Op-Ed: A strategic vision of the economics of sports
Sports are a highly profitable business enterprise, with Forbes Magazine recently confirming “the sports market in North America was worth $60.5 billion in 2014. It is expected to reach $73.5 billion by 2019.”
But what are the aspects that circumscribe this statement?
Well…let’s provide a quick overview. The development of new media outlets and their increased outreach; new technologies targeted toward specific markets and clients, as well as innovative non-traditional marketing campaigns; sports professionalism through new certifications; and proliferation of league/clubs in different territories, make this a goldmine for enterprising opportunities.
However, sports also embody social values, entertainment and passion. Let’s look at the big picture and how everything could properly work together.
First: Companies are always trying to find the best ways to communicate with their clients or customers, to create branding, loyalty and engagement. Based on these needs and desires, sports play a huge role as a catalyst for people to follow their leaders.
Why? Because great athletes, teams and the history behind them represent leadership, admiration, enthusiasm, harmony, comfort, etc. Sports also help release anxiety, fear and stress. The way I see it, business has to do with people, without them there is no purpose.
Second: When looking at business opportunities that provide a return on investment, sports can offer more than increased sales — it also gives companies the chance to contribute as a socially responsible member of a community by affording an athlete the chance to compete.
Sports have demonstrated the capacity to be a social changer. When you invest in sports you are working for the future of multiple generations…you are giving the chance to develop a better community, group and individual.
You are providing competitive experiences and, through a financial commitment, pushing the athlete to do their best to achieve a goal. This mutually beneficial relationship between the sponsor — which enhances its public image and community loyalty — and athletes who build responsibility, discipline and perseverance.
Some notable examples of mutually beneficial relationships between companies and athletes are Olympic gold medalist Monica Puig and Olympic Silver medalist Jaime Espinal, who excelled at tennis and wrestling, respectively, due in part to the financial support they have received over the years from multiple corporate sponsors.
So inevitably, a company that supports sports becomes unforgettable to the athlete and the fans that follow their disciplines.
Third: Entertainment is a money-making machine. Sports are designed to show the “best of the best” and the “potential” of athletes, so it is inevitable for advertisers to want to take center stage. Marketing takes over everything from uniforms, water bottles, towels, shirts, banners, to traditional ads in print, TV, radio or internet. This support elevates athletes, coaches, and sports clubs to a higher level of popularity and fans become passionate about everything behind them, including the brands.
So, part of the deal is knowing how to manage this sports passion to create a social responsibility plan that supports sustainable development for an individual, groups or communities. Corporate and government supporters with a vision can invest their funds in a way that benefit their brand, while creating goodwill.
You, the business expert, can work with these athletes in a strategic way that will most likely result in unforgettable, and often conversational, pieces for an audience. There are many examples of 15-second ads that grab the attention of viewers for many months after they originally aired.
Understanding sports as a business opportunity that can also impact people positively will have multiplier results for your company.