Teams Sports Economics - Essay Example

SPORTS ECONOMICS by Student's Name Course Code and Name Professor’s Name University Name City, State Date of Submission Sports Economics The Media The media has been a major influence or rather a catalyst in the entire sport world since the mediocre ages since sport is in essence an old experience. Since the 19-20th centuries, the newspaper was used as a medium to transmit and convey information on the various undertakings of the world, sport obviously among them. The world of sport is very reliant on the media fraternity to reach out to the various fans out there and also promoting the sponsorship gain recognition worldwide. Were it not for the media, the world in my view would be a boring experience. This is because the media plays a major role in bringing together people from each and every part of the world and in this case through the sport. The media, we can say then acts as a mode of transmission of information from a central part with the aim of reaching a mass of individuals out there in order to keep them updated on whatever is happening and the developments being made (Rich 2000). The media is a major societal concern and therefore plays a major role in the public image of any sport. Sponsorship Sponsorship is another tool used, of course through the media to promote the sponsors to the public hence acquiring recognition their goal being to get as much consumers as possible. It is therefore with no doubt that this has become both a business venture to the sponsors and also a boost and security for the various clubs the sponsors represent. Since I am a good football fan, I couldn’t help but notice the various sponsors of the different clubs in Britain and Europe. For example the Qatar foundation, fl emirates, Britannia, Samsung, Heineken, and we could go on and on. Hence it is evident that these two players, the media and sponsorship of sport leagues in Europe and Britain, need each other in their endeavor to promote the sport entertainment. Sponsorship matters a lot because it plays a major part in the public image of these sports. The Qatar foundation, fly emirates, Britannia, Heineken and beverage brands are among the known sponsors in the sport world (Szymanski 2009). Collective Selling In these top leagues in both Europe and Britain, the broadcast of these games is seen to be done collectively. For example I have just noticed that formula 1 is only showed on one channel on super sport this is this is also evident in the football world collective selling is the order of the day. This gives broadcast rights to selected channels while the number of teams involved is large enough. This gives much power to the major league clubs whose games are televised more preferably. The big cubs as they are known get much broadcast time than the ‘smaller league clubs’. This consequently gives the sponsors of these big clubs the advantage of advertisement as well. Collective selling there makes the small clubs appear exploited because they all play the same game and in the same league but the big clubs have all the rights. This I have noticed even in the Spain league, La Liga where the two big clubs there being Real Madrid and Barcelona are seen to own like every television station. Recently the small clubs in the country complained of being under estimated by the media (Raney & Bryant 2006). Collective selling therefore doesn’t control the rights of these clubs which is a major concern to the sport world. Hence it should be under scrutiny and sport bodies should revise on the various improvements to be made in order to help promote sport with sound equity. Hyper-Commoditization The sport world has seen it evolve in accordance with the society as well. There has been a great transformation in the sport world in relation to both the media and sponsorship of the major sports and league clubs. For example the in the previous centuries, the news papers were printed in black and white which is also the case with the television stations broadcasting. Modernity has seen a post modern transformation in the world of sport where even health advertisements are aired on televisions with respect to the sponsorship of these sports (Downward & Dawson 2000). Post modernity has transformed radically and new technology has improved every aspect in sport. Television sets are now colored and so are the news papers, clubs even have their own broadcasters and reporters. The idea of hyper-co modification has seen diversity in the sport world in terms of promoting various social aspects’ such as peace, respect and togetherness. Racism which has been a major setback in this fraternity has also been put under serious scrutiny and just recently a committee was formed to tackle this animosity (Quinn 2009). Return on Investment In the economic sector, the sport world is a major contributor. In fact as we I stipulated earlier, the Spain economy of the country is in essence controlled by the two big football clubs in the league (Kern 2000). The cities of Barcelona and Madrid are where the stock market is most active. Sponsors are major players in the economy of these clubs. Clubs and sponsors today and sports such as athletics and basket ball use their prolific players to advertise various products which have been a huge influence on investors. These celebrities capture the attention of investors and are motivated to invest in order to be associated with the positivity in sports. This has increased the value of these clubs and their share capital boosted to greater standards. This positivity in the sport world has increased investments and added value to these sports (Noll & Zimbalist 1997). Vertical Integration Vertical integration occurs when an organization simply extends it operations to other areas related to the business instead of relying on other companies. This strategy has been used by major leagues for several years. This method works by making sure that sports events are well covered in terms of media coverage hence pleasing their sponsors. The sponsors would normally pay endorsement money depending on the value of the club will bring to the company in terms of marketing. This means that those clubs that are more likely to attract more market base simply get better endorsements deals. In this line most companies across the world are now venturing into sports for the sake of marketing rather than trying to win make a sport a viable business option. For example, Red Bull owns a racing sport team for the sake of advertising their drinks which they have associate with speed and adventure. This demonstrates shows sports clubs and media play a crucial role in driving the economy of a country (Andreff 2011). In this situation most clubs owns TV stations which they use to promote their marketing across the world. If a football club owns a TV or a radio stations they are more likely to promote their activities hence attracting more sponsors. This is due to the fact that sponsors of these clubs who are usually business enterprises do it for the sake of advertising for their products they are selling. For example, the emirates sponsor arsenal and their stadium for the sake of getting crucial airtime in their advertisement due to the fact that most fans who watch the club are also potential customers of the emirates airlines. The clubs also owns outlets where they sell their merchandise an essential part of their income. Some of the things they sell include their team shirts, shoes, and other items like key holders which have their logos in it. When they sell these products it helps to spread the population the time and the companies that are in their merchandise. The whole process shows a vertical integration due to the fact that teams, their TV stations or shop outlet play one fundamental role which is simply advertisements (Betenko & Pardalos 2004). Foreclosure Foreclosure is also another significant issue in the sport industry that has affected various clubs. In some cases increase in competition and economic downturns has also spread to club levels. In this case of scenarios most clubs have seen their income decreasing significantly. The most affected areas are in the sells of tickets with fewer people attending the matches most clubs especially the smaller one are losing significantly. On the other it is becoming harder to win lucrative sponsorship deals across the continent due to effects of economic recession. With euro crises in countries like Spain it is becoming hared for clubs to operate. Some of the clubs have deepen into debts which they have failed t pay. This has forced some owners to sell the clubs to other enterprises in order to pay their debtors. This foreclosure has made significant number of clubs to change hands in Europe in the last few years. In some countries where this clubs cannot sustain their activities the sport bodies usually relegate to lower leagues with significant impact of the community at large (Fort 2006). This is due to the fact that clubs owns other enterprises which leads to thousand of employment opportunities. For example, they operate restaurants and sponsor several community development projects in places hey are situated. Anti –Siphoning These laws are tailored to prevent pay TV from owning inclusive rights of broadcasting sports or other events which are of public importance. This means that any events which are significant to the public must be dealt with different (Fizel & Fort 2004). The notion behind this is to give power people in the society who do not own pay TVs channel a chance to watch these events. In case of an event of such magnitude the free airtime TVs channels are giving preference for the sake of promoting fairness to the society. Although this can have negative repercussions on the company it nevertheless boosts sponsor5s. this can be attributed to the fact that both free and pay TVs channels broadcast this events which add the percentage the number of viewers which is one of the principles of marketing. In Europe this normally occurs when broadcasting events of national importance like Olympics or world cup. In this type of events there is usually a national interest in them for people across the class divide. For example, in the football world cup the game where the mother country it becomes a national interests which cannot be viewed by the only economically endowed (Gratton & Solberg 2007). Conclusion We can say that sports and media are highly integrated and they depend on each other in terms of economic growth. This has promoted some sport clubs to media houses in order to foster their growth. However, just like any mother industries there usually various challenges associated with this industries. In most cases, small clubs are usually affected by economic of the country because their market is usually limited. However in some cases t also affects big clubs which leads to foreclosure in some instances. On the brighter picture sport industry is very huge business in Europe making billion of dollars each year. Reference List Andreff, W. (2011). 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Princeton, Princeton University Press. Quinn, K. G. (2009). Sports and their fans: the history, economics and culture of the relationship between spectator and sport. Jefferson, N.C., McFarland. Read More