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What has Commercialisation done to the Sports Industry?

Introduction

In the late ’90s, it used to be a dream of every young cricket enthusiast to own an MRF bat before any of their peers can have it, as their very favorite Sachin Dada and Viru were their brand ambassadors. Seeing their treasured cricketers promoting the brand won the trust and heart of the budding sportsmen. Those were the sports branding days with which we all have grown up but now this business has taken new heights. It has become an entire industry which has given an alternative source of career to the sportsperson. Apart from being involved in various social media activities and business, these people have become a symbol of ideological values, a social sign carrying cultural meaning ,an emblem of nation and not to miss an international celebrity promoting fashion and personal style.

The Opportunity

The sports industry has enjoyed prolific growth in the last decade. It’s the second fastest growing sector for brands. Trends like E-Sports, Fan Engagement, Mobile Ticketing, Virtual Reality, Athletes as Investors, Smart Stadiums, etc. have added to the commercialization to make once cherished pastimes to big businesses now.  KPMG notes that the entire global sports market – including infrastructure, events, training, and sports goods – is estimated to be worth between $600-700 billion and its growth outpaces the GDP growth of most countries. According to Macquarie Research, it is on course to continue growing by up to 5.6% until 2020.

The industry’s huge year-on-year increases in revenue can mostly be attributed to the rise of televised broadcasting of sporting events over the last two decades – which has, in turn, led to an upsurge in advertising and merchandise sales and brand sponsorship deals. It is predicted that media rights and sponsorship fees will experience the sharpest increase in revenue generation by 2020. Clearly, for non-sponsors , not stepping over the line will become more challenging. Emerging markets too are increasingly playing a bigger role in the professional sporting landscape and should be firmly on the radar of all rights holders in this field.

Beijing will host the 2022 Winter Olympic Games. The International Olympic Committee (IOC) granted the Chinese city the right to hold the Games after being the only other bidding candidate than Almaty, Kazakhstan. Highlighting the controversy of huge spending, China will spend about USD 90 million importing water to its desert climate to create fake snow for the event, according to The Economist making it the only country to host both summer and winter Olympics.

Effects on both the sides

Commercialization of sports sector has seen growing importance in the recent past for the players as it opens various other sectors for them and thus can use their sports career for other endeavors. Considering sports industry as being very unstable as a career option owning to the unexpected injuries or performance slumps, strong branding strategy acts as a cushion to the individual’s future. Today a well-branded sportsperson has a value in the industry which assist them in attaining price premium in salaries, transfer fees, contract monies and enhance the ability to maintain fan support even when their performance has declined. Successful branding has positive consequences for companies as well. A well-known player advertising a new brand influences its probability of brand choice, customer’s willingness to pay higher price, marketing communication effectiveness, and promotion through positive word of mouth.

Ambassadors for Good

The late Nelson Mandela once said “sport has the power to change the world,” and he completely lived that statement when South Africa’s 1995 Rugby World Cup victory unified a long-divided society. The environment to create social change couldn’t be any better. There are thousands of nonprofits and NGOs around the world who use Sports to address critical social issues, and they connect with brands that see sports as a great way to market products and services.

A recent example of which is when ICC Cricket for Good, in partnership with UNICEF, announced #OneDay4Children at the ICC Men’s Cricket World Cup. ‘OneDay4Children’ will use the power and reach of the ICC Men’s Cricket World Cup 2019 to help children learn to play and be healthy. The money raised will support UNICEF’s work for children in cricket playing nations across the world. Celebrities and legends of the game joined the action with unique activation and fundraising both in-stadium and across the live broadcast.

Masculine Hegemony

Equal pay is an issue in different gender sports, not because of gender disparity but, due to the generation of lower revenues through marketing in either of them. Lack of promotion leads to lower attendances and sales.  Gender differences are too reinforced through elements such as marketing practices and strategies. 

It’s going to be difficult for a client to sell in if women’s sport is measured by the same metrics as men’s sport. If we look at the broad opportunity, it is much more accessible than men’s sport and produces much more interesting content. Pivoting to women’s sports sponsorship means brands taking a different view on the metrics by moving away from the traditional measures of success. Sponsorship is more about engagement than pure brand awareness, which is why women’s sport delivers. The recent performance of female sportspeople outshines the efforts of their male counterparts, and thus seems more potential successes on the horizon.

Conclusion

Sports marketing have become one of the most effective of all marketing strategies and sports will surely remain one of the most valuable elements of the media and branding for years to come. The merging of the sports in today’s world branding is successful because of inclusive digitization and increased connectivity thus providing significant growth opportunities in the future. The sports community is now being endorsed by leading brands which in turn provide an individual, ability to perform at par. Sports have always signified the compassion of players and spectators around the world. For the right brand, an association with something that powerful is highly desirable. But if we concentrate on the other side, we’ll notice that the commercial value of an individual player depends on spectator’s subjective perceptions and not solely on visible statistics, and thus it has a possibility of being ambiguous. There are numerous players who have high commercial value despite their poor-performing standards and in some cases the opposite is true. The question of what makes this difference is critical and the idea of branding gives effective guidance in answering this question.

 

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1 Comment

  1. Kajol Setia

    Well written Aashi?

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