User:EdwinaElizabeth/Commercialisation of Sport
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There are many different elements when it comes to sport and the sporting world. Over recent years it has changed significantly, transforming from amateur – playing for ‘fun’, to professional - where athletes are now receiving financial gain for their efforts. This is emphasised as a ‘big business’ and 'big businesses is involved in sport'. This concept will be explored through many different examples, as it is seen as a major issue today.
Over recent years sport has become increasingly commercialised through many different elements such as increased media exposure and sponsorship, facilities of sporting venues, change in government and a significant change within the management of sport itself.
This paper will describe and explore commercialisation in sport and the changing elements of the business and the politics of commercialisation, within the sporting world today, not only at a local and regional scale, but also to a national and international scale as well.
Commerce may be defined as the ‘activities and procedures involved in buying and selling products’ a commercial activity ‘involves producing good / services in large quantities in order to make a profit’; and commercialisation is ‘mainly concerned with making money’ Westerbeek (2003, p. 89). When applying these elements within sport it seems logical that the commercialisation of sport involves producing sport products and making money.
The commercialisation of sport has two aspects. The first has been an increase in the truly commercial operations of sport. Sports organisations have become focused on maximising revenue, using this principle as the underlying rationale for decision-making and strategy development. As a result expenditure on sponsorship, television rights, players salaries and sports betting has risen markedly in the past few decades as sports organisations have sought to optimise their opportunities to generate revenue by adopting a business approach to the management of sport Houlihan (2003, p. 166).
The second aspect of commercialisation has occurred within not-for-profit organisations or state sport organisations. These organisations have undergone substantial cultural and operational change within the last decade as managers have moved towards a business-like approach in the management of their organisations Houlihan (2003, p. 166).
Professional sports, a big business that has grown rapidly over the last three decades. This can be seen through professionalism of sports management, which is now a pivotal influence in modern sport. A trend in good management practice being the key to organisational survival is evident in the modern day culture, where performance is measured and management techniques and marketing plans are implemented in all areas within sport Churchill (2008, p. 3).
The increase in commercial operations of sport has primarily been caused by a growth in the number of professional sports and sporting teams. Athletes are now being paid to train. The true value of sport however as a business, is perhaps most obvious in those spectator sports with a worldwide audience, such as football or formula 1 Houlihan (2003, p. 166). Sport organisations have also established brands and brand loyalty, which is high in the sport industry. People are becoming emotionally attracted to their teams; especially when a team has a long and proud history they can ultimately generate or convert, a new generation of loyal fans. This therefore can be seen as a powerful mix and as a result attracts communication companies to sport and lead to an increase of mass media Westerbeek (2003, p. 92).
The coming of mass media, and the rise of mass advertising from the 1880s, represented an opportunity for closer links between sport and business. Mass media provided a way in which products could be promoted to an ever-increasing audience Cashman (2010, p. 145).
Advertisers facilitated a closer relationship then before between sport and big business. At first business merely attempted to profit from the indirect sports association, but sport provided such a profitable means selling products that some companies sought a direct link with a sport Cashman (2010, p. 147). This is evident as Rupert Murdoch’s BSkyB proposed to buy Manchester United, the worlds most famous soccer club for US$950 million; it therefore became quite obvious it was not at all about the value of the club Westerbeek (2003, p91).
Big businesses also invest a considerable about of money with athletes themselves. Hundreds of professional athletes earn easily over $1million a year. This can be evident with Tiger Woods for example who remains sports' highest earner with an annual income two and a half times larger than his closest competitor. The world's top golfer made $110 million over one year and is the best-paid sportsman for the eight years in a row Badenhausen (2009, para. 1).
It can also be seen that “endorsements make up over 90 percent of athlete earnings” Sunset (n.d. p. 1). This can also be seen through Tiger Woods and Nike. Woods profited from his success where the companies golf division (Nike), hit a record $725 million. Woods' most lucrative new endeavor is his golf course design business. In 2008 he also announced plans for a third course to be built in Mexico. His other courses in Dubai and North Carolina are currently under construction Badenhausen (2009, para. 3). Sponsors need to associate themselves with an achievement, team or individual to gain maximum exposure. This therefore is evident between Nike and Tiger Woods along with Rupert Murdoch and Manchester United.
The expansion of television from the 1970s represents the continuing relationship between sport and business. There can be seen in the recent decade a greater incentive for ‘big businesses’ to become involved in sport. Arguably once again the world’s most powerful media entrepreneur, Rupert Murdoch believes that sport absolutely overpowers all other programming as an incentive for viewers to subscribe to cable or satellite television. “Sport remains king when it comes to the list of most attractive media entertainment” Westerbeek (2003, p. 90). Mass media can therefore be seen to play a major part in commercialisation. It brings greater exposure to sport therefore increasing fans to events and ultimately improving revenue and productivity of sporting clubs, internationally, nationally and locally.
The commercialisation of not-for-profit or state sports organisations has been primarily a result of a push towards efficiency, effectiveness and quality and this, alongside the increasing competitive sports market led these organisations to adopt the same strategies and techniques as profit orientated organisations. The most obvious example of this is the International Olympic Committee (IOC). The IOC and strong advocates of commercialisation, the Olympic Games is a much sought-after product and subject to intense competition between sponsors Houlihan, (2003, p. 167).
In the early part of the 20th century, “98 percent of the Games amateur competitors made no money from their participation”, Sunset (n.d. p.1). In contrast, today’s Olympic athletes are far from amateurs. The IOC recognise the inevitable creep of commercialism and professionalism, and instead of requiring participants to be amateurs they merely ask that participants have an “amateur spirit” (n.d. p. 1).
The Australian Sports Commission (ASC) on the other hand also provides increased support to national sporting organisations to create additional domestic competition opportunities to increase the standard of our national competitions, and further support to enable elite athletes to be exposed to international competition and compete on the world stage ASC (2011, p. 11).
According to the Australian Sports Commission, athlete support is critical to retaining Australia’s talented athletes within the sports system and in recognition of this, the Australian Government through ASC will provide increased funding to targeted athletes through a Direct Athlete Support scheme to assist them in their preparation for major international events. This scheme will embrace an increased number of elite athletes and emerging athletes. In addition, ASC will also expand the Local Sporting Champions initiative, which provides financial assistance for junior sportsmen and women, young coaches, umpires and referees to compete and participate at state and national sporting events (2011, p. 12).
Even at a local level a cultural shift has emerged in the management of sporting facilities, highlighting how the use of commercial management techniques and practices were now common place, within this sector of the sports industry. Similarly in the volunteer sector, national sports organisations have moved towards a more professional and bureaucratic structure Houlihan (2003, p. 168). Thus, the commercialisation of the sport industry has not just been confined to commercial organisations; indeed it could be argued that there is little difference in the management techniques used to run sports organisations whether commercial, state or not-for-profit Houlihan (2003, p. 169).
With sport now becoming a major industry the government has implemented commercialisation strategies on sport to capitalise on the growing potential of the industry. There are more investments on grassroots, coaching and interaction aspects of sport to encourage participation increase and expand the professional sector rationally Churchill (2008, p.2). The attempts to develop modified games of mini football or kanga cricket recognises the need of children by developing a game with less contact, greater co-operation and more enjoyment Cashman (2010, p. 157).
With this strategy in place it increases sales on sporting goods such as equipment, supplements and television broadcasts. If children or young sporting star hopefuls see their favourite player or athlete run in a particular pair of shoes for example, kids will ultimately want those shoes. This can be seen though Michael Jordan Nike Air, which are still the most recognised product on the market Churchill (2008, p. 5). The sporting sector also generates income through facilities, education such as the modified games for children and events Churchill (2008, p. 2).
Commercialisation has had an exuberant influence within sport at a local, national and international level. It can therefore be seen that, without the support of the business community, technology, people, services products, telecommunication financing towards sport are all part of sport and its increasing business. Sport has become a highly marketable commodity and big businesses have sought more direct investment in it than before.
Alternatively it can be argued that the commercialisation of sport has been condemned as an undesirable process, as commercialism takes away the essence of sport. In your opinion what do you think? What are your thoughts on the commercialisation of sport?
Australian Sports Commission, (ASC), (2011). Agency resources and planned performance, viewed 21 October 2011, www.health.gov.au/internet/budget/publishing.nsf/.../ASC.rtf
Badenhausen, K. (2009). Worlds highest paid athletes, Forbes sports valuation, viewed 20 October 2011, http://www.forbes.com/2009/06/17/top-earning-athletes-business-sports-top-earning-athletes.html
Cashman, R. (2010). Paradise of Sport, Walla Walla Press, Petersham, NSW, Australia, http://www.wallawallapress.com/sports-paradise.php
Churchill, G. (2008). The influence of commercialisation on professionalisation of sport, viewed 20 October 2011, pp. 1 – 5, http://www.scribd.com/doc/3927334/Commercialisation-In-Sport
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Slack, T. (2004). The commercialisation of sport, Routledge, New York, United States of America, http://books.google.com.au/books?hl=en&lr=&id=OYcHkxUh5tkC&oi=fnd&pg=PP1&dq=commercialisation+of+sport&ots=JelezigpJb&sig=Z8a04gwSuNnLIVohPdJLw0BrpXg#v=onepage&q&f=false
Sunset, B. (n.d.). The commercialisation of sport, viewed 25 August 2011, http://blaisunset.hubpages.com/hub/The-Commercilization-of-Sport
Westerbeek, H. & Smith, A. (2003). Sports business in a global market, Palgrave Macmillan, Basingstroke, Hampshire and New York. http://books.google.com.au/books?id=8ZJ8Fp8NJ_kC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false