22-1 Chapter 22 Controversial Issues in Sports Marketing McGraw-Hill/Irwin©2007 The McGraw-Hill Companies, All Rights Reserved

22-2Controversy Marketers Face Continuous Scrutiny For Sports Marketers, Criticism Emanates from Many Different Groups –Consumers –Consumer Advocacy Groups –Community Residents –Fans –Media –Government

22-3 “Do The Right Thing” Ethics Is Subjective Any Decision May Evoke Controversy Critics Are Vocal Issues for Both the Marketing of Sports and Marketing Through Sports

22-4 Controversial Issues in Sports Marketing Target Market Decisions Marketing Mix Decisions –Product –Distribution –Pricing –Promotion Broad-Based Controversies

22-5 Target Market Decisions Exclusionary Membership Policies –Private Clubs Excluding Women or Minorities –Protests Regarding Masters Golf Tournament Targeting Children –Expensive Products –Creating Unrealistic Expectations

22-6 Product Decisions Oversaturation of Spectator Sports –More Teams, Longer Seasons, More Sports –More Post-Season Participants Gimmick Sports –Contrived Competitions –Athletes Outside of Their Sport –Focus on Sexuality Rather than Sport

22-7 Product Decisions Appearance Money –May Cause Ticket Prices to Go Up –May Not Be a Good Investment TV’s Role in Spectator Sports –Media Time-Outs –Event Scheduling

22-8 Product Decisions Changing the Spectator Sport Core Product –Traditionalists Will Resist –Did the Change Make the Game Better Player Mobility –Often Cited as the “Business Side” of Sports –Players Deemed “Greedy” - Moving for Money –Owners Deemed “Cheap” – Money over Fans

22-9 Product Decisions Unwholesome Nonsports Products Sold Though a Sports Platform –When Appropriate Segment Is Targeted –When Non-Targeted Segments Are Reached –Examples of Unwholesome Products Alcoholic Beverages (Miller Lite Beer and the NFL) Tobacco Products (Marlboro and Indy Car) Products of a Sexual Nature (Viagra and MLB)

22-10 Distribution Decisions Franchise Mobility –Loyal Fans Even When Overall Support Is Low –Team Moves because of Financial Incentives

22-11 Distribution Decisions Taxpayer-Funded Venues –Billionaire Owners with Millionaire Players –New Stadium May be Required to Keep Team –Taxpayers “Held Hostage” –Better Ways to Spend Tax Moneys

22-12 Distribution Decisions

22-13 Pricing Decisions Ticket Prices –Fan Cost Index Documents High Cost –Focus on Corporate Ticket Buyers –Exorbitant Prices for Special Events PSLs –Personal Seat License –Permanent Seat License –University Contribution

22-14 Examples of University PSLs

22-15 Pricing Decisions Pay-per-View (PPV) –When Event Moves from Free to PPV Format –Will Mainstream Events Go to PPV Format? Team “Scalping” of Tickets –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

22-16 Pricing Decisions High Prices for Participation Sports and Athletic Shoes –Greens Fees –Ice Time –Shoes Endorsed by Popular Players

22-17 Promotion Decisions Overcommercialization –Proliferation of Event Sponsors – Olympics –Cluttered Sports Environment – NASCAR –Perception of Emphasis on Bottom Line Naming Rights –Venue Names Often Ignored –Title and Presenting Sponsors

22-18 Promotion Decisions Signage Issues –Too Many According to Fans –Too Few Say Many Sponsors –Clean Stadia Concerns Athlete Endorsements –Create Unrealistic Expectations Among Kids –Create Demand that Parent May Rebuff –Believed to Exert Upward Pressure on Prices

22-19 Promotion Decisions Virtual Advertising –Ability to Manipulate Environment –Ability to Block Out Actual Signage –Opportunities for Ambush Marketers –May Distract Viewer from the Action

22-20 Broad-Based Controversies Overstated Estimates of Economic Value –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

22-21 Sweatshop Production Outsourced Manufacturing For Example, Athletic Shoes in Vietnam “Emergence of “Hate Nike” Web Sites Led to New Policies at Some Universities

22-22 Gender Equity Title IX Led to More Female Participants Has Resulted in Cuts to Men’s Programs Most Universities Have Compliance Officer

22-23 Handling of Performance Enhancing Drugs (PED) Steroids and Human Growth Hormones Rules Against Use, But Penalties Have Been Relatively Mild Have Leagues Condoned Use for Economic Reasons? Recent Government Intervention

22-24 Closing Capsule Sports Marketers Have Many Critics Questions Arise Regarding Each Element of an Organization’s Marketing Strategy There Are Also Several Broad-Based Controversies Surrounding the Sports Marketing Environment

22-25 Closing Capsule We Market Through Sports We Market Sports Products It May Sound Easy, But It’s Not As a Business, There Is A Focus on the Bottom Line – And the Industry Has Critics