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Chapter 20Chapter 20

Controversial Issues in Controversial Issues in Sports MarketingSports Marketing

Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin

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ControversyControversy

• Marketers Face Continuous Scrutiny

• For Sports Marketers, Criticism Emanates from Many Different Groups– Consumers– Consumer Advocacy Groups– Community Residents– Fans– Media– Government

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““Do The Right Thing”Do The Right Thing”

• Ethics Is Subjective

• Any Decision May Evoke Controversy

• Critics Are Vocal

• Issues for Both the Marketing of Sports Products and Marketing Through Sports

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Controversial IssuesControversial Issuesin Sports Marketingin Sports Marketing

• Target Market Decisions

• Marketing Mix Decisions– Product– Distribution – Pricing– Promotion

• Broad-Based Controversies

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Target Market DecisionsTarget Market Decisions

• Exclusionary Membership Policies– Private Clubs Excluding Women or Minorities– Protests Regarding Masters Golf Tournament

• Targeting Children– Expensive Products– Creating Unrealistic Expectations

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Product DecisionsProduct Decisions

• Oversaturation of Spectator Sports– More Teams, Longer Seasons, More Sports– More Post-Season Participants– More Media-Based Access to Sports

• Gimmick Sports– Contrived Competitions – Athletes Outside of Their Sport– Focus on Sexuality Rather than Sport– Non-Athlete Participation

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Product DecisionsProduct Decisions

• Appearance Money– May Cause Ticket Prices to Go Up– May Not Be a Good Investment

• TV’s Role in Spectator Sports– Media Time-Outs– Event Scheduling

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Product DecisionsProduct Decisions

• Changing the Spectator Sport Core Product– Traditionalists Will Resist– Did the Change Make the Game Better

• Player Mobility– Often Cited as the “Business Side” of Sports– Players Deemed “Greedy” – Moving for Money– Owners Deemed “Cheap” – Money over Fans

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Product DecisionsProduct Decisions

• Unwholesome Nonsports Products Sold Though a Sports Platform– When Appropriate Segment Is Targeted– When Non-Targeted Segments Are Reached

– Examples of Unwholesome Products • Alcoholic Beverages (Miller Lite Beer and the NFL)• Tobacco Products (Marlboro and Indy Car)• Products of a Sexual Nature (Viagra and MLB)

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Distribution DecisionsDistribution Decisions

• Franchise Mobility– Loyal Fans Even When Overall Support Is Low– Team Moves because of Financial Incentives

• Drop in Table 20.1 Here

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Distribution DecisionsDistribution Decisions

• Taxpayer-Funded Venues– Billionaire Owners with Millionaire Players– New Stadium May be Required to Keep Team– Taxpayers “Held Hostage”– Better Ways to Spend Tax Money

• Control Of Streaming Video and Podcasts– Not Allowing 3rd Party Distribution

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Distribution DecisionsDistribution Decisions

• Drop in Table 20.3 Here

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Pricing DecisionsPricing Decisions

• Ticket Prices– Fan Cost Index Documents High Cost– Focus on Corporate Ticket Buyers– Exorbitant Prices for Special Events

• PSLs– Personal Seat License– Permanent Seat License– University Contribution– Seeing PSLs Used at High Schools

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Examples of University PSLsExamples of University PSLs

• Drop in Table 20.2 Here

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Pricing DecisionsPricing Decisions

• Pay-per-View (PPV)– When Event Moves from Free to PPV Format– Will Mainstream Events Go to PPV Format?

• Team “Scalping” of Tickets– Often Illegal for Individuals to Sell Tickets at

Prices Exceeding Face Value – Some Teams have “Premium Ticket” Unit– Court Cases Ruled in Favor of the Teams– Secondary Ticket Market Being Used

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Pricing DecisionsPricing Decisions

• High Prices for Participation Sports, Athletic Shoes, and Other Sports-Related Products– Greens Fees– Ice Time– Shoes Endorsed by Popular Players– Food & Beverages at Pro Sport Venue

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Promotion DecisionsPromotion Decisions

• Overcommercialization– Proliferation of Event Sponsors – Olympics – Cluttered Sports Environment – NASCAR – Perception of Emphasis on Bottom Line

• Naming Rights– Venue Names Often Ignored– Title and Presenting Sponsors– Cost – Is It a Sound Investment

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Promotion DecisionsPromotion Decisions

• Signage Issues– Too Many According to Fans– Too Few Say Many Sponsors– Clean Stadium Concerns

• Athlete Endorsements– Create Unrealistic Expectations Among Kids– Create Demand that Parent May Rebuff– Believed to Exert Upward Pressure on Prices

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Promotion DecisionsPromotion Decisions

• Virtual Advertising– Ability to Manipulate Environment– Ability to Block Out Actual Signage– Opportunities for Ambush Marketers– May Distract Viewer from the Action

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Broad-Based ControversiesBroad-Based Controversies

• Overstated Estimates of Economic Value– Estimate Used as Rationale for Investment– Governments Invest Millions on this Basis– Critics Doubt Investments Will be Recouped– Critics Argue Much of the Money Would be

Spent in the Area Even without the Team, Stadium, or Event

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Broad-Based ControversiesBroad-Based Controversies

• Costs Are Underestimated

• Drop in Table 20.4 Here

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Disregard of Human RightsDisregard of Human Rights

• Outsourced Manufacturing– For Example, Athletic Shoes in Vietnam– “Emergence of “Hate Nike” Web Sites

• Led to New Policies at Some Universities

• Competition Tours– Teams Reluctant to Compete in Countries

• Zimbabwe• China

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Gender EquityGender Equity

• Title IX

• Led to More Female Participants

• Has Resulted in Cuts to Men’s Programs

• Most Universities Have Compliance Officer

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Handling of Performance Enhancing Handling of Performance Enhancing Drugs (PED)Drugs (PED)

• Steroids and Human Growth Hormones

• Rules Against Use, But Penalties Have Been Relatively Mild

• Have Leagues Condoned Use for Economic Reasons?

• Recent Government Intervention

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Integrity of SportsIntegrity of Sports

• Criminal Charges– Sexual Assault, Marijuana

• Civil Infractions– Reckless Driving, DUI

• Cheating– Spying, Corked Bats, Foreign Substances

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Integrity of SportsIntegrity of Sports

• Judging Transgressions– Olympic boxing, Olympic ice skating

• Selection of Location for Special Events– Salt Lake City Olympics

• Gambling– NBA referee, Pete Rose

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SecuritySecurity

• A Concern versus a Criticism– Fan Safety– Terrorism– Tremendous Financial Burden on Organizers

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Closing CapsuleClosing Capsule

• Sports Marketers Have Many Critics

• Questions Arise Regarding Each Element of an Organization’s Marketing Strategy

• There Are Also Several Broad-Based Controversies Surrounding the Sports Marketing Environment

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Closing CapsuleClosing Capsule

• We Market Through Sports

• We Market Sports Products

• It May Sound Easy, But It’s Not

• As a Business, There Is A Focus on the Bottom Line – And the Industry Has Critics