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 • • • •

$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 • • • • • • • • • • • • • • • • • • •

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

• • • • • • • • • • • • • • • • • • • •

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.