Sugar & Spice & Everything Nice

Sports marketing is very much a numbers game.  The more numbers a potential sponsor offers to affiliate their product or service to a sport entity, the more likely they are to “win” the sponsorship bid.  When considering the sheer quantity of sport sponsorships in the US alone, contradictions abound.  Professional athletes are often times in peak physical fitness with body fat percentages that mirror the average female shoe size.  Even though these superman and women-like athletes have bodies of steal, they’re sponsored by companies, that anyone with common sense would conclude are the antithesis of physical fitness.  For example, any sport sponsorship with McDonalds, specifically Michael Jordan’s deal in 1987.

One can only assume that after a hard workout or challenging game, Michael Jordan didn’t pull up to a McDonald’s drive through because he was craving a Big Mac.  Especially now, with heavy emphases on maintaining a healthy playing weight, eating organic foods and taking care of one’s body, its hard to believe LeBron consumes the Dunkin’ Donuts shredded pork donuts he pedals as the company’s Asian brand ambassador.  Additionally, I’m not sure consumers are to truly believe Russell Westbrook drinks Mountain Dew’s Kickstart for breakfast in the morning as the Dew’s player endorser.

As we’ve learned in class, good sport sponsorships connect the sponsor to the product, therefore engaging the consumer with an organic partnership.  Basketball fans don’t watch NBA basketball for health benefits, they watch for love of sport, to support their favorite player or to engage in social interaction.  The products associated with the action of watching a sport are a secondary involvement and relative means to an end.  The money involved with the sponsorship of a sport allows for that sport to be televised, thus allowing a sports fan to enjoy his/her favorite sport on television.  Although, the overconsumption of soda can lead to myriad health problems including obesity, Type 2 diabetes and heart disease, the over consumption of sports can just leave one without loved ones but at least you’re healthy!

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The NCAA’s NLRB Problem

In the winter of 2014, the National Labor Relations Board office in Chicago received union cards from over 60 Northwestern University football student-athletes indicating their attempt to unionize.  The cards were delivered by Ramoji Huma, a former football player and graduate of UCLA and Tim Waters the director of the United Steelworkers Political Action Committee.  The intent to create a student-athlete union was a cause that Huma had been working on for almost a decade before his trip to Chicago.  The cause was rooted in an effort to secure rights for student-athletes participating in collegiate athletics, specifically Division I FBS football student-athletes.

As a football player at UCLA, Huma encountered several occasions where NCAA policies led to financial hardships and were unnecessarily restrictive and punitive.  As a sophomore, he founded the College Athlete Coalition which later morphed into the National College Players Association.  The mission of the NCPA was to advocate for student-athletes and ensure their health, well-being and safety were prioritized by the respective athletic departments and universities through legal measures founded in labor relation policies.

Huma’s future partner would emerge in 2013 as a quarterback for the Northwestern University football team.  Kain Colter also encountered problems as a student-athlete that made him question whether the long-accepted practices were actually appropriate. Unable to continue on with a major in premed because his football schedule was incongruent with his class schedule, Colter was also unable to make ends meet with the stipend he received for living in off-campus housing.  Upon commiserating with fellow student-athletes who also complained about the lack of academic support they received, Colter realized the endemic nature of the issue he was living.  Although athletic institutions, conferences and the NCAA were monetarily benefiting from student-athlete participation in sports, specifically football, the student-athletes were not reaping those benefits.  According to studies, some were even living below the poverty line.

For Huma and Colter, the current state of college athletics was unacceptable; they were determined to elicit a change.  As a current student, Colter had the ability to galvanize his fellow teammates and make a “statement” while on the field during nationally televised games.  Huma didn’t simply relegate his recruitment to just Colter, he had built a small network of student-athletes on 150 campuses.  And when Colter appeared on a Saturday televised football game with “APU” (All Players United) on his wristband, the protest was officially launched.

Although the initial decision of the NLRB was to certify the Northwestern football player’s union, on appeal, the board changed its mind and rescinded the certification.  Their rationale was as follows:

“By statute the Board does not have jurisdiction over state-run colleges and universities, which constitute 108 of the roughly 125 FBS teams. In addition, every school in the Big Ten, except Northwestern, is a state-run institution.  As the NCAA and conference maintain substantial control over individual teams, the Board held that asserting jurisdiction over a single team would not promote stability in labor relations across the league.” (NLRB, 2015)

By 2016, Huma and Colter still didn’t have a player’s union that was recognized by the NLRB but several other changes that occurred within college athletics can be attributed to the push by the NCPA and its leaders.  Improvements such as:

  • $40 million settlement with CLC, EA Sports and NCAA for the improper use of student-athlete name, image and likeness through the Ed O’Bannon case.
  • Many football conference (including all Power 5 institutions) requiring the cost of attendance provision.
  • NCAA no longer requiring student-athletes sign the name, image and likeness release form in order to receive their grant-in-aid.

A new development to the story came in February 2017 when Richard Griffin issued the statement that “scholarship football players in Division I Football Bowl Subdivision private-sector colleges and universities are employees” under the National Labor Relations Act (New, 2017).”  As general counsel for the NLRB, Griffin’s statement does not address whether players may unionize but does indicate that they enjoy certain protections under the law just as regular employees.  In essence, they can request improved conditions including pay without worry of retaliation.  The general counsel for the NCAA, Donald Remy, disputes the NLRB’s new position, positing that “students who participate in college athletics are students not employees (New, 2017).”

There are many opinions on whether student-athletes should unionize.  The most controversial of those being the money sharing.  Although conferences are signing billion dollar deals with media rights holders, equating to each athletic department receiving eight-figure payouts annually, the trickle down of funds doesn’t make it to the student-athletes who make these payments possible.  With million dollar salaries for athletic directors and coaches, student-athletes continue to be relegated to tuition, room/board and books.  Some question why student-athletes receive the least compensation for doing the lion-share of work.

With the presence of a union, student-athletes would be able to effectively negotiate better compensation for the services received.  Currently, they have no bargaining power, especially prior to the initial NLRB decision which led to guaranteed scholarship agreements.  As a union, student-athletes at private institutions could work with university administration to determine better compensation standards.

Additionally, supporter of unionization attribute it to the health of student-athletes, even after they’re eligibility runs out, as a monumental reason why unions are needed.  The health, welfare and safety of student-athletes is not a priority of athletic departments according to Huma and Colter.  In their opinion the establishment of a student-athlete union would ensure this issue remained top-of-mind for every athletic director and university president.

Those on the other side of unionization reiterate the meaning of student-athlete, emphasizing that student precedes athlete.  College athletes’ primary purpose is to work towards attaining a degree while participating in athletic activities.  According to the Ninth Circuit court in California, unlike work-study students whose work is of primary benefit to the university, therefore making them employees, student-athlete participation in football is primarily self-beneficial and only on a limited basis does the institution receive benefits.  That decision was made in April of this year and is currently being appealed to the same court.

As mentioned earlier, the NLRB can make decisions regarding how private schools identify their student-athletes but the landscape for the other 108 public institutions provides for myriad of interpretations.  With varying labor policies spanning the 50 states in the union, some believe determining work guidelines for all will be close to impossible.

Only time will tell what college athletics will look like in the future and whether unionization will be included in that outlook.  Tremendous sums of money have been infused into college athletics recently causing more attention to be paid to how those funds are allocated.  One thing seems to be evident to all involved on either side of the issue, the state of college athletics is on the precipice of change.  What it currently resembles will be different than the form it takes in five to ten years.


 

References:

(2017). Board unanimously decides to decline jurisdiction in Northwestern case.  National Labor Relations Board.  Retrieved from https://www.nlrb.gov/news-outreach/news-story/board-unanimously-decides-decline-jurisdiction-northwestern-case

(2017). Ninth circuit court rules student athletes are not employees: Dawson v. National Collegiate Athletic Association. The National Law Review. http://www.natlawreview.com/article/ninth-circuit-court-rules-student-athletes-are-not-employees-dawson-v-national

Elejalde-Ruiz, A.  (2016).  Northwestern modifies handbook to treat football players like employees.  Chicago Tribune.  Retrieved from http://www.chicagotribune.com/business/ct-northwestern-handbook-nlrb-1012-biz-20161011-story.html

New, J.  (2017). NLRB chips away at NCAA amateurism.  Inside Higher Ed.  Retrieved from https://www.insidehighered.com/news/2017/02/02/nlrb-general-counsel-says-private-college-football-players-are-employees

Puskar, G. (2015). Why can’t college athletes unionize.  L.A. Times.  Retrieved from http://www.latimes.com/opinion/editorials/la-ed-ncaa-20150826-story.html

 

The ESPN Layoffs

This week, ESPN announced layoffs of over 100 individuals including several long-tenured, well-recognized on-air veterans.  The fact that ESPN was hemorrhaging profits because of the loss of so many subscribers was well reported.  Also, their overpayment for sports rights was widely understood as unsustainable.  Although the writing was on the wall for ESPN for some time, they persisted and continued to make rights deals, most recently a multi-million dollar deal with the ACC to establish a stand-alone TV network.

ESPN has focused on flashy presentation, big personalities, breaking news (if sometimes inaccurate) and huge rights payouts.  Less focus seemed to be placed on the sustainability of the flash and personalities.  In a realm where unfavorable, though reliable coverage is deemed as “fake news” and opinioned pundits are mistaken for fact-checked reality, the current landscape of broadcast news in general and sports media specifically, is in flux.  The wealth of sport media outlets is staggering, with commentary on all aspects of sports.  From SB Nation to The Undefeated to the Players Tribune, the current landscape is rife with sports opinions.  Opinions are great but when readers are looking for unbiased factual information, what sources can they rely on?

In one five minute segment of watching ESPN, an assortment of shows which involve hosts yelling their opinions across a table or through a screen at each other dominates the lineup.  Remember when the only opinion based show on ESPN, other than NFL Countdown was the Sports Reporters?  Now, the only time you get non-opinion programming is during the commercials.

Although ESPN is the first channel I click when my television is turned on, I’ve activated the mute button more often lately.  In lieu of listening to Stephen A. Smith and Max Kellerman screaming about the Cavs free agent moves in the off-season or Michael Wilbon and Tony Kornheiser fuss about the various methods of shortening baseball games, I might choose to mute the channel and watch the evocative facial expressions of the on-air commentators only unmuting when Bob Ley and Outside The Lines comes on with investigative reporting of sports related issues.  Luckily Mr. Ley made it through the layoffs unscathed, at least so far…

 

America’s Social Contract Gone Awry

Declining by Degrees: Higher Education at Risk describes the current state of higher education and students enrolled in those institutions.  Shortly after World War II, FDR signed the GI Bill, providing financial aid to soldiers returning home from the war in order to provide professional training, thus preventing a surge of individuals on the unemployment rolls.  Additionally, the federally funded Pell Grant program offered economically disadvantaged students the opportunity to afford a higher education degree.  The unwritten understanding, aka America’s social contract, dictated that, where possible, the playing field would be leveled between the haves and have nots through federal assistance.  According to the video, once a college degree proved to lead to more economic success than those without a degree, the social contract between government and citizens became null and void.  The “right” to attend college became more of a privilege, one that was available primarily to those who could afford the privilege.
Several types of academic institutions were highlighted in the film including: Western Kentucky University, a state institution with a high acceptance rate; University of Arizona, another state institution with large resources; Amherst College, a private, exclusive liberal arts college; Community College of Denver.  All four have different students living in a variety of circumstances, different funding structures and various capabilities.  Their similarities are present as well.  Funding cuts that impact the ability to maintain full time professors and unengaged students are amongst the chief concerns shared by the featured institutions.  In terms of students being a product of their academic institution, the persona of the students was indicative of their educational situation.  The students attending less rigorous schools were less likely to be challenged to their potential.  College became a social experience, not a period of professional preparation laying the foundation for a career.  Students commonly described the major difference between high school and college being the struggle with autonomy.  Being disciplined and self-motivated without needing prompting from outside influencers.  Those who weren’t financially advantaged had to make sacrifices in order to afford attending college.  Matriculating to more prestigious institutions without the funds to pay tuition led to a student attending community college.
The film reiterated the saying “the rich keep getting richer” as well as the converse.  On many occasions students with extraordinary abilities, intellectually, athletically and/or financial resources, were all better off than those with average or less resources.  They received more assistance, sometimes more than what was necessary, more resources such as smaller classrooms, learning communities and opportunities for success.  For those who could afford it, being successful in college was sometimes an afterthought.  For those who couldn’t, struggle was constant and consistently threatening their ability to be a student.
The film Declining by Degrees: Higher Education at Risk illustrates the current state of the higher educational system and the need to reaffirm the social contract which was established two generations ago.  In the current academic system, the rich keep getting richer and the less advantaged are required to do whatever is possible to stay afloat.  Having been a student with less resources, the inherent advantages of being “better off” were apparent but unattainable.  My future and the future of my children and family is what motivates me to gain the status of “extraordinarily resourced”.

More Than Sports Training: 21st Century Social Media

Social media is a powerful tool used by many marketing, public relations and communications departments to convey organizational information, highlight company achievements, and engage constituents.  When used properly, social media can be a tremendous asset.  Conversely, social media can be the source of major headaches to athletic departments when student-athletes are involved.  In 2012 Cardale Jones, then third-string quarterback for the Ohio State University Buckeyes, sent a tweet indicating his displeasure with having to attend classes.  The tweet caught up with him in 2015 when the Buckeyes were contending for the first College Football Playoff National Championship.  Although in April of the same year, Jones walked back the comment, this situation is a great example of how social media can forever follow posters.  The students presenting in the OSU Sport Media video reported on different stories of how social media has impacted various departments in college athletics, namely the areas of compliance student-athlete communication allowances.

Ben Dyson of the OSU compliance department discussed the challenges he faces when dealing with social media and maintaining compliance with NCAA policies; namely, monitoring communication between prospective student-athletes and boosters and program donors.  Dyson indicated the need to reach out to donors and even Facebook and Twitter to request the removal of social media communication directed to prospects.  Although the NCAA rule is nearly impossible to enforce, it is up to Dyson and his staff to make honest efforts to protect their department, programs and prospective student-athletes from any inappropriate interaction.

Additionally, athletic departments also have to determine their stance on student-athlete social media usage.  Although some schools have banned social media use by student-athletes, several state legislation policies have set a precedent for disallowing social media bans.  Regardless of bans, athletic departments should devote resources to establishing social media usage expectations for student-athletes and educating them on those expectations.

When used properly, social media can lead to unique and effective communication opportunities with constituents.  Fans can be galvanized to attend an event, support a cause or donate to a campaign.  Unlike email, the reach of social media is immediate and more cost effective than traditional mailings.  Social media has been firmly established as an effective communication tool in athletic departments across the country.  The importance of establishing policies for social media practices is a great way for athletic departments to stay ahead of the curve.

Engagement is Not Just Butts In Seats!

When considering the logistics involved with getting between 50,000 to 100,000 people interested enough in a football game to purchase tickets, then consider the work necessary to get them to come back, sometimes over and over again, the task seems quite daunting.

Fortunately for sport marketers, there is a wide assortment of automated solutions that can capture first time purchasers, incentivize established purchasers and continuously and creatively engage season-ticket holders in an attentive and effective manner.  The four-phase process includes building a roster, communicating, establishing behaviors during the event and establishing behaviors before and after the event.

Before a ball is bounced on a court, or a racket hits a ball over a net, ticket marketers are updating their pre-existing information and establishing strategies to collect real-time data during their sport contests.  Collecting new user information can be as simple as establishing an enter-to-win contest that requires the submission of personal information by fans in order to bolster the database.  The NCAA Women’s Final Four marketing staff employs this tactic at the beginning of every championship selling season (day 1 after the women’s final four).  Pre-sale purchasers have access to purchase prime seating as well as enter to win free tickets.  Presale opportunities and contests are simple yet effective ways to collect new customer information, thereby building a database.

Once information is collected and databases are updated, the process for communicating with purchasers will begin.  For the newbies, automated programs that send specific messages depending on the activity of the purchaser will allow for a soup to nuts communication experience.  New users are welcomed, educated on the benefits of the ticket purchasing programs (AKA nurtured), provided with ordering notices to provide details on how and when to order products and finally given proof of purchase or transactional emails.  Immediately after purchasing tickets for the Mavericks game in February, my transaction report and electronic access to game tickets were emailed to me.  I also received details about the bobble-head night promotion that occurred and received a follow-up call one week later asking about my experience and my interest in buying additional tickets.  Marketers must walk the fine line of providing thorough correspondence versus overwhelming a customer with information.

Once tickets are in-hand, or in-phone, opportunities to engage fans during the game will present themselves.  Again, knowing when to engage is crucial, during dead balls and/or stoppage in play are the most ideal times.  If the resources are available, utilizing videoboard graphics and interactives are effective and relatively easy ways to reach consumers.

Phase four entails communication plans before and after the games.  The end goal with engagement is not simply placing a butt in a seat.  The end goal is continuous engagement, spectator loyalty and return visits.  Continuous, well-timed, automated communications help marketers achieve those goals.  Social media is a tremendously helpful tool for engaging fans in new and creative ways.  Content is an important driver of engagement and the ability to use resources such as athletes, coaches and recognizable team personnel are great ways to build a strong, engaged fan base.

The event marketer is an important cog in the success of teams around the globe.  Ensuring that success is the establishment and implementation of an effective and efficient communications plan that contains content that is engaging and informative.  Ensuring that all resources that are available to the marketer are utilized and establishing a welcoming relationship with purchasers so they feel “taken care of” are all aspects of the four phases to drive fan engagement.

Winning! 8 Helpful Steps

IEG has narrowed down eight steps to creating a winning sports sponsorship experience.  Step one is to determine what consumers are passionate about and utilizing analytics from that information to determine how to reach fans in an impactful way.  If consumers care about a product, they will be much more likely to engage with that product and therefore purchase or consume it.

Secondly, once consumer passion is determined, companies must determine how to incorporate that into their brand sponsorship so as to ensure the organization operates with an identifiable purpose.  A sponsor shouldn’t have activations just to have them or to simply elicit attention.  There should be purpose behind activation to galvanize consumer interaction and engagement.

The third step involves doing more than slapping a logo on an event or product.  Creating great content for consumers to engage with is a great way to create genuine pub for an event or product and enhance the fan experience.  A memorable fan experience will lead to an increased willingness to engage and even share if a sharing method is permitted.

When consumers share i.e. participate, sponsors have accomplished the fourth step of winning in sport sponsorship.  Social media, especially, is an effective way to increase participatory interactivity between sponsor organizations and the consumer.  The use of social media can be elaborate or simply but following the three previous steps of touching on consumer passions with purposeful activities and intriguing content will almost guarantee interactivity.

Steps five and six involve companies including their brand story into the consumer activation/interactivity and being relevant, agile and fast.  Steps five and six are important when transitioning from consumer focused tactics to seamlessly incorporating brand awareness while staying true to the first few steps mentioned.

When attempting step seven, continuing to think outside the box in regards to evaluation is just as important as doing so when engaging consumers.  Efficacy evaluation should provide results that are helpful to improving for future endeavors, not simply provide transaction data that doesn’t aid in consumer engagement.  Going beyond the realm of simply or traditional analytics will allow for a necessary and effective deep dive.

Finally, winning in sports sponsorship requires a balanced portfolio, one that doesn’t zero in on one event but treats sponsorship holistically.

When the eight characteristics of winning sports sponsorships are used, any organization has a chance at successful consumer interactions and engagement.

Building a Team of Sport Sponsorship

In general sport sponsors take planning in order for the sponsoring organization and the entity receiving the sponsorship are satisfied with their relationship and the services involved.  A plan outlines the needs and expectations of each organization, allowing for clear communication and potentially eliminating surprises.  A plan should indicate presence in all three phases of the sponsorship relationship, before, during and after thus ensuring high levels of customer service which often lead to repeat partnerships.

When beginning the sponsorship process, the video provided seven helpful tips on how to successfully identify, procure and service sponsors as well as evaluate the efficacy of the relationship/sponsorship.  Step one is Knowing your audience.  Organizations seeking sponsors should have a strong understanding of their audience, i.e. the demographics and habits of their consumers and constituents.  Understanding this information is important for more than just sponsorships but will assist an organization in determine the route they should take when communicating to and engaging with consumers.  Germane to this discussion, knowing an audience will assist with identifying sponsors who have a natural connection simply because their consumers are similar in various ways.

Once your audience is recognized and their demographics and habits can be communicated, step two is to brainstorm what’s brandable.  What qualities does the organization have that can be turned into a branding opportunity for a potential sponsor.  For example, the SEC’s football tailgating culture includes male and female fans dressing up in team affiliated attire and colors on football Saturdays.  A partnership with Belk as the official retail department store of the SEC, provides tremendous nationwide exposure to Belk as they encourage continued growth in their current locations as well as movement into contiguous markets.

 Within the brainstorming session, the concept of “no bad ideas” should encourage the creation of a wealth of ideas.  Emphasis should be placed on uniqueness, what consumers within the demographic care about and quantifiable benefits.  Upon the conclusion of brainstorming, sponsorship teams to pare down their idea list by approaching step three – making a list of potential sponsors.  By making a list, the brainstorming list and the audience demographic information can be used to determine what kind of sponsors could be approached and what unique tactic could be used when engaging.

The slideshare video provided a few helpful ways to determine an effective sponsor list:

  1. Start with people you know
  2. Tap your event participants
  3. Identify events that are similar to yours, identify their sponsors and approach them or even their market competitors.
  4. Identify local businesses, especially those with grand openings that will appreciate extra publicity.

Upon creating the preliminary list, do some homework.  What have they sponsored in the past?  Who in the company makes the decisions and when are the budgetary decisions made?

Step five requires a deeper dive into the companies that have been identified.  Its not time to know your sponsors, their needs, what they would want, not want, how to communicate, what sponsorship benefits would intrigue them and what tactic to take.  Sponsor teams should determine if B2C or B2B approaches are best.

After research is done and the client is known and understood, sponsors should begin tailoring sponsorship opportunities to those individual clients.  Drilling down and going beyond typical signage opportunities and database sharing.  For example, ESPN partnered with Taco Bell to create a student section at the College Football Playoff national championship games.  Taco Bell provided 1,000 game tickets and access to a Zac Brown Band concert to students whose institution was participating in the CFP.  Reaching a target that is unique to Taco Bell in a unique way worked will for the corporate sponsor.

The last two steps are measurement and endorsement.  Going through the sponsorship process while successfully landing a sponsor is great but communicating to that sponsor the value of the partnership is an essential tool for retention.  Going with traditional ways to measure impressions or efficacy can lead to dissatisfied sponsors especially of those traditional measurements don’t align with the intent of the original sponsorship.  Organizations should be sure to measure the attributes and impressions that are of consequence to an organization.  Taco Bell was interested in focusing in on college students as their target market, therefore a measurement using social media analytics, a method of communication that would most likely be the preferred form by their target market, would be a natural measurement tool.

After successful sponsorship activities, organizations can use those relationships to create new relationships with other sponsors by procuring endorsements from current sponsors.  From customer service to uniqueness of opportunities to overall successful partnerships, organizations should use their sponsors positive experiences to create new opportunities.

A Summary of Revenue Projections to 2020

The PwC Sports Outlook identified four key revenues sources shared by sport organizations and evaluated their projected growth and therefore impact on the sports industry, overall.  The four areas included: gate revenue, media rights, sponsorship and merchandise.  All areas are projected to see compounded annual growth by 2020 of a rate of at least one percent with media rights leading the key areas with the largest rate of growth being 5.5 percent.  Interestingly enough, the article describes the exorbitant fees rights holders are receiving as a leveling off event as opposed to oft reported bursting bubble.  Nevertheless, sport revenue of the present and future will require the knowledgeable handling of these four key areas.

Gate revenues have become a dynamic source of income for sports properties.  The variability of ticket programs including season ticket holders (full and partial), incentivizing purchasers with value-added benefits, fan zones and the differentiation between the in-game and broadcast experience are all ways ticket managers ensure ticket sales revenue.  Specifically, with season ticket holders, membership programs have been established to provide a more immersive, exclusive experience to further connect the season ticket member to their sport franchise.  These “members” are rewarded for their involvement in the program with a variety of experiences including behind-the-scenes access and meet and greets with players among other incentives.  From the collegiate to the professional level, creativity and innovation with seating programs greatly enhances a sport organization’s ability to monetize the most plentiful asset, its seats.

Media rights have received an increased amount of publicity in the past few years with ever-rising rights fees being paid out by various media companies.  Specificallu, the Big Ten’s multi-billion-dollar deal with ESPN and FOX.  Earning $440 million annually for the Big Ten deal was to be a litmus test to determine how other rights holders would fare in the new round of TV negotiations.  Because, $2.64 billion contracts don’t seem sustainable, media companies and rights holders are investigating new ways to distribute and monetize their content.  Cord cutting is at an all-time high and alternative forms of distribution are necessary.  Although no one can put a finger on exactly what route the sports entertainment industry is taking, many are certain the road leads through the intelligent, handheld devices that often accompany sporting event spectators.

Similar to gate revenues and media rights deals, sponsorships are in a new era of existence.  No longer are court-side dorna signs an acceptable display of sponsorship graphics and logos (except for in AT&T Arena in San Antonia), sponsor expectations include fan and product immersion and dynamic displays.  Sponsorships that have cracked into the digital and social space have barely scratched the surface of their exposure capabilities.  Currently, projected growth will occur towards the latter years of the four-year period with most companies locked into deals causing a stabilizing of the field.  Awareness will always be the leading driver for a company to enter into a sponsorship but the added benefit of community relations and foundation interaction helps with solidifying a positive company image for those who interact with the brand.

Although having the smallest compounded annual growth rate of 1.4 percent, merchandise has become an important tool in earning revenue.  E-commerce is an obvious advantage to the sale of club specific merchandise especially with fans of sports franchises not being relegated to one city or region.  Representation is as easy as a click of a button for a Dallas Cowboys fan who lives in Montreal.  For fans who are able to represent their favorite teams locally, sports venues have team stores that sell merchandise.  Facility/team owned merchandising versus third party vendors is a question that provides pros and cons that defend either side.  The most important aspect of sales is the integration between team and sales, ensuring team assets are advocating for the purchase of key products as communicated by the merchandise professionals.

Revenue streams are important to the sustainability of the sports industry.  Making intelligent, well-thought out decisions that increase the bottom line can be effectively done with a focus on gate revenues, media rights, sponsorships and the sale of merchandise.

The chart below compares revenue accrued in 2016 versus the revenue projected by 2020 and the compounded annual growth rate over the four-year period.

North American sports market by segment (2016 to 2020 projections and growth rate)
US$ billions 2016 2020 CAGR
       
Gate Revenues 18.7 20.8 2.7%
Media Rights 18.2 21.2 5.5%
Sponsorship 16.3 18.7 3.9%
Merchandise 13.9 14.8 1.4%
CAGR = compound annual growth rate