A level Physical A level Physical EducationEducation

Unit 3 Unit 3

Social and Cultural factors Social and Cultural factors

Commercialisation Commercialisation of elite sportof elite sport

CommercialisationCommercialisationThe treating of sport as a commodity, involving the The treating of sport as a commodity, involving the buying and selling of assets, with the market as the buying and selling of assets, with the market as the

driving force behind sport driving force behind sport

LESSON AIMLESSON AIMTo introduce the nature of commercial sportTo introduce the nature of commercial sport

LESSON OBJECTIVES LESSON OBJECTIVES To understand the relationship between finance To understand the relationship between finance and sportand sport

To know the different types of investment in sportTo know the different types of investment in sport

To know the advantages and disadvantages of To know the advantages and disadvantages of investment in sportinvestment in sport

Understand the ways in which elite sport has Understand the ways in which elite sport has become commercialised become commercialised

Describe how elite sport relies on sponsorshipDescribe how elite sport relies on sponsorship

Class taskClass task

Write down as much as you can about a Write down as much as you can about a famous sports personality famous sports personality

Include sporting details as well as anything Include sporting details as well as anything else outside of their sport else outside of their sport

TelevisionTelevision

Best medium for images, as they occur Best medium for images, as they occur Development of Sky Sports – domination Development of Sky Sports – domination

of sport (Led to government ring fencing) of sport (Led to government ring fencing) Pay-per-view issuesPay-per-view issues

Emergence of commercialism Emergence of commercialism

Occurred in 19thC when spectator sport Occurred in 19thC when spectator sport emerged emerged

Increased free time and disposable Increased free time and disposable income - coupled with a need for income - coupled with a need for excitement and entertainment excitement and entertainment

Exploited by those who saw ‘entertainment Exploited by those who saw ‘entertainment value’ of regular sporting events value’ of regular sporting events

Commercialisation became an integral Commercialisation became an integral part of sportpart of sport

Growth of commercialism Growth of commercialism

Perhaps the most significant development Perhaps the most significant development was the transition from playing to viewingwas the transition from playing to viewing

This led to widespread commercialisation This led to widespread commercialisation of sport and profits to be madeof sport and profits to be made

Sports began to turn their attention to Sports began to turn their attention to becoming more ‘spectator friendly’becoming more ‘spectator friendly’

Professional sport, the media, advertising Professional sport, the media, advertising and sponsorship formed mutually and sponsorship formed mutually beneficial relationships beneficial relationships

Commercialisation of sportCommercialisation of sport Sport is a fairly cheap form of entertainment - Sport is a fairly cheap form of entertainment -

production costs are lowproduction costs are low Plenty of excitementPlenty of excitement Developments in technology have enhanced the Developments in technology have enhanced the

viewers experience viewers experience Sport can make a lot of money from television Sport can make a lot of money from television

(Premier League worth £1bn a year in (Premier League worth £1bn a year in broadcasting rights) broadcasting rights)

Offers business investment opportunitiesOffers business investment opportunities Advertising, sponsorship, merchandising and Advertising, sponsorship, merchandising and

endorsements are made availableendorsements are made available

How commercialisation has How commercialisation has affected sportaffected sport

Commercialised sport driven by profit for Commercialised sport driven by profit for stakeholders demanding quick return = stakeholders demanding quick return = obligation to winobligation to win

Performers become the commodity Performers become the commodity Sport now a lot more professionally Sport now a lot more professionally

managed managed Sport needs to be attractive to the media Sport needs to be attractive to the media

= attraction of sponsors . . = attraction of sponsors . .

Recent considerations Recent considerations

Global marketingGlobal marketing Huge TV rights Huge TV rights Clothing and Clothing and

equipmentequipment Exclusive rights e.g. Exclusive rights e.g.

at the Olympics at the Olympics Money in soccerMoney in soccer Rich club gapRich club gap

Aggressive marketing Aggressive marketing by Gov.B by Gov.B e.g. NBA NFLe.g. NBA NFL

Betting industry Betting industry New technology New technology Millionaire ownersMillionaire owners Conglomerates Conglomerates (BSkyB (BSkyB

and ManU 98)and ManU 98)

THE RELATIONSHIP BETWEEN THE RELATIONSHIP BETWEEN FINANCE AND SPORTFINANCE AND SPORT

Sponsors image can be enhanced by Sponsors image can be enhanced by association with sportassociation with sport

Sport provides a vast market/audience for Sport provides a vast market/audience for productsproducts

The audience is greatly increased if TV is The audience is greatly increased if TV is involvedinvolved

Without TV the attraction of sports sponsorship Without TV the attraction of sports sponsorship is devalued is devalued

Sponsors look for likelihood of interest, publicity, Sponsors look for likelihood of interest, publicity, attendance and TV audience of the sport/eventattendance and TV audience of the sport/event

DIFFERENT FORMS OF INVESTMENT TO DIFFERENT FORMS OF INVESTMENT TO

SUPPORT THE PERFORMERSUPPORT THE PERFORMER

SPONSORSHIP SPONSORSHIP

ENDORSEMENTENDORSEMENT

ADVERTISEMENTADVERTISEMENT

Obtaining sponsorship task Obtaining sponsorship task

SPONSORSHIPSPONSORSHIPFinancial input into sport by business or an Financial input into sport by business or an individual usually in return for advertising individual usually in return for advertising facilitiesfacilities

ENDORSEMENTENDORSEMENTGive approval or support to a product Give approval or support to a product or company in return for paymentor company in return for payment

ADVERTISEMENTADVERTISEMENTTo promote or make known to the public To promote or make known to the public offering goods or services for saleoffering goods or services for sale

Class task Class task

What would you associate with the What would you associate with the following brands: following brands:

Class taskClass task

Advantages and disadvantages of Advantages and disadvantages of sponsorship sponsorship

Advantages of sponsorship and Advantages of sponsorship and endorsements endorsements

A source of income for players or organisation – sport is expensive!A source of income for players or organisation – sport is expensive! Sport is promotedSport is promoted Helps create atmosphereHelps create atmosphere Sports are organised betterSports are organised better Improved facilities Improved facilities Helps raise standards of performance for amateurs Helps raise standards of performance for amateurs Helps operate coaching and training schemes for amateur sports Helps operate coaching and training schemes for amateur sports Sponsor gains publicity by being linked with popular, wholesome Sponsor gains publicity by being linked with popular, wholesome

sporting activities – associated with supporting the community sporting activities – associated with supporting the community Free products for the performerFree products for the performer New products can be introducedNew products can be introduced Association of star/product performanceAssociation of star/product performance Reduces tax paid by the companyReduces tax paid by the company Link to healthy image of sport Link to healthy image of sport Corporate hospitality Corporate hospitality

Disadvantages of sponsorship and Disadvantages of sponsorship and endorsementsendorsements

Sport comes to rely on it, often giving hold Sport comes to rely on it, often giving hold on the sport – control sporton the sport – control sport

Less popular sports that attract little/no Less popular sports that attract little/no sponsorship may declinesponsorship may decline

Competitors/teams may be forced to wear Competitors/teams may be forced to wear products/equipment that is not suitableproducts/equipment that is not suitable

Sponsor may pull out due to decrease in Sponsor may pull out due to decrease in popularity or image = disaster popularity or image = disaster

Team selection may be affected Team selection may be affected Regular loses attract few sponsors Regular loses attract few sponsors Product made more expensive Product made more expensive

Should a performer consider the nature of the product before accepting the Should a performer consider the nature of the product before accepting the

financial support?financial support? YesYes Performer as a role Performer as a role

model – duty to others to model – duty to others to set exampleset example

Support depends on the Support depends on the image of the performerimage of the performer

Problem of Problem of poor/unhealthy products poor/unhealthy products

May bring criticism to May bring criticism to performer if an performer if an inappropriate product inappropriate product

NoNo Financial need – Financial need –

livelihood at stakelivelihood at stake If product is legal – why If product is legal – why

not?not? No other deals available No other deals available Little availability for grass Little availability for grass

rootsroots

What aspects of sport receive What aspects of sport receive sponsorship? sponsorship?

EventsEventsGoverning Bodies and coaching schemesGoverning Bodies and coaching schemesStadiums/standsStadiums/standsTeams and individualsTeams and individuals

What does a sponsor consider? What does a sponsor consider?

Success of team or individualSuccess of team or individualPopularityPopularityMedia coverageMedia coverageParticipation levels Participation levels Suitability of the sport for the product Suitability of the sport for the product

SPONSORSHIP PRESENTATION SPONSORSHIP PRESENTATION TASKTASK