The Professional Sports Industry - Essay Example

The Professional Sports Industry Contents Introduction 2. Sportswear and equipment producers 3. Trade 4. Sport Clubs, assoiciations and federations 5. Sportsmen 6. Fan Clubs 7. Sports financing 8. Medical Provision in Sports 9. Sports and business 10. Olimpic Movement Commercialization 11. Strategic Management The work focuses on the economical review ot the professional sports industry and touches upon the main problems of this sphere. The features and peculiarities of this industry are described also. The connection between such notions like sports – business – economics is vivid and discussed in the work. Introduction Sports is becomming a strong social and economical movement during the last decades and this movement is a determinal factor for any sphere of our life. It influences the forming of the variety of spiritual, moral, ethical and social-economic relationship. Growth of public significance of modern sports (mainly big-time sports) allows to consider the sports as a complecated process. Sports as a separate and self-developing phenomenon has not yet become an object of “classical” sports theory researching. Professionalism of sports at last quater of XX century has got the general character and now it is considered like a natural process. The events and people’s activity in professional sports attracts much attention of population of any country. Sports influences all spheres of life such as economics, poticy and culture. And touches many ethical problems of nowadays environment. It is considered that professional and big-time sports increases the state prestige, peace consolidation, and even popular sports. It is difficult to tell about the health problems which many sportsmen have. It is a fact that most of the sportsmen have serious deseases. Full-time trainings (especially for women and children), off-centred methods which include dopes and stimulators, various injuries, contests and fightings for the first place – all these things hurt morally and physically greatly. It is not a secret that very often a criminal cases take place in the professional sports industry. The sports economy has got important quantative and qualitative changes lately. The new technologies of market are in use now and the interaction looks in such a way – sports – fan, and sports – customer. The instruments and methods of management and marketing are actively used now. Along with the perfection and stirring up of the traditional instruments of influence on people (such as cost policy, advertising and quality) new trends got the impulse to development, the promotion of which became possible only with the help of Internet. A new virtual system of “new economics” began to develop. This system includes a complex of branches and groups of innovation economical activity. In structure of virtual economics of sports the information business plays an important role. It seems to be a paradox circumstance, but it is easily explained by the great advantages which new instruments of business communications have. We should pay attention to the main features and advantages of these instruments. Sportswear and equipment producers Almost all leaders of world sports industry have their Web-sites, portals and other resourses. It is very comfortable because the expenses for this service are low if to compare with the profit it makes. It is enough to have a glance at any site of a famous sports goods producer to understand the potential advantages the Internet resourses have. First of all company-producer gets an exellent opportunity to advertise its brand and products for 24 hours a day, price is twice lower than the traditional one. Besides, it is possible to tell about the advantages of new products, to show them and to have an interactive contuct with a consumer (it is very important for marketing research). On the sports production consumer chats and forums it is possible to express the constructive criticism and wishes about any product, trade technilogy, warranty and post-warranty service. Secondly, the web-resourse helps to provide the transparentness (information clarity) of producer’s activity, tells about sponsor and other types of work, which is aimed to increase the rate of a company. All these makes the level of company competitiveness higher. The third advantage is the “openness” and information transparentness of a sportswear producer. As a rule, agreat number of companies give the price lists on their sites and it gives to get any information about the price for any product of a company. The price openess does not give the possibility to middleman to set high extra charge for the service. It makes the price lower what is very profitable for a consumer and increases production competitiveness greatly. Sports as a very important social phenomenon is represented at all spheres of modern society, it influences all spheres of human activities. Sports influences national relationship, official life, social position, fashion formation, ethical values, way of people’s life. The analysis of sports development in the USA and other countried all over the world shows that active position of population towards sports is a result of Mass Media work. The popularization of sports depends on Mass Media, especially TV, and now sports activity is taken as an integral part of culture and life. (“The Value of Sports Economy in the Regions”) It is considered that sports accumulates the basic values of American society. Thanks to going in for sports and watching sports competitions people learn some values and it is very important not only for the person but for the country in general. Besause only people with high values can build a healthy and economically developed state. World practice is trying to decide the problems which are connected with social regulation. International Sports Movement, which includes Olimpic Movement also, is considered to be a social phenonenon and influences the life of people greatly. The aim of the movement is make sports a service for harmonic development of every person. Trade The instruments of Internet economics apply in sports market very actively and successfully. New virtual shops in net are very profitable because of marketing reasons and because of trans-action expenses reducing. It is considered that especially successful way is when sports products are advertised by famous sports stars who transfer their name to business and use it as a commercial brand. Sport Clubs, assoiciations and federations Internet became an important means of realization of ecomomical and social interests in sports organizations. With the help of internet the sports organizations advertise their brand, attract new fans using chats, forums and conferences. It is possible to learn the news about some changes in teams from the site and also to learn about life of some sportsmen. Nowadays many famous sports clubs have very interesting commercial projects. For example, the official site of British football club “Manchester United” declared about the fee for review of football matches through the Internet. A great part of income the site administration expect to get from the foreign viewers who have no possibility to watch matches on TV. Sportsmen The instrument of Internet-ecomonics are very popular among sportsmen and sport specialists. They advertise themselves, show their most successful pictures or video. Usually the private sites have such rubrics as “success”, “ questioning” (the fans vote or answer some questions), “contacts with sponsors” and others. Using the instruments of Internet economics sportsmen increase their rate, contact with advertising managers, and interact with their fans. Fan Clubs Fan Clubs are very popular all over the world. These clubs unite the people who have common interests to some sportman or sport club. Because of the process of globalization and active information exchange new international clubs appear. It is interesting to notice that nationality does not play a great role in choosing the fan club, people pay more attention to sportman’s skills. The development of fan clubs all over the world is good in economical sense because people who belong to one club are not an odd group of people any more but an organizationally formed consumers quota of sports products, symbols and servives. (“The Value of Sports Economy in the Regions”) The intensive development of Internet economics allows us to speak about the new possibilities in sphere of management and marketing of sports, that is activization of advertising and PR- campaigns, optimization of sale and cost policy, virtual communication with fans and sponsors. Efficient coming of cheap and reliable information greatly changes the managing processes and decision-making procedures in commercial and non-commercial organizations. Interactive questionaries and instruments of online-marketing help the managers of all levels to consider the opinion of “advisers” and think upon mistakes and critisism. Sports financing In countries with well-developed economics and market the gambling industry is successfully used as a source of sports financing. For example, in Finland according to the law, gambling industry is a main source of sports financing. The biggest companies are the National lottery of Finland (Veikkaus) and The Bet Horsing Association. The greatest part of of the income of these companies goes to the state budget. The income of first company is used to finance national mculture development and the income of the second is used for developing of national horsing and contests. The National Lottery of Finland was founded in 1940 by the sports organizations. Earlier it was a company which financed only sports development. Now many other spheres are sponsored by thes company. Veikkaus has a large structure, agents in different places which control their shops. Nowadays the company has 16 games which are classified into three groups: lotteries, momentary lotteries, and sports bets. Sports bets include Football Pools, Fixed odds betting, Result odds betting, Winner odds betting, V65 Off-track horse betting, V5 Off-track horse betting. In the end of last century Finland was at the top according to the level of bets, which was higher than in Norway, Sweden, Italy, Israel, Denmark, Greece, Spain, Great Britain and Canada. Veikkaus’s income goes to the state budget and is redistributed to the spheres of arts, sports, science and social work though the Culture Ministry. The sports industry get the greatest part of income and uses money for the development of service, sports equipment (building and repairing), sports institutes, scientific research in sports, sports contests and international sport contest where Finnish sportsmen take part, some sportsmen and coaches get financial support. Medical Provision in Sports The reforming of the medical provision in sports concerns different activities. One of the most important tasks is the cost problem. As any othere sphere sports industry should have the aim to create the conditions which would prompt the medicians to improving professional skills, quality and effectiveness of medical service. Estimating the economical effectiveness of medical service and its system is possible only because there are such figures as state of health evaluation, quality of sports and health training, efficiency dynamics of the people who are the bearer of economical information. It is considered that medicine in general, sports medicine, and sports belongs to nonproduction sphere. This economical sphere unites various kinds of activity, in particular: medical service, social welfare, sports and trade. Under the economical effectiveness we should understand the positive contribution, which is made by health improving of the people who go in for sports professionally, their skills improving, and national income increasing. The correlation of sports medicine and economics today is distinguished in two directions: 1) influence on further economics development; 2) influence of economics on further perfection of forms and methods of health protection. Sports medicine influences economics of any country greatly. The character of influence can be both – positive and negative. Sports medicine can make for production increasing and benifits accumulation by the reducing of temporal disability and invalidity of people who go in for sports. As a result we will be able to see the positive effect: increasing of the number of people who go in for professional sports causes increasing of benifits production and reduce the expenses for medical certificates. Speaking about expenses for medical provision we should notice that they include the expenses for hospital support and first aid. (The Economics of Professional Sports Leagues) The notion of economical effectiveness is connected with the basic notions of economics of sports medicine which researches its place in general system of sports development, connection with economics in general, using of benifits, financial and personal resources of medical service, sport medicine influence on country potential. In economical frames of medicine service the analysis of the effectiveness is taking place: regular preventive measures; liquidation of some deasease consequences, kinds of traumatism; perfection of the diagnostic programs; treating programs. It is very important to notice that the economics of sports medical provision should be rated as a scientific direction which integrates some problems of medical systems and programs. The main aim of the economics of medical provision is to assist the organization of service for people who go in for professional sports. All the financial expenses should be economically based. Sports and business It is a well-known fact that sports business-machine is highly developed in the USA. It is enough to remember such popular kind s of sports as baseball, American football, golf, and boxing. It is an opposite situation in Europe. There are two models of sports development in Europe - Eastern and Western. The Eastern model (the countries of former Soviet Union) is state oriented. State takes part in every problem concerning sports, such as what kinds of sports to develop, what competitions to take part in, what to change. This model of sports development can be called state and is a part of state propaganda, has an important political function. The Western model of sports development united the possibilities and interests of state and non-state organizations. In some counries ( for example, in Sweden and in Norway) sports is regulated by government relatively and in other countries (Italy and Greece), on the contrary, this function is actively performed by the goverment. Business structures play great role there because they are interested in business relationship development in sports. Olimpic Movement Commercialization The processes of commercialization and professionalization has got a irreversible character. In the end of XX century professional sports has become an integral part of international and olimpic movement. The variety of social functions divided the sports into following trends: popular sports, big-time sports, olimpic sports, and professional. The professional is considered a sportman who earns money working in sports industry. The professional sports is represented as a kind of business in society, it is an important part of show industry, a form of commerce and business, the aim of which is selling a show of sports. Sports professionalism is an objective process which makes for improving results, technics and aethetics of sports. Besides as a new organizational and economical base sports can serve as an additional source of financial income to state budget. Professional sports give many possibilities for creative activity as any other kind of arts. But characterising dynamic development of professional sports it is vivid that sports loses its humanistic functions and role in society. The first feature of Olimpic sports crisis is its commercialization when the Olimpic movement begins to represent the synthesis of sports show-business advertisment technology and public policy. Law regulation of professional sports is made out International Commettee. Here it is possible to see two ways: European and American. The USA was the first country which defined the status of a professional sportsman. The professional clubs of gambling industry appeared in the last decades of the XIX century. Then they were united into professional leagues with the aim to decide some common problems such as game schedule and rules. In the beginning of XX century new baseball leagues were created – National, American and Federal. The reference point of systematic sports commercialization became the year 1980. There are two reasons for this. The Olympic Games in Moscow were unprofitable event though it proved that Soviet Union can organize such great events. The second reason is that the International Olimpic Commettee was headed by Juan Antonio Samaranch, who came to sports from business, he was a successful businessman and diplomatist. Having declared the idea of non-state funds attracting to the sports industry he formulated a new strategy of Olimpic movement development: The International Olimpic Commettee should make a perspective program of commercialization, which would make sports open and attractive for business and will give the possibility to sports to live on self-financioning conditions. The professional managers from other spheres of business should be engaged in sports. The succesful mechanisms of sports should be applied in sports and make sports a forehanded sphere of business. Using the income of Olimpic Movement, the unpopular kinds of sports should be developed and the Olimpic Commettees of economically underdeveloped countries should be helped. It is very important to notice that modern sports, from the point of view of economics, has become a dynamically developing industry, which makes 3 per cent of world commercial intercourse and which is the source of new work places. Every new big sports project, such as Olimpic games, World football, athletics, basketball, swimming championships, gives possibility to get stable income, to improve the infrastructure (sports facility, transport, communictions, telecommunications hotels and other objects); to use sports facilities for popular sports, to create new work places, to develop international tourism. Among the most successful, from the commercial point of view, are the following projects: summer and winter Olimpic games, World football championship, NBA championship, World athletics championship, tennis tournaments, champions football league. (The Economics of Professional Sports Leagues) It is easy to compare the modern world sports industry turnover with many other branches of production. Today the sports industry occupies the 22nd place in the hierarchy of human activities. If to speak about modern sports as about the sphere of business we should remember about the subjects (participants) of the sports industry. Here belong the state organs of executive power, sports federations, clubs (professional and amateur), business representatives (investors, partners, sponsors and advertisers), sports and marketing agencies, mass media, viewers and fans (the most important consumers of sports industry) and producers of sports products and attributes. From the category of hobby sports transfered to the sphere of business and industry. Of course all kinds of sports are developing in the same way, but the major part of them has found their reliable business partners. If to speak about the kinds of sports with the most successful economics we will see the following sheme : football (is on the top and it is the kind of sports with the well-developed economics) – autosports and tennis – basketball and golf – boxing and athletics – motosports and hockey. Along with the success and good income some problems came into sports. If we say that sports, being a game, became the business, then all the problems that economics has are acceptable for sports. The problems of sports industry are following: Unfair competition (corruption and forged passport). Bankruptcy (for example, of some football clubs and sports projects). Salary delays. Strikes (lock-outs of hockey and basketball players). Consumer frauds (also fans and viewers). Non-equal conditions of payment (for example, financial discrimination towards the sportsmen from Africa and countries of Western Europe. Tax violations. It is possible to continue the list. So it is vivid that sports industry has all the features that economics has. Any economics develops cyclically and that is why we can see ups and downs what is absolutely natural. We should admit that most of financial problems are connected with the organization of international competitions. (Berkey-Gerard) Strategic Management Modern sports industry is a complecated management object. International Olimpic movement has been developed successfully for many years and mostly the reason for this is managing by supertop-manager Samaranch. Sports industry as any other branch of business needs highly qualification and professional managers. Strategic management of sports needs the following steps in its development: To make a common strategy and certain goals. To define the financial and human resourses, which should be used for goal realization. To unite the forces of participants and to assign the functions to every person. To provide high qualification and professionalism. Everything should be controlled by the administration regularly. Everything is repeated in history. Modern sports uses antique logic in its development. But in comparison with antique sports modern sports does not hve tendencies of losing its functions. Mordern sports is experiencing a deep csisis. But we should admit that many spheres of life (like whole culture and civilization) are in the same situation. Sports crisis is not a collapse process, it is just a discrepancy of role of sports and social structures, standards. Sports industry is one of the most successful and perspective. The propaganda of healthy way of life, anti-smoking campaigns and other events that call people to keep their health go together with the sports advertising. Professional sports is not just an economical phenomenon but the sphere of life which helps to regulate educational and social points. Characterizing the sports industry in general we should mention its peculiarities and special features. The main thing in sports in its product which can be compared with the show-business. The most important product of sports inductry is sports product which is show created on the sports competition and which attracts attention of millons of consumers. Works cited Berkey-Gerard, Mark “New Yorks Sports Economy” The Economics of Professional Sports Leagues: The Bottom Line in the Kintetsu Buffaloes Merger Issue is a Lack of Management “The Value of Sports Economy in the Regions”, June,2003 http://www.sportengland.org/sporteng_wm_june03.pdf Read More