Controversial Issues in Sports Marketing Chapter 13 Controversy

Controversial Issues in Sports Marketing Chapter 13

Controversy l Marketers Face Continuous Scrutiny l For Sports Marketers, Criticism Emanates from Many Different Group, Including: ü ü ü Consumers Consumer Advocacy Groups Community Residents Fans Media Government

“Do The Right Thing” l Ethics Is Subjective l Any Decision May Evoke Controversy l Critics Are Vocal l Issues for Both the Marketing of Sports Products and Marketing Through Sports

Controversial Issues in Sports Marketing l Target Market Decisions l Marketing Mix Decisions Ø Ø l Product Distribution Pricing Promotion Broad-Based Controversies

Target Market Decisions l Exclusionary Membership Policies ü Private Clubs Excluding Women or Minorities o Protests Regarding Masters Golf Tournament Ø l Augusta National Admits First Two Female Members Targeting Children ü ü Expensive Products Creating Unrealistic Expectations

Product Decisions l Over-saturation of Spectator Sports ü ü ü l More Teams, Longer Seasons, More Sports More Post-Season Participants More Media-Based Access to Sports Gimmick Sports ü ü Contrived Competitions Athletes Outside of Their Sport Focus on Sexuality Rather than Sport Non-Athlete Participation

Product Decisions l Appearance Money • • May Cause Ticket Prices to Go Up May Not Be a Good Investment ü l Tiger Woods in 2010 Australian Masters TV’s Role in Spectator Sports ü ü Media Time-Outs Event Scheduling

Product Decisions l Changing the Spectator Sport Core Product ü ü l Traditionalists Will Resist Did the Change Make the Game Better Player Mobility ü Often Cited as the “Business Side” of Sports § § Players Deemed “Greedy” – Moving for Money Owners Deemed “Cheap” – Money over Fans

Product Decisions l Culturally Insensitive Team Names and Mascots Ø l Washington Redskins; Cleveland Indians’ Chief Wahoo Unwholesome Nonsports Products Sold Though a Sports Platform Ø Ø When Appropriate Segment Is Targeted When Non-Targeted Segments Are Reached ü Examples of Unwholesome Products Alcoholic Beverages (Budweiser Beer and the NFL) ü Tobacco Products (Marlboro and Formula 1 Racing) ü Products of a Sexual Nature (Viagra and MLB) ü

Distribution Decisions l Franchise Mobility Ø Ø Loyal Fans Even When Overall Support Is Low Team Moves because of Financial Incentives

Distribution Decisions l Taxpayer-Funded Venues ü ü ü l Billionaire Owners with Millionaire Players New Stadium May be Required to Keep Team Ø Taxpayers “Held Hostage” Better Ways to Spend Tax Money Control of Streaming Video and Podcasts ü Not Allowing 3 rd Party Distribution

Controversy: Taxpayer Funded Venues

Pricing Decisions l Ticket Prices ü ü ü l Fan Cost Index Documents High Cost Focus on Corporate Ticket Buyers Exorbitant Prices for Special Events PSLs (Qualifying Payments) ü ü ü Personal Seat License Permanent Seat License Stadium Builders License (SBL term used for Levi’s Stadium) University Contribution Starting to See PSLs Used at High Schools

Examples of University PSLs (Football Season Tickets)

Example of NFL PSL – San Francisco 49 ers

Pricing Decisions l Pay-per-View (PPV) Ø Ø l When Event Moves from Free to PPV Format Will Mainstream Events Go to PPV Format? Team “Scalping” of Tickets Ø Ø 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

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

Promotion Decisions l Overcommercialization ü ü ü l Proliferation of Event Sponsors – Olympics Cluttered Sports Environment – NASCAR Perception of Emphasis on Bottom Line Naming Rights ü ü ü Venue Names Often Ignored Title and Presenting Sponsors Cost – Is It a Sound Investment?

Promotion Decisions l Virtual Advertising ü Ability to Manipulate Environment ü Ability to Block Out Actual Signage ü Opportunities for Ambush Marketers ü May Distract Viewer from the Action

Promotion Decisions l Signage Issues ü ü ü l Too Many According to Fans Too Few Say Many Sponsors Clean Stadium Concerns Athlete Endorsements ü ü ü Create Unrealistic Expectations Among Kids Create Demand that Parent May Rebuff Believed to Exert Upward Pressure on Prices

Promotion Decisions l Virtual Advertising Ø Insert Signage over Blank Space Ø Insert Signage that Blocks Actual Venue Signage Ø Ambush Marketing Capability

Broad-Based Controversies l Overstated Estimates of Economic Value Ø Ø 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

Broad-Based Controversies ü Costs Are Often Underestimated

Broad-Based Controversies l Disregard of Human Rights Ø Outsourced Manufacturing ü For Example, Athletic Shoes in Vietnam ü “Emergence of “Hate Nike” Web Sites q Led to New Policies at Some Universities Ø Competition ü Teams Tours Reluctant to Compete in Countries q Zimbabwe q China

Broad-Based Controversies l Gender Equity Ø Title IX (in USA) ü Has Led to More Female Participants ü Has Resulted in Cuts to Men’s Programs ü Most Universities Have Compliance Officer

Broad-Based Controversies l Handling of Performance Enhancing Drugs (PEDs) Steroids and Human Growth Hormones P Rules Against Use, But Penalties Have Been Relatively Mild P Have Leagues Condoned Use for Economic Reasons? P Recent Government Intervention P Harsher Penalties in Recent Years Ø Leagues, Organizations, and Players’ Unions Have Supported Sanctions

Broad-Based Controversies l Integrity of Sports Ø Criminal Charges ü Sexual Ø Civil Assault, Marijuana, Domestic Abuse Infractions ü Reckless Driving, DUI Ø Cheating ü Spying, Corked Bats, Foreign Substances

Broad-Based Controversies l Integrity of Sports (continued) Ø Judging Transgressions ü Olympic Ø Selection ü Salt boxing, Olympic ice skating of Location for Special Events Lake City Olympics Ø Gambling ü NBA referee, MLB’s Pete Rose

Broad-Based Controversies l Security Ø l A Concern versus a Criticism ü Fan Safety ü Terrorism ü Tremendous Financial Burden on Organizers Compensation for Student Athletes Ø Ø Should They be Compensated How is Equity Achieved; Who Should Receive What?

Closing Capsule l Sports Marketers Have Many Critics l Questions Arise Regarding Each Element of an Organization’s Marketing Strategy l There Also Several Broad-Based Controversies Surrounding the Sports Marketing Environment

Closing Capsule l We Market Through Sports l We Market Sports Products l It May Sound Easy, But It’s Not l As a Business, There Is A Focus on the Bottom Line – and the Industry Has Critics (and Advocates)