COLLEGE AND AMATEUR SPORTS

Marketing College AthleticsEconomic Impact of College AthleticsAmateur Sports

Effects of Collegiate SportsA winning team has economic

implications for school, community, region, and state

Fan expectationPromotion of organization’s

goods and services

FBS RevenueRank

School Total Revenue

1 Texas $95,749,684

2 Penn State $72,747,734

3 Georgia $74,888,175

4 LSU $68,510,141

5 Michigan $70,300,676

2010 - 2011

Rules & Rankings National Collegiate Athletic

Association (NCAA) is the governing body of most college and university athletic programs

NCAA creates guidelines for recruitment, gender equity, scholarships, gambling prohibitions, and many ethical issues

The overall goal is the promotion of college athletics with a focus on the integrity of the athletes and their game

Joining the NCAA

Must meet the following conditions: Obtain accreditation by the recognized

accrediting agency of its region Offer at least four intercollegiate sports

for men and four for women (one in each of the three traditional seasons)

Complies with all NCAA rules Cooperates with the NCAA enforcement

program and accepts penalties imposed by that program

NCAA as a Sponsor Magnet The NCAA attracts sponsors that

support intercollegiate athletics financially and provide business and personnel expertise

These advertising dollars support the NCAA Championship, as well as allow expansion of NCAA programs for young people

NCAA Revenue

2010 – 2011 NCAA Revenues $845.9 Million

College Team RankingsRankings are based on past team performance,

wins against ranked teams, losses against unranked teams and personal preference.

Why so much emphasis? Early exposure promotes a team A highly ranked team builds excitement and

strong attendance at games (which creates fan loyalty and national respect)

Preseason rankings influence major television networks (more revenue for the team and its university)

BCS Bowl Background Bowl games make $260 million in annual payouts to NCAA schools. More than $1.8

billion has been paid out in just the past 10 years and the bowls will conservatively pay out more than $2.6 billion during the next decade.

Most bowl games are nonprofit organizations. The more revenue the bowl brings in through ticket sales and sponsors, for example, the more money can be paid to NCAA schools.

Bowl games generate increased donations, valuable visibility and even increases in school enrollment applications. In addition, they also can increase long-term revenues in licensing, endorsement money, TV contracts and season-ticket sales.

Bowl games generate an estimated $1.285 billion in economic impact for host communities each year.

#1 Has Lingering Effects A national championship brings

favorable national recognition and increased potential for recruitment of top high school athletes

Retailers carrying national championship sportswear will experience tremendous growth in sales

Market Segmentation Market segment is a group of individuals

within a larger market that share one or more characteristics

Divides the marketplace into smaller interest groups

Market Segmentation

Geographic segmentation divides markets into physical locations, such as

eastern, northern, southern, and western regions of the United States or the urban and rural areas of a state Example: US, South, Texas, Austin, 78738

Market Segmentation

Demographic segmentation focuses on information that can be measured,

such as income, profession, gender, and educationExample: males, $50,000+ income, college

educated

Psychographics focus on characteristics that cannot be

measured, such as attitudes and lifestyle choices. Consumers frequently make decisions based on emotions. Example: sports fans spend more money on

clothing with a teams logo right after the team has a big victory

Product usage reflects what products you use, how often, and why. Example: How often you eat pizza.

Benefits derived are the value people believe they receive from the product or service.

Marketing-Information Management takes into consideration the elements of market segmentation to improve business decision making.

ECONOMIC IMPACT OF COLLEGE ATHLETICS Winning college teams=money for the

community and media attention year-round

Cities with college sport teams must have shopping areas, hotels, restaurants, and other tourist attractions

Biggest Collegiate Fan Base

Sponsorships and Licensing Sponsorships

Generating revenue Name-brand apparel Create goodwill

Licensing License—the legal right to reproduce a team’s logo

in exchange for payment (known as a royalty) Protect the use of the name and symbols Identify and associate logos

In 1997, there were 2,000 licenses worth $2.5 billion

Items licensed include: clothing, posters, sunglasses, video games and photographs

Rank

School Rank

School

1 Texas 6 Georgia

2 Alabama 7 Michigan

3 Florida 8 Kentucky

4 LSU 9 Penn State

5 North Carolina 10 Oklahoma

2010 - 2011

Popularity of Amateur Sports Professional athlete is someone who

earns a living participating in a sport

Amateur athlete is someone who does not get paid but plays for the enjoyment, challenge, or both

There are millions of amateurs, which marketers see as millions of consumers

Marketing and Sponsoring Amateur Sports

Provides significant income for manufacturers (uniforms, shoes, equipment, etc.)

Minivan and sport utility vehicle

Retro sports jerseys

Local Promotion of Amateur Sports

Local business support amateur sports because:

Promotion is good for the local team (many times a high school team)

Image of being an active participant in the community

People that attend the event will frequently shop with businesses that advertise in the sports program

Economic BenefitsIn 1987, the Minnesota State Legislature created Minnesota Amateur Sports Commission. The goals are:

To create economic development through amateur sports

Create the maximum opportunity for sport participation for all Minnesotans

To establish Minnesota as a national model for the Olympic and amateur sport movement

Generates over $70 million of direct economic impact to Minnesota communities