Transcript The Origins of Sports and Entertainment Marketing Lesson 2

The Origins of Sports and
Entertainment Marketing
What is SEM?
• Earliest forms of Sports Marketing
started around 1858….first known
sporting event to charge admission
– The emergence of TV/Radio/Internet
– Corporations see a benefit to working with
sports/entertainment
organizations…results in a sponsorship
boom
– Celebrity endorsements and naming rights
deals become common industry practice
Size and Scope of the Sports
Industry
• The sports industry is one of the largest
and fastest growing industries in the US
• Today's global sports industry is worth
between $480-$620 billion, according to a
recent A.T. Kearney study of sports teams,
leagues and federations. This includes
infrastructure construction, sporting
goods, licensed products and live sports
events.
Properties. The properties managed by rights owners are the intangible
assets that draw fans and money. They include a wide range of parties,
including leagues (such as the Premier League), pro tours (golf's PGA Tour),
teams (the New York Yankees) and athletes (Roger Federer, Lionel Messi).
Rights management. Historically, monetization of properties was based
on gate "take" (revenues) but now professional sports depend on media and
marketing rights for more sources of revenues. Rights owners, or sports
agencies acting on their behalf, not only structure the deals but also trade
media and marketing rights.
Events. Effective rights
management depends first on
operating live events. An enjoyable
experience for fans can create
additional opportunities for
revenue.
Content. The stadiums can only
seat a certain number of fans, but
packaging content for
broadcasters' and sponsors' needs
is a vital part of creating revenue
in modern sports.
The four Pillars of the Sports Value
Chain
• Structured around these four pillars, the sports value
chain becomes a virtuous circle. Shaping a property
can help increase its value through tailored rights
management and content packaging can make it more
attractive. For example, when cricket organizers
created "Twenty20" cricket in 2003, shortening the
typical game from several days to a few hours, they
shaped a format better suited to live broadcasting.
• This sports value chain applies similarly to the
entertainment industry—including book publishing,
music production and other live-event-based
markets (see sidebar: The Wide World of Sports).
$$$
• United States. U.S.-based sports—
American-style football (NFL), baseball
(MLB), basketball (NBA) and hockey
(NHL)—are the biggest, bringing in more
than ($23 billion) yearly in gate, media
and sponsorship revenues.
Money Breakdown
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$27.4 Billion spent on Advertising
$26.2 Billion spent on Spectator Spending
$25.6 Billion spent sporting goods
$15.3 Billion spent on professional services
o Marketing, agency, event management
• 10.5 Billion spent on licensed goods
• $7.0 Billion spent on broadcast rights
• $897 Million spent on athletic
endorsements
• $239 Million spent on Internet
Factors Contributing to Growth
• Increase in numbers of those participating in
sports and entertainment
• Increase in those following sports and
entertainment
• Increase in offerings
• Attendance increases
• Media Coverage
• International Marketplace
• Continued Growth
Important milestones
• 1869 – Cincinnati Red Stockings become the first sports team in
history to have each member of the team on salary
• 1923 – First known individual player endorsement deal between
golfer Gene Sarazen and Wilson Sporting goods ($600 per year)
• 1928 – Coke teams up with the Olympics as an “official sponsor” of
the athletic event
• 1949 – First female endorsement also with Wilson Sporting goods
• 1951 – Eccentric owner of the Chicago White Soxs, Bill Veeck, sends
3’7” Eddie Gaedel to the plate in an official game as a publicity stunt
• 1979 – an all sports tv network debuted….ESPN
• 1980 – Syracuse University first college to have naming rights to a
facilty
• 2006 – An estimated 1.2 billion tune in to view the World Cup,
estimated 17% of the world population
Industry Pioneers
• Choose Five Industry Pioneers from the
following list, or think of a few on your own.
– Two must be from the entertainment industry
• Provide a brief biography of the person(s)
– 1 paragraph of at least5 sentences
• Describe how this person influenced the sport
and entertainment industry
– 2nd paragraph of 3-5 sentences
• Insert a photo of the person
Industry Pioneers
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Pierre de Coubertin
Bill Veeck
Mark McCormack
Mildred Didrikson Zaharias
Roone Arledge
Jackie Robinson
Mohammed Ali
William H.G. France Sr.
Pete Rozelle
Michael Jordan
David Stern
Jon Spoelstra
Phil Knight
JK Rowling
Ted Turner
Sean “Puffy” Combs
Shawn Fanning and Sean Parker
Hulu.com
YouTube
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P.T. Barnum
Walt Disney
Adolph Zuker
Charlie Chaplin
Louis Armstrong
Lucille Ball
Jerry Siegal and Joe Schuster
Rodgers and Hammerstein
The Beatles
Elvis Presley
William Hanna and Joseph Barbera
Steven Spielberg
Steve Jobs
Vince McMahon
Michael Jackson
Theodor Seuss Geisel
Hiroshi Yamauchi
Steve Allen, Ed Sullivan, Johnny Carson
Mort Sahl
Jim Henson
It should look like this!
• PT Barnum –
• This is where I would do research on my person
and write a short paragraph. I would make sure
that it is written in my own words and that I listed
the website I got my information.
• This is where I would write how my person
influenced the sport and entertainment industry.
It would be at least 3-5 sentences long and be in
my own words.