Sports Industry




Sport became an industry at the point at which events (matches, races, bouts) ceased to be oriented solely toward participants and became largely organized so that they could be consumed by spectators. In perhaps the earliest sociological analysis of this process, Gregory P. Stone (1955) argued that consequently ‘‘play’’ (unscripted, spontaneous) became overshadowed by ‘‘display’’ (prearranged, staged, spectacular); that is to say, in some respects industry or commercialism is the very antithesis of sport. This critique still lingers amongst those who might be termed ‘‘purists,’’ but it must now be recognized that whilst on the one hand sport has become an industry just like any other, on the other hand, and particularly in terms of the demand for sport, it has a number of distinctive or peculiar features.




Outline

Contemporary analysis of the sports industry can be subdivided into four mutually interdependent parts: sports teams and leagues; the media; sponsors and manufacturers; and sports celebrities. A brief initial examination of the development of the sports industry, however, will be used to demonstrate the long lineage of these commercial processes, and therefore to correct the prevalent, false, assumption that they are unique to contemporary sport.

Aspects of a sports industry can be seen in the ‘‘sports like’’ activities of ancient Rome, but it is more useful to trace the development of the sports industry back to eighteenth century Europe, and England in particular. At this time, tavern owners and innkeepers started to exploit existing sports events to increase trade. The more entrepreneurial would provide facilities for playing cricket, quoits, horse racing, cock fighting, and so on. As the eighteenth century progressed, tavern owners started to charge admission fees to supplement the profits made through the sale of refreshments and lodgings. Subsequently, the emergent ruling bodies of sport (e.g., the Jockey Club, the Marylebone Cricket Club) established their own permanent facilities (i.e., Newmarket Race Course, Lords Cricket Ground) to contain the 10,000 plus spectators that could be attracted to the major sporting events of eighteenth century England.

The development of the sports industry in England progressed relatively unrestricted until the advent of amateurism in the middle of the nineteenth century. Boxers, cricketers, and jockeys were often sponsored by a wealthy aristocrat who would employ talented sportspeople, nominally as household servants or for work on his estate but, in fact, principally on account of their sporting skills. The first professional sports team was William Clarke’s All England XI, a cricket team which toured England playing ‘‘exhibition’’ matches from 1846 to 1870. A number of imitators soon followed. Churches and factories were subsequently influential in establishing works teams. These teams came to represent towns and cities and thus became key sites of identity formation in a time of industrialization led geographical mobility. Public demand for regular and meaningful fixtures, fueled by the emerging publishing industry that grew up around sporting contests, led to the establishment of the Football Association (FA) Challenge Cup in 1871 and the English Football League, consisting of 12 clubs from the English Midlands and the north, in 1888. In 1895, rugby clubs in the north of England broke away from the staunchly amateur English Rugby Football Union (RFU), ultimately forming a professional version of the game, rugby league. English counties first competed for a cricket championship in 1873 (Holt 1989).

Whilst the emergence of a sports industry in America was initially slower, the lack of a strict adherence to amateurism enabled it to subsequently develop rather more rapidly. During the 1860s sports entrepreneurs enclosed grounds, assembled ‘‘all star’’ teams, and charged entry fees. Initially, baseball was strongly influenced by the amateur ethos, but by the time the National Baseball League (NBL) was formed in 1876, commercialization and covert professionalization were well established. Albert Spalding, a significant driving force in the development of the NBL, had the year before moved from the Boston Red Stockings to the Chicago White Stockings because he was offered a well paid job in a grocery which entailed minimal duties and thus the chance to play regular baseball. Spalding subsequently went on to organize promotional baseball tours to England and develop baseball related merchandise such as balls, uniforms, and bases. The antecedents of today’s sports industry were well established in nineteenth century Britain and America (Wiggins 1995).

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Sports Teams and Leagues

The appeal of sport, and therefore the economic viability of the sports industry, is said to depend on ‘‘uncertainty of outcome,’’ i.e., its unpredictable, unscripted nature. It is on this basis that anti competitive practices (the draft system, collective merchandising, and revenue sharing agreements) and legal exemptions from antitrust laws exist in many US sports (and to a lesser extent under EU law). US leagues are organized as monopolies – or cartels – with no automatic mechanism for the removal of weaker clubs and their replacement by stronger teams. By limiting the extent to which the individual teams compete against one another for fans, media revenues, and merchandise sales, the league is in a stronger position to eliminate competition from rival leagues. The peculiar feature of sport in the US is that competitions are oriented toward the economic benefit of all the teams in the league, rather than forwarding the interests of individuals and individual teams (Gratton & Taylor 2000).

Somewhat ironically, after decades in which team sports have not been particularly profit-oriented (economists have traditionally described English professional football clubs as utility maximizers rather than profit maximizers), the leagues and sports clubs of Europe have, in some regards, ‘‘out commercialized’’ their American role models. Pyramids of leagues exist to enable weaker teams to be replaced by stronger ones. Leading clubs have successfully sought to consolidate their own economic position, at the expense of teams with less popular support, using as leverage the threat of withdrawal from existing competitions and the establishment of their own private league and cups. Recently developed European football competitions (e.g., the European Champions League in football) structure prizes and revenue sharing to favor the clubs from the wealthiest leagues. Currently, broadcasting rights are sold by the league or competition as a whole, but if clubs were to negotiate individually, some, and Manchester United in particular, would be likely to profit considerably. To this end, some clubs (e.g., Manchester United) have established their own television stations. Whereas most American sports organizations are privately owned but reliant on publicly funded or owned stadia, mainland European (football) clubs have traditionally been membership clubs owning their own facilities (though an increasing number have established commercially oriented, more streamlined, executive boards in the last decade). Traditionally, English sports clubs have been privately owned but in an attempt to release capital and increase spending power, many have become publicly listed companies on the London Stock Exchange. A consequence of this is that clubs now have a legal obligation to prioritize the interests of shareholders, and inevitably this leads to a more direct pursuit of profit.

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The Media and Sports

It is often said that the relationship between the media and sport (but strictly speaking the sports industry) is symbiotic. Media companies pay large amounts for the right to broadcast particular sports events because the programs are cheap to produce, attract relatively large audiences, and because the demographics of the viewers they attract (e.g., young males with large disposable incomes) appeal to sponsors who, in turn, are willing to pay large fees for the right to advertise during the broadcast. The sports industry needs the media both as a source of income and as a means of publicity. The balance of power between the sports industry and media companies varies from sport to sport and between countries. However, certain common patterns of the ways in which the media have shaped sport in recent years are identifiable (Wenner 1998).

First, media companies request that events are scheduled at particular times in order to appeal to the largest viewing audience. The establishment of Monday night football in the US is a classic example. Similarly, whilst English football matches have traditionally been held on Saturday afternoons, increasingly television has (successfully) requested matches to be rescheduled to Sundays, Monday nights, and Saturday mornings in order to maximize view ing figures (which itself has led to the expansion of the phenomenon of sports consumption based around bars and inns). International sporting events, such as the Olympics, are most heavily influenced by the media of economically dominant countries, i.e., the US. Second, it has been claimed that media companies have forced changes to the structure of the sports themselves. Boxing contests were reduced from 15 to 12 rounds, it has been argued, to enable television companies to more conveniently package bouts within a 1 hour time slot. Rule changes have increasingly protected quarterbacks in American football to encourage a more open passing game. Free throws in basketball have been minimized to speed up the action. Third, accompanying these structural and timing changes have been changes in presentational style. The use of loud music, video, cheerleaders, and mascots all serve to make the behavior of sports crowds more orchestrated, and thus more amenable to broadcasters’ desires and production needs. Whilst there is a tendency to exaggerate the media’s influence (sports are not fixed in time, and rules are not inherent or unalterable but have continually been refined for various purposes), commercial interests currently play a larger part in rule reformation than at any stage in the past (Sewart 1987).

Some sports events combine some or all of these characteristics and essentially become ‘‘TV made’’ (e.g., Kerry Packer’s cricket ‘‘circus’’ in Australia, indoor soccer leagues in America, professional wrestling competitions). Television programs such as Gladiators illustrate the media’s ideal format for sports but, tellingly, as Stone earlier argued, the demands of spectacularization are sometimes entirely antithetical to play, for they destroy the uncertain element that is the basis of the appeal of sport. This has led television companies to pursue a new strategy, the purchase of sports clubs, for this is now seen as the most effective way in which broad casters can exert control over ‘‘genuine’’ sporting events which enjoy enduring and widespread popularity.

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Sponsors and Manufacturers

Sponsors of sport can be divided into two groups, those whose products are intrinsically sport related, and those whose aren’t. For the latter group, sport is seen as a useful tool through which to promote products because of the supposedly health promoting and character building qualities of sport. The mass and youth appeal of sport is similarly attractive to sponsors and the male dominance of sports spectatorship has led numerous beer manufacturers to sponsor leagues and teams. In recent years tobacco companies have used sports sponsorship (most notably motor racing) to overcome legal restrictions on their ability to advertise. A classic example of what has been called the ‘‘sport–media–production complex’’ is the coalition of the National (American) Football League (NFL), Anheuser Busch (makers of Budweiser beer), and British television company Channel 4 (Maguire 1990). Their mutual interests converged in an attempt to increase the popularity of American football in the UK, overcome the British perception of American beers as unmasculine, and aid a newly established broadcaster to develop a distinct profile and market. Despite the triumvirate’s success in the 1980s, the subsequent decline of American football in the UK again shows the limits of the industry’s ability to manipulate popular demand.

There is, however, a more natural link between sport and companies producing sports related products, but it is only since the 1980s that the demand for sports related goods – such as sports shoes – has become big enough (i.e., as high-performance sports gear has become high fashion) to justify the levels of expenditure required to sponsor major sports events. Nike are thought to have changed the rules for sports marketing by paying huge endorsements to tie athletes to using their equipment ($90 million for basketball’s Lebron James, $450 million for the right to run Manchester United’s merchandise and kit operation) and ‘‘in your face,’’ aggressive advertising linking their products to the athletic success of a few high profile individuals. Nike, more than most, have had to deal with accusations about their dependency on exploited Asian labor, but this seems to have had little impact on sales and profits (Sage 1999).

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Sports Celebrities

It is the convergence of the interests of sponsors such as Nike, media/television companies, and sports organizations that means that when we look at the sports industry we must recognize the role of sports celebrities (Andrews & Jackson 2001). The sports industry idealizes images of sports celebrities so that they become general objects of glamour and fantasy in popular culture. Nike’s endorsement deal with basketball superstar Michael Jordan led the ‘‘Air Jordan’’ sports shoe to become the highest selling sneaker of all time, and helped bolster the popular appeal of the NBA. But these interdependencies also fed Jordan’s celebrity status, which in turn served as a site for the production of particular (largely racial) ideologies. Sociologists have also highlighted how, in tennis, the Anna Kournikova sports industry produces ideologies relating to gender and how Nike’s work with self starred ‘‘Cablinasian’’ golfer Tiger Woods has sought to promote a color blind, multicultural America of the future, which in turn has helped open up lucrative new markets for golf equipment in Asia.

But perhaps at the pinnacle of this sports celebrity industry is English footballer David Beckham, about whom an increasing quantity of academic literature has appeared (Cashmore 2004). Beckham ties all these themes of the sports industry together: a sport which has in the last decade exploited satellite television technology to increase exposure and generate ever increasing income; a player for the wealthiest soccer clubs in the world (Manchester United, Real Madrid); huge endorsement contracts with Adidas, Brylcream, and others; and, underlying his success and celebrity status, the production of various class and sexuality discourses. But more than this, unlike Michael Jordan whose celebrity was a largely North American phenomenon, Beckham, by virtue of playing the only truly global sport, is perhaps the most globally recognized sports celebrity.

The sports industry started as a local financial venture, with locally based sports celebrities like Albert Spalding. As the Beckham case shows, the contemporary sports industry has expanded to be global in scale, hunting out new audiences and markets for merchandise, filling increasing amounts of television airtime, and creating new sources of revenue for sports teams, sports media, sports sponsors, and sports celebrities.

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References:

  1. Andrews, D. L. & Jackson, S. J. (2001) Sports Stars: The Cultural Politics of Sports Celebrity. Routledge, London.
  2. Cashmore, E. (2004) Beckham, 2nd edn. Polity Press, Cambridge.
  3. Gratton, C. & Taylor, P. (2000) Economics of Sport and Recreation. Routledge, London.
  4. Holt, R. (1989) Sport and the British. Oxford University Press, Oxford.
  5. Maguire, J. (1990) More Than a Sporting Touchdown: The Making of American Football in England, 1982-1990. Sociology of Sport Journal 7(3): 213-37.
  6. Sage, G. (1999) Justice Do It! The Nike Transnational Advocacy Network: Organization, Collective Actions, and Outcomes. Sociology of Sport Journal 16(3): 206-35.
  7. Sewart, J. (1987) The Commodification of Sport. International Review for the Sociology of Sport 22(3): 171-90.
  8. Stone, G. P. (1955) American Sports: Play and Display. Chicago Review 9: 83-100.
  9. Wenner, L. (Ed.) (1998) Mediasport. Routledge, London.
  10. Wiggins, D. K. (1995) Sport in America: From Wicked Amusement to National Obsessions. Human Kinetics, Champaign, IL.

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