Sports Marketing: A Special
Case of Marketing?
Theory & Application
• General theories of marketing should ultimately
possess superior predictive & explanatory
powers of how marketing works.
• Does the application of sports marketing
principles better explain and predict optimal
buyer/seller relationships & exchanges better
than traditional goods/services marketing?
– In other words, if everyone marketed like sports
marketers, would they be more successful?
Team Sports Marketing 2
How is sports marketing different from
traditional goods/services marketing?
By understanding the differences we can understand
the effectiveness of sports marketing principles.
Fans vs. Customers
• Customer: ―One that buys What are some
goods or services.‖ things you have
• Fan: ―An ardent devotee; seen fans do at a
• Fanatic: ―A person
marked or motivated by
customers at a
an extreme, unreasoning grocery store never
enthusiasm, as for a do for a favorite
cause cereal or
Team Sports Marketing 4
Fans vs. Customers
• If a customer is a loyal Folgers coffee customer, we
can predict that s/he will likely continue to buy Folgers
coffee at the grocery store. A loyal Folger’s customer
may, however, switch to similar coffee (Maxwell
House) or buy Folgers at another store if appropriately
• You won’t see many Folger’s customers wearing shirts
with its brand name emblazoned across the chest. Nor
are you aware of many people, who of their own free
will, frequently visit www.folgers.com. If so, they must
be the same people who are visiting www.tide.com,
www.zest.com, and www.crest.com.
• Why? Because most people don’t identify themselves
by what detergent or toothpaste they use.
Team Sports Marketing 5
Fans vs. Customers
• Identify with and follow the behavior of the team and individual
players on that team, on and off the field (via www.espn.com, team
websites, newspapers, television, radio, wireless emails, etc.).
• Purchase licensed merchandise (jerseys, automobile
paraphernalia, caps, mugs, etc.) promoting the team.
• Donate or pay extra for permanent seat-licenses (PSLs) in order to
buy season tickets.
• Travel to see games of that team outside of his local market.
• Support tax-based initiatives to pay for a new arena or stadium for
• Are a supporter of the conference or league in which the team
• Devote significant social time attending, watching and discussing
the team with others devoted to the same or other teams.
Team Sports Marketing 6
Why? Consumer Surplus.
Team Sports Marketing 7
How much would you pay to go to the Super Bowl? Why?
Identification vs. Loyalty
• Loyalty is the repeat How did you feel when
purchasing of a good or
service by a consumer. A loyal your team won or lost
customer is sensitive to
differences in brands and in the play-offs
prefers a brand or set of
brands over others (see Odin, recently?
Odin and Valette-Florence
2001). What exactly did you do
• Identification is when an when your favorite
individual reacts to events that
occur to the team or player as player succeeded or
if the events happened to him
or her (Kagan 1958). failed? Why did you
Team Sports Marketing 8
Loyalty vs. Identification
Team Sports Marketing 9
Advertising & Promotion Costs
• The manufacturer and/or retailer of Can you think of any other
goods and services pay for the
development and placement of brand goods or services that
advertising and promotions. come close—such that
• In contrast, sports teams and
individuals (e.g., players and drivers) customers promote the
receive indirect and direct financial organization the way
support to advertise and promote
themselves. sports fans do?
• Fans indirectly promote the team by Is anyone else marketing as
buying and wearing or displaying
licensed team merchandise. effectively as sports
• Sponsors directly promote the team teams often do?
and pay for advertising and media to
do so. What brands are people
– For instance, ATT pays the Dallas
Stars at least $100,000 to host the
willing to pay extra for just
team website so people can see the
– Radio and TV broadcasts of events are logo?
―brought to you by‖ the sponsors.
Team Sports Marketing 10
Advertising & Promotion Costs
• Much of the actual product,
particularly in terms of
revenue, is in the broadcast
of the games or event.
• The fact that sports are
broadcast, in and of itself,
differentiates sports from
other goods and services.
• Typical goods and services
find it difficult to entertain
using its product as the star
of a broadcast…although
some try. Team Sports Marketing 11
• Goods and services marketers typically pay for media
to broadcast or print advertising and promotional
• The media pays sports teams for the right to broadcast
or print team and event information.
– For example, ABC/ESPN & Time-Warner are paying
$4.48 billion for NASCAR (8 years).
– Relatedly, the distribution for sports is increasingly
electronic and not limited to static locations.
Team Sports Marketing 12
Static vs. Mobile
• Goods and services are sold in • Has anyone ever seen a
specific geographic outlets.
• Although retail locations may open
or close, customers typically visit or event broadcast in
receive service based from specific another country? How is
locations. the product (i.e., the
• Sporting events and teams, on the
other hand, are basically traveling broadcast) similar or
road shows, moving from location different from what is
to location, city to city, nationally seen in the U.S.?
– The NFL, for example, is • Has anyone ever bought
broadcast in 205 countries a Coke or gone to
across 24 time zones for
upwards of 4500 hours of
McDonald’s in different
weekly programming. countries? How is the
product and marketing
Team Sports Marketing 13
Truly Global Products
• From an international marketing perspective, sports such as soccer,
basketball, baseball, tennis, golf and motorsports are global products
that need little translation or alteration to be accepted across cultures.
• Compared to most sports, frequently cited global products such as Coke
and McDonald’s are not actually standardized global products.
– Coke alters its packaging, name and syrup content in foreign
– McDonald’s offers beer in German restaurants and cooks its
hamburgers rare in France.
• The content or product of the NFL, Formula1 Racing, Olympics Downhill
Racing, or World Cup Soccer remains the same throughout the world.
– In a sense, given its electronic broadcasts, this distribution channel is
standardized around the world.
– Obviously, the promotion (e.g., language) and pricing (e.g., costs of
cable or PPV) aspects of the marketing mix are adjusted to regional
Team Sports Marketing 14
Coke in Japan
• Customers typically Can you think of any
pay one price for a goods/services that
given product or
service. require an initial
• Professional sports payment before you
and major college pay a second price for
sports fans frequently the actual use of the
pay a two-part tariff good/service?
Team Sports Marketing 15
• Demand is frequently sufficient • Price-setting in most sports
to require an initial payment settings must consider various
(donation to the university, forms of price bundling.
payment for a seat license,
membership fees) for the right – Season tickets are offered
to pay more money as a at a bundled price for the
means to allocate a limited entire season and are de-
inventory of preferable seats. bundled in the form of
Fans who pay the initial fee smaller ticket packages or
are then given the opportunity individual tickets.
to purchase tickets. – Offering tickets with a hot
• Another aspect of two-part dog and soft drink for a
pricing in sports is the event single price is another
itself. Fans pay for a ticket to example of price bundling
enter the event (initial in that it combines the
payment) and then purchase prices of what would
other products (food, drink, normally be two-part
souvenirs) after entering. pricing.
Team Sports Marketing 16
Why do you think fans
are willing to pay so
much money for food
& drink at a sporting
Why don’t more people
bring coolers (when
allowed) or eat
Team Sports Marketing 17
• Although the subject of much • In contrast, the majority (18/29)
public policy debate, sports of NBA owners’ facilities are
team owners frequently do not largely or entirely paid by
pay for their own stadiums or taxpayers (see
arenas. A new Nissan http://www.marquette.edu/law/
automobile plant may be able sports/sfr/nba22.pdf, 2001).
to acquire favorable tax status • In addition, naming rights by
and property in Mississippi sponsors add additional
($695 million in tax breaks and revenue to the team. Even
incentives over 20 years), but when owners invest private
will still pay for building their dollars into the facility it is not
own facilities ($930 million in necessarily because public
Canton, MS). monies are unavailable, but is
often due to revenue control
issues that will favor the team
owners if they own the facility.
Team Sports Marketing 18
Consider Reliant Stadium in Houston,
• As first planned, stadium officials had
$367 million with which to work - $317
million from bond issues, to be paid off
with hotel and rental car tax revenue, and
$50 million from the sale of permanent
license seats by the Texans.
• Officials now concede they knew all
along that wouldn't cover the costs for
the stadium they wanted. They added a
parking tax of $1 per vehicle and a ticket
tax capped at $2 a ticket.
• Fans are helping pay off $82 million
worth of extras that have increased the
cost of the Reliant Stadium complex to
• Among the items added to the original
stadium proposal are extra restrooms,
larger concession areas, 4,000 more
parking spaces and landscaping.
Team Sports Marketing 19
Why are communities willing to pay whatever
it takes to attract pro sports?
From a broader sociological perspective, How do people in your city or state
sports teams provide a city (or state) a represent themselves to others by the
social identity that can represent who success of their sports teams?
they are to others.
•The successful state university
sports team allows constituents to
represent themselves to others as
•The tough blue-collar character
of the Steelers over the years
symbolizes who Pittsburgh fans
are to the rest of the country.
•The black uniforms, skull-and-
crossbones, and intimidating
players for the Oakland Raiders,
for better or worse, mostly identify
•The Hogs at Redskins games20
Team Sports Marketing
represent…ok, we don’t know
Cooperation & Monopoly Power
• Branded goods and services have traditionally not
cooperated in their marketing efforts.
– At the wholesale level and in some highly competitive retail
markets, goods and services may engage in co-branding or
cooperative strategic alliances.
– As a rule, however, goods and services marketers do not
cooperate in cross-promotions and work in-league with each
other on a permanent basis.
• Professional sports leagues have unique anti-trust
exemption & monopoly powers
– limiting production (expansion and contraction of its members)
– providing revenue sharing (national TV contracts, etc.), and
– Allowing profit maximization
Team Sports Marketing 21
Economic vs. Social
• Customers pay an economic price for • In sports, attendance is nearly always
the goods or services they purchase… (98-99% of the time) with at least one
while fans make a social investment in other person.
the transaction. – The sports fan pays a price for the right to
enjoy an emotional experience with others.
• Customers typically give up monetary – The fan goes to the game to be with others to
value in exchange (what one gives up share the experience in this social
for what one gets) for the good or exchange.
service, although time and search
effort may also be expended.
– In most cases only limited social exchange
occurs. 1. What is the difference between a
– Consumers may join together to go out to a good crowd at the mall and at the
restaurant for primarily social reasons.
However, the exchange with the restaurant is game?
still premised upon the purchase of the meal. • How does it make people feel?
– Individual and groups of customers may at the
same time purchase a meal in the same • Will they approach or avoid the
venue where social exchange accounts for
little or no part of the encounter. This rarely place?
happens in sports settings. 2. If it is not very crowded at the mall
– Crowds are generally a bad thing, with
negative psychological effects. or the game, how will people
Team Sports Marketing 22
Goods & Services Sports
• The size and power of the How can star players command
manufacturer or retailer of such high salaries? Why are
goods and services affords the teams & sponsors willing to
owner contractual leverage
over its employees. pay? How can they be worth
• Salaries, benefits and tenure what they earn?
are largely controlled by the 1. Tiger Woods: $81m
owners. 2. Michael Schumacher: $80m
• Employees have mobility, but 3. Peyton Manning: $42m
are rarely able to single-
handedly affect the outcome of 4. Michael Jordan: $35m
the firm by making contractual 5. Shaquille O’Neal: $32m
demands. (2004 Salaries & Earnings, Forbes)
Team Sports Marketing 23
Goods & Services
• The size and power of the manufacturer or retailer of goods and services
affords the owner contractual leverage over its employees.
• Salaries, benefits and tenure are largely controlled by the owners.
• Employees have mobility, but are rarely able to single-handedly affect the
outcome of the firm by making contractual demands.
• Employees (viz., players) of sports teams are more likely to possess
contractual power over employers.
• Contract concessions, renegotiations and arbitrations generally favor
• The scarcity of superstar talent has shifted the power to players over
• Union membership has declined in manufacturing over the past four
decades. At the same time, union membership in professional sports
leagues have grown relatively strong due to the leverage held by the players.
Consequently, work stoppages in major sports leagues have become nearly
commonplace in the past decade.
Team Sports Marketing 24
is marketing a special case of sports
Dimension Goods/Service Sports
1 Purchasers Customers Fans
2 Adoption Loyalty Identification
3 Promotion & Media Owner pays Fans, sponsors, & media pay
4 Distribution Channel Static; More site-limited Mobile; more flexible
5 Product Adapted Global
6 Pricing Single price for a given form of Two-part: Fan pays for right to
product/service buy tickets
7 Facilities Owner buys/builds own facilities Government (taxpayers) pay
8 Competition Individual branding in Cooperative contractual
competitive markets relationshipsMonopoly power
& anti-trust exemption
9 Exchange Principally economic Principally social
10 Employees Contractual power favors
Team Sports Marketing Contractual power favors
Goods/Services that approach the level of
effectiveness exemplified in sports marketing:
– Harley Davidson
– Borat, Austin
Team Sports Marketing 27
Definition of Sports
Sports marketing is building a highly
identified fan base such that fans,
sponsors, media and government pay to
promote and support the organization for
the benefits of social exchange and
personal, group and community identity
within a cooperative competitive
Team Sports Marketing 28
One of the advantages of being disorderly is that one is
constantly making exciting discoveries.