1. Sports in Society: Issues and Controversies
Chapter 11
Sports and the Economy:
What Are the Characteristics
of Commercial Sports?

2. Through history, sports have never been as
Photo by Bárbara Schausteck de Almeida
Through history, sports have never been as
thoroughly commercialized as they are today.

3. Conditions for emergence and growth of commercial sports
A market economy
Large, densely populated cities
A standard of living that provides people with time, money, transportation, and media access
Large amounts of capital (for venue construction and maintenance)
Culture emphasizing consumption and material status symbols

4. Source: © IGOR KOVALENKO/epa/Corbis)
Pro sports seldom exist in labor-intensive, poor nations. The Afghan horsemen
playing buzkashi, a popular sport in their country, are not paid because Afghanistan lacks the conditions to sustain a sport with fulltime paid athletes and paying fans.

5. In most of Africa there’s not enough capital to develop or
Photo by Kevin Young
In most of Africa there’s not enough capital to develop or
sustain professional sports. Teams from wealthy nations now
use Africa as a “talent pool” for recruiting players they can sign for little money compared to European and North American players.

6. Class relations and commercial sports
The preferences and priorities of people with power and wealth often influence which sports are commercialized—for example:
Golf is enjoyed by wealthy people; therefore, it receives TV coverage despite low ratings.
Football reproduces an ideology that privileges men, celebrates masculinity, and reaffirms the cultural priority of competition; therefore it has been heavily marketed and televised since the 1960s.

7. Football is by far the most widely watched sport in the United States.
Photo by Jay Coakley

8. Why are commercial sports so popular in society today?
The quest for excitement
Fit with social class ideology
Widespread organized, competitive youth sports
Widespread media coverage

9. Photo by Jay Coakley
FB offers U.S. fans rule-governed violence, competition, and male warriors all wrapped in the U.S. flag and combined with the military, female cheerleaders, and sponsors selling beer and fast food.

10. Economic motives and the globalization of commercial sports
Sport organizations look for global markets.
FIFA, the NFL, the NBA, etc. seek global media exposure and expansion.
Corporations use sports as vehicles for global expansion.
To increase profits
To sponsor enjoyment and pleasure and establish ideological outposts in the minds of people worldwide.

11. For over two decades the NFL has sought the global expansion of its fan base. In 1992 this is how an NFL exhibition game was promoted in Japan.
Making cultural sense of American football is difficult outside the U.S.
Photo by Jay Coakley

12. Wanting to expand o London, the NFL promotes its games there in grand fashion. Here they promote a pre-season game with a 90-foot tall inflatable Miami Dolphin, among other things.
Photo by Elizabeth Pike

13. Corporations such as Coca-Cola have long used
Photo by Elizabeth Pike
Corporations such as Coca-Cola have long used
sports as vehicles for global expansion.

14. Ideological outposts in action: Branding sports
Sport places are branded
Sport events are branded
Athletes are branded
Corporate branding is accepted in the U.S. and much of the world today as necessary, non-political, and even “natural.”
Questions:
What are the limits of corporate branding? When do Americans resist having their minds colonized by corporations?

15. Corporations looking to establish ideological outposts in the minds of Americans use sports as a delivery site. Notre Dame partnered with Lucky Strike in the 1950s—until too many fans died of lung cancer

16. The branding that occurs today is in your face,
Photo by Elizabeth Pike
The branding that occurs today is in your face,
as in Beijing during the 2008 Olympic Games.

17. Because people watch sports live and don’t edit
out commercials, televised games and events are
now the hottest programming in media history.

18. Sponsors of sports nourish our dreams and save us from nothingness—so they say
Without sponsors, there would be no Olympic Games. Without the Olympic Games, there would be no dreams. Without dreams, there would be nothing. ---Notice published in an official program for the Olympic Games

19. Photo by Jay Coakley
Corporations sponsor sports because they can put their logos and messages where they cannot be ignored

20. Spectator appeal in sports depends on:
Spectator attachments to those involved in the event
The uncertainty of an event’s outcome
The risk or financial rewards associated with an event
The anticipated displays of excellence, heroics, or dramatic actions by athletes

21. When sports are commercialized there are changes in
Structure and goals
Orientations of athletes, coaches, and sponsors
People and organizations that control sports

22. Commercial sports involve a shift from aesthetic to heroic orientations

23. The origins of heroic action in sports
Commercial sports are ENTERTAINMENT
Commercial entertainment depends on attracting a mass audience.
Members of a mass audience lack technical knowledge about a sport.
Entertaining people without technical knowledge requires heroic action.

24. Changes in structure and goals
Rule changes occur to make action more exciting, understandable, and profitable by
Speeding up action
Increasing scores and scoring chances
Balancing competition
Maximizing dramatic moments
Heightening attachment to players and teams
Providing commercial breaks
GOAL:
provide a Total Entertainment Experience

25. The promotional culture of professional wrestling
Events are dramatic spectacles.
Players display carefully constructed personas.
Emphasis is on heroic action.
Storylines are simple; they emphasize domination, gender differences, and capricious bosses.

26. Professional wrestling is an example of what occurs when
aesthetic orientations are replaced by heroic orientations;
the activity changes from sport to spectacle.
( Source: © Splash News/ /Splash News/Corbis)

27. Ultimate fighting (aka cage fighting), clearly a dramatic spectacle, is the fastest growing media sport in the United States. When heroic values are taken to an extreme, this and/or professional wrestling is the result.

28. Changes in locus of control in sport organizations
With commercialization:
Control shifts away from athletes; decisions are less likely to reflect their interests
Control shifts toward owners, corporate sponsors, advertisers, media personnel, marketing and publicity staff, professional management staff, accountants, and agents
Athletes accept the decisions of these people because their financial interests are at stake.

29. Owners, sponsors, and promoters of professional sports
Owners are a diversified collection of people—usually white men.
Owners of teams in many sport leagues have formed cartels—centralized organizing groups that coordinate the actions of all team owners in a league.
Profits can be great in leagues where monopoly control and TV revenues are high; but losses may be great under other conditions.

30. Team owners usually make money when allowed
to operate as monopolies & monopsonies.

31. Some fans in England have organized to buy pro soccer teams
Some fans in England have organized to buy pro soccer teams. They can do this because many teams are owned by stockholders.
This could work only for the NFL Green Bay Packers in the U.S.—the only publicly-traded team in pro sports.

32. Advantages of monopoly & monopsony
A monopoly enables team owners to:
Share revenues
Negotiate high media rights fees
Prevent the formation of new teams
A monopsony enables team owners to:
Draft new players to one team only
Control the careers of athletes
Minimize bidding for athletes’ contracts

33. Team owners benefit from public assistance (aka “welfare”)
Owners benefit when
Public money is used to construct and maintain facilities
Federal tax deduction loopholes boost profits (e.g., depreciating players)
Cities and states give them tax breaks, tax rebates, and special opportunities for commercial development around a stadium
Cities that build venues allow them to control revenues created by the venues (e.g., parking, concessions, seat licenses, luxury box leases, etc.)

34. Stadium Subsidies: Arguments for
A stadium and team create jobs.
Stadium construction infuses money into the local economy.
Team attracts other businesses.
Team attracts media attention to boost tourism and economic development.
Team creates positive psychic and social benefits—social unity, civic pride, and sense of personal well-being.

35. Stadium Subsidies: Arguments against
Stadium jobs are low-paid, part-time, and seasonal—except for athletes and executives.
Construction companies and materials often come from outside the local area.
New businesses often are franchises that are headquartered in other cities.
Entertainment dollars are moved from areas in a region to the area around the venue, thereby undermining local businesses.
Men’s sport teams reaffirm values and orientations that disadvantage many people.

36. Tax payers provided $432 million to renovate Soldier Field
Tax payers provided $432 million to renovate Soldier Field. Result: team owners enjoyed a $702 million increase in franchise value
( Source: Mike Smith of Aerial Views Publishing, October 5, 2003)

37. Sources of income for team owners
Gate receipts/ticket sales
Sale of media rights (TV/radio)
Stadium revenues
Leases on club seats and luxury boxes
Concessions/parking/leasing spaces to others
Sale of naming rights and site advertising
Special events/concerts/meetings
Licensing fees and merchandise sales

38. New stadiums are built as shopping malls around a playing field.

39. Amateur sports
Self-funded and dependent on corporate sponsors, or funded through a central government sports authority
Controlled by organizations with an interest in two things:
Power—over the athletes in their sport
Money generated by events & sponsorships

40. Legal status of athletes in pro team sports
Athletes in team sports are governed by a reserve system—a set of practices that team owners use to control the movement of athletes from team to team.
Players have formed unions to challenge the reserve system and gain free agency—the right to sell their skills to the highest bidder.
Free agency exists to varying degrees in major team sports.
Labor rights for athletes in minor sports are limited.

41. The NFL is a machine. The operators of the machine pull its levers more frantically every season, pushing it past its breaking point. So the league has stockpiled interchangeable spare parts. The broken ones are seamlessly replaced and the machine keeps rolling.
—Nate Jackson, former NFL player (2011)
Note: this way of treating players has led to lawsuits that will cost the NFL billions over time

42. Legal Status of Athletes in Individual Sports
Varies greatly from sport to sport and athlete to athlete
Status often depends on what athletes must do to support their training and competition
Status may be partially protected by professional associations formed by the athletes

43. Income: Team sports
A large majority of pro athletes make limited income
Super-contracts and mega-salaries for a few athletes have distorted popular ideas about athlete income
Income among top athletes has risen because
Legal status and rights have improved
League revenues have increased

44. Average salaries in major U.S. professional leagues,
compared with median family income, 1950–2013
Salaries for pro athletes in the major men’s spectator sports were
low until after 1976 when they could become “free agents.”
The average NBA player made slightly more than the median U.S. family income in In 2013, he makes 87 times more than median family income! Average salary for WNBA players is less than median family income.

45. Athletes’ salaries DO NOT determine ticket prices; owners charge what people will pay for tickets, regardless of athletes’ salaries.

46. Tickets for NFL and the University of Nebraska games cost the same, but college players don’t have salaries.

47. Primary issues in CBA negotiations (I)
1. The percentage of league revenues that must be allocated to players’ salaries and benefits, and what is counted as “league revenues”
2. The extent to which teams can or must share revenues with one another
3. Salary limits for rookies signing their first pro contract, salary restrictions for veteran players, & minimum salary levels for all players
4. The conditions under which players can become free agents, and the rights of those who are free agents

48. Primary issues in CBA negotiations (II)
5. A salary cap that sets a maximum player payroll for teams, and a formula determining the fines that an owner must pay if the team’s payroll exceeds the cap 6. The minimum payroll for each team in a league 7. The conditions under which players or teams can request an outside arbitrator to determine the fairness of an existing or proposed contract 8. Changes in the rules of the game

49. Lockouts vs Strikes
Lockout = an employer-imposed work stoppage that suspends all games and practices until the dispute is resolved and the CBA is revised to the owners’ (and players’) satisfaction. Strike = a work stoppage in which employees refuse to work until a labor dispute is resolved and the players (and owners) agree to sign a new CBA.

50. Income: Individual sports
Many athletes do not make enough to pay training and travel expenses.
There are increasing disparities between top money winners and other athletes.
Top male heavyweight boxers have traditionally made the most money.
Question: does prevailing ideology shape the reward system in sports?

51. Amateur athletes
Rights depend on the governing bodies that control various sports.
Income depends on
The rules of governing bodies
Endorsements that vary with celebrity status and corporate interest
Most intercollegiate athletes in the U.S. are controlled by the NCAA; they have few rights.