Chapter 1.1

Factors Contributing to Industry Growth

LESSON 1.1

History of SEM

Factors Influencing Industry Growth

Increase in participation

More people following sports and entertainment

Increase in sports/entertainment offerings

Attendance boom

Media coverage

Global products

LESSON 1.1

History of SEM

Evidence of Increased Participation Rates

• U.S. Youth Soccer Association • 1974 100,000 registered players • Today 3.2 million registered players

800,000+ coaches & volunteers

LESSON 1.1

History of SEM

• US Golfers• 1974 3.5% of population • Today 12.6% of the population

Evidence of Increased Participation Rates

LESSON 1.1

History of SEM

• Lacrosse• 280% increase in the last decade• National Federation of State High

School Associations

Evidence of Increased Participation Rates

LESSON 1.1

History of SEM

• Skateboarding• 74.1% growth within the past 10

years• National Sporting Goods

Association (NSGA)

Evidence of Increased Participation Rates

“Skateboarding saw a remarkable increase in the last 10 years, due in part, to the television exposure provided by ESPN’s X-Games”

- NSGA VP of Information & Research, Thomas B. Doyle

LESSON 1.1

History of SEM

• USA Hockey• 2014 519,547 people register

as amateur hockey players • 8,000 more players than any other year• non-traditional markets like

California, Texas and Florida have grown exponentially over the past 20 years • CBS Sports report

Evidence of Increased Participation Rates

LESSON 1.1

History of SEM

Increase in participation

More people following sports and entertainment

Increase in sports/entertainment offerings

Attendance boom

Media coverage

Global products

Emergence of Internet and new technologies

Factors Influencing Industry Growth

LESSON 1.1

History of SEM

• Television Broadcasts• 1971 - U.S. TV broadcast 800 hours of sports

• 2014• NBC streamed the entire Winter Olympics in Sochi,

Russia• 1st time that fans had a chance to watch every

Winter Olympic event live • Compared with a total of 14 total hours of coverage

from the 1964 Tokyo games

Increase in Those Following Sports & Entertainment

LESSON 1.1

History of SEM

Increase in participation

More people following sports and entertainment

Increase in sports/entertainment offerings

Attendance boom

Media coverage

Global products

Emergence of Internet and new technologies

Factors Influencing Industry Growth

LESSON 1.1

History of SEM

Disc Golf

• 1995 560 courses nationwide • 2000 1120 courses nationwide• Today 4,000 courses globally played in

40+ countries• Professional Disc Golf Association

Increase in Sports/Entertainment Offerings

LESSON 1.1

History of SEM

Surfing

• In 2013, Hawaii became the first state to sanction surfing as an officially recognized high school sport

Increase in Sports/Entertainment Offerings

LESSON 1.1

History of SEM

Bass Fishing

• Also in 2013, the state of Missouri bass fishing became an officially sanctioned high school sport • Illinois, Kentucky and Tennessee already

had it

Increase in Sports/Entertainment Offerings

LESSON 1.1

History of SEM

Go Kart Racing

• One school in Florida is attempting to legitimize Go Kart racing as an official varsity sport

Increase in Sports/Entertainment Offerings

LESSON 1.1

History of SEM

Spikeball

• A new sport called Spikeball burst on the scene two years ago

• Already boasts 125,000 participants• Fastest growing sport in the U.S.

Increase in Sports/Entertainment Offerings

LESSON 1.1

History of SEM

• ESPN’s coverage features more than 65 sports including:

Increase in Sports/Entertainment Offerings

MLB WNBA Spelling

NBA College Football Billiards

NFL Monday Night Football

Men’s & Women’s College Basketball

Poker

NASCAR Golf Arena Football

MLS Little League World Series

Eating Championships

FIFA World Cup Fishing X Games

LESSON 1.1

History of SEM

• DirecTV now offers over 285 channels as part of their “premiere” package• over 50 channels dedicated

specifically to sports programming • 17 “specialty” packages that

require an additional subscription like the NBA League Pass, NFL Ticket or NHL Center Ice

Increase in Sports/Entertainment Offerings

LESSON 1.2

History of SEM

Copyright © 2014 by Sports Career Consulting, LLC

LESSON 1.1

History of SEM

Increase in participation

More people following sports and entertainment

Increase in sports/entertainment offerings

Attendance boom

Media coverage

Global products

Emergence of Internet and new technologies

Factors Influencing Industry Growth

LESSON 1.1

History of SEM

Attendance Increases

• NHL

• 1978-1979 7,758,050 attendance

• 2013-2014 21,960,034, attendance

• Only played half a season due to a lockout that drew plenty of fan and media criticism, NHL league

• And missed several weeks of the season during the 2014 Winter Olympic Games in Sochi

LESSON 1.1

History of SEM

Attendance Increases

• Movies

• Over 75% of movies in the top 50 all-time highest-grossing films (before inflation) were released after the year 2000

• 1970s Star Wars $800 million

• 1980s ET $750 million

• 1990s Titanic $2.19 billion

• 2000s Avatar $2.78 billion

LESSON 1.1

History of SEM

Attendance Increases

• Movies

• Highest grossing animated films of all time:

• #1 Frozen 2013 $1.27 billion

• #2 Toy Story 3 2006 $1.06 billion

• #3 Despicable Me 2 2013 $970 million

• #4 Finding Nemo 2003 $936 million

• #5 Shrek 2 2004 $919 million

LESSON 1.1

History of SEM

Increase in participation

More people following sports and entertainment

Increase in sports/entertainment offerings

Attendance boom

Media coverage

Global products

Emergence of Internet and new technologies

Factors Influencing Industry Growth

LESSON 1.1

History of SEM

Media Coverage

• Media coverage of sports and entertainment has grown significantly in the past half-century, placing athletes and entertainers in the public eye with incredible frequency

• Introduction of Internet makes information available “on demand” with increased frequency and accessibility

LESSON 1.1

History of SEM

Media Coverage

Television and radio provide alternative news sources to newspapers while social media provides an even newer alternative to all other forms of media

Profit potential for media centers encourage increased competition for top stories

Introduction of Internet makes information available “on demand” and with increased frequency

LESSON 1.1

History of SEM

Media Coverage“Arnold Palmer…came along at the same time television was exploding in America. Now we’ve got global Internet access. Our sport wasn’t global when I began playing the Tour. Now it is. You can log on anywhere in the world an see what any player did in any tournament or for the year. With that international boom, that international stream of information, golf is getting exposed to parts of the world that it never even thought of getting into.”

- Tiger Woods

LESSON 1.1

History of SEM

Increase in participation

More people following sports and entertainment

Increase in sports/entertainment offerings

Attendance boom

Media coverage

Global products

Emergence of Internet and new technologies

Factors Influencing Industry Growth

LESSON 1.1

History of SEM

Global Marketplace

The international marketplace continues to provide a platform for driving sales of sports and entertainment products and services

LESSON 1.1

History of SEM

Global Marketplace

Global events attract world-wide attention, providing an exceptional marketing opportunity for ticket sales, sponsorship sales, licensing and merchandise opportunities and provide a major economic impact for host cities• Wimbledon Olympic Games• Tour de France Iditarod• FIFA World Cup Cannes Film Festival

LESSON 1.1

History of SEM

Global Marketplace

Winter X Games• In 2010, ESPN, CANAL + Events and Tignes Ski &

Snowboard Resort (in France) launched the first Winter X Games to be held outside the United States

• X Games Munich 2013 demonstrated the growth in global appeal of the event • 47.5 hours of action were broadcast across ESPN’s

various platforms, • including 26.5 hours on live television

LESSON 1.1

History of SEM

Global Marketplace

Footwear and Sports Apparel • International brands

• China’s Li Ning • Germany’s Adidas and Puma

• Fiercely competing with American brands like Nike and Under Armour for market share

LESSON 1.1

History of SEM

Global MarketplaceCelebrity Endorsements• Dwyane Wade left Jordan Brand for Li-Ning• Steve Nash left Nike to sign with Luyou• Kevin Garnett left Adidas to sign with Anta• Kevin Love wears a new Chinese shoe brand, 361 Degrees

LESSON 1.1

History of SEM

Global MarketplaceCelebrity Endorsements• Reebok Market Expansion - India

• Population of more than 1.2 billion people• Signed Indian cricket captain M. S. Dhoni as its

ambassador• Negotiating with other yet-to-be-revealed

“well-known personalities from different walks of life such as musicians, entertain-ers and professionals" • according to the Economic Times

LESSON 1.1

History of SEM

Global Marketplace

Prominent American sport are making a push to expand their presence overseas by hosting regular season games (not exhibition games) outside of the United States

LESSON 1.1

History of SEM

Global MarketplaceMajor League Baseball • 2014 Season Opener • Arizona Diamondbacks vs.

Los Angeles Dodgers • Played in Sydney, Australia

NCAA College Basketball• 2013 Season Opener• MSU vs. UConn• Played in Germany aboard

USS Carl Vinson

LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Video Game Industry• Set to reach $70.1 billion globally by 2015• Due to the combined growth of console, portable,

PC, and online video games• DFC Intelligence

LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Digital Music• Pandora radio now boasts over 250 million users• Revenue will exceed physical recorded music revenue

for the first time in 2014

LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Other Markets• Theme Parks • Projected to reach $29.5 billion by 2015

• Footware• Expected to reach $195 Billion by 2015

• Ebooks• ebook sales generated more revenue than

hardcover books in 2012 • overall ebook sales have increased 4,456%

since 2008

LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Soccer

• Nike• 1994 brand revenues were $40 million

• 2014 brand revenues of $2 billion

• Adidas• 2014 soccer division also surpassed $2.7 billion in

sales

LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Football• NFL media fees are projected to double to $8 billion

annually by the end of the decade

Basketball• Former NBA commissioner David Stern told industry

executives at a 2013 meeting that the league estimated revenues would be a record $5 billion

• An increase of about 20% from the league's last full season in 2010-11 (the 2011-12 season was shortened by a lockout)

LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Food and Beverage• Centerplate

• Leading hospitality partner to North America's premier sports, convention and entertainment venues

• Fastest growing restaurant chain in America• Serves over 115 million guests per year

LESSON 1.1

History of SEM

Signs of Continued Industry Growth

NBA• Television

• 2014 NBA FinalsHeat vs. Spurs 15.5M viewers• Broadcast in 215 countries and 47 languages

• Social Media• 400 million likes and followers combined across all league,

team and player pages on Facebook, Twitter, Instagram, Sina and Tencent

• You Tube• 1st professional sports league to exceed 1 billion videos

viewed on its YouTube channel • More than 1.3 billion videos viewed overall

LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Soccer• 2014 World Cup shattered a number of viewership records• double digit growth across ESPN’s digital platforms• U.S.A. vs. Portugal match was the highest rated soccer

match in ESPN history• World Cup final between Germany and Argentina drew

bigger TV audience than entire Stanley Cup finals• Overall, 2014 World Cup viewership 29% increase over

the 2010 tournament in South Africa

LESSON 1.1

History of SEM

Signs of Continued Industry GrowthSports Franchises• Yankees

• In 1973, the late George Steinbrenner bought the New York Yankees for just under $9 million.

• In 2014, Forbes magazine valued the historic franchise at $2.5 billion

• Cowboys• Most valuable team in NFL at $2.3 billion

• Soccer• Average Major League Soccer franchise is now worth over

$100 million• An increase of more than 175% over last 5 years

LESSON 1.1

History of SEM

Fandom is a term used to refer to a subculture composed of fans characterized by a feeling of sympathy and camaraderie with others who share a common interest

Signs of Continued Industry Growth

LESSON 1.

History of SEM

Signs of Continued Industry Growth

The term fandom can be used to describe all types of fan groupings or “subcultures”

Copyright © 2014 by Sports Career Consulting, LLC

LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Over 50% of respondents claimed to more of a sports fan than they were five years ago

ESPN’s annual “SportsNation Survey” found that a whopping 90% of male respondents claimed to be sports fans on some level

Copyright © 2014 by Sports Career Consulting, LLC

58% of respondents would prefer to receive free season tickets to their favorite sports team than be promoted at work. 40% of those participating in the 2012 SportsNation Survey said they had traveled 250 miles or more to attend a sporting event

LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Fans have, in a limited number of occasions, successfully organized on behalf of a cancelled

television series to lobby networks to bring back their favorite show (examples include Chuck in 2010 and Community in 2012 while prompting

Netflix to resurrect cult hit series Arrested Development)

Copyright © 2014 by Sports Career Consulting, LLC

LESSON 1.1

History of SEM

Signs of Continued Industry Growth

The intensity levels of fandom vary, ranging from a casual sports fan who might take in one NBA game per year to those fans that put the “fan” in “fanatic” (and otherwise engage in behavior that other fans might otherwise find to be irrational)

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Fans who go to extremes to show their loyalty to their favorite team, band, actor or other celebrity are often referred to as “superfans”

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Self-proclaimed Clippers fan “Clipper Darrell” spent $12,000 customizing his BMW to reflect his love for the Los Angeles Clippers (complete with the license plate “CLIPERD”)

Copyright © 2014 by Sports Career Consulting, LLC

Darrell has gone so far as to have his own personal dedicated website

Because Clipper Darrell began charging people for public appearances, the Clippers franchise asked that he disassociate himself with the team in 2012. They would later sort the issue out and Darrell returned to his regular seats.

LESSON 1.1

History of SEM

Signs of Continued Industry Growth

A Washington Redskins superfan who goes by the nickname “RG3 Woman” dresses up in a gold bodysuit at home games to cheer on her favorite player

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

In 2013, an Alabama football superfan passed away at the age of 91 but had attended 781 straight games

Also in 2013, a lifelong Cleveland Browns superfan passed away (his family even encouraged everyone attending his funeral wear clothes supporting the team) but requested that the pallbearers be Cleveland Browns players, stating: "He respectfully requests six Cleveland Browns pall bearers so the Browns can let him down one last time."

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Fandom explains why people propose at sporting events or feature a themed wedding centered on their favorite sports team

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LESSON 1.1

History of SEM

Signs of Continued Industry GrowthOn opening night, Activision says that approximately 1.5 million gamers lined up outside 13,000 stores to buy a copy of Modern Warfare 3 at midnight

USA Today published a story suggesting the number of people calling in to work sick the day after Call of Duty is release results in a significant increase

University of Kentucky fans paid between $7,500 to $12,500 for the opportunity to attend a basketball camp (called John Calipari Basketball Fantasy Experience) and “essentially experience what it’s like to be a Kentucky basketball player”

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

The existence of fandom is what ultimately fuels today’s non-stop, around the clock media coverage of celebrities and sports stars and drives a culture in which athletes and celebrities are often quickly forgiven for highly publicized transgressions when they perform

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

After his immense popularity quickly dissipated upon the revealing of a “girlfriend hoax”, Notre Dame football star Manti T’eo was named by Forbes as one of the most disliked athletes in the U.S. Yet after earning a starting position with the San Diego Chargers, his jersey was among the top selling among rookies in 2013

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

While many media pundits publicly chastised LeBron James’ decision to announce which team he would be

joining in a one hour ESPN special, the show (aptly named “The Decision”) drew very high ratings as

nearly 10 million people tuned in to watch

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Despite all the scrutiny surrounding singer Chris Brown (including his widely publicized assault of then-girlfriend Rihanna, a disturbance in a nightclub with

rapper Drake, and poor album reviews), his 2013 release of “Fortune” managed to debut at the top of

the Billboard 200 chart

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Because of the strong emotional connection

fans maintain with their favorite sports teams, wins and losses on the grandest of stages can

yield incredible influence (both positive and

negative) on a community at large

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

After struggling with one of the worst national disasters in US history (Hurricane Katrina), fans in the New Orleans area often cited the New Orleans Saints Super Bowl win as an

inspiration for the city’s resurrection

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Representing their country just four months after a devastating tsunami rocked Japan, their women’s

soccer team pulled off one of the greatest upsets in sports history by defeating the heavily favored

Germans in the 2011 World Cup and, ultimately, beating the United States in the championship game.

“Our playing is to be an encouragement for the victims of the disaster,” said Coach Norio Sasaki after

the monumental victory while the headline in the New York Times the following day read: “A Resilient

Team Soothes a Nation.”

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Copyright © 2014 by Sports Career Consulting, LLC

On the flip side, after losing in extra time in the World Cup final to

Germany, a large crowd of Argentinian fans turned violent and destructive, including setting fires and rioting, a

scene which required police intervention and many arrests to

contain

LESSON 1.1

History of SEM

Signs of Continued Industry Growth

Fandom can, unfortunately, also result in an unhealthy (and potentially dangerous) subculture of fans that become too emotionally invested and obsessive with their favorite sports teams or celebrities.

In 2014, a homeless man was arrested after allegedly stalking Rihanna, sending threatening letters and even appearing at her home on more than one occasion

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

After being knocked out of the 2013 NBA Playoffs, Chicago Bulls fans who were disappointed that star point guard Derrick Rose was unable to play that season due to injury took to Twitter to voice their displeasure. Moments after the team lost, #DerrickRoseMoreUselessThan started trending nationally on Twitter.

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LESSON 1.1

History of SEM

Signs of Continued Industry Growth

After a highly recruited football player made the decision to attend Alabama over Auburn, the recruit told rivals.com that "Someone actually put out an article about my family's business telling all Auburn fans not to go there. We are going to eventually start losing money. People are telling restaurants in the town not to serve us. Social media has definitely been the worst. People on Instagram are telling me how they hope I tear my ACL in game one. They will laugh when I do. They are saying my family is horrible and how they didn't raise me right. It's just crazy.”

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