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Sports and Entertainment Marketing Ethics

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Page 1: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Sports and Entertainment Marketing

Ethics

Page 2: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Profit

Difference between the revenues earned by a business and the costs of operating the business

Opportunity to earn a profit is at the heart of the free-enterprise system The World’s 50 Most Valuable Sports Tea

ms

Page 3: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Profit By 2015, global revenues in Sports

industry set to rise to $145B 3.7% annual growth rate

What’s driving growth? Gate Revenues – still the biggest local source

of revenues in most markets Merchandising – online, global fan base Sponsorship – sponsors are no longer just

interested in raising profile, but about deeper engagement with the fans

Media Rights – are huge! $42B rights deals with CBS, Fox, and ESPN through

2022

Page 4: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

It’s All About the Money

NFL earned $9.5B in revenues in 2012 Where does it come from?

Ticket Sales Licensing and merchandise Sponsorship * Stadiums Venture Fund * Media *

Page 5: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

It’s All About the Money

How does money play out in college sports? College Football’s Most Valuable Teams

Who benefits from team’s success? Should collegiate athletes get paid?

Page 6: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Why is this Important?

Sports teams and entertainers in it to make money!

2014 Highest Paid Actors #1 Robert Downey Jr. ($75M) #2 Dwayne Johnson ($52M) #3 Bradley Cooper ($46M) #4 Leonardo DiCaprio ($39M) #5 Chris Hemsworth ($37M)

Page 7: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Why is this Important?

Sports teams and entertainers in it to make money!

2014 Highest Paid Athletes #1 Floyd Mayweather ($105M) #2 Cristiano Ronaldo ($80M) #3 LeBron James ($72.3M) #4 Lionel Messi ($64.7M) #5 Kobe Bryant ($61.5M)

Page 8: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Why is this Important?

Sports teams and entertainers in it to make money!

2014 Highest Paid Musicians #1 U2 ($195M) #2 Bon Jovi ($125M) #3 Elton John ($100M) #4 Lady Gaga ($90M)

Page 9: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Why is this Important?

Businesses engaged in the Sports & Entertainment industry are also in it to make money

Goal to increase shareholder value Example: Nike outsourcing production to Less-

Developed Countries More profitable Illegal vs. Unethical

Page 10: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Ethics Defined

Ethics Moral principles that govern a person’s or group’s

behavior

Ethics in Business The study of proper business policies and practices

regarding potentially controversial issues Implemented in order to ensure that a certain required

level of trust exists between consumers and businesses

Ethics in Sports Sportsmanship – matter of being of good character and

doing right action in sports

Page 11: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

What Does Sportsmanship Look Like?

Playing fair Following the letter and spirit of the rules Respecting the judgments of officials Treating opponents with respect Shaking hands at the end of the game Never running up the score Never cheating Never taunting

Page 12: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Unethical Behavior in Sports?

Does it exist? Recruiting violations Performance enhancing drugs Illegal benefits Violence Hazing Behavior of coaches, athletic administrators,

parents, and fans Out-of-control boosters

At what levels? Professional, Collegiate, Interscholastic, &

Youth

Page 13: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Ethical Issues In Youth Sports?

Cutting a child trying out for a sports team Playing the best players (some do not play) Keeping the best players in the “key”

positions Competing for championships and trophies Requiring a child to play a sport Specializing in one sport Offering teams for one gender only

Page 14: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Ethical Issues In Interscholastic Sports?

Requiring athletes to pass all subjects Specializing in one sport Treating male athletes preferentially Playing while injured Using drugs to enhance performance Teaching athletes (by coaches) how to break

sport rules to gain an advantage Giving athletes money or other benefits Taunting and gamesmanship

Page 15: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Why Unethical Behavior? Pressure to win Money on the line Job security Future employment Pride Living through the athletic

accomplishments of their children

Page 16: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Rationalization for Behavior

There is no rule against it Everyone else does it This action is not unethical because

no one will ever know about it Circumstances require acting in this

way

Page 17: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Moral Justification Muddy the waters

Claim it really was ethical Make the wrong look right

No foul, no harm Make it a non-issue Didn’t harm anyone Unseen by the official

End justifies the means Admit guilt, but focus on the greater good A rule was violated but the amount of good accomplished

overshadowed the small amount of harm that occurred Everybody’s doing it

Downplay it’s significance Feel can’t compete without it

Page 18: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Problems With Moral Reasoning

The longer athletes participate in sport, the lower their moral reasoning

Males have lower levels of moral reasoning than do females

Team sport athletes show lower levels of moral reasoning than do individual sport athletes

The moral reasoning of interscholastic athletes is less consistent, impartial, and reflective than is that of non-athletes

Page 19: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Agree Slightly Agree Slightly Disagree Disagree

1 2 3 41. Teamwork is important for winning.

2. I would taunt my opponent.

3. A team must have a good coach to win.

4. I would spit on my opponent.

5. Luck is a part of winning.

6. It is important to shake hands with my opponent after a game.

7. I have never been in a game where any rules were violated.

8. Referees’ decisions will affect a game’s result.

9. Intramurals are a waste of time.

10.I would deliberately injure my opponent to help me win.

11.A team must have a “star player” to be a winning team.

12.Respecting my opponent gives me a better chance of winning.

13.The team that prepares the best should win the game.

14.“Winning isn’t everything, it is the only thing.”

15.I have never seen or heard someone taunt or trash-talk an opponent.

16.Respect is an important attribute for a winning team.

17.Football is a more violent sport than ice hockey.

Page 20: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Agree Slightly Agree Slightly Disagree Disagree

1 2 3 4

28. Integrity is an important attribute for a winning team.

29. Intercollegiate athletics are bad for a university.

30. I would retaliate if I was given a “cheap shot” by my opponent.

31. Skill in a sport is more important than hard work.

32. I play fair.

33. Being a good sport (showing sportsmanship) is important to winning.

34. “Every student an athlete, every student challenged.”

18.I must respect my opponent to play my best.

19.Basketball is a non-contact sport.

20.I would trash-talk my opponent.

21.Soccer is a non-contact sport.

22.I compliment an opponent for a good play.

23.It is “OK” to run up the score against aninferior opponent.

24.Basketball players are better “athletes” than baseball players.

25.I would "bend the rules" to win.

26.It is not whether you win or lose, but how you play the game.

27.It is not up to players to enforce rules (it’s the referee’s job).

Page 21: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Ethical Questions…

Should a professional sports team go on strike when athletes are earning multi-million-dollar contracts?

Page 22: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Pro Sports Lockouts and Strikes

Major League Baseball 1972 First strike in the history of the league Lasted 2 weeks Players won salary arbitration and an

increased pension Sport lost

86 missed games $1M lost pay for athletes $5M lost in ticket sales and broadcast fees

Page 23: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Pro Sports Lockouts and Strikes

National Football League 1982 Lasted 57 days Players demanded free agency after 3

years and 55% share of broadcast revenue

Owners agreed to $2B increase in salaries and additional veterans and severance pay

7 games of regular season cancelled in process

Page 24: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Pro Sports Lockouts and Strikes

National Basketball Association 1998 Lasted 204 days Loss of 32 games Reinforced a widespread impression of

athletes and owners as greedy and overpaid

Dubbed the dispute "between tall millionaires and short millionaires.”

Attendance at the games and television ratings dropped, and the salary issues that had inspired the dispute were barely resolved

Page 25: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Athletes with Unethical Behavior

Black Sox Scandal 1919 World Series – White Sox vs. Cincinnati

Reds 8 players banned from MLB for life for

purposely losing Shoeless Joe Jackson

Page 26: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Athletes with Unethical Behavior Little League World Series

2001 Danny Almonte Pitcher for Baby Boomers Dominated Series

Threw perfect games and 70 mph fast balls ~ pretty impressive for a 12 year old!

Found out after the fact, Danny was actually 15!

2 ½ years older than maximum age to compete in Little League World Series

Danny retroactively declared ineligible Baby Boomers had to forfeit all their wins All of their records were removed from

the books

Page 27: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Athletes with Unethical Behavior

US Figure Skating Championship 1994 Tonya Harding and Nancy Kerrigan rivals on ice Right before competition, Kerrigan is hit in the

knee with a metal pipe by an unknown man Amid suspicion, Harding admits she,

her now ex-husband, and body guard hired the man to break Kerrigan’s leg

Harding banned from skating Threatens to sue and is re-instated At the following Winter Olympics,

Harding places 8th while Kerrigan wins Silver

Page 28: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Athletes with Unethical Behavior

Pete Rose 1980s One of best baseball players of all time Gambled on games

Even bet on the Cincinnati Reds – when he was their manager

Originally denied allegations Agreed to voluntary ban from

MLB in exchange for stop in investigation

Page 29: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Athletes with Unethical Behavior

Bill Belichick 2007 New England Patriots coach Filmed competitor Defensive Coordinator’s

signals during a game “Misinterpretation

of the rules” Fined $500,000

Page 30: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Athletes with Unethical Behavior

MLB and Steroids Records breaking Biceps bulging Mitchell Report

89 former and current and MLB players named

Biggest names Roger Clemens Barry Bonds Jose Conseco Mark McGwire Sammy Sosa

Page 31: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Athletes with Unethical Behavior

Michael Vick 2007 Dog fighting scandal Sentenced to 21 months in federal prison Upon release, former team, Falcons, didn’t want

a former convict Now playing for the Eagles Forgive and forget or shouldn’t

even be playing in the NFL?

Page 32: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Athletes with Unethical Behavior

Lance Armstrong 2012 U.S. Anti-Doping Agency (USADA) Amidst alleged increasing evidence and

frustration with fighting allegations, Armstrong stops arbitration

Banned for life from cycling Stripped of 7 Tour de France victories Livestrong Foundation?

$500 million raised in 15 years to fight cancer

Page 33: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Athletes with Unethical Behavior

Penn State 2011 Jerry Sandusky – child sex abuse

At least 8 underage boys on or near university property June 2012, Sandusky found guilty of 45 counts of sexual

abuse Faces up to 60 years in prison

University officials (including President, Graham Spanier and head football coach, Joe Paterno) fired for allegedly covering up the incidents and enabling more

NCAA imposed penalties of Fine of $60 million 4-year post season ban Vacating all victories from 1998 – 2011

Big 10 also imposed a $13M fine

Page 34: Sports and Entertainment Marketing Ethics. Profit Difference between the revenues earned by a business and the costs of operating the business Difference

Athletes with Unethical Behavior

SMU mid 70s - mid 80s From 1985 55-14-1 record Won 3 Southwest Conference titles Nearly won it’s 2nd National Title (lost it when decided to

take a tie against Arkansas instead of go for the win) To stay competitive with other teams in league (8 schools

in Texas, plus Arkansas), began using questionable recruiting tactics

Received 2 warnings from NCAA to stop 3rd time, received “Death Penalty” ~ highest punishment

for repeat offenders Terminated the football program for two years Players allowed to leave/go to another school 1 winning season in next 20 years!