Sports Marketing:

A Take on the History and the Future

 

Colby Weikel

INTS 92

April 28, 1998

Professors Andrews, Didow, and Peacock

 

Brief History and Trends in Sports Marketing

Sports marketing is a relatively new field and dimension within the broad concept of marketing. It is constantly evolving and changing today as society battles the free market to decide the legal and ethical boundaries of business today. It is import ant to note that this discipline within marketing is not clearly defined. Sports today utilize corporate sponsorships and television money in order to compete and pay for top quality athletes. Those companies use teams, leagues, colleges, and individual s to differentiate their products in a very competitive business environment. What constitutes sports marketing to one person could be considered "selling out" to some critics. The business world keeps pushing to find a competitive advantage an d the sports world has generally welcomed the money offered. Every level of sports from peewee leagues to the pros has been affected by the sports marketing trend. It will be difficult to point out where it all began or where we are today in the develop mental cycle, but that is still easier than figuring out what will happen to this emerging discipline.

Sports Marketing Texts

To date there are few if any real sports marketing texts published. Most attempts at this type of text use sports as an example of how to market using the four P’s (Product, Place, Price, and Promotion). Mullin, Hardy, and Sutton’s Sports Marketing and Pitts and Stotlar’s Fundamental of Sports Marketing are the only examples of college sports marketing texts and both have similar faults. They examine how to use sports to do basic marketing, but lack the important history and cr eativity that are crucial to understanding today’s field. In addition these texts seem to miss the question: why sports marketing? How to market sports is an important but simple question with relatively clear answers. Why is a more difficult di lemma, and the answers are constantly changing. There are so many reasons to use this means for marketing that I can not begin to find them all, but a future sports marketing text should be able to cite motivations behind actions more than methods for em ploying those actions.

My Own Take On History

I have included a timeline of what I feel are important events in the forming of sports marketing as a more recognizable marketing strategy. These are events evident to me in my studies, yet you may know of omissions or debate the importance o f others. Until more academic books on this field have been written, there will continue to be a wide range of opinions on the subject so I make the disclaimer that this is merely an interpretation and not something to be considered definitive.

As early as the 1870s, tobacco companies made cards of baseball players and inserted them with packs of cigarettes in order to try and boost sales or develop brand loyalties. The tobacco industry has had a huge impact on this country’s past in several arenas and sports marketing is no exception. These cards were probably the first promotion of sport for another industry’s benefit. This baseball card concept evolved into the more widely known bubble gum cards made for the first three-fourths of this century. Interestingly that promotion evolved into an industry of its own, sports cards, that no longer even have gum.

Jesse Owens received free shoes in the 1936 Berlin Olympics from Adidas, which was one of the first known examples of an amateur athlete used for a public relations or advertising means. His four gold medals won in Nazi Germany were important social i ncidents. At that point in time he was stripped of his medals for playing minor league baseball, not for taking free shoes. People paid little attention to a gold medallist’s shoes in those days when amateur really meant amateur. The exposure of athlet es would become much greater in the decades to come, increasing the amount of sports marketing opportunities.

In 1957 when Jackie Robinson first integrated baseball, sports became a symbol of changing social times in the United States. While Robinson was still segregated in hotels, restaurants, and even some clubhouses, his breakthrough set an important prece dent that would be followed by other sports later. By including blacks in sports the market for sports in general grew. Culture started to become less segregated, and a sports marketer could reach both blacks and whites by sponsoring or advertising in i ntegrated sporting events. The importance of this event in helping the Civil Rights Movement is clear, but it also proved the social power of sports and demonstrated the impact that could be made using sports as a medium of communication. Robinson’s leg acy proved important to sports and to sports marketing in the years to follow.

About the same time, television became the means by which sports personalities evolved. The radio had done that to some extent, but the visual aspect was a huge event for sports marketing. Now with radio and television advertising, marketers could tu ne their messages to more specific, but large audiences. People could see their sports hero’s and soon would want to emulate not only their great athletic feats, but their styles of clothing and equipment as well. When Muhammad Ali fought, people recogn ized he wore Adidas shoes, and the Everlast or Champion Belt boxers worn were prominent then. The Converse Chuck Taylor and Adidas gazelle shoes were noticed as well. In the decade for Birkenstocks, these shoes with laces became important sporting items the consumer had to have. A future shoe giant, Nike, was born in 1964 selling Tiger shoes that would change the sporting apparel industry in the years to come (Strasser & Becklund). Sports were driving consumer preferences in a way that they had ne ver before.

When the tobacco industry was forced off the TV airways that freed up a huge advertising budget. Promotions like the Winston Cup of NASCAR and the Virginia Slims Tennis Circuit were soon to follow. The fit was great for the sports and the tobacco ind ustry, providing the first hugely successful sports marketing achievement. Companies like Philip Morris now could avert the law that kept them from buying television commercials by getting airtime during sporting events. The industry established themsel ves in growing sports whose fan base would grow considerably in the coming years and appreciate the tobacco industry’s sponsorships.

The 1970s included several important evolutionary events in sports marketing. Sponsorships of products by athletes emerged as a trend. Joe Namath became a sex symbol and used that image to sell pantyhose, of all things. By the end of the decade the Pittsburgh Steelers defensive tackle "Mean" Joe Green starred in one of the most acclaimed advertisements ever for Coke.

The shoe wars began as Adidas, Puma, Nike, and others fought to snatch up athletes for endorsements (Strasser & Becklund). Players began to market themselves and used their personality as well as performances to land more money through sponsorship deals. Title IX went on the books with the real ramifications to be seen a couple decades later. Women were now entitled to the same rights and opportunities as males in college athletics. The woman athlete would evolve into a powerful market in a few short years. ESPN was founded providing the first all sports network, and would continue to grow as sports moved to the forefront of society. The first corporate sponsored stadium was named in Buffalo for Rich Foods, Inc. at $1.5 million over 25 years, an important milestone then and a bargain now.

Dynasties began and ended as well. The UCLA dynasty of college basketball came to an end, but the slam-dunk became legal. The Boston Celtics kept building to their legacy even after the NBA-ABA merger. The Pittsburgh Steelers won four SuperBowls. T he teams of each league developed personalities and people began to feel stronger connections. Television began bringing teams from across the country into the spotlight. The exposure of sports continually grew, as did their popularity. Individual spor ts like tennis and jogging took off (Strasser & Becklund). The health craze swept the nation, increasing the sporting goods and athletic shoe industries. By the end of the 70s sports were becoming a marketing tool and industry on a national scale.

The following decade of the 1980s is commonly referred to as the "me" decade, and that could be applied to sports marketing as well. Sporting goods became tailored to specific sports more than ever, and specific individuals captured the eyes and heart s of the nation. Michael Jordan, Larry Bird, Magic Johnson, Bo Jackson, and Joe Montana all rose to immense fame (most recognized by only their first name). The Olympics in L.A. brought lesser-known athletes into the spotlight and increased sports popul arity in the nation. Sponsor dollars were abundant and even mediocre athletes began signing contracts with companies to endorse or wear their product.

Free agency began first in Major League Baseball and the money started rolling in for athletes as the other pro leagues followed shortly thereafter. Salaries skyrocketed and leagues began to have to deal with competition issues related to team finance s. Every off-season, athletes would sign for a million per year more than the previous year citing a lesser player making more than they were. The NBA instituted a salary cap in its collective bargaining agreement with the players, providing the first ev er check on player salaries. Football and hockey would do the same while baseball instituted revenue sharing that still presents problems for small market teams. The money from television contracts became important to a team’s bottom line and ability to pay top players. Free agency ushered in a swap of team loyalty for money, and the fans still kept coming through the turnstiles and listening to their athlete heroes for what brands to buy.

In 1985 Pete Rose gathered the most career hits of anyone ever in baseball, but just a few years later was suspended for life after gambling on baseball. College sports were now being invaded by the agents and shoe contracts with coaches were the norm not the exception. Drugs began to be detected and screened for, partly as a result from the Len Bias tragedy that rocked college basketball and sports in general. Proposition 48 made it harder for high school athletes to play as freshmen in college due to higher SAT and GPA requirements. Several athletes like Dwight Gooden, Darryl Strawberry, Jose Canseco, Chris Washburn, Pete Rose, Len Bias, and Mike Tyson crumbled under all the attention of sports media having little direction and lots of money. Spo rts had to regain a better control of themselves and the players with salary caps, drug tests, and higher college academic requirements. The free rolling decade that brought huge growth had left plenty of problems for the future as well. Despite or beca use of the greed, sports grew in popularity and became a more desirable marketing tool than ever before. Individual athletes became even greater than their own on-the-field personality; the personas were larger than life (at least until they failed).

The 1990s for the most part have only continued the growth trend for most sports marketing and sports. As leagues became popular, they expanded to take advantage of untapped markets. Players saw the dollar signs and made a beeline for the endorsement s and the bank. Kids out of high school like Kobe Bryant and Tracy McGrady soon were becoming millionaires overnight with deals to play and endorse Adidas (even mediocre prospects like Jermaine O’Neal are in on the act). College players like Shareef Abd ur-Rahim, Tim Thomas, and Stephon Marbury started treating college as a minor league more than an education staying for only one season (as little as one semester). Basketball stars now become rappers like Shaquille O’Neal and movie stars like Milwaukee’s Ray Allen.

Television money has become the driving force behind almost every college and pro league. College football and basketball are ruled by TV dollars (Feinstein). Why else would ACC basketball games start at 9PM on school nights? Or Thursday night Footb all games? Why would Bowl games start by 11AM? The football season keeps getting longer to stretch out TV revenues over more weeks. Pre-season tournaments are basketball’s equivalent to longer football seasons.

Most pro teams have at least half of their income from TV deals the league negotiates. It is impossible to determine the figures in most cases because teams are usually privately held or part of a larger organization that doesn’t have balance sheets s pecific to the team made public. Baseball still struggles with teams like Atlanta, New York, Los Angeles, and Chicago benefiting from TV contracts that teams like Montreal, Pittsburgh, and Milwaukee can not reach. The strike in 1993 killed baseball’s po pularity and it still has not recovered. Fans generally want to be loyal, but they have enough choices for entertainment that baseball will have a hard time recovering, until another sport falters. The stadiums have become advertisements for a myriad of industries. No longer is it affordable to name a stadium after a great person, player, or coach unless they pay a lot to do so. The search for luxury boxes and brand new stadiums sends the teams and players to move around constantly in search of the mo st profit potential. The number of teams owned by families is rapidly decreasing. Corporations are snatching up teams trying to find synergy to help their core business more than the sport itself.

Dangers of the Field

Now the dangers of sports marketing are becoming more apparent as the business world dives into this domain sometimes without much research. The Fuzzy Zoellers, Latrell Spreewells, O.J. Simpsons, Art Modells, and Nike university contracts all point out important lessons to those in sports marketing. If you are associated with racist remarks, violence toward superiors, domestic violence, turning your back on a community, or unfair labor practices you stand to lose a lot more than you might gai n by sports marketing. It is important to research and understand individual sponsors, as well as have an out or behavior clause in contracts. No publicity is not only cheaper, but better than bad publicity.

No marketing plan is fool proof and celebrities are famous for reasons generally other than their perfection in hawking product. Some people even resent sports taking corporate money, even thought the athletes rarely mind. Money has given sports grea t things in the past 25 years and sports have paid huge dividends for companies who have invested wisely in sports marketing. For every Winston Cup or Air Jordan, there are at least as many ineffective sports marketing campaigns, and even some disasters such as O.J. Simpson.

The threshold for message clutter, consumer ambivalence, or worse yet contempt, could be fast approaching. Some sports have teams that are more overt in their corporate relationships than others. Watching 10 minutes of Washington Capitals hockey from the MCI center on HTS this January showed at least 24 different sponsors on the players, rink, stadium, etc. Then there are the commercial breaks. A highlight reel of a Georgia Tech basketball game that same night showed 6 obvious sponsors in only 60 se conds. Cameron Indoor Stadium, home of the infamous Blue Devils seems to be sponsor free, but if you look at their scoreboard there are several sponsors there. Of course a Notre Dame basketball game had only 5 corporate logos obvious in an entire half ( and most of them were put there temporarily by ESPN), but they have their own TV deal with NBC for football that may be all the cash they need. UNC has no obvious signage in Kenan Stadium or the Dean Dome, yet Eurosport and Adidas signs are common and ob vious at soccer matches. At UNC football games you can get Beefmaster hotdogs, Subway subs, Wendy’s Frostees, Cokes, Dominos Pizza, even if there are no big signs telling you their availability. Nike only gets to have the focus of every spectator on the ir products, and a few pages in the program (low key by some standards, but still very noticeable).

In the professional realm the NBA’s Indiana Pacers play at Market Square Arena and only about 5 sponsors could be seen even occasionally on the screen. On the other hand a NASCAR race would not be very easy to count the sponsors for two reasons: there are so many and the cars move so fast. Another interesting example is The Masters. They have just three sponsors and CBS can only run advertising from Cadillac, Traveler’s Group Insurance, and IBM. Dean Smith’s campaign to eliminate beer advertising f or Carolina Basketball games seems very possible when comparing the University’s bargaining power to the Masters.

Baseball teams in the Minors have outfields full of advertising. Now the Major leagues are catching up with Gap signs in the gaps of the outfield, in addition to the huge Budweiser signs seen all over the league. Look around Shea Stadium, home of the Mets, and you’ll see all sorts of signs. Disney’s California Angels advertise prominently all the corporations many interests like ABC, ESPN, and of course Mickey. The Dallas Cowboys are possibly the most interesting case; they have shunned the NFL’s c ontracts with Reebok and Coke. The owner Jerry Jones signed with Nike and Pepsi and since he owns the stadium, not the league, he can get around those league-wide contracts. Clutter is a risk when using teams like the Cowboys to market your products, bu t consumer sentiment towards this type of sponsorship could change as people become fed up with commercialization. It is important to be aware of the risk and in touch with the consumer when attempting to market through sports.

Today and the Future

The examples of pro teams with less than overexposed teams are likely to decrease. As for college athletics, that trend should not be the same. While it is financially responsible to take sponsors, it does not seem as positive in amateur athl etics as a rule. Colleges have alumni and interests other than merely winning at all costs. Colleges will not be where sports marketing trends will usually develop; they are more at the will of the public opinion towards sponsors, unlikely to take as ma ny risks as the pro organizations.

Sports Marketing has made its way into the budgets of many companies around the world. The stakes keep rising to get into this game and the returns may be diminishing. The importance of sport and how the consumer perceives its relationship with busin ess is very important. Sports and athletes are incredibly dependent on TV and endorsements today. Those sources of capital will pull back if the consumer becomes disillusioned with sports and ratings drop. The most recent NFL TV contracts were for more money than it would cost to buy every team in the league. Players salaries will hit limits at some point (probably when TV deals decline), and players will seek even more outside sources of income.

Sports marketing cannot grow at the pace it has forever, but it still has room to expand. The sports marketing trend’s success or failure will hinge on sports’ role in society in the coming years. Many issues arise everyday between fair play and big

money. Its important for a company to stay clear of the troubles sports can be a victim to, while it is important for sports to keep their integrity to stay popular with the people. It is important for sports marketers to increasingly police themselv es in order not to ruin an effective marketing tool and sport in general.

Sources Utilized

Cashman, Richard and Michael McKernan. 1981. Sport. Australia: New South Wales University Press Limited.

Feinstein, John. 1998. A March to Madness: The View From the Floor in the Atlantic Coast Conference. Boston: Little, Brown and Company.

Gorman, Jerry and Kirk Calhoun. 1994. The Name of the Game: The Business of Sports. New York: John Wiley & Sons.

Jones, Michael E. 1980. Current Issues in Professional Sports. New Hampshire: Whittemore School of Business and Economics.

Kamphorst, Teus J. and Kenneth Roberts. 1989. Trends in Sports. Netherlands: Giordano Bruno Culemborg.

Mullin, Bernard J., Stephen Hardy, and William A. Sutton. 1993. Sport Marketing. Champaign, Illinois: Human Kinetics Publishers.

Olson, John, Otto Breitenback, Elroy Hirsch, and Kit Saunders. 1987. Administration of High School and Collegiate Athletic Programs. Philadelphia: Saunders College Publishing.

Pitts, Brenda G. and David K. Stotlar. 1996. Fundamentals of Sport Marketing. West Virginia: Fitness Information Technology.

Pope, S. W. 1997. The New American Sport History. Chicago: University of Illinois Press.

Rosentraub, Mark S. 1997. Major League Losers: The Real Cost of Sports and Who’s Paying For It. New York, Basic Books.

Schaaf, Paul. 1995. Sports Marketing: Its Not Just a Game Anymore. Amherst, NY: Prometheus.

Schlossberg, Howard. 1996. Sports Marketing. Cambridge, Massachusetts: Blackwell Publishers, Inc.

Strasser, J.B. and Laurie Becklund. 1991. Swoosh - the Unauthorized Story of Nike and the Men Who Played There. New York: HarperCollins Publishers, Inc.

Ukman, Jon. 1984. The Official 1984 – 1985 International Directory of Special Event & Festivals. Chicago.

Whannel, Garry. 1992. Fields in Vision. New York: Routledge.

 

Various Other Sources Including

www.auburn.edu/~raymoje/mn530ppt.htm

www.bizsports.com

www.ice.kpmg.com/articles/sports/naming.html

www.nascar.com

www.nba.com

www.nfl.com

www.mlb.com

www.pga.com

BUSI 197 Sports Marketing Class

A lifetime of following sports and the people who play them.

 

Copyright, 1998
Colby Weikel, INTS 092
UNC - Chapel Hill