Objectives

Today students will

Discuss the impact of commercialization on sports
Discuss the nature of professional sports
Discuss the legal status and incomes of athletes
involved with commercial sports

Sports and the Economy

For Discussion
Commercial sports prosper in certain types
of societies. Drawing from the textbook and
using Canada, the U.S., England, or
Australia as an example, explain how the
characteristics of any one of those countries
provide a strong support for maintaining
commercial sports.

Emergence and Growth of

Commercial Sports
Coakley & Donnelly note that commercial sports grow and prosper
best under certain social and economic conditions:

Market economies
Societies with large, densely populated cities
People with time, money, and freedom of
movement to attend sports events regularly
Availability of large amounts of capital to build
facilities
Lifestyles based on high rates of consumption and
that emphasize material status symbols

Class Relations and Commercial

Sports
Market economies always privilege the interests of
those who already have power and resources
In the commercialization of sport, priority is usually
given to sports consumed by people who possess or
control economic resources.
Consider golf as an example of this:
golfers not only have lots of money, but also have
professional occupations in which they are responsible for
a considerable number of purchases. This makes golf
attractive to advertisers as a means of presenting images
and products to consumers.

Creation of Spectator Interest in

Sports
Several factors contribute to spectator interest in
sports:

Quest for excitement

Success ideology
Childhood sports experiences
Media coverage

Discussion Question
Transnational corporations are using sports
as vehicles for global expansion to a greater
degree than ever before. Using material
from the chapter discuss the following: Why
do these large corporations see sports and
sport sponsorships as important in their
growth? Are they interested only in
immediate profits or do they have other
goals as well? If so, what are those goals?

Economic Motives and the

Globalization of Commercial Sports
Coakley and Donnelly note that those who control,
sponsor and promote sports are looking constantly for
new ways to expand their markets and make new
money.
Many pro sports leagues have been developing strategies to
sell television rights and product licensing around the
world
Makers of unhealthy products are eager to see their
products associated with healthy sporting activities
Sports help companies create corporate outposts:
i.e. people internalize the belief that enjoyment and pleasure in a
persons everyday life depends upon a particular corporation and
its products

Outposts in Action
When corporations want to prove they own sports,
they brand sports by searing their logos into them.

Sport places have been branded

Sport events have been branded
Athletes have been branded
Branding has come to be accepted by many as
necessary and non-political. Isnt this a sure
sign of the success of corporate branding?

Commercialization and Changes in

Sports
Because sports are social constructions, they
change in connection with social relationships.
Currently most changes are heavily influenced
by economic relationships and conditions.

Changes in Sports Structure and

Goals
Commercialization has had an impact on the
structures and goals of most newly developed sports
as entertainment has become the primary focus for
sports such as the XGames. In most older established
sports, entertainment is not the primary issue but has
become important.
Sports are entertaining because of three factors:
Uncertainty of the event or outcome
Risk and rewards associated with participating in an event
Anticipated display of excellence

Changes in Sports Rules

Creating a total entertainment experience
Rules in new sports such as the XGames emphasize
risky spectacular moves and the sponsors equipment.
In established sports, changes in rules are usually
aimed at accomplishing any one or a combination of
five things:

Speed up the action

Increase scoring to create excitement
Balance competition to increase uncertainty
Maximize drama
Provide commercial breaks

Changes in Players, Coaches, and

Sponsors
As commercialized sports are entertainment,
athletes have become entertainers and heroes in
addition to being highly skilled players.
Audience members who have little technical
knowledge about sport are easily impressed by things
extrinsic to the game.
Many players themselves have recognized that style
is as important as skill in commercial sports.
Broadcasters always talk about danger, injuries,
playing with pain, and courage, which has led
players, coaches, and sponsors to develop heroic
orientations in addition to aesthetic ones.

Discussion Question
Some critical theorists say that professional
wrestling is little different from other major
spectator sports especially with respect to
the orientations of those involved at all
levels. Do you agree or disagree with them?
Use material from the chapter to make your
case, one way or the other.

Changes in Sport Organizations

The organizations that control commercial sports are
complex but their primary goal is to maximize
revenues.
A low priority is given to the interests of athletes, and
athletes often defer decision making to team owners,
agents, advertising, executives, media people and
corporate sponsors.
By shifting the control of sports away from athletes,
commercialization has created a situation in which
corporations are now defining what sports are all
about.

Owners, Sponsors, and Promoters

in Commercial Sports
Professional Sports in North America
Most sports franchises in NA are privately owned by
individuals or small partnerships; a few are owned by
large corporations.
Sports leagues form some of the most effective
monopolies in the history of North American
business. These monopolies limit the competition
between teams regarding players, fans, media
revenues and sales of licensed merchandise.

Discussion Question
Many cities in North America are subsidizing
professional sport team owners to some
degree. Cities often provide public funds to
build stadiums and arenas. Such support for
teams is justified by beliefs that pro teams
are good for the economy of a metropolitan
area. Using information presented in the
chapter, explain why you agree or disagree
with this justification.

Financing Professional Sport

Public assistance for team owners:

Use of public funds to construct and maintain facilities

Income deductions on tax returns
Tax breaks and rebates
Control of revenues in public facilities

Sources of income for team owners:

Media revenues
Gate receipts
Stadium revenue:
luxury suites and boxes, concessions, sale of stadium advertising
and naming rights, and parking

Licensing fees and merchandise

For Discussion
The legal status of professional athletes in
North American team sports has traditionally
been regulated by the "reserve system."
Describe the characteristics of the reserve
system, and show how those characteristics
have had an impact on the salaries earned
by professional athletes. What has
happened to the salaries of athletes as
various aspects of the reserve system have
been eliminated?

Legal Status of Professional

Athletes: Team Sports
Historically, pro athletes have had fewer employment
rights than non-athletes because US teams are exempt
from anti-trust laws that would otherwise have made
the "reserve system" illegal.
Free agency now exists for veteran players.
It has been difficult to organize players because
owners frown upon players who have been reps in player unions or
associations
players are reluctant to join an organization that may ask them to
strike for an entire season because their careers last only 4 - 7 years
strikes are risky as owners may hire scabs
highly paid players don't identify with the 20-35% of players who
make the minimum salaries in the leagues

Legal Status of Professional Athletes:

Individual Sports
The legal status of these athletes varies from sport
to sport; nonetheless, it is possible to make a few
generalizations:

The legal status of many of these athletes are shaped

by their agreements with sponsors and sanctioning
groups.
In some sports, legal status is defined in the by-laws
of professional organizations such as the PGA,
LPGA, ATP, and PRCA. Because these organizations
are heavily controlled by athletes, their official
policies are supportive of athletes rights.

Income: Team Sports

Salaries vary widely across the different levels and
divisions in professional team sports.
In many sports, jobs are seasonal and more players
play in the minor leagues than in the major leagues.
Michael Jordan made more in the first 16 games of
his 1996-97 season than all 80 women playing in the
ABL did in their entire 40-game season.
Mega salaries are quite new in professional team
sports. The rapid increase in salary is due to
changes in the legal status and rights of athletes
increased revenues generated by new forms of media
coverage

Income: Individual Sports

While publicity is eagerly given to the size of
winnings, little is said about the cost of playing in
tournaments.

Many of these athletes must carefully manage

their money to make sure they are at least
breaking even.
The gap between top money winners and
others has increased recently.
Sometimes these athletes have to share their
winnings with investors who sponsor them.

Pro Athlete FAQ

Are pro athletes overpaid?
Coakley (2004) says not in economic terms.

How much do athletes make on endorsements?

Coakley (2004) says it depends on an athletes
marketability.

Do athletes salaries affect ticket prices to sports

events?
According to Gerald Scully, no.

Do big salaries influence the motivation of athletes?

Although motivation is difficult to measure, Coakley
doubts that salaries influence it.

Commercialized Amateur Sports:

Sponsors and Promoters
Amateur sports don't have owners but they do have
sponsors who are generally large corporations that
support them for advertising purposes.
Athletes access to sponsors varies according to the
number of national organizations that control amateur
sport and whether that control is centralized or
decentralized.
Sponsorship patterns can take many forms:
Event sponsorship
Team sponsorship requiring exclusivity across the board
Sponsorship of college sports: a clever way for privately
owned corporations to use tax-supported institutions as
vehicles for their own profit making

Amateur Athletes in Commercial

Sports
These athletes are relatively powerless: They have
few rights and have no formal means to file
complaints when they have been mistreated.
The above is not only true of the NCAA athletes
described by Coakley but also of Canadian amateur
athletes.
Most amateur athletes in commercial sports do not
receive any compensation for their involvement in
revenue-generating events.

Student Questions
Questions addressed by the textbook or other research

Professional athletes and salaries (fairness)

Why is there such an emphasis on professional sports in society?
Do we need to sacrifice some sport rules to entertain spectators?
What factors need to be present for a sport considered
'professional'?

Questions Requiring Further Research

How does getting paid in professional sports impact the
experience of the sport for those individuals in comparison with
those who are involved in sport purely out of self-interest (i.e.
without monetary rewards)?
What is the reality about pro-wrestling performance, is it in fact
real?
Are today's professional athletes proper role models for children?

For Next Class

Prepare for a quiz on chapter 11