Washington Post, “I do watch NBA games on television when I have time.” Only four months earlier, party leaders had announced a new initiative to promote “spiritual affluence” and “creativity” so that Chinese culture—with “core socialist values”— might match other Chinese products on the export market. With the great Yao Ming in retirement, apparently the capitalist NBA’s Jeremy Lin would do in the short run. But if Chinese Communists wanted to claim him, so did Chinese Christians, who emphasized his great grandfather’s conversion and hoped that young Jeremy’s success and faith would help their cause. So did Taiwanese, because Jeremy’s family had fled the mainland. Like most popular players and teams, Jeremy Lin could symbolize many things to many people.4

Media Squabbles

For many in the New York metro area, Linsanity was the condition caused by an inability to watch the Knicks on television. At the height of the mania in mid-February, some 2.5 million New York state Time Warner cable customers could not watch the Knicks because of a squabble over carriage costs demanded by the MSG network, which televised Knicks games. One Chinatown resident summed up the frustration. “It doesn’t make sense,” he complained, “for a New Yorker to not be able to watch their home teams.” Welcome to the dollars and cents world of sport product distribution, where teams and leagues have formed television networks (e.g., Big Ten, Pac 12, University of Texas) that require carriage on a cable system, preferably on a standard platform that reaches all customers, and returns a hefty per-customer fee. In other words, every new sports network wants the deal that ESPN has. Negotiations in New York turned bitter and led to a 48-day blackout. In this case Linsanity won the day. Governor Andrew Cuomo and public pressure corralled the two firms to reach a deal, in time to watch Lin and the Knicks cool off. Given the ever-rising rights fees that networks have paid to teams and leagues, however, we may expect more squabbles and more blackouts for sports fans.5

25

Valuation, Monetization, and Marketing Metrics

Just a few decades ago, a meteor like Jeremy Lin would have been measured solely by playing stats and salary. Although Lin’s numbers were closely followed, the media circulated an equal amount of information on his value as a commodity. As Sports Illustrated’s Pablo Torre reported, three weeks of Linsanity had spiked stock in the MSG Corporation (owner of the Knicks) by 11 percent. The Knicks online store had seen traffic and sales skyrocket by over 4,000 percent. The MSG cable channel had seen its metro ratings rise 70 percent. An area sporting goods chain had sold over 50,000 items of Lin merchandise. Over the first week of the run, Lin got more social media buzz than President Barack Obama. Even after the cool-down, fan interest kept rising. Two late February games drew ratings over 7.3 for the MSG Network, both higher than the regular-season record set in 1995 for a game that featured Michael Jordan redux. On the other hand, when Lin injured his knee, sales of Lin merchandise suffered. The Modell’s sporting goods chain was stuck with 40,000 items to sell. His July free-agent departure to Houston cut T-shirt prices from $20 to $5; replica jerseys sank from $60 to $20, and that was the day after the Knicks announced that they would not match the Houston offer. 6

In 2012 Jeremy Lin was a product that captured attention, emotion, and sales on an international stage. Despite sport scandals of all stripes—racism in the English Premier League, endless doping sagas in cycling, match fixing in cricket, a cover-up of pedophilia at Penn State—fans around the world remained eager to embrace someone like Jeremy Lin, who combined hard work with inherent talent and made the most out of his chance, no matter how long it lasted. In many respects, he was simply repeating a fundamental sports story, only he was living and playing in a rapidly changing marketplace.

Although entrepreneurs have been selling sport for centuries, rational systems of marketing sport are relatively new. In this chapter, we discuss the need to employ modern marketing principles in the sport domain. We examine sport industry trends in growth and competition that heighten the need for scientific, professional approaches to sport marketing. We consider examples of lingering marketing myopia in sport, as well as

26

significant progress. Next, we consider the components of the sport product and the sport industry. Finally, we outline the numerous features that in combination make sport marketing unique.

Activity 1.1 Recent History of Sport Marketing

In this WSG activity, you will consider how sport marketing has changed in the past 30 years, why sport is unique to marketing compared to traditional products, and how sport marketing professionals can be more successful in their work.

The NBA and Global Marketing Strategy Jeremy Lin is a marketing parable, but so is the NBA. Over the last three decades, David Stern emerged as lord of a far-flung, international empire inappropriately called the National Basketball Association. When Stern became commissioner in 1984 (he had been NBA general counsel since 1978), the NBA was a struggling enterprise, despite having stars such as Magic Johnson and Larry Bird. Teams were playing in arenas filled to less than two-thirds capacity, NBA merchandise sales were only about $15 million, and network television coverage was limited—the finals were shown on tape delay. Worse yet, corporate sponsors were scared off, in large part because of a poor public image resulting from drug scandals and labor strife. As one NBA executive recalled in a 1991 profile of Stern, “If you had 30 minutes with a prospective sponsor, your first 20 minutes were spent trying to convince him that the players weren’t all on drugs.”7

Even before his elevation to the commissionership, Stern had laid the foundation for the NBA to become one of the most successful brand names in sport. He did it by recognizing and using standard tools of marketing. He knew, among other things, that product recognition required a more expansive television package. In turn, the broadcast networks demanded a more stable product with a cleaner image. That meant getting owners and players to agree on several fundamental issues, including revenue sharing, salary caps, and tougher drug testing. As a Spalding executive concluded,

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“A good marketing guy knows that he has to get the product right before marketing it. That’s what Stern did with basketball.”8

If Stern spent the 1980s getting his product right, he focused the next decades on worldwide product distribution. More than anything, Stern believed in going global. The NBA could create an empire along the lines of British mercantilism—with fine, finished products moving from North America to distant centers of exchange like Moscow, Buenos Aires, Cape Town, and Beijing—especially Beijing. Some surveys conducted in 2003 suggested that among China’s more than 1 billion people, basketball had supplanted soccer in popularity. In the first four years of the new millennium, the Chinese edition of the NBA’s Time and Space magazine had boomed to a circulation of over 200,000. NBA games were a regular Sunday feature on China Central Television. NBA logos adorned the apparel worn by the coolest kids on China’s hoop courts, which now drew the crowds once reserved for Ping-Pong tables.9

By 2004 the NBA finals were broadcasted to 205 countries in 42 languages. The international traffic on NBA.com was well over 40 percent of the total; the league had nine foreign-language websites. Yao Ming was only the tallest of the internationals on NBA rosters; the total number had expanded from 65 in 2002–2003 to 84. The synergy was obvious. For instance, Dirk Nowitzki’s success with the Dallas Mavericks translated into five television outlets in Germany. And every new foreign star meant more foreign exposure. By October 2004 the NBA had 212 international television deals.10

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David Stern (center, holding trophy) has helped to turn the NBA into a global empire.

Zuma Press/Icon SMI

Much of the NBA’s success stemmed from what might be called an open- architecture strategy in its global expansion. That is, the focus of effort was as much to promote basketball as it was to promote the NBA brand of basketball. The NBA did not initially look to enter markets with total product control. In 1987 David Stern visited Beijing with the simple notion that Chinese national television, CCTV, might be interested in showing weekly NBA highlights for a share of advertising revenues. That arrangement slowly grew to include live games broadcast on provincial and local television stations during Michael Jordan’s heyday. When Yao Ming joined the NBA in 2002, the stream of distribution and revenues turned into a torrent. Run-of-the-mill games drew up to 15 million viewers for morning broadcasts and triple that number for a game with Yao. Stern was hardly alone in his China strategy. In 2009 alone foreign enterprises invested $572 million on 34 sport projects. From 2000 through 20009, total foreign sport investment increased 12-fold. The NBA learned by hard experience that the Chinese wanted partners to build their own talent and their own league, the CBA, and Chinese Central Television could be a hard-nosed negotiator. Stern and his associates have suspended their notions of an NBA China, instead planning for exchanges for Chinese referees and coaches to obtain advanced training in the United States and for a player’s academy in southern China. Working with China as a partner fits with David Stern’s long view that what is good for the global game

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will be good for the NBA.11

Stern’s “soft power” approach to global presence has paid off in many ways, not least of which is a good working relationship with FIBA, the game’s international governing body. In early 2011 FIBA secretary general Patrick Baumann, a Swiss, told the international SportsPro Magazine that David Stern ranked among the three most influential people in the history of basketball. “The NBA is probably the very best at marketing its league,” he emphasized. Although not conceding on the level of organization or growing the game, he noted that on “the exploitation of the rights and making this property a valuable property from a commercial standpoint, I think there is no other league than the NBA.”12

The global economy also boosted prospects for other sport leagues. The National Hockey League and Major League Baseball, for instance, both attracted top talent from overseas, such as Europeans to the NHL and Asians to MLB. But the flows of commerce worked along multiple currents. Russia’s Kontinental Hockey League and Japan’s Nippon Professional Baseball have attracted top players and coaches from North America. Expanding sports networks deliver televised events across countries and continents. Americans have ESPN, Canadians have TSN, and Europeans have Eurosport. The Middle East has Al Jazeera Sport; Australians have TVN. And this is only a short list. The most pronounced consequences of such circulation occurred in world football, the globe’s number one game. FIFA, the international governing body, reported that television coverage of the 2010 World Cup in South Africa “reached over 3.2 billion people ‘in-home’ around the world, or 46.4 per cent of the global population, based on viewers watching a minimum of over one minute of coverage.” Every country and territory on the globe had viewers. Staggering though the number is, it did not even include “people watching out-of-home at the FIFA Fan Fests and other public viewing venues, as well as in pubs, bars, restaurants, clubs, hotels, or even online and via mobile handsets.”13

In football’s global market, the world’s talent moved to European leagues, especially England’s Premiership, Italy’s Serie A, and Spain’s La Liga. If the NBA looked to Europe and China for expansion markets, the Europeans saw America as ripe for the picking. A steady swell of youth soccer players, “soccer moms,” and their families had provided a strong base for the United States’ successful hosting of World Cups in 1994 (men’s) and 1999 (women’s). Major League Soccer, hatched after the

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1994 World Cup, was averaging crowds over 15,000 by 2004, better than those in Argentine and Dutch leagues. By 2011 the MLS average had increased to 17,872, a respectable size when compared with other leagues, as shown in table 1.1. North America appeared to have arrived as a market for world football.

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Activity 1.2 The Global Marketing Strategy

College sport marketing has traditionally been centered in the United States. In this WSG activity, you will learn how a globalized marketplace is changing college sports.

Weathering Recessions Global competition was shifting the realities of the sport marketplace at the turn of the 20th century. So were the economic booms and busts. As early as 1998, Street & Smith’s SportsBusiness Journal asked the headline question “Is Sports Business Recession-Proof?” The answers were mixed. Most industry insiders said yes (no surprise). But some bankers and economists were less certain. Randy Vataha, an investment banker (and an NFL alum), worried about the 1990s buildup of luxury seats that would likely be threatened by a recession. As the stock market bubble reached its peak, the ESPN Chilton poll announced that the last half of the 1990s had seen a decrease in the percentage of Americans who considered themselves fans of the NFL (–3.06 percent), the NBA (–11.38 percent), the NHL (–8.57 percent), college basketball (–8.45 percent), and college football (–6.37 percent), all this despite general increases in aggregate attendance.14

The next decade saw both dot-com and real estate bubbles burst—the first in 2000, the second in 2008—unleashing recessions to wreak havoc on

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economies at the national and household levels. The effects on sport were palpable, as a few examples suggest:

Sport-related construction slipped 7.9 percent in the United States between 1999 and 2001. This decrease was in contrast to the 22.3 percent increase in overall construction spending during the same period.15 Overall attendance in Major League Baseball went significantly down and up twice over the decade, in tune with the economy. The downturn in 2009 was an aggregate 5,220,345 (6.64 percent), the highest overall decline in history and the fourth largest percentage decline. Only slightly behind was the 2002 decline of 4,448,769 (6.30 percent). League attendance bounced back in both cases, but it was a tense roller coaster ride.16 Franchises, especially in the minor leagues, were stressed to their limits. In early 2009 the Southern Professional Hockey League lost two franchises. Richmond (VA) Renegades GM Allan B. Harvie Jr. repeated the obvious and painful reality: “The economy has driven a spike into the heart of the leisure-time market and fans have very hard choices to make with their money.” Successful teams were not spared. Although the EPL’s Chelsea sold out all 24,000 season tickets in 2011, they had softness in sales of premium seats that went for $1,000 per game and with luxury boxes.17 Corporate sponsors, especially in the financial sector, were forced to rethink their expensive partnerships with sport properties. Many reduced or dropped their deals. The Royal Bank of Scotland was a good example. In February 2009 the venerable institution, which faced nearly £30 billion in losses, announced that it was cutting its sport funding by half.18 In 2012 the Football League, the English association of 72 professional clubs playing in tiers below the Premier League, saw a 26 percent decline in its three-year television broadcast package with the Sky network, from $420.5 million to $316.6 million.19 Sport wasn’t the only sector affected. The wider entertainment industry was also reeling. Rolling Stone reported that attendance at North American music shows dropped an “astonishing” 24.4 percent in 2010 compared with 2009. Gross sales were down 26 percent, in part because the number of concerts was down 16 percent. Promoters weren’t taking chances.20

Teams and leagues responded in emergency fashion. In the fall of 2008,

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the New Jersey Nets gave season-ticket holders an extension on payment until January 2009. The Indiana Pacers didn’t even charge their season- ticket holders for preseason games, a loss they estimated at $2 million. That same year, English Premier League clubs started to slash ticket prices; for example, Newcastle cut prices by 9 percent on average, and Manchester City reduced prices by 7 percent.21

Even the NFL, about as close to bulletproof as a sport league can be, had to respond to soft demand. Ticket sales were way off for the 2009 Super Bowl, held in Tampa. Only days before kickoff, StubHub could not unload 3,000 tickets. A spokesman quipped, “In terms of pricing, this game has become the Limbo Bowl—how low can it go?” SportsBusiness Journal surveyed the league’s 32 teams in late summer 2009 as the national and world economy kept sagging. The basic question was this: How have you responded to the recession? All but three franchises reported either a ticket price freeze or new initiatives in sales closer to those used in the NBA or MLB. Only four teams had raised prices across the board—almost a given in the good old days. Many teams rolled out new group-ticket packages, staged special meetings between coaches or executives and season-ticket holders, or offered miniplans. All these tactics have been outlined in earlier editions of Sport Marketing. The recession had prompted NFL action. As the St. Louis Rams COO put it, “The days of rolling out the football and expecting to sell out are done.”22

Longtime pollster Rich Luker remained gloomy about the American market in late 2010 after two solid years of surveys indicated nagging consumer concerns about the ability to spend on sport. He said, “Let’s face it: We are not getting past this any time soon.” That same fall a reader’s survey by SSSBJ found that 28.9 percent of respondents, the largest segment of respondents by a wide margin, ranked rising ticket prices as the biggest threat to sport. The next top threat was disconnect with fan base, a reason chosen by 19.8 percent of respondents. Luker’s pessimism seemed confirmed by some striking attendance drops among college basketball powers. In early 2012 the Chronicle of Higher Education analyzed NCAA Division I men’s basketball attendance. Although overall numbers had held steady, some significant drops had occurred at local and regional levels. Between 2009 and 2012, Arizona State dropped over 40 percent in attendance. The Pac-12 overall dropped 14 percent. Missouri dropped by 21 percent, and Indiana declined by 15 percent. The Atlantic Coast Conference slid 7 percent overall.23

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The Competitive Marketplace

Economists and journalists have occasionally cobbled together estimates on the size of America’s sport industry. Unfortunately, each study has employed different methods and different assumptions. Consequently, we have no longitudinal data tracking sport industry growth over time, using generally agreed-upon methods. In any case, one must recognize that the sport industry, by any calculation, is a small piece of the economic pie. For instance, one study pegged the 1995 gross domestic sport product at $152 billion, claiming that sport was the 11th largest industry in the American economy. That figure would equal $229 billion in 2012 dollars. The overall 1995 GDP, however, was $7.4 trillion (in 2012 dollars), meaning that despite widespread media attention, sport accounted for just 3 percent of overall GDP. A more recent, and more conservative, approach found that the aggregate demand and aggregate supply of the 2005 sport industry ranged between $44 and $73 billion. Given that year’s $12.6 trillion GDP, even the higher number ($73 billion) amounted to a paltry .6 percent of overall GDP.24

Other data suggest that the American sport market is growing only slightly. For instance, past Census Bureau figures have shown that in 1970, recreation accounted for 4.3 percent of total personal consumption. By 1980 recreation had grown to 5.3 percent of total personal consumption. As table 1.2 illustrates, recreation’s piece of the consumption pie continued to expand until it plateaued in the 9 percent range in the last two decades. The statistics were mixed, however, for spectator sports. In 1970, Census figures suggested that spectator sports admissions accounted for 3.9 percent of the total recreation consumption pie. That number shrank over the next decade to 2.8 percent in 1980. Table 1.2 shows that spectator sports continued the slump to a mere 1.52 percent in 1990 before seeing a small but steady increase. And where is the recreation dollar going? As table 1.2 suggests, the video, audio, computer, and musical goods segment has grown more steadily in the last decade as a percentage of all recreation expenditures. One might argue that spectator sports events simply can’t expand like DVRs or iPods or smartphones. Sport requires an infrastructure of fields and stadiums, which are slow to develop. And some argue that many people are using their smartphones or tablets to view sport. All this is true. At the same time, competition for the discretionary dollar is heated. This competition is especially fierce inside the sport industry.

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Of course, competition is the nature of sport. For well over a century, entrepreneurs and investors have jostled for market space, particularly in professional team sports. Sport in America offers several examples. The troubles of professional baseball are internal these days, but the history of the game is punctuated by a number of wars among rival leagues, the last threat being the Continental League in the early 1960s. Football took center stage in the 1960s with the rivalry between the American and National Football Leagues. The World Football League and the U.S. Football League followed in the 1970s and 1980s. In 2000 two sport magnates—Dick Ebersol of NBC and Vince McMahon of the World Wrestling Federation—announced a new competitor, the XFL. Like many of its predecessors, however, the XFL died after its inaugural 2001 season. Another interesting market battle was in women’s pro basketball, in which the Women’s National Basketball Association (WNBA) and the American Basketball League (ABL) offered consumers alternative visions of a “big league” until the ABL dissolved in early 1999. The successful Women’s World Cup of 1999 spawned the first women’s professional soccer league (WUSA), which opened in 2001 with eight teams. By September 2003 the league had collapsed. Another attempt (WPS) in 2009 lasted three seasons, but was shut down in 2012.25

In December 2011 SportsBusiness Daily published Harris Poll data from 1985 to 2011 that tracked the favorite sports among U.S. fans (defined as adults who follow at least one sport). The results are suggestive. Baseball had been the favorite of 23 percent in 1985, a close second to pro football (24 percent). By 2011, however, baseball had slipped steadily to be a favorite of only 13 percent of American adults—tied with college football. Meanwhile pro football had grown to be the heads-on favorite at 36 percent. Auto racing had grown slightly—from 5 percent to 8 percent, as had hockey—from 2 percent to 5 percent. Tennis had dropped from 5

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percent to 2 percent. Other sports had been flat or shifted 1 or 2 percent in a very low range. Of course, a fan might avidly follow more than one sport. But the data clearly suggested that pro football had grown in the public’s imagination, while baseball had slipped.26

Action sports had been an industry darling in the late 1990s and beyond, but something ominous was happening. Data from the National Sporting Goods Association and the Sporting Goods Manufacturers Association indicated significant downward participation trends in skateboarding and BMX biking since 2000. Snowboarding had flattened. Ratings for the X Games and the Dew Tour had declined. Worse yet, polls indicated that the cohort of avid action sports fans among 12- to 17-year-olds had been declining for nine years. Action sports had been the hot ticket for access to youth. What was happening? Consumers were shifting their sports allegiance, as they had been doing for decades.27

Consumers had many choices, and these options were only multiplying. But polls don’t stop the entrepreneurs, especially in the global marketplace. Take cricket, which had moved into the top echelon with the arrival of the Indian Premier League (IPL) in 2007. Cricket had always been popular among countries of the British Commonwealth, and its robust markets included India, which has the world’s second largest population. The IPL looked to be a cross between NBA showtime and MLS salary restraint. And yes, throw in celebrity owners like Bollywood actor Shah Rukh Khan. In 2007, 13 bidders vied for one of eight franchises that cost $90 million each. By 2008 matches were averaging 58,000 in attendance. In 2010 the television audience was an estimated 67 million per match. By 2011 one franchise had sold for $370 million, and the league had snagged a $1.69 billion, 10-year television deal.28

Media Challenges

For over two centuries, sporting events have benefited from innovations in media technology. A big boxing match or horse race attracted a big audience. Newspapers and magazines wanted to write those stories and circulate them widely and quickly. All this depended on technology. One of the first breakthroughs was the electrical telegraph, developed commercially in 1840s America by Samuel Morse and Alfred Vail. As telegraph lines slowly connected the nation’s cities and regions, newspaper magnates like James Gordon Bennett (New York Herald) jumped on the

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value of instant reports of sporting events. The telegraph enabled, as one historian has written, “instantaneous reporting of ball games, horse races, prize fights, yachting regattas . . . box scores, betting odds, and all kinds of messages.” When John L. Sullivan fought Jake Kilrain in New Orleans in 1889, Western Union employed some 50 operators to handle over 200,000 words of special reports on the bout. By this time, sports news was filling whole pages of major daily newspapers like the Herald, the New York Sun, and the New York World. Hence the rise of the sports section, which has provided abundant and free publicity for sport properties ever since— as long as the sport property knew how to work with the press. It is no wonder that smart athletes like Jack Dempsey hired press agents like “Doc” Kearns or that universities like Knute Rockne’s Notre Dame developed offices of sports information.29

Each decade has seemed to bring a new media technology with new opportunities and new challenges—silent movie newsreels, radio, broadcast television, cable and satellite television, the Internet, and the World Wide Web. All have required adjustment and action by media and sport properties. Those with the skills and the drive could build market share at the expense of technological laggards. The last decade has been no different. Perhaps the biggest change has been in the newspaper business. Newspapers thrived in the ages of radio and television. A synergy that seemed to be present has disappeared with the advent of the Internet and the World Wide Web. As newspapers fiddled with an online presence, they could not stop the bleeding of subscribers and advertisers. Total circulations of American weekday and Sunday papers slid from the 60 millions in 1990 to the low 40 millions in 2011. Ad revenues were surprisingly stable because the ads moved to online versions, at least until 2007. The standard response was to cut staff. Sports reporting suffered, at all levels. A 2009 SportsBusiness Journal survey revealed that 50 major dailies had cut sports staffs by 20 percent in the previous 16 months. Fewer beat writers were making road trips. A fan survey reinforced editors’ worse nightmares; 42 percent of respondents said they preferred a team website for information. Coverage of college and high school teams was even worse; no beat writers, or even correspondents, attended games.30

The Internet started on cable. Wireless technology both spawned and fed the rise of cell phones, smartphones, and tablets, all of which changed the game of reporting and consuming sports news. Blogs, podcasts, YouTube, Facebook, Twitter, Tumblr—the list of new forms and new formats for

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delivering, sharing, and reading information will continue to lengthen. And every sport property at every level, from the top professional team to the local recreation league, must learn how to use them. New sports media technology is always developing. The need to adapt is not new.31

Jacksonville Jaguars CFO Bill Prescott said in 2010, “Our biggest competitor, everyone’s biggest competitor, is HDTV. There’s no doubt, to view a game in your own living room, the beer is colder and cheaper, the restroom is closer, and there’s no line.” In May 2012 executives at YouTube and Google (which had purchased YouTube) announced plans to develop over 100 new channels of original programming, including a Team USA channel focused on the Olympics. World Wrestling Entertainment already had a Google channel that drew over a million views per week. Google executive chairman Eric E. Schmidt predicted, “We’re about to see another large explosion in the use of video.” By his estimation this was part of a third wave of media change for properties and sponsors to address. The first was broadcast TV to cable, the second was cable to Internet, and the third was everything to smartphones and tablets.32

New media were just part of a squeeze on modern lifestyles. As Seattle Seahawks COO John Rizzardini put it in 2010, NFL clubs, like all sport properties, were pressured by a tight economy that simultaneously pinched consumers in several ways—be it the need for multiple incomes, intrusive media and communications, or overscheduled kids’ activities. “People’s time is that much more precious these days. . . . People are more cautious about how they spend their time and money.” And in the end, a consumer has only a finite amount of time to spend. An evening spent watching a Netflix video could not be redeemed for a sport event. Steve Hank, associate athletics director for revenue at Arizona State summed up the reality: “Honestly, time is the greatest commodity someone has.”33

Activity 1.3 The Competitive Marketplace

In this WSG activity, you will propose marketing approaches for the Brooklyn Cyclones Baseball Club, a minor league baseball team in the short-season New York Penn League. The Cyclones are located in Brooklyn, New York and are affiliated

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with the New York Mets, who also are located in Brooklyn. The Cyclones are in a competitive marketplace. They not only have two Major League Baseball teams to compete against but also face additional competition from sport programming on TV and other forms of entertainment.

Grassroots Stress

Times were especially tough for high school athletics, long the great talent developer in American sport. In the heartland of American basketball, 40 miles (65 km) outside Indianapolis, Anderson High School was a case study in grassroots struggle. The Wigwam—the nearly 9,000-seat field house—had once packed in crowds that included 5,000 season-ticket holders. Fifty years ago, nothing was bigger than high school basketball. The state high school boys’ tournament—the stuff of Hoosiers legend— drew 1.5 million fans in 1965. As late as the 1980s the Anderson High School Indians outdrew the NBA’s Pacers. But that was yesterday. State tournament attendance was down 50 percent in the early 1990s. By 2012 Anderson High School had closed the Wigwam and was playing in a gym with a 2,800-seat capacity. As the New York Times’ Craig Fehrman wrote in a poignant story, many reasons contributed to the attendance collapse. General Motors had once run more than 20 factories in the area. By 1999 they had left town and with them 14,000 people, triggering school closings, consolidations, and identity crises. Top that with expanded sports coverage on television and the Internet, as well as students and adults being forced to work more part-time jobs, and the recipe for low ticket sales is in place. In 2012 the Indians sold only 450 season tickets.34

Cities and towns around the country faced tighter budgets, often restricted by tax caps. If pension systems were under stress, everything was up for grabs and cuts. Local athletics directors had to be nimble. They had been revving up their local sponsor deals for some time. They had also established user fees. By fall 2010, programs in at least 43 states were dependent on such fees, which normally ran from $100 to $150 per athlete per sport. School boards played chicken with athletics directors, voters, and city councils by saying, “Find more money or we will cut these sports.” In Lowell, Massachusetts, the cut list included freshmen and middle school teams, as well as 37 assistant coaches. In Greenville, Mississippi, tennis, golf, soccer, and baseball were among the sports that

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went on the chopping block. The Los Angeles district ripped $650,000 from transportation, effectively cutting a host of away games or forcing players to find their own ways to travel.35

Times were tough. In January 2012 Robert B. Gardner, executive director of the National Federation of State High School Associations, wrote an open letter to the American sport industry. He believed that high school sports were being overlooked in the industry press; its leaders were never included among lists of the most influential people. He noted, “19,000 high schools provide nearly 8 million young people opportunities to play high school sports. More people attend high school sporting events than college and professional sports events combined. The growth of web streaming will widen the gap.” Given this reach, he urged industry and business leaders to “recognize the key role of high school sports in developing the next generation of employees and entrepreneurs, not to mention the current generation of consumers.” Gardner had a point. At the same time, local athletics directors were probably more interested in funding than in making a list of the most influential leaders.36

Local businesses, some national corporations, and numerous professional leagues and teams have generously put money back into high school sports. The investment has been wise. As Rich Luker noted in 2011, ESPN Sports Poll data revealed that “more Americans are avid fans of high school sports than are avid fans of NASCAR, the NBA, or the NHL. Fifty- five percent of all Americans are fans of high school sports, making it the sixth-largest fan base in sports.” More important were avidity rates. Although young males aged 12 to 17 have been expressing less interest in sport, 85.8 percent of that age cohort were high school sports fans, and 48.3 percent were avid fans. Adult fans were not just parents of competing athletes. As Luker added, “Seventy percent of high school sports fans don’t have kids at home between the ages of 12 and 17, nor do 57 percent of those who are avid fans.” Clearly, there is both great potential and great need for more sustained and more effective marketing of grassroots sports.37

Sport Marketing Defined As the needs and demographic makeup of sport consumers have become more complex and as competition for the spectator and participant dollar has increased, the demand for professional marketing has also grown.

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Professional teams, small colleges, high schools, sport clubs, and youth programs have all looked for a better way to attract and maintain consumers. Among other things, they know that they compete for time and money with a host of rivals, including malls, mega movie complexes, Internet providers, concerts, and museums. Today’s marketers clearly need a rational, coherent system that can match sport consumers with sport products. We may call this sport marketing. The term sports marketing was coined by Advertising Age in 1979 to describe the activities of consumer and industrial product and service marketers who were increasingly using sport as a promotional vehicle. Even a casual television viewer cannot help noticing the use of sport images and personalities to sell beer, cars, and a whole range of other products.38

This text recognizes two components in sport marketing: marketing of sport and marketing through sport. A professional team engages in the former; a brewery or an auto dealer employs the latter. Although most of this book addresses the marketing of sport, we also consider (especially in chapter 9) the corporate sponsor, who markets through sport. We will also use the singular sport marketing rather than sports marketing. We do this because we see a need to conceptualize sport industry segments (e.g., pro, college, and club leagues; various media) as a homogeneous entity. In the chapters that follow, we hope first to provide a general theory of sport marketing across all segments.

Given these notions about the sport industry and marketing, we offer the following definition of sport marketing, adapted from standard definitions of general marketing:

Sport marketing consists of all activities designed to meet the needs and wants of sport consumers through exchange processes. Sport

marketing has developed two major thrusts: the marketing of sport products and services directly to consumers of sport and the

marketing of other consumer and industrial products or services using partnerships and promotions with sport properties.

As we will see, the terms sport consumers and sport consumption entail many types of involvement with sport, including playing (both real and virtual games), officiating, watching, listening, reading, blogging, and collecting memorabilia.

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Marketing Myopia in Sport

If sport marketing ideally consists of activities designed to meet the wants and needs of sport consumers, then historically the industry has been guilty of what Theodore Levitt called marketing myopia, or “a lack of foresight in marketing ventures.” We like to call it the vision thing.39

Following are some of the standard symptoms of sport marketing myopia:

A focus on producing and selling goods and services rather than identifying and satisfying the needs and wants of consumers and their markets. Spencer Garrett, part owner and general manager of the successful Pierpont Racquet Club, recognized a problem that plagues many sport teams: “There are industry people who still focus on closing the sale. Membership retention [we can add fan retention] is where the future of the industry lies, so selling has to focus on benefits to the potential member.” Selling is a critical component of marketing, but it is not the end all.40 The belief that winning absolves all other sins. Longtime Buffalo Bills owner Ralph Wilson expressed this sentiment when he questioned some expenditures. “You go about marketing by winning,” he insisted. “That’s how you do it. A couple years ago we spent $700,000 on television, advertising the Bills, and we didn’t sell five tickets. . . . This is sort of an anomaly, this marketing. Everybody gets carried away with it.” Unfortunately, winning does not guarantee a rise in attendance. Take the case of the New Jersey Devils. Under the leadership and genius of Lou Lamoriello, the franchise has enjoyed extended excellence on the NHL ice. Their record between 1988 and 2012 included 17 straight winning seasons; playoff berths almost every year; nine Atlantic Division championships; and Stanley Cups in 1995, 2000, and 2003. Few professional franchises in any sport can match that record. Nonetheless, despite the record and concerted marketing efforts, the Devils’ average attendance record was a downward staircase from 1998 to 2007. It had peaked above 17,000 in 1998, but by 2007, when the Devils moved to a new arena, it was barely above 14,000. Attendance is a constant challenge.41 Confusion between promotions and marketing. Promotion— including advertising and special events—is only one part of a marketing mix, or strategy. Many fail to see the difference between promotion and marketing. Not long ago, NCAA News ran a feature

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story titled “Professional Marketing Finds Its Way into College Basketball.” The article hardly described professional marketing— only the influx of promotional tactics such as NBA-style laser shows, cheerleaders, and halftime shows. Said Jim Harrick, UCLA coach at the time: “In the past, UCLA has had a history of its game being its main attraction. Marketing has become a great asset.” Good promotions can certainly be the “sizzle that sells the steak,” but promotions must be part of an integrated strategy that begins with knowing consumer wants and needs.42 Ignorance of competition inside and outside sport. Not enough teams are smart enough to recognize competitive trends and use them to advantage. For instance, the Atlanta Hawks had data that showed that their fans were 30 percent more likely than the general population to attend movies four or more times in the last three months. What did they do? They began to use ticket promo ads on the big screen before the movies. Research found that moviegoers have an 80 percent recall the next day, compared with a 15 to 20 percent recall rate from television ads. The Hawks made good use of competition.43 A shortsighted focus on quick-return price hikes or sponsorships rather than long-term investments in research and in relationship marketing. This predisposition is especially true at the professional level, where escalating salaries have prompted front offices to focus resources on selling corporate signage, often at the expense of building a large database around small groups, families, and individual ticket buyers. Worse yet, too many teams gouge their fans whenever they sense that demand is greater than supply. In the new millennium, some NFL teams began to charge fans to see preseason practice. In the enlightened opposite camp was Robert Kraft, owner of the New England Patriots, whose Super Bowl champs have enjoyed a long train of sellouts. Rather than alienate preseason fans, Kraft understood that they represent future generations of Patriots Nation. To this end, New England’s preseason camp had free admission, free parking, free rosters, and players lingering to sign free autographs. Said well-known Boston Globe columnist Dan Shaughnessy, “It’s the best sports deal in New England.”44 Poor-quality research. When Matt Levine, who we consider the father of modern sport marketing, broke into the NBA in 1974, the cutting edge of market research belonged to the L.A. Lakers, who collected patron names and addresses on raffle entries available at Forum ticket gates. Levine’s boss, Golden State Warriors GM Dick

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Vertlieb, posed a simple question to Levine: “Isn’t there more we could learn than their names and addresses?” Since our first edition in 1993, the sport industry has come a long way with research. But common problems remain. For instance, as we discuss in chapter 4, the sport venue requires special considerations of sampling. Simply handing out surveys at the front door will not always do the trick. Further, questions on sport participation require much more clarity than we see in an average survey. Does playing one round of golf per year, with someone else’s clubs, make a person a golfer? Some surveys have suggested this sort of thing. Quick, sloppy surveys will not suffice. The authors of this book have experienced firsthand some of the frustrations in selling research to executives. A few years ago we developed a machine-readable fan survey for a big-league team. A few weeks after the surveys were administered, a team employee brought us the completed surveys—dumped and mangled in four Hefty trash bags! Myopia can’t get much worse. Professional teams and major universities are now investing hundreds of thousands of dollars in developing, maintaining, and using databases. Managers at the youth club, high school, and small-college levels obviously lack the resources for sophisticated systems. But research can begin with simple Excel files or even paper files.45 Poor sales and service. Although many sport firms have equated sales and promotions with marketing, until the last decade few even invested in the sales effort. Historically, sales have been driven by quota and commissions mentalities, and little emphasis has been placed on training, tactics, or sales as part of the larger marketing strategy. We should not conflate the notion of sales with boiler-room operations using untrained and exploited staff and interns. The philosophy there seems to be this: If they can’t do it, we’ll just fire them and bring in more from the hundreds who have sent in resumes. In all this, no thought is given to the value of training and incentives, both of which might improve the interaction between the sport organization and its consumers. Arrogance and laziness. Simon Kuper, a well-known world football writer, recently recalled his attempts to reach the chairman of an English club. The press officer kept asking for fax requests, which Kuper called “a 1980s technology revered by soccer clubs.” Kuper sent them, but the press officer claimed that none were received. Only after a month of this did Kuper get permission to send an e-mail request. His frustration grew: “Because soccer clubs are the only businesses that get daily publicity without trying to, they treat

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journalists as humble supplicants instead of as unpaid marketers of the clubs’ brands. The media often retaliate by being mean. This is not very clever of the clubs, because almost all their fans follow them through the media rather than by going to the stadiums.”46 Failure to adapt to industry, market, and consumer change. As we noted earlier, adapting to new technology has been a constant necessity for sport executives and their media counterparts. Something new is always shaking up the status quo, and calling an innovation a fad or a waste of time is easy. People said that about the telephone and the cell phone, video games, and Facebook. But each of these innovations changed the way that many people lived their everyday lives. The business world, in and out of sport, it littered with the carcasses of firms that failed to adapt.

Change in the Profession Sport marketing has a long history, dating back to spectacle promoters in ancient Greece and Rome. Many golden ages and growth spurts have occurred. David Stern has hundreds of predecessors, including the legendary Bill Veeck, one of the most imaginative sport entrepreneurs and marketers of the past century (see the sidebar about Veeck). Boxing had Tex Rickard, who made a name in the first quarter of the 20th century promoting boxing matches with the likes of Jack Johnson and Jack Dempsey. He later ran sports at Madison Square Garden, where the press referred to his young hockey franchise as Tex’s Rangers. In 1928 he was asked by a pundit, “What do you regard as the secret to your success as a promoter—what psychological impulse guides you?” Rickard answered quickly: “It’s no secret. By merely reading the newspapers most anybody can tell what the public wants to see.”47

Bill Veeck: Sport Marketing’s Foremost Prophet

Bill Veeck (b. 1914) was bred to sport marketing. His father, William Veeck Sr., was a Chicago sportswriter who switched fields to become president of the Cubs. In the cozy confines of Wrigley Field, young Bill Jr. learned the trade of the baseball magnate, from the bottom up —working with the grounds and concessions crews or with the ticket office, like any good intern today. The short biography on his plaque

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in the National Baseball Hall of Fame sums up his rich and varied sports life:

Bill Veeck, owner of Indians, Browns and White Sox. Created heightened fan interest at every stop with ingenious promotional schemes, fan participation, exploding scoreboard, outrageous door prizes, names on uniforms. Set M.L. attendance record with pennant-winner at Cleveland in 1948; won again with “go- go” Sox in 1959. Signed A.L.’s first black player, Larry Doby, in 1947 and oldest rookie, 42-year-old Satchel Paige in 1948. Champion of the little guy.

He was a champion of the little guy not because he once used a midget as a pinch hitter, but because he believed that everyday fans were baseball’s true royalty. His two classic books, Veeck as in Wreck and The Hustler’s Handbook, still hold up as invaluable guides for any would-be sport marketer or executive. He happily considered himself a hustler, but here was his definition: “An advertiser pays for his space. A promoter works out a quid pro quo. A hustler gets a free ride and makes it seem like he’s doing you a favor.” For high school and small college athletics directors or youth program administrators who need to cut deals on slim budgets, Veeck’s hustler should be a prototype.

Bill Veeck also left a legacy of 12 commandments that capture an enduring vision for successful sport marketing:

1. Take your work very seriously. Go for broke and give it your all. 2. Never ever take yourself seriously. 3. Find yourself an alter ego and bond with him for the rest of your

professional life. 4. Surround yourself with similarly dedicated soul mates, free

spirits of whom you can ask why and why not. And who can ask the same thing of you.

5. In your hiring, be color blind, gender blind, age and experience blind. You never work for Bill Veeck. You work with him.

6. If you’re a president, owner, or operator, attend every home game and never leave until the last out.

7. Answer all of your mail; you might learn something. 8. Listen and be available to your fans. 9. Enjoy and respect the members of the media, the stimulation,

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and the challenge. The “them against us” mentality should only exist between the two teams on the field.

10. Create an aura in your city. Make people understand that unless they come to the ballpark, they will miss something.

11. If you don’t think a promotion is fun, don’t do it. Never insult your fans.

12. Don’t miss the essence of what is happening at the moment. Let it happen. Cherish the moment and commit it to your memory.

Bill Veeck’s 12 commandments offer an effective antidote to marketing myopia.48

12 commandments reprinted, by permission, from P. Williams, 2000, Marketing your dreams: Business and life lessons, In Baseball’s marketing genius, edited by Bill Veeck

(Champaign, IL: Sports Publishing), xiv.

The field was not much farther along in 1975 when Sports Illustrated’s Frank Deford wrote a brilliant profile of Michigan’s athletics director, Don Canham, a man widely recognized for leading college athletics into a new age of marketing. Deford focused on Canham’s frenetic pace and his hustling personality. He was way ahead of his time in the use of direct mail and aggressive advertising (including using airplane banners over nearby Detroit’s Tiger Stadium), and in recognizing the need for commercial sponsorship. More than anything, Canham saw the need to sell the overall experience of big-time college football or basketball. As he said to Deford: “We’ve got to promote what we have. We’ve got to ballyhoo the pageantry. . . . We’ve got to sell the spectacle.” To many fellow athletics directors (ADs), Canham’s approach threatened the purity of “amateur” sport. Deford recognized this, but he also recognized the key to Canham’s success: “There is very little that Don Canham does not take into consideration, and that, indeed, is the first mark of a promoter: concern for the tiniest detail while retaining the broadest vision.” We would make only one correction in Deford’s description. Canham was more than a promoter. He was a marketer. It is all in the vision thing.49

The authors of this book have interviewed thousands of young people who want to work in sport marketing because they “love sports.” Like millions of others among the ESPN generation, they are deluded by visions of mingling with Robbie Cano, LeBron James, Maria Sharapova, or Lionel Messi. Reality is much more of a grind—heavy competition for entry-level jobs (the XFL reportedly had over 50,000 people apply online for 112

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positions), low salaries, and long hours. A 2012 survey of pro franchises showed that the median income of workers in marketing, broadcast, and communications departments was $79,510. Still, those with strong sales skills (where salaries are higher) and an equally strong work ethic have a chance to be discovered by a team or by an executive recruiter such as Buffy Filippell, whose TeamWork Online LLC (www.teamworkonline.com) is highly respected and widely known inside the industry.50

Despite lingering myopia, the last 15 years have seen many encouraging signs of professional approaches to sport marketing. Among them are the following.

Robust Improvements in Sales

Few sport properties have the luxury of waiting to take ticket orders— what is now called an inbound sales approach. To succeed in a competitive environment, organizations need to use a proactive outbound sales approach. Yet until recently the industry did little to train a sales force. That circumstance has changed rapidly, of necessity, because a strong sales program depends on having people who understand and can implement activities that integrate database development, prospect identification, dynamic pricing, primary and secondary market sales, and (ultimately) customer satisfaction. Professional teams and Division I universities have led the trend, either building an in-house staff or outsourcing to companies like IMG, Learfield Ticketing, Get Real Sports Sales, or the Aspire Group.51 For instance, faced with a steep decline in men’s basketball attendance, Arizona State hired the Aspire Group, led by coauthor Bernie Mullin, to boost sales in four ticketed sports. As part of the deal ASU also hired 30 full-time sales and service representatives. The goal was to build relationships. Aspire implemented tactics that included “occasional conference calls between coaches and season-ticket holders, giving supporters a chance to dial in with questions,” as well as a young alum ticket package.52

Institutionalization of Knowledge and Training

When we started this book in the 1980s, some two dozen universities in the United States and Canada offered programs in sport management. Now

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there are hundreds around the world. On the professional side, Ron Seaver’s National Sports Forum has served the industry since 1996, bringing the top marketing executives together for keynotes, roundtables, and workshops (www.sports-forum.com). Along similar lines, the National Association of Collegiate Directors of Athletics (NACDA) sponsors professional groups such as the National Association of Collegiate Marketing Administrators (NACMA). Many other formal organizations and consultants like IMG and NASCAR are providing information, training, and professional identity to men and women in the field. Universities are developing more structured internship programs (see the sidebar about the ’Cat Crew). A number of journals and magazines, such as Street & Smith’s SportsBusiness Journal, Sports Business Daily, SportsPro Media, Sport Marketing Quarterly, and the International Journal of Sports Marketing & Sponsorship provide forums for sharing the latest best practices, research reports, and convention calendars.

Coauthor Bill Sutton and Dick Irwin have filled industry needs by developing the Sport Sales Combine, a unique event held periodically around America in partnership with professional franchise staffs. Fashioned along the notions of the scouting combines that evaluate player talent, the Sport Sales Combine is designed for entry-level to advancing sport industry ticket sales representatives looking to develop and refine sales and management skills. Combine trainees are engaged in an authentic sales training environment working with seasoned professional sales team leaders as well as hiring sales managers. Over the course of two high- action days, combine attendees receive training and then get to display their talents in real auditions at real events. Eager and effective sales “athletes” may leave with four or more job offers.53

University of New Hampshire ’Cat Crew Sports Marketing Team

Amber Lilyestrom, Associate Athletic Director for Marketing and Communications, University of New Hampshire Athletics

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Photo courtesy of UNH Athletics.

One of the most important parts of my job as a collegiate sport marketer is to serve as an educator. The University of New Hampshire Department of Intercollegiate Athletics serves not only as a learning environment for student-athletes but also as a training ground for young sports marketing professionals.

When I began my role at UNH in 2004, I quickly realized that to meet the many demands of seven revenue-generating programs I would need a lot of help. After one year of working with any student who walked through my door, I learned that a more formalized internship program would be the answer. This is when the ’Cat Crew was born.

Fast forward to 2012. The ’Cat Crew Marketing Team consists of 15 undergraduate students in majors varying from sport studies to business administration. The group is responsible for the marketing and game presentation of UNH’s ticketed sports as well as the activation of elements contained in the department’s corporate sponsorship agreements. UNH is home to some of the nation’s most competitive programs in the sports of ice hockey and football (FCS). UNH’s athletics department, like many other collegiate athletics departments, works with lean budgets on an annual basis. Therefore, a hearty volunteer-based internship program has become the lifeblood of UNH’s marketing department.

The ’Cat Crew Marketing Team internship program is unpaid, but the students are eligible to receive academic credit hours for their participation. More important, the program prepares them for a career after they graduate. Some of the keys to success are as follows:

Provide titles that match responsibilities. Our marketing team members earn titles for their specific roles. This arrangement not only increases accountability but also outlines expectations and

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responsibilities (e.g., student marketing director for men’s ice hockey). Directors must staff all events for their sport; write PA scripts; direct fellow team members on game day; and write a comprehensive year-end report that analyzes the attendance figures, marketing initiatives, and methods of their sport. Support teamwork. Most of the members who have gone on to earn great jobs upon graduation have participated in the ’Cat Crew for two years. In year 2, they have the opportunity to maximize their leadership skills by training their new teammates. They also have time to expand on projects and initiatives that they dreamt up in year 1 and now have the time and experience to implement them. Through this internship program, these students not only increase their sport marketing knowledge but also significantly develop their confidence, public-speaking ability, and creativity. Create opportunity. The ’Cat Crew is responsible for all ticketed home athletics events at UNH, but we also have the opportunity to work at NCAA championship events and large- scale events taking place at neutral sites (e.g., 2010 and 2011 Colonial Clash football game at Gillette Stadium, 2012 Frozen Fenway hockey game). Through these opportunities, the students get to meet other sport professionals in the industry, broaden their networks, and experience events at alternate venues.

To date, 95 percent of those who have participated in the ’Cat Crew Marketing Internship program have earned full-time jobs in a marketing or sales position upon graduation. We have found that employers are impressed with the level of experience and responsibility that these interns were given during undergraduate years and the skills that they have developed as a result. Placements of recent ’Cat Crew grads include regional sales manager at Monumental Sports & Entertainment, new business development account executive at Pittsburgh Pirates, group sales and marketing coordinator at the University of New Hampshire Athletics Department, inside sales representative at AEG, account manager at Genesco Sports Enterprises, event coordinator at Octagon Sports Marketing, and selection tour representative at All-American Games.

The ’Cat Crew takes a good bit of my time. But we see a very high ROI.

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Broadening Diversity

Historians have recently rediscovered the genius of minority marketers like Rube Foster, who built the first stable professional baseball league for African American players in the 1920s, and Senda Berenson, who was a central steward of women’s basketball in the 1890s. Although the industry still shades heavily to male and white, minorities have made progress. A good example is Sportivo, an agency “dedicated to harnessing the muscle of sports to drive brand acceleration among the nation’s fastest growing population” (www.sportivo.us). The market segment is covered by the blogspot Marketing to Latinos and Hispanics Sports News (http://marketingtolatinossports.blogspot.com).

As the field continues to progress, sport marketing will move back to a future that was recognized clearly by old-time promoters and hustlers such as Tex Rickard, Bill Veeck, Rube Foster, and Charlotte Perkins Gilman— who all knew how to leverage sport for media attention.54

Uniqueness of Sport Marketing Overcoming sport marketing myopia requires an appreciation of this particular domain of human experience. Our book, in fact, rests on a simple premise: that humans view sport as a special experience or as having a special place in their lives, and that marketers must approach sport differently than they do used cars, donuts, or tax advice. John Staffen, chief creative officer of Arnold Worldwide, planned ad campaigns for dozens of consumer products and services, including McDonalds, Progressive Insurance, and Volvo. He compared them to events like tennis’s U.S. Open: “Sports are so multifaceted. The Open is sports, sure, but it’s also part fashion, part people watching, part cuisine-fest and part New York City happening—balancing all those things isn’t easy.” Much of the marketing process is similar, and some of the sharpest industry minds came from outside sport, such as Sarah Levinson (from MTV), who served as president of NFL Properties in the late 1990s.55

But the sport domain has distinct features, which we discuss in the following sections, and there is no simple road to mastery. This book can provide an overview, but hard experience is also needed. Just ask Tim

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Leiwicke, president and CEO of AEG, governor of the NHL’s L.A. Kings, and CEO of Maple Leaf Sports and Entertainment. It all started in 1979, when Leiwicke began as assistant general manager of the St. Louis Steamers, a franchise in the Major Indoor Soccer League. Although to some extent we can argue that marketing is marketing, the field is full of failures who treated tennis, golf, and basketball as though they were the latest fashion design or tooth whitener. In the following sections, we suggest components that, collectively, make sport a unique phenomenon.

Sport Product

A product can be described generally as “any bundle or combination of qualities, processes, and capabilities (goods, services, or ideas) that a buyer expects will deliver want satisfaction.” A peculiar bundling distinguishes the sport product, including at least the following elements:56

Playful competition, typically in some game form A separation from normal space and time Regulation by special rules Physical prowess and physical training Special facilities and special equipment

Figure 1.1 illustrates the importance that this special bundling has for the sport product. At its core, the sport product offers the consumer some basic benefit such as health, entertainment, sociability, or achievement. Of course, many other products may offer the same core benefit. The sport marketer must understand why a consumer chooses to satisfy a given want or need by purchasing a sport product rather than some other type of product. Why do some people seek achievement in sport whereas others prefer to raise prize tomatoes? Although research on such a question is sparse, we may assume that the preference relates partially to the generic product components of sport—emphasis on physical activity that is regulated in special game forms. At the same time, the golfers among this sport group might scorn tennis and vice versa. The tennis players may be split into groups that prefer public courts and those that prefer private club membership. We can recognize the complex dynamics behind each level of segmentation (considered in later chapters), but the fundamental point is that the sport product is unique.

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Figure 1.1 The bundle of characteristics of the sport product.

Additional elements of the basic sport product—the game or event—make it unusual. Some of these elements reflect the nature of sport as a service.57

An intangible, ephemeral, experiential, and subjective nature. Sport is an expression of our humanity; it can’t be bottled like tonic water. Even tangible elements like equipment have little meaning outside the game or event. Few products are open to such a wide array of interpretations by consumers. What each consumer sees in a sport is subjective, making it extremely difficult for the sport marketer to ensure a high probability of consumer satisfaction. As baseball executive Peter Bavasi once said: “Marketing baseball isn’t the same as selling soap or bread. You’re selling a memory, an illusion.” Each fan and each active participant creates a different illusion. Each round of golf, each tennis match, each softball game brings a different experience. Equally important, consumers use sport to brand themselves in multiple ways. The same person in Seattle can easily say, “I am a Jimmie Johnson fan (NASCAR); I am a Storm fan (WNBA); I am a Red Sox fan; I am a Huskies fan.” Each of these identities may embrace different aspects of the sport experience— speed and risk in NASCAR, team play in the WNBA, hope and redemption with the Red Sox, and community with the UW Huskies. Thus, selling the benefits of consuming sport (compared with those of a car) is difficult because they are hard to pinpoint or describe.58 Strong personal and emotional identification. As we discuss in chapter 3, few products or services elicit passions and commitments as sport does. Most readers will remember the first time they were bitten by a sports bug—golf, tennis, baseball, hockey, or whatever. The addiction for more is striking. Fan identification with players and teams has spawned its own nomenclature. For example, there’s BIRGing, or “basking in reflected glory,” which can be seen in fans’

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use of the words we, us, and our when their favorites win, or CORFing (“casting off reflected failure”), as seen when the words them or they are used to discuss a loss. This strong identification is connected to the general feeling that “I could do that if only I had the chance.” In the world of sport it sometimes seems that everyone is a passionate expert. No wonder that fantasy games, talk radio, and sport blogs are successful. Simultaneous production and consumption. Sports are perishable commodities. As events, they must be presold, and there are no inventories. Sport consumers are typically also producers; they help create the game or event that they simultaneously consume. Although DVDs, on-demand videos, and newspaper accounts extend product life in a different form, the original event is fleeting. No marketer can sell a seat for yesterday’s game. Day-of-game sales alone are not sufficient, because inclement weather or some other factor may diminish gate sales. Preselling, especially of season-ticket programs or yearly memberships, guarantees a minimum revenue. Dependence on social facilitation. The loneliness of the long- distance runner notwithstanding, sport usually occurs in a public setting. Enjoyment of sport, as player or fan, is almost always a function of interaction with other people. Typically, less than 4 percent of those attending collegiate and professional sport events attend by themselves. Only a few sports, such as running, can be undertaken by a single person. And who watches the Super Bowl or the World Cup alone? Consequently, sport marketers need to recognize the central role of social facilitation. Inconsistency and unpredictability. A baseball game played today will be different from next week’s game even if the starting lineups are the same. Numerous factors such as weather, injuries, momentum, rivalries, and crowd response create the logic of “On any given day . . .” Who can predict a no-hitter, or a dog of a game, or the sudden squall on a mountain? Unpredictability is one of the lures of sport, but it makes the marketer’s job more complex. One baseball marketing executive, who previously spent 13 years with Clairol, put it this way: “Before, I had control of the product. I could design it the way I wanted it to be. Here the product changes every day and you’ve got to adapt quickly to the changes.”59 Core-product control beyond marketer’s hands. As suggested, most sport marketers have little control of their core product—the game itself. General managers make trades. Leagues make schedules and game rules. Although some core-product decisions are clearly

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made with an eye on marketing (in baseball, one such decision was the designated-hitter rule to create more offense), these decisions are still typically made by coaches and administrators whose agendas are often the game’s “purity” or equalizing offense and defense. Sport team marketers must sell the sizzle as much as the steak. Boston Marathon managers sell T-shirts, collector’s item lithographs, and special marathon-label wine. Only one person finishes first, but everyone can have a winning memento. That objective will be doubly important in the aftermath of the 2013 Boston Marathon bombings.60

Sport Market

Following are some special features of the sport market.

Many sport organizations simultaneously compete and cooperate. Few sport organizations can exist in isolation. To have meaningful competition, professional, intercollegiate, and interscholastic sports require other franchises and schools. The same is true for private and amateur sport clubs. Product salience and strong personal identification lead many sport consumers to consider themselves experts. The expert mentality was clearly revealed decades ago in a famous national survey. Among the respondents, 52 percent said yes when asked, “Do you think you could play for a professional team if you practiced?”; 74 percent said yes when asked, “Do you think that you could do a better job of officiating than most officials?”; and 51 percent said yes to the question, “Do you think that you could do a better job of coaching than the average coach?” No other business is viewed so simplistically and with such personal identification by its consumers.61 Demand tends to fluctuate widely. Each sport form tends to have an annual life cycle, and spectator sports fans are especially prone to quick changes in interest. Season openers bring high hopes and high demand; but midseason slumps, injuries, or weak competition may kill ticket sales. Sport has an almost universal appeal and pervades all elements of life. Although most of the world’s most popular sports clearly have a Western tradition, a wide world of sport is also clearly in place. A recent book even took as its title How Soccer Explains the World. What appear to be simple games—soccer, hockey, or basketball—

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link easily to other facets of our humanity, for better or worse.62

Sport Financing

The financing of sport encompasses the following special features.

Pricing the individual sport product unit by traditional job costing is difficult. For example, it is virtually impossible for the sport marketer to allocate fixed and operating costs to the individual ticket or membership. How can one account for the possible use of an usher, an instructor, an attendant, or a shower? Further, the marginal cost of providing an additional product unit is typically small. Therefore, pricing the sport product is often based on the marketer’s sense of consumer demand—for certain seats, for certain times of day, for certain privileges. The price of the sport product itself is invariably small in comparison with the total cost paid by the consumer. As we will see in chapter 8, marketers must recognize the hidden costs of sport. The cost of tickets to a ball game may be only one third of a family’s total costs, which include travel, parking, hot dogs, drinks, and merchandise—all perhaps controlled by someone other than the team hosting the event. Indirect revenues are frequently greater than direct operating revenues. Because consumers are (and should be) cost sensitive, income from fans is often not enough to cover total expenses, especially debt service to the shiny, high-tech facilities that consumers demand. The direct income–expense gap has focused more attention on media and sponsor revenues. The quest for television and sponsors extends to all levels and segments of the sport industry, in part because the money is there. A good example is the NCAA. Of the NCAA’s total revenues for 2010–11 ($845.9 million), 81 percent came from television and marketing rights fees. And most of this amount was from rights associated with March Madness, the men’s Division I basketball tournament.63

Sport Promotion

Promoting sport is not as easy as it seems, despite widespread media attention. Consider the following.

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The widespread media exposure is a double-edged sword. Unlike a hardware store, sport teams get free promotions daily, in the newspapers, on the radio, and on television. Cases in point: In 1997, the Chicago Sun-Times and the Chicago Tribune published 6,259 articles mentioning Bill Clinton, the elected president and the “leader of the free world.” Michael Jordan was mentioned in 4,173 articles. An economic impact study by Price/McNabb (North Carolina) estimated that the University of Tennessee at Chattanooga men’s basketball team generated $22 million of free media exposure through its 1997 Sweet Sixteen run. At a time of great competition in college admissions, any president or trustee would take notice. On the one hand, this exposure is a blessing, particularly for financially strapped programs at the grassroots level. At the same time, free exposure can lead to laziness, arrogance, and amnesia toward fans.64 Media and sponsors emphasize celebrities. Sport marketers work hard to shape their organization’s image. This purpose becomes problematic because the bulk of sponsor and media attention is focused on a few celebrities, whose expanded egos can lead to wholesale problems both inside and outside the locker room.

Activity 1.4 The Uniqueness of Sport Marketing

In this WSG activity, you will consider how to market the U.S. Open tennis tournament, which is the fourth and final major in the tennis Grand Slam. You will discover that the Open is more than just a sporting event.

Wrap-Up Sport is a distinct enterprise. It cannot be marketed like soap or tax advice. A sport marketer is asked to market a product that is unpredictable, inconsistent, and open to subjective interpretation. The marketer must undertake this task in a highly competitive marketplace with a much lower promotional budget than those of similarly sized organizations in other industries. Finally, the sport marketer must do all this with only limited

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direct control over the product mix. On the bright side, the media are eager to give wide exposure to the general product, and many opportunities exist to generate revenue through associations with business and industry.

Activities

1. List three reasons for the great need for better sport marketing. 2. Define marketing myopia; give three examples in the sport industry. 3. On the basis of figure 1.1, discuss how two golf players might

consume different products in terms of benefits, sport forms, or marketing mix.

4. Find the names of four sport organizations from a major newspaper to illustrate each segment of the industry identified in this chapter.

5. Discuss the three elements of sport that you believe most contribute to the uniqueness of sport marketing.

6. Identify a sport or a sport organization on the rise and one on the decline. What types of evidence support the notions of either rise or decline? Is the change caused by the invisible hand of the market or by the visible hand of marketing?

Your Marketing Plan

In the following chapters, you will be asked to develop your own marketing plan, step by step. This activity will allow you to apply the topics that are presented in each chapter. Take advantage of these opportunities and have fun!

Endnotes

1. Quoted in Pablo Torre, “From Couch to Clutch,” Sports Illustrated, 20 February 2012, 46; Pablo Torre, “A Run Like No Other,” Sports Illustrated 27 February 2012, 32; Harvey Araton, “Disappointing Defeat Fine Tunes a Frenzy,” New York Times, 25 February 2012, D2; Howard Beck, “Lin Craze Has Left the Building,” New York Times, 16 March 2012, B12; Howard Beck, “Knicks’ Push For Playoffs Will Go On Without Lin,” New York Times, 31 March 2012, SP1; Howard Beck, “Clock Strikes 12: Fairy Tale Ends,” New York Times, 18 July 2012, B10.

2. Chip Heath and Dan Heath, Made to Stick: Why Some Ideas Survive and Others Die (New York: Random House, 2007).

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3. Keith Bradsher, “In China, Lin Is a Star and a Symbol,” New York Times, 15 February 2012, B12; Ho quote in Torre, “A Run Like No Other,” 32; Adam Fraser, “Brand Design’s: Basketball’s FIBA World Championships Were Screened in 183 Countries,” Sports Pro Magazine, December 2010, 60–64; Nielsen Co., “State of the Media: Year in Sports 2010,” Supplement in Street and Smith’s SportsBusiness Journal (hereafter cited as SSSBJ), 24–30 January 2011, 7.

4. Keith Bradsher, “In China, Lin Is a Star and a Symbol,” New York Times, 15 February 2012, B12; Michale Wines, “China Tries to Add Cultural Clout to Economic Muscle,” New York Times, 8 November 2011, A8.

5. Ken Belson, “Chinatown Can Cheer, but Can’t Watch, Rise of an Adopted Star,” New York Times, 16 February 2012, A1, www.nytimes.com/2012/02/16/sports/basketball/cable-tv-blackout- frustrates-lins-chinatown-fans.html?ref=cabletelevision&pagewanted=all; Howard Beck and Richard Sandomir, “Time Warner and MSG Resolve Cable Dispute, With Help of Lin and Cuomo,” New York Times, 18 February 2012, D5; www.nytimes.com/2012/02/18/sports/time-warner- cable-and-garden-resolve-dispute.html?ref=timewarnercableinc.

6. Pablo Torre, “A Run Like No Other,” Sports Illustrated 27 February 2012, 33–34; Richard Sadomir, “As Lin’s Legend Grows, MSG’s Ratings Keep Rising, Too,” New York Times, http://offthedribble.blogs.nytimes.com/2012/02/22/as-lins-legend-grows- msgs-numbers-continue-rising/; Richard Sandomir, “Lin Is Gone, and So Is the Buzz,” New York Times, 19 July 2012, B12.

7. M. Swift, “From Corned Beef to Caviar,” Sports Illustrated, 3 June 1991, 75–89, quotation on 80.

8. Ibid.

9. Jeff Coplon, “The People’s Game,” New York Times Magazine, 23 November 2003, 73–77.

10. L. Jon Wertheim, “The Whole World Is Watching,” Sports Illustrated, 14 June 2004, 72–85; John Lombardo, “Game Plan Calls for Growth Overseas,” SSSBJ, 27 October–2 November 2003, 25; John Lombardo, “Stellar Rookies Help Lead NBA to Heights It Hasn’t Reached Since Jordan Left,” SSSBJ, 19–25 April 2004, 36; John Lombardo, “Global

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Trade: NBA Imports Talent and Exports the Game,” SSSBJ, 25–31 October 2004, 21–25; Jack McCallum, “Wake-Up Call,” Sports Illustrated, 27 June 2005; Johnny Ludden, “Argentina in Love With Its Hoop Star,” Globe and Mail, 7 July 2005.

11. For an excellent look at Chinese basketball in 2012, see Jim Yardley, “Away Game,” New York Times Sunday Magazine, 5 February 2012, MM33, www.nytimes.com/2012/02/05/magazine/NBA-in-China.html? _r=1&pagewanted=all; investment growth in “China Sports Industry Report,” published by Research in China, www.researchinchina.com/Htmls/Report/2010/5847.html.

12. Adam Frazer, “Net Growth,” SportsPro Magazine, February 2011, 94– 95.

13. FIFA.com, “Almost Half the World Tuned in at Home to Watch 2010 FIFA World Cup South Africa,” 11 July 2011, www.fifa.com/worldcup/archive/southafrica2010/organisation/media/newsid=1473143/index.html. For a good overview of sports broadcasting, see Rodoula H. Tsiotsou, “Entrepreneurship in Sports Broadcasting,” in Sports Entrepreneurship: Theory and Practice, ed. Dorene Ciletti and Simon Chadwick (Morgantown, WV: FIT, 2012), 97-120.

14. Daniel Kaplan, “Is Sports Business Recession-Proof?” SSSBJ, 19–25 October 1998, 37; Marcy Lamm, “Sports’ Grip on Public Slips in Poll,” SSSBJ, 31 January–6 February 2000, 47.

15. Bill King, “Passion That Can’t Be Counted Puts Billions of Dollars in Play,” SSSBJ, 11–17 March 2002, 32.

16. David P Kronheim, “Major League Baseball 2011 Attendance Analysis,” http://numbertamer.com/files/2011_MLB_Attendance_Analysis.pdf.

17. John Raby, “Minor-League Hockey Taking a Hit in Recession,” Fosters Sunday Citizen, 1 March 2009, C5; Fred Dreier, “Key Business Issues Facing EPL Franchises,” SSSBJ, 15 August 2011, 35.

18. BBC Sports, “RBS Cutbacks to Hit British Sport,” 26 February 2009, www.sports-city.org/news_details.php?news_id=7248&idCategory=1.

19. Tom Love, “A Different League: The Football League,” SportsPro

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Magazine, April 2012, 60–64, TV rights deals at 61.

20. Steve Knopper, “Concert Biz Collapses as Fans Flee,” Rolling Stone, 20 January 2011, 19.

21. Bloomberg News, “NBA Reacts to Tough Economic Times,” 6 October 2008, www.sports-city.org/news_details.php? news_id=5771&idCategory=1; Reuters, “English Football Clubs Cut Prices to Help Fans During Recession,” 25 February 2009, www.sports- city.org/news_details.php?news_id=7240&idCategory=74.

22. AP, “ ‘Big Game’ Not Quite as Big This Year,” Foster’s Sunday Citizen, 1 February 2009, A3; Daniel Kaplan, “Teams Tackle Tough Ticket Market,” SSSBJ, September 7–13, 2009, 1, 24–27, quotation at 24.

23. Rich Luker, “Industry Must Adapt to Decline in American Spending on Sports,” SSSBJ, 27 September 2010, 13; “About the Industry,” SSSBJ, 29 November 2010, 18; Brad Wolverton and Alex Richards, “Crowds Shrink at Men’s Basketball Games,” Chronicle of Higher Education, 25 March 2012, http://chronicle.com/article/Basketball-Draws- Shrinking/131294/?sid=wb&utm_source=wb&utm_medium=en.

24. Alfie Meek, “An Estimate of the Size and Supporting Economic Activity of the Sports Industry in the United States,” Sport Marketing Quarterly (hereafter cited as SMQ), 6 December 1997, 15–22; Brad R. Humphreys and Jane E. Ruseki, “Estimates of the Size of the Sports Industry in the United States,” IASE/NAASE Working Paper Series, No. 08-11, August 2008, http://college.holycross.edu/RePEc/spe/HumphreysRuseski_SportsIndustry.pdf; U.S. GDP levels found at http://knoema.com/gdp-by-country? gclid=CKGFl6LC07ACFUZN4AodDDvq2g.

25. Terry Lefton and John Ourand, “X Years After: The Brash, Bold XFL Played Only One Season, but a Decade Later Its Images and Impact Live On,” SSSBJ, 16 May 2011, 1, 26–7; http://msn.foxsports.com/foxsoccer/usa/story/womens-professional-soccer- league-shut-down-051812.

26. “Poll Shows Popularity of Pro Football Continues Growing While Baseball Slides,” SportsBusiness Daily (hereafter cited as SBD), 26 January 2012, www.sportsbusinessdaily.com/Daily/Issues/2012/01/26/Research-and-

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Ratings/Harris-Poll.aspx?hl=Research%20and%20Ratings&sc=0.

27. Tripp Mickle, “Balancing Act: With Some Metrics Leveling Off, Action Sports Industry Pushes Ahead With New Strategies,” SSSBJ, 23 January 2012, 1, 15–17.

28. Tripp Mickle, “Billion Dollar Baby: In Four Short Years, the Indian Premier League Has Put Cricket on a Wicket Growth Curve,” SSSBJ, 18 April 2011, 1, 15–18; “Global Growth Markets: India,” SSSBJ, 18 April 2011, 20; David Hoyt and George Foster, “Sports Entrepreneurship: The Case of the Indian Premier League,” in Sports Entrepreneurship: Theory and Practice, ed. Doreen Ciletti and Simon Chadwick (Morgantown, WV: FIT, 2012), 34–50.

29. John R. Betts, “The Technological Revolution and the Rise of Sports, 1850–1890,” Mississippi Valley Historical Review, 40 (September 1953): 231–56, quotation at 239.

30. Pew Research Center, State of the News Media 2012, http://stateofthemedia.org/2012/newspapers-building-digital-revenues- proves-painfully-slow/newspapers-by-the-numbers. Bill King, “No News Is Good News,” SSSBJ, 20–26 July 2009, 1, 28–32.

31. For more on technological innovation and sport products, see Stephen Hardy, Brian Norman, and Sarah Sceery, “Toward a History of Sport Branding,” Journal of Historical Research in Marketing, 4 (4) (November 2012): 482–509.

32. Jaguars quotation in Albert Breer, “Teams Finding Their Product Is a Tougher Sell,” Boston Sunday Globe, 4 July 2010, D-9; Stuart Elliott, “YouTube and Kin Woo Marketers, Seeking to Siphon Dollars From TV,” New York Times, May 3, 2012, B2, www.nytimes.com/2012/05/03/business/media/youtube-channels-court- advertisers-at-newfronts.html?ref=todayspaper.

33. Albert Breer, “Teams Finding Their Product Is a Tougher Sell,” Boston Sunday Globe, 4 July 2010, D-9; Brad Wolverton and Alex Richards, “Crowds Shrink at Men’s Basketball Games,” Chronicle of Higher Education, 25 March 2012, http://chronicle.com/article/Basketball-Draws- Shrinking/131294/?sid=wb&utm_source=wb&utm_medium=en.

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34. Craig Fehrman, “The End of an Era in Indiana,” New York Times, 25 March 2012, SP1, www.nytimes.com/2012/03/25/sports/farewell-to- wigwam-and-heyday-of-high-school-basketball-in-indiana.html? _r=1&pagewanted=all.

35. Bill King, “High School Sports Running on Empty,” SSSBJ, 2 August 2010, 1, 15–19.

36. Robert B. Gardner, “Influence of High School Sports Goes Overlooked,” SSSBJ, 30 January 2012, 24.

37. Rich Luker, “Local Power, Grassroots Appeal Make High School Sports Compelling,” SSSBJ, 28 March 2011, 21.

38. L. Kesler, “Man Created Ads in Sport’s Own Image,” Advertising Age, 27 August 1979, 5–10.

39. T. Levitt, “Marketing Myopia,” Harvard Business Review (July– August 1960): 45–56.

40. D. Cooke, “Packaging for Prestige: The Tennis Advantage,” IRSA Club Business, July 1987, 62.

41. SBD, 22 August 1997, 11; Andy Bernstein, “Despite Stanley Cup Win, Devils Play to Few Fans,” SSSBJ, 11–17 December 2000, 1, 58; Matthew Ventolo, “2010–2011 New Jersey Devils Attendance Analysis,” www.inlouwetrust.com/2011/4/22/2125803/2010-2011-new-jersey-devils- attendance-analysis.

42. Laura Bollig, “Professional Marketing Finds Its Way Into College Basketball,” NCAA News, 6 December 1993, 12.

43. Marcy Lamm, “Teams Take Their Pitch to the Big Screen,” SSSBJ, 21–27 February 2000, 13.

44. Dan Shaughnessy, “Eyes of Many Are Trained on Workouts,” Boston Sunday Globe, 8 August 2004, C-1, 4.

45. “Profile/Interview With Matt Levine,” SMQ, 5 (2) (September 1996): 5–12.

46. Simon Kuper and Stefan Szymanski, Soccernomics (New York: Nation

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Books, 2009), 85.

47. Bozeman Bulger, “Twenty-Five Years in Sports,” Saturday Evening Post, 26 May 1928.

48. Hustler definition in Bill Veeck with Ed Linn, The Hustler’s Handbook (New York: Fireside Books, 1989), 12.

49. Frank Deford, “No Death for a Salesman,” Sports Illustrated, 28 July 1975, 56–65.

50. Bill King, “What’s the Payoff in Sports? Salary Survey Sheds Light on Challenges College Grads Face,” SSSBJ, 13 August 2012, 1, 16–25.

51. Michael Smith, “Survey: More Schools Beefing Up Ticket Efforts,” SSSBJ, 4 June 2012, 8.

52. Brad Wolverton and Alex Richards, “Crowds Shrink at Men’s Basketball Games,” Chronicle of Higher Education, 25 March 2012, http://chronicle.com/article/Basketball-Draws-Shrinking/131294/? sid=wb&utm_source=wb&utm_medium=en.

53. Description taken from www.sportsalescombine.com.

54. For an outstanding introduction to the broader roles of these people (and many more) in American sport history, see Gerald Gems, Linda Borish, and Gertrud Pfister, Sports in American History (Champaign, IL: Human Kinetics, 2008).

55. Terry Lefton, “9 Rules for Making the Most of Sports Property/Ad Agency Relationships,” SSSBJ, September 24–30, 2007, 23–28, quotation at 25; www.arn.com/creative/client-list.

56. B. Enis and K. Roering, “Services Marketing: Different Products, Similar Strategy,” in Marketing of Services, ed. J.H. Donnelly and W.R. George (Chicago: American Marketing Association, 1981), 1. The classic definition of sport comes from John Loy, “The Nature of Sport,” Quest, 10 (May 1968): 1–15.

57. Scott Edgett and Stephen Parkinson, “Marketing for Service Industries,” Service Industries Journal, 13 (3) (July 1993): 19–39.

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58. B. Stavro, “It’s a Classic Turnaround Situation,” Forbes, 1 July 1985, 70.

59. R. Poe, “The MBAs of Summer,” Across the Board, October 1985, 18–25.

60. Tom Moroney, “Hopkinton Finds Itself in the Winner’s Circle,” Boston Globe, 3 April 1996, 1, 24.

61. Research and Forecasts, Miller Lite Report on American Attitudes Toward Sports (Milwaukee, WI: Miller Brewing Co., 1985), 131–136.

62. Franklin Foer, How Soccer Explains the World: An Unlikely Theory of Globalization (New York: HarperCollins, 2004).

63. www.ncaa.org/wps/wcm/connect/public/ncaa/finances/revenue.

64. “NBA News and Notes,” SBD, 20 February 1998, 5; “Marketplace Roundup,” SBD, 20 March 1998, 4.

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Chapter 2 Strategic Marketing Management

Zuma Press/Icon SMI

Objectives To identify the key stakeholders in sport marketing and the interaction between them that creates brand perception To recognize the interacting components of the marketing management process To appreciate the core elements of market analysis, product concept, and product position To understand the distinctions among the five Ps of sport marketing: product, price, place, promotion, and public relations

Branding With Music

Many professional musicians make no secret of their dream to be a

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professional athlete, yet since the late Italian tenor Luciano Pavarotti and Scottish rocker Rod Stewart’s flirtation with professional soccer over four decades ago, precious few in the music entertainment business have ever come close. Similarly, many professional athletes make no secret of their love of music and their desire to be professional musicians, but equally few possess the necessary talent to carry it out. Maybe it’s the love of performing in front of an adoring fan base. Maybe it’s the bond of people with God-given talent that places them far above average mortals. Or maybe it’s something more fundamental than that. Whatever the case, sport and entertainment clearly go hand in hand, and music will always play a part in dramatizing and enhancing the sport experience.

No surprise, then, that the National Basketball Association leads the way in producing a comprehensive sport and entertainment experience that appeals to a broad base of fans. In the 1990s the NBA was the first league to recognize the need to enhance its product with a fully choreographed entertainment package. More than any other league, the NBA acknowledges that the product outside the white lines is as important as the product inside the white lines in terms of inducing fans to repeat purchase and come back to the arena again. Sometimes, to the chagrin of fans, particularly older ones, the comprehensive production that wraps around NBA games means that there is never a dull moment, or even a silent moment.

Music is frequently the main emotive force that unlocks the passion of sports fans and facilitates their expression of support. Mark Cuban, owner of the NBA’s Dallas Mavericks, the 2010–11 champions, once said that anyone on his ticket or sponsorship sales staff that sold based on wins and losses would be fired immediately: “We sell a basketball entertainment experience, of which the music, video, promotions, and other entertainment off the court is a vital part of the product we sell and exactly how we are able to attract every member of the family.1

Consistent, marketing-minded leadership, complete with a vision and a plan, is a necessity in today’s competitive environment. For the high school athletics director, the racket sports and health club manager, or the commissioner of a professional league, the absence of this type of leadership is a sure ticket to disaster. Of course, having a plan does not

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ensure success. The NFL’s 2004 Super Bowl halftime fiasco, thanks to Janet Jackson’s “wardrobe malfunction,” and the failures of the WUSA and the XFL were fundamental miscalculations in marketing strategy.2 The lack of a strategy, however, simply multiplies the odds of failure. In this chapter, we lay out the basic elements required for strategic marketing leadership. We refer to these elements as marketing management, but we emphasize that the key to successful marketing management lies in the development of a comprehensive, strategic, and creative marketing plan. This plan must involve a process that combines both strategy (the big picture) and tactics (the details of a plan). Note that throughout this text we purposefully don’t just call it a marketing plan; we emphasize the concept of a marketing planning process (MPP) to delineate a calculated process formed from direct input from all sport marketing stakeholders. Subsequent chapters in this book flesh out the various tactical steps in the marketing management process. This chapter places each step in the broader perspective of strategy.

Sport Strategy Is More Than Locker Room Talk

The NFL, like the NBA, remained an industry leader over the last two decades by having clear strategies to develop and position their products in the marketplace of consumer needs. Although these leagues face their own challenges to retain prominence and profitability, their success came from carefully developed visions and plans—game plans, to use a sport term. In fact, many successful organizations have borrowed the notion of game plans from the successful coaches, who have always evaluated their own talent, carefully scouted their opponents, and developed their tactics and playbooks accordingly. In simple terms, that process is the essence of strategy, and it has spread from the locker rooms to the front offices of the sport industry.

In its simplest sense, strategy entails setting long-term goals, developing plans to achieve those goals, and then outlining tactical programs for execution. This process requires a continual analysis of the environment and the organization. The challenges of today’s marketplace have forced sport executives to think more strategically, as shown in the following examples from tennis, golf, and ice hockey.3

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Tennis

In 1960 American tennis had some 5.6 million participants (people who played at least once per year). By 1974 tennis was booming, and the number of participants had grown to 34 million. Then came the big slump in the 1980s as participation dwindled to 13 million in 1985. By 1995 tennis was still only half as popular as it had been 20 years before. The problems in tennis were recognized in 1995 when the Tennis Industry Association, or TIA (a trade association), announced their strategic Initiative to Grow the Game from the grassroots level upward. As Brad Patterson, TIA executive director, put it, each tournament, manufacturer, club, association, and pro tour had been marketing itself: “The fact is that nobody was marketing tennis.” Tennis, in effect, had lost its position to aerobics, in-line skating, basketball, and other competitors. In the last decade, the United States Tennis Association (USTA) and the TIA have developed a range of programs under such banners as Play Tennis America and Tennis Welcome Center, which included free clinics, free equipment, and organized leagues for all ages. As Patterson reminded his colleagues, “What was missing was that we were not telling people to come out and play tennis.” Gauging the success of these campaigns is difficult. The tennis industry claims that participation is on the rise, but statistics from the Sporting Goods Manufacturers Association and the National Sporting Goods Association (NSGA) suggest flat or declining participation among both casual and frequent players. In the spectator arena, the USTA recently sought to boost its sagging tournament ratings by creating a series with a point system, along the lines of NASCAR. They needed to do something fast. A 2002 ESPN poll had reported that almost 57 percent of respondents had indicated they were “not at all interested” in the U.S Open—the marquee event. In a 2004 Turnkey Sports Poll, 52.4 percent of sport industry executives believed that getting recognizable players was the biggest challenge facing pro tennis. Tennis has a long way to go, but at least it has begun to pursue an integrated strategy.4

As of March 2011 the most recently released USTA membership data showed 700,000 individual members, 7,000 organizational memberships, and an estimated 25 million people playing tennis. Public interest in the sport, however, continues to decline. The New York Observer noted that TV ratings were down for the 2010 Wimbledon match featuring Rafael Nadal against Tomas Berdych, which scored a 1.8 rating, the lowest rating since 1988 and one of the lowest in history. The interesting story of Novak Djokovic in 2011 and the rebirth of U.K. favorite Andy Murray in 2012,

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under the tutelage of Ivan Lendl, have added some freshness and hence increased interest in men’s tennis among existing tennis fans. But these events have not been enough to raise overall ratings by drawing new fans to the sport.

Golf

In the mid-1990s golf participation was stagnant. In 1997 the World Golf Foundation (WGF)—a nonprofit entity funded by the PGA, USGA, LPGA, Calloway, Titleist, and others—announced a campaign called the First Tee, which aimed to develop hundreds of new golf facilities around the country in the next decade. Former president George Bush agreed to serve as honorary chairperson of the initiative. The effort stemmed from a simple conclusion that the game of golf was limited only by the availability of facilities. Tiger Woods might excite millions, but millions couldn’t take up the game without available, affordable facilities. At the WGF’s first GOLF 20/20 conference in November 2000, Chairman Tim Finchem set three major goals for golf to achieve by 2020:

Reach 55 million participants Reach 1 billion rounds played Achieve a level of interest in the United States comparable to that of professional football

By 2002 the number of courses in the United States had increased to 14,725 from 13,528 in 1998. NSGA statistics indicated a rise in the number of one-time players—up to 28.3 million. At the same time, however, the number of frequent players (40 or more days per year) had plateaued at 6 million. The number of rounds played had actually decreased in the near term, from 518 million in 2000 to 502 million in 2002. Rounds played continued to slip in 2003, to 495 million. The industry was still struggling to unite around a clear strategy. Many experts thought that too many courses had been built, that the issue was oversupply, not too little demand. Although Finchem and the WGF stood firmly behind a grassroots strategy that built the base of novice players, including those in inner cities, Acushnet’s chairman, Wally Uihlein, was less sanguine: “GOLF 20/20 is a noble effort, but it’s in default and denial of golf’s middle-class requisite.” Uihlein claimed that Finchem was “a little bit naive as to our ability to bring in non-middle-class components to prop up the numbers.” To Rich Luker, who guided the Chilton Sports Poll

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in the 1990s and then headed up the Leisure Intelligence Group, the major problem was not the availability of golf greens; it was the availability of time. Spending five or more hours to play a round of golf is considered too much in an age of multitasking: “Golf doesn’t meet the relevance of a generation for whom option, speed and simplicity are the most important things.” Like tennis, golf had a long way to go, but at least it recognized the need for strategy.5 Hence, the PGA initiated its Tee It Forward program featuring Jack Nicklaus to encourage players who do not hit the ball that far to use the forward tee boxes to speed up play and enjoy the game more.

According to the National Gold Foundation (NGF), the independent resources dedicated to supporting all the people, companies, facilities, and associations that earn their living in golf:

The United States lost nearly four million golfers from 2007 through 2012. Golf participation in the United States in 2012 fell to levels not seen in 25 years; only 9.2 percent of the population played golf. The numbers of female and junior golfers dropped 23 and 35 percent, respectively, over the previous five years. Golf continued to be viewed by many as an expensive game, which goes hand in hand with perceptions that it is an elitist game.6

The number of annual rounds of golf played in the United States fell from 518 million to 475 million in the past decade, and it declined for the fifth consecutive year in 2011. The number of players peaked at 30 million in 2005 and has been sliding since, to 26.1 million golfers in 2010, the most recent year for which numbers were available. Based on these findings, the PGA launched Golf 2.0, an initiative to increase the U.S. golfer participation and increase frequency of play. Coupled with the grassroots participation programs, such as First Tee, the USGA, PGA, and LPGA have set a goal of increasing the U.S. golfer population to an unprecedented 40 million by 2020.7

Golf 2.0 initiatives include the Get Golf Ready and Play Golf America programs as the most important initiative ever undertaken by the 96-year- old PGA organization. Golf 2.0 is a targeted, focused, long-range strategic plan for the golf industry to achieve a substantial increase in the number of golfers, the number of rounds of golf played, and the revenue generated from golf over the next decade among current and potential consumers of

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the game. Golf 2.0 is a philosophy based on the belief that golf must change now. “Millions of people love this game, but the staggering statistic is that (in 2010) we lost 4.6 million people. It’s terribly important that we recognize that golf doesn’t fit currently into the lives of consumers,” said Darrell Crall, senior director of Golf 2.0. Goals of the plan are to

retain and strengthen the existing core golfers, engage the 61 million lapsed golfers who still have an interest in playing, and drive new players.8

Golf is expensive and time consuming—two major factors that have led to continual decline in participation despite the proliferation of new golf courses and hence the availability of the sport. The major organizations in golf are clearly now addressing this widespread defection, but it remains to be seen whether it is too little, too late or just in time to sustain the future of the sport.

Hockey

In the fall of 2004, 32 stakeholders met in St. Paul, Minnesota, for the Grow Hockey Summit under the aegis of the International Hockey Industry Association. The IHIA’s founding members include major manufacturers such as Itech Sport Products, Nike Bauer Hockey, Sher- Wood Hockey, Hespeler Hockey, and Louisville Hockey, all of whom have an obvious stake in growth. The summit attracted representatives from the NHL, the NHLPA, USA Hockey, Hockey Canada, and the International Ice Hockey Federation. Although the group was helpless to stop a lockout of the world’s top hockey league, they did agree on an issue demanding concerted effort: the slow overall participation growth of 1 to 2 percent, although much better for females. The summit also recognized the importance of three youth segments: 5- to 8-year-old entry-level players, 10- to 14-year-olds thinking of leaving the sport, and 18- to 34-year-olds entering or reentering. In all cases, the obstacles to growth revolve around cost, time, availability of ice, and perceptions of violence. Attendees circulated a press release in which they committed to developing a strategic plan that included the following:

Increasing accessibility through an emphasis on fun

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Partnerships with kids’ organizations Increased skill focus Renewed focus on ice, in-line, street, and other types of hockey An international Grow Hockey Day Ties with the retail community, such as a Welcome to Hockey kit Targeted communication to hockey moms Development of First Goal, a collaboration to include equipment discounts and a mass media campaign

With the NHL in lockout mode for the entire 2004–2005 season and again for the first half of the 2012–2013 season, hockey is clearly in dire need of a grassroots growth strategy.9

The two factors that have hurt hockey the most are the frequent NHL labor strife at the highest level of the game in North America and the lack of consistent coverage on major television networks in the United States. Even though NBC started its latest broadcast rights agreement in 2007, the limited game schedule and changing start dates and times have not driven the desired increase in ratings. ESPN’s increased coverage of the sport in the past two years through their SportsCenter show has increased the visibility of hockey. NBC’s addition of regular weekend broadcasts during the second half of the season and the playoffs coupled with extremely competitive series on the ice led to ratings for the 2013–14 NHL Conference Championships and Stanley Cup that were among the highest in 17 years. Nonetheless, hockey’s 4.8 TV rating, the highest ever for the NHL on NBC for game 1 of the 2013 Stanley Cup Championships, and double the rating for the prior year, paled in comparison to ABC–ESPN’s 14.7 rating for the Heat versus Spurs NBA Championship game 6. Hockey’s fan base is loyal and passionate but still limited in the United States.

The Harris Interactive poll in December 2011 surprisingly showed hockey to be at least as popular as basketball in the United States. This survey, conducted since 1985, asked participants what their favorite sport was. Among the 2,237 adults surveyed online, men’s professional and men’s collegiate hockey each rated at a consistent 5 percent level of interest in the past decade, significantly ahead of the 1985 level and substantively higher than the level in 2003. Table 2.1 is adapted from this poll and reveals the significant growth in interest among men in both professional and collegiate hockey in the United States during the past decade, although at 5 percent hockey remains very much a niche sport.

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Hockey has clearly developed an avid core group of fans who support the game with fervor and whose average attendance frequency is the highest of fans of all the major professional leagues. One of the major reasons cited for the growth in interest among more casual fans is the increased scoring in the NHL. Before the lockout in 2004, many hockey games were viewed as boring defensive battles. The league noted this perception and implemented significant rule changes designed to reduce the neutral zone trap and other negative defensive strategies. These changes led to a speeding up of the flow of the game and produced more scoring chances and goals.

Tennis, golf, and hockey leaders began to realize that marketing their sports required broad, integrated efforts—campaigns that would transcend old divisions between amateurs and professionals, between grassroots and elites, and between manufacturers and governing bodies. As the golf, tennis, and hockey industry groups demonstrate, marketing strategy is not a privilege reserved for the big-time leagues and teams. It is a necessity for all organizations, all the way down to the grassroots level. In fact, given the financial squeeze at the grassroots level, marketing strategy may be even more essential there. Grassroots leaders cannot defer their marketing efforts simply because they lack a support staff. David Hoch, former athletics director at Eastern Technical High School in Baltimore County, Maryland, stated the matter clearly: “For many athletics directors, the first stumbling block to starting a marketing program is the work it adds to your already hectic schedule.” But, added Hoch, marketing can no longer be viewed as an “extra or frivolous effort. Marketing is just as important as scheduling facilities, evaluating coaches, and the numerous other responsibilities” that any high school AD must address on a daily basis.10

Marketing Planning Process The elements of marketing strategy can be conceptualized in models. Marketing theorist Philip Kotler has called one model the marketing management process (MMP). We have blended Kotler’s model with others

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(see figure 2.1) to create our version, which we consider both a step-by- step process and a way of thinking. As some of the activities at the end of the chapter suggest, the MMP can be used to develop a marketing plan. But the marketing plan must be integrated into an organization’s larger strategic plan, which includes finance, asset management, resource allocation, and personnel management, among other elements. The MMP is the backbone of marketing; it emphasizes interdependencies at all stages.11

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Figure 2.1 The marketing management process in sport.

Adapted, by permission, from B. Mullin, 2000, Characteristics of sports marketing. In Successful sport management, edited by H. Appenzeller and G. Lewis (Durham, NC: Carolina Academic

Press), 123.

Although subsequent chapters examine the MMP steps in greater detail (e.g., research, product development, pricing, and promotion), a brief introduction is important here if only to emphasize that decision making is an ongoing, circular process. The business side of sport really has no off- season (see the sidebar on strategic opportunism later in this chapter). As figure 2.1 suggests, a marketing plan aligns tactical details and operations (such as pricing) with broader organizational strategies (such as setting attendance goals). To use a sport metaphor, tactics are the offensive and defensive plays or sets, used for various situations, that collectively make up a strategic game plan for victory. The game plan provides a broad direction to the coach or quarterback, who picks the specific tactics to be used during the game itself. This chapter introduces that important blend of strategy and tactics. Just as it is on the field, court, and ice, all elements of the plan must be synchronized and fully integrated.

The strategic steps of the MMP and their relation to the remaining book chapters are as follows:

Develop vision, position, and purpose (chapters 3–5, 16) Develop strategic goals and objectives (chapter 5) Develop a marketing mix plan (chapters 6–13) Integrate the marketing plan into the broader organizational strategy

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(chapter 15) Control and evaluate all elements of the marketing plan (chapters 14, 15)

Activity 2.1 The Marketing Planning Process (MPP)

For this WSG activity, assume you were just hired as the new director of marketing for the Tulsa Shock. The Shock is a professional basketball team based in Tulsa, Oklahoma, playing in the Women’s National Basketball Association (WNBA). As of 2012, they had never qualified for the WNBA playoffs in their years in Tulsa. The Shock does not share a city with an NBA counterpart.

Strategic Step 1: Develop Vision, Position, and Purpose

In the following sections, we provide examples of the way that core vision and ideology should inform decisions and position the sport product or service. We also discuss the importance of using a technique known as a SWOT analysis (strengths, weaknesses, opportunities, threats) that involves the use of data-based marketing (DBM) systems and customer relationship management (CRM) systems to provide market intelligence and identify fads and trends (and determine which is which). DBM systems house fan contact data and essential information such as purchase history. CRM systems provide a 360-degree record of all customer interactions with the organization, such as complaints about traffic, fans sitting nearby, and broken seats.

Core Vision and Ideology

When we talk about developing a vision, we mean visualizing the organization. We borrow the concept from sport psychologists, who teach athletes to visualize the process and outcomes of performance. Above all,

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any strategic plan must operate within the framework of the organization’s core vision and ideology, as James C. Collins and Jerry I. Porras argued in Built to Last: Successful Habits of Visionary Companies, one of the most successful management books of the millennium. Collins and Porras examined the performance of a set of companies over the last century. What distinguished the firms that seemed “built to last”? In their words,

The fundamental distinguishing characteristic of the most enduring and successful corporations is that they preserve a cherished core ideology while simultaneously stimulating progress and change in everything that is not part of their core ideology. Put another way,

they distinguish their timeless core values and enduring core purpose (which should never change) from their operating practices and business strategies (which should be changing in response to a

changing world).

With increasing frequency of on-field violence and off-field negative behavior problems by NFL players, the league has had to review its strategic plan, check its core purpose, and ask itself whether extremely negative player behaviors like the New Orleans Saints’ Bountygate, or former San Diego Chargers player Junior Seau’s suicide (attributed to concussion-related injuries that apparently led to permanent brain damage), or Kansas City Chiefs player Jovan Belcher’s murder of his girlfriend and subsequent suicide at the team’s practice facility fit with the NFL’s core vision as an organization whose product appeals to all segments of society, including youth and women. Such questions have been equally troubling for school and college athletics, whose leaders must balance commercial realities with educational core visions. The path has not been easy. Again, the fundamental task lies in the effort to develop, recognize, and sustain a core vision, even as the organization changes.12

In the early 2000s Ohio State University made such an effort under the leadership of then athletics director Andy Geiger. OSU athletics is a mighty big boat to steer; its 36 programs make it one of the nation’s broadest and largest departments (with a budget over $80 million at that time, which has now grown closer to $200 million per annum, it’s not surprising that in January 2013 the school announced a 25 percent increase in premium-seating ticket prices for its perennially sold-out football home games). Its operating waters are filled with shoals and sharks, as the Maurice Clarett, Jim O’Brien, and Jim Tressel episodes in the past decade demonstrate. In early 2005 Andy Geiger announced his retirement

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because, in his own words, “I find that my work is no longer fun.” Some things haven’t changed for Buckeyes AD Gene Smith. In 2012, following major NCAA penalties, the football team was not allowed to play in a bowl game despite an undefeated season. But Smith’s ability to be proactive and get ahead by reporting those transgressions led to a strengthening of his position with the school’s board of trustees under the leadership of Bobby Shottenstein. Despite major problems, Ohio State has been extraordinarily successful both on the field and in the classroom. One reason is the recognition of a core vision and consistent dedication to that ideal, developed during a series of staff meetings based on a shared reading of Built to Last.

OSU’s core vision rests on six elements, which are spelled out on its website and in numerous publications. These elements are considered when hiring a coach or developing a marketing plan:

Education and enrichment of the student-athlete Integrity in all aspects of behavior Innovation in approach and spirit Excellence throughout the organization Respect for the individual A tradition of leadership

As Andy Geiger and his staff knew full well in the early 2000s and as Gene Smith and his staff currently live every day, a core vision can’t prevent mistakes or public relations nightmares, but it can steer a big boat.13

SWOT Analysis

All strategy begins with an understanding of the environment and the organization or the place of the product within it. As executives in tennis, golf, and hockey realized, the organization must know where they are before they can decide where they want to go or how to get there. Knowing where the organization is requires a knowledge of consumers and their behavior (see chapter 3), which in turn requires careful research and the development of a data-based marketing (DBM) system or customer relationship management (CRM) system (see chapter 4) that supplies timely, accurate, and usable data to decision makers. As we will explain, the elements of the DBM and CRM systems range from magazine

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clippings to vast computer databases that describe the customer’s every interaction with the organization.

Step 1 often includes what is called a SWOT analysis, a careful analysis of the strengths and weaknesses of the organization as well as the opportunities and threats in the marketplace or beyond. The SWOT analysis relies on the DBM system and reinforces its importance. Unless marketers understand their industry and their business, they are doomed. Later in this chapter, we consider some megatrends in the sport industry and offer some tips on culling trends from fads.

Ideally, the SWOT analysis involves the full range of key stakeholders and staff constituents in the organization. In the early 2000s two of the authors (Mullin and Sutton) helped the NBA develop an internal consulting group (the Team Marketing and Business Operations Group, or TMBO), which, among other things, helped individual franchises develop SWOT analyses. As the NBA’s TMBO insisted, narrowly crafted, top-down planning, whether farmed out to consultants or not, rarely succeeds because it invariably misses the mark and few workers are willing to buy into the effort. Knowing your organization means paying close attention to what Peter Drucker called the theory of the business, which he defined as assumptions about the environment, the organizational mission, and the core competencies needed to accomplish the mission. Managers must be sure that the theory is realistic and widely understood.14

Studies on Member and Fan Preference Change Put the “O” in Opportunity

Perhaps no segment of sport business has undergone more metamorphological change than the health club business. When the principal author became a consultant in this field in 1977, the big growth business was racquetball clubs. Tennis was becoming too expensive for many people, and the cardiovascular benefits of the more vigorous workout obtained playing the wristy racquetball game drove a customized-facility building boom.

Although new purpose-built racquetball clubs were sprouting up in many suburbs of large cities throughout America, IRSA

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(International Racquet Sports Association), then the leading association in the racket, fitness, and health club industry, noted that many of the racquetball courts were being built at tennis clubs. On the space required for one tennis court, six racquetball courts could be built instead. Instead of 2 or at most 4 players occupying the one tennis court, the club could instead have 12 members using the club at the same time, driving more revenue at the bar, restaurant, and pro shop afterward. Only a few short years later the racquetball craze began to die, and those racquetball courts were quickly transformed into variable-resistance exercise machine centers as the Nautilus craze took off. Shortly afterward, the spaces became aerobic dance studios. But in true renaissance fashion, the health and fitness industry continued to morph and add exciting new features each year to retain their members. In quick order came free weights, personalized trainers, and prescriptive evaluation of strength, flexibility, and endurance. The addition of personal trainers led to diversification into performance enhancement, diet and nutrition supplements, and eventually “juicing” (the legal kind). Juice bars located within the health and fitness facility offered patrons a postworkout way to replenish energy.

The latter-day desire for more effective and efficient workouts has led to highly specialized equipment and the creation of spinning classes, CrossFit training, Pilates, kick boxing, Zumba, Insanity, and a myriad of exercise methodologies. These activities have been incorporated into today’s health clubs, YMCAs, YWCAs, JCCs, and community fitness facilities to such an extent that racquet sports are rarely emphasized.

Such rapid and constant change in consumer taste is, of course, a marketing consultant’s and researcher’s dream because the facility owner cannot exist without having expert advice, constantly talking to customers, and interpreting consumer trends.

The Detroit Pistons provide an excellent example of how the location of an arena can have a massive effect on the composition of attendance. Despite the fact that Detroit has the second highest percentage of African American population among U.S. cities at 82.7 percent, according to the U.S. Census Bureau’s Quick Facts, updated in June 2013, the team draws less than 10 percent of its fan base from the African American community.

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Of course, the dreadful economy in the Michigan city may have something to do with this disparity, but current management is convinced that the location of the Palace of Auburn Hills, in an affluent suburb 25 miles (40 km) north of the city, is by far the larger contributing factor.

Under the leadership of President/CEO Dennis Mannion, the Pistons used SWOT analysis and sophisticated fan and market research programs to identify that mass media advertising to the downtown Detroit African American population is futile, even with the disproportionate interest among African Americans for watching NBA basketball on television. Consequently, the team has adapted their strategy specifically for this segment to drive in-arena attendance sampling. A comprehensive school student award voucher program targeted African American families of good students (those with B plus or better grades, perfect attendance, or good behavior), offering two complimentary tickets for the student and a sibling or friend. The voucher program had no adult purchase requirement for those schools offering free lunches (primarily those of low-income inner-city families). For the city and suburban schools not in free lunch programs, the complimentary tickets were contingent on the purchase of at least one adult ticket.

In this manner, a situational strategy was devised that varied with each target segment. Further, this strategy was communicated directly rather than via the mass media, which was essential in order to protect the integrity of the Pistons broader offerings to the more affluent market area surrounding Auburn Hills. Following are a few additional examples of strategies devised through understanding the organization’s place within its environment and its target segments.

Athletics club manager Marla Chavetz built a strong clientele by knowing her consumers. When member surveys showed that a large number of older members had orthopedic problems and that asthma was far more prevalent than expected, Chavetz responded with clearer guidelines on dealing with knee and shoulder rehabs and working with people who had asthma. Says Chavetz, “The whole point is to identify your clients’ needs and to develop programming to meet those needs.” Burton Snowboards increased market share from 30 to 40 percent in the latter half of the 1990s by carefully culling the opinions of some 300 professional riders, whose opinions on product design often overruled those of Burton’s top designers.

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The Florida Panthers, the NFL, and the USTA have employed the Sports Management Research Institute to conduct in-depth fan research, using both traditional methods (focus groups, surveys) and more innovative ones such as mystery shoppers. As SMRI’s CEO Kathy Davis explained: “We put on a hat and pretend we’re Joe Fan to experience all the elements. We take pictures, test out toilets. Is there a baby-changing amenity? Is the ATM functioning? Are they friendly when you come into the parking lot?” Ohio State University hired the Aspire Group to conduct extensive fan research with the many committees and constituent groups within the university community before rolling out its aggressive price increases for the 2013 football season. The organization believed that the price increases were essential to sustaining a financial structure that would allow the university to offer its 36 sports at the desired level of excellence, which is to compete perennially for conference and national championships.

Sport Megatrends in the New Millennium

Marketing strategy is not an easy game, especially when the environment is rapidly changing, as it has been pretty much since the 1950s. An annual SWOT analysis is essential. This analysis can be conducted internally by any sport management team willing to take time out and think (as recommended by Rich Horwath in his New York Times best-selling book Deep Dive). But this essential, annual internal reflection process must begin with an objective evaluation of strengths and weaknesses. The S and W portion of this exercise is highly dependent on the staff being honest and not fearing reprisals from the boss. Consequently, outside facilitation is frequently critical to success. The O and T portion of this exercise refers to a constant scanning of the environment, a search for trends and clues about the future, and objective analysis of the competition and economy. Of course, recognizing trends (more of a historical analysis) is far different from forecasting the future. Some trends, such as population growth and demographic shifts, have real predictive power. Consumer tastes are a different matter. Take automobile styles, for instance. In the late 1970s spikes in the price of gasoline prompted a trend toward smaller, fuel- efficient cars. No one predicted the surge of demand two decades later for tanklike, gas-guzzling sport utility vehicles. Just ask the executives who banked on the continued demand for minivans! By 2005, however, sales of big SUVs were again pinched by price increases at the gas pump.

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Forecasting is an art, not a science. A rigid faith in forecasts has led many an executive, in the words of American Demographics, to “plan for a future that never arrives, while a different future passes them by.” We have already described two key trends in chapter 1—globalization and consolidation. Here are a few more worth noting.15

Women’s Sports Continue to Crest

In 1970, 1 in 27 girls played on high school teams—less than 4 percent. By 2002, 33.5 percent of girls in high school were playing on sport teams. According to the 2010–11 NFHS (National Federation of State High School Associations) participation study, athletics participation grew for the 22nd straight year and the participation rate for girls was growing at double the rate for boys. Now, 42 percent of all high school sport participation is by girls.16 The reason is simple—Title IX. And the Title IX generation has come of age, causing marketing implications that we will examine throughout the book. To be sure, stumbles have occurred at the big-time level, most notably the failure of the Women's United Soccer Association (WUSA) and Women’s Professional Soccer (WPS). The WUSA began play in 2001 following the success of the U.S. national team in the 1999 World Cup, but the league was out of business by late 2003. The WPS was founded in 2007 but folded a few years later. Analysts blamed the WUSA’s demise on the lack of financial controls, poor media strategy (including the decision to spurn a TV deal with TNT in favor of one with the Pax network), and an overreliance on soccer moms as the target audience. As one consultant said, “For Gen-X moms, the whole ‘soccer moms’ concept is dead.”17 In 2013 the National Women’s Soccer League played its inaugural season, which reinstated top-division women’s soccer in the United States.

The failure of the WUSA is a reminder that a strong participant market does not guarantee the success of a professional league. But this does not diminish the growing importance of girls and women to the sport marketplace. Over the last decade, attendance at NCAA women’s basketball games has tracked sharply upward in all three divisions, while it has been relatively flat or declining on the men’s side. Or, take the case of ice hockey:18

In 1991 USA Hockey had 5,533 registered female players. By 1997

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the number was almost 21,000. By 2012 USA Hockey had a total of 66,692. In Canada, female participation had been growing steadily for several decades, tripling from 2000 to 2005. According to Hockey Canada, overall youth hockey participation in Canada from 2005 through 2011 declined by 15 percent overall and would have been a greater decline had it not been for continuing increases in girls’ participation.19 The NHL has estimated that 45 percent of NHL game attendees are female. A Fox–TMG poll taken after the Nagano Olympics indicated that over 80 percent of the people who watched the U.S. women’s hockey team were either somewhat likely or very likely to watch a women’s hockey game in the near future. Equipment manufacturers have begun to make hockey gear designed for girls and women. For instance, Louisville’s pants for women have wider hips, a narrower waist, and more pelvic protection than the men’s version. CCM’s women’s Tack brand skate is narrower through the heel.

More Action at the Grassroots

Women and girls both forged and reflected important links across sport levels, from the grassroots to the elite professionals. Female athletes often seemed to be throwbacks to an earlier age of unspoiled athletes who played for the love of the game and not for the next deal. Sponsors noticed this characteristic as they sought to spend their dollars more effectively. The most appealing segment of sport were the extreme or action sports— skateboarding, snowboarding, motocross biking, surfing. In the 1980s these sports were considered alternative and minor. By 2001 they had become mainstream and major, and skateboarding had more participants than baseball did. Television had the X-Games and the Gravity Games. Tony Hawk became the new Larry Bird. Experts wondered whether the growth would slow or fizzle, but the NFL was not taking any chances. Partnering with the NFLPA, the league channeled some $130 million into the creation of USA Football, whose prime objective was to boost participation in youth and amateur football.20

Digital Revolution Expands

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In 1999–2000, Internet ticket sales accounted for less than 25 percent of individual game tickets sold in the NBA. By 2012–13 this figure has risen to over 90 percent of individual game tickets sold in advance of the game. People of all ages, especially the young, are seeking basic information instantly provided on their personal device of choice by the Internet.

In June 2004 the Pew Research Center released its Biennial News Consumption Survey based on telephone interviews with a national probability sample. Two-thirds of Americans (66 percent) indicated that they used the Internet for e-mail and for information, a 12 percent increase from 2000. One of the major shifts in the new millennium has been the steady increase in regular online news consumption—from 23 percent of Americans in 2000 to 25 percent in 2002 to 29 percent in 2004 and to a whopping 84 percent of U.S. adults having been online in 2013. The trend crosses categories of age, gender, race, ethnicity, and education and appears to be a key driver of Internet use. Two amazing 2013 statistics reveal the ubiquity of electronic communications in America: An estimated 72 percent of adult Internet users are now using social network sites, and 20 percent of U.S. adults are using Twitter.

The move to Internet news is part of a larger interactive digital trend. Like television and radio decades before, the Internet and the cell phone did not cause people to become less active couch potatoes. The digital age has simply rechanneled their activities. Fans now expect an interactive website that gives them a peek at the sight line they will have when they buy a ticket in a certain section. Drive-time commuters seek a piece of the “juice” by calling their favorite sports talk radio show. At a sport venue, they expect interactive kiosks and more. In 2006 Sprint Nextel and NASCAR were experimenting with fourth-generation cell phones that fans could rent at racetracks. These devices would provide video views from cameras attached to race cars, stream live chatter from the drivers and their pit crews, and deliver stats from a NASCAR database. In the future, fans will play the role of television or radio producer and director. And between live events, weblogs (a.k.a. blogs) and podcasts allow the everyday fan to develop a fan following of his or her own. In short, people are not just consuming the new technology; they are active producers. And the new technology promises new and cheaper avenues to reach these consumers. School, club, and college programs should begin to rethink their heavy reliance on newspaper ads and public service announcements to drive consumer awareness. The emerging markets have been digitized. As BusinessWeek summed up the digital revolution as of 2005, when some

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billion people were online, the Internet has nurtured the “power of us.”21

More Battles Over Ambush Marketing

In 1998 a post–Nagano Olympics survey of 512 consumers revealed that 55 percent incorrectly named Pepsi as an official Olympic sponsor. One reason for the confusion was the practice of ambush marketing, in which a nonsponsor corporation’s ads create the image of sponsorship without using any official logos or symbols reserved for sponsors. At those same Olympics, Wendy’s ran ads with a hockey theme, even though McDonald’s was the official sponsor. Events such as road races or marathons, held on open, public venues, face special difficulties. At the 2005 Boston Marathon, one ambush marketing firm hired “guerrillas” to wear sandwich-board signs promoting a nonsponsor. One of them ran onto the course itself and joined a pack of competitors—all for $50 and an arrest by Boston police. Such antics have given rise to a new class of consultants. Before the 2000 Olympics in Sydney, an Australian sponsorship expert, Kim Skildum-Reid, offered a series of workshops promising “to teach marketers how to mount and protect themselves from ambush marketing campaigns,” although ambush marketing is a problem with no clear solution in sight. A 2010 Turnkey Research survey found that 88.9 percent of responding sport marketing executives agreed that “ambush marketing can confuse consumers into thinking that a nonsponsor is actually a sponsor.” As more sport organizations and athletes push their brands in the marketplace, further confusion among consumers is likely to occur. The sorting of multiple sponsorships is an escalating problem, especially in professional team sport where leagues, players, teams, and venues are all looking to push their brands. Short of costly lawsuits, there seem to be few effective antidotes to clever ambush marketing. Jeff Long, the former Atlantic 10 Athletic Conference’s assistant commissioner for corporate sponsorships, summed up today’s reality: “Frankly, as well as it can be done now . . . I’m always surprised there’s not more.”22 Whether brands are ambushing or just being active in the market place, a recent study by Alan Mitchell of Marketing Magazine of sponsor recall at the 2012 London Olympics revealed that while Olympic sponsors Coca-Cola and McDonalds received recall scores above 25 percent of survey respondents, non-Olympic sponsors Nike and Barclays Bank received erroneous association scores above 10 percent of respondents. Mitchell’s obvious conclusion is that the latter two iconic brands receive a halo effect

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from their other sport sponsorships in the market place, which in this case was the United Kingdom.

Culling the Fads From the Trends

As marketers scan the environment, some trends jump out clearly. The rise of aerobics in the 1980s is a good example. Even the casual observer could see this. Nike, however, was slow to respond to the growing popularity of aerobics and lost that huge market to Reebok (now absorbed by Adidas). But sport history is punctuated by many fads that lit up the skies for a few years and then fizzled.

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Sport marketers must be good at recognizing fads versus trends.

George Barker/Courtesy of Library of Congress

Examples are the roller-skating craze of the 1860s, the bicycle boom of the 1890s, the miniature golf mania of the 1920s, the racquetball boom in the late 1970s and early 1980s, and the roller-hockey craze of the 1990s. So how can the marketer distinguish between a solid trend and a short-term fad? Consultant Martin Letscher suggested a few simple questions that can help:

Does the new development fit with other basic lifestyle trends or changes in the consumer world? How varied, immediate, and important are the benefits associated with the new development? Can the product or service be personalized or modified to meet individual needs? Is it a trend in itself or is it merely the manifestation of a larger trend? Has the new development been adopted by key consumers who drive change? Is the new development supported by changes in unrelated or surprising areas?

Although these questions are useful, no system is foolproof. After all, Letscher predicted a long boom for in-line skating, which has declined in popularity over the last two decades. Still, Letscher’s questions provide an effective framework for analysis. In an industry in which racquetball is hot one year and fly-fishing the next, in which changing tastes in color create wild swings in merchandise from bright pastels to earth tones, to teal and black, to neon colors, the marketer must be careful to distinguish fads from trends.23