Sports & Entertainment Marketing Unit One Outline, 2014-15 School Year

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Sports & Entertainment Marketing

Unit One Outline, 2014-15 School Year

Unit 1:

Unit one provides students with an understanding of the evolution of sports and entertainment as it relates to business. Identifying industry “pioneers” and important milestones will assist students in the comprehension of how the sports and entertainment industry has become the multi-billion dollar industry it is today.
Lesson 1.4 of this unit reviews a number of industry pioneers. The list is pretty extensive, but by no means is it “all-inclusive”. Challenge your students to create a list of their own pioneers. Make sure they can identify specific areas where the individual has made an impact and how it helped shape the state of the industry.
History & Evolution of Sports & Entertainment Marketing



1) Define the acronym SEM

2) Identify factors that contributed to the growth of the sports and entertainment industry

3) Understand the concept of “fandom” and its importance to the business of sports and entertainment

4) Discuss the impact specific individuals had on the evolution of the industry

5) Recognize specific milestones relevant to industry growth

6) Define media

7) Understand the importance of media (broadcast) rights



Lesson 1.1 Genesis of Sports & Entertainment Marketing

Lesson 1.2 Factors Contributing to Industry Growth

Lesson 1.3 Media Impact on Industry Growth

Lesson 1.4 Industry Pioneers

Lesson 1.5 Important Milestones in SEM History

Lesson 1.6 Where Are We Now?


Fandom Media Media (Broadcast) Rights

SEM Superfan

Lesson 1.1

Genesis of Sports and Entertainment Marketing

  1. The origins of sports and entertainment marketing (SEM)

    1. What is SEM?

      1. SEM is the acronym for sports and entertainment marketing

    2. Sports and entertainment marketing is a relatively new player in a field of multi-billion dollar industries.

      1. Forms of sports marketing started as early as 1858 (first known athletic event to charge admission took place at a baseball game)

      2. Entertainment as we know it today (movies, radio, television, music) exploded from 1900 on, and as technology improved, so did the products being offered

        1. Silent movies progressed to sound, and radio eventually expanded to television;

        2. Vinyl records evolved into tape and CD and today’s digital formats

      3. The 1900’s also brought the advent of carnivals, amusement parks, and theme parks which evolved from (but did not completely replace) fairs, circuses and festivals

    3. Many events have influenced the industry’s transition from leisure activity to big business

      1. Evolved as fan support grew with willingness to spend discretionary income

      2. Emergence of radio and television offered more opportunity for consumption of sports and entertainment products

      3. Corporations began to see the benefit with sports and entertainment affiliations, resulting in a marketing and sponsorship boom

      4. Celebrity endorsements and naming rights deals became common industry practice

      5. Advancement of technologies making it easier to consume sports and entertainment while more sports and entertainment properties are introduced

    4. Size and scope of the sports industry

      1. The sports business industry is one of the largest and fastest growing industries in the United States

      2. Research conducted in 2014 by Plunkett Research estimates the overall size of the entire sports industry in the U.S. is around $485 billion (global, the sports industry is estimated to be around $1.5 trillion) 1

      3. Comparatively:

        1. More than twice the size of the auto repair services and parking industries 2

        2. Larger than such industries as insurance carriers and legal services 2

    5. Sports industry revenue breakdown (in 2014) 3

      1. $44.1 billion in sales of U.S. sporting goods equipment by retailers

      2. $34.3 billion in racetracks, sports teams and other spectator sports

      3. $23.5 billion in revenues for the “Big 4” U.S. sports leagues

        1. NFL, MLB, NBA, NHL

      4. $22.4 billion in revenue in fitness and recreation centers

      5. $913 million in NCAA sports revenue

      6. $828 million in NASCAR revenue

      7. $495 million in MLS revenue

    1. Size and scope of the entertainment industry

      1. Industry extends from movies, television and radio, to theatre, home entertainment, amusement/theme parks, gaming and much more

      2. Consumers have shown an insatiable appetite for entertainment resulting in an industry boom

        1. Broadly measured, the entertainment and media industry spans multiple sectors

          1. There are 9,566 FM radio stations in the United States

          2. Over 1.4 billion movie tickets are sold each year in U.S. theaters

          3. Analysts at Veronis Suhler Stevenson estimate that total U.S. communications and media spending hit $1.12 trillion in 2011 (up from only about $891.5 billion in 2008) and will grow to $1.4 trillion by 2014 4

          4. Of the 50 billion+ downloads sold on its history, 15 of the 25 most downloaded apps ever are games (click here to view the entire list)

    2. Entertainment industry revenue breakdown (according to latest US Census Data) 5

      1. $91 billion in film/theatrical/DVD rental/related revenues

      2. $80 billion in TV broadcast and cable revenues

      3. $76 billion in music industry revenues (CDs, downloads, radio, concerts, etc.)

      4. $18 billion in electronic gaming 6

      5. $12 billion in amusement/theme park revenues

      6. $7 billion in theatrical productions

Lesson 1.2

Factors Contributing to Industry Growth

  1. Many factors in sports and entertainment business led to its enormous growth

    1. Increase in numbers of those participating in sports and entertainment

      1. The U.S. Youth Soccer Association reports that there were 100,000 registered players in 1974. Today the organization has grown to 3.2 million registered players and over 800,000 coaches and volunteers. 8

      2. The number of U.S. golfers has risen to 12.6% of the population vs. 3.5% 50 years ago 9

      3. According to the National Federation of State High School Associations, the sport of lacrosse has seen a 280% increase in participation in the last decade 10

      4. Among sports and recreation activities that grew more than 15% the past 10 years, skateboarding led the way with a 74.1% growth, according to the National Sporting Goods Association (NSGA) 11

        1. Skateboarding saw a remarkable increase in the last 10 years, due in part, to the television exposure provided by ESPN’s X-Games,” said NSGA Vice President of Information & Research Thomas B. Doyle (NSGA) 11

      5. According to a CBS Sports report, USA Hockey saw a record 519,547 people register as amateur hockey players in the US in 2014, 8,000 more players than any other year as non-traditional markets like California, Texas and Florida have grown exponentially over the past 20 years

    2. Increase in numbers of those following sports and entertainment

      1. U.S. television broadcast 800 hours of sports in 1971 12

        1. NBC streamed the entire 2014 Winter Olympics in Sochi, Russia, marking the first time that fans had a chance to watch every Winter Olympic event live (compared with a total of 14 total hours of coverage from the 1964 Tokyo games) 13

    3. Increase in sports/entertainment offerings

      1. More options for sports as participants

        1. Disc golf the sport spread to 560 courses nationwide by 1995 and doubled that number by 2000. Today, the Professional Disc Golf Association boasts more than 4,000 courses globally and the game is played in more than 40 countries 14

          1. Click here to view reports published in 2014 by the PDGA demonstrating the sports’ growth in several areas

        2. In 2013, Hawaii became the first state to sanction surfing as an officially recognized high school sport

          1. Also in 2013, the state of Missouri bass fishing became an officially sanctioned high school sport (joining the states of Illinois, Kentucky and Tennessee as states sanctioning fishing as a recognized sport)

          2. One school in Florida is attempting to legitimize Go Kart racing as an official varsity sport

          3. According to the National Federation of State High School Associations, other high school athletic and activity associations have been adding sports such as bowling, archery, beach volleyball, rodeo, air riflery, chess, Nordic skiing and canoe paddling

          4. A new sport called Spikeball burst on the scene two years ago and, according to its governing body, already boasts 125,000 participants and is the fastest growing sport in the U.S.

            1. The sport was featured on ESPN2’s “Sports Nation” television program last year, click here to see the clip

      2. Media broadcast offerings

        1. According to the Sports Business Journal, ESPN’s coverage features over 65 sports (including MLB, NBA, NFL’s Monday Night Football, NASCAR, MLS, FIFA World Cup, WNBA, college football, men's and women's college basketball, golf, Little League World Series, fishing, spelling, billiards, poker, arena football, eating championships, and the X Games), 24 hours a day in 15 languages in more than 150 countries

        2. DirecTV now offers over 285 channels as part of their “premiere” package, including over 50 channels dedicated specifically to sports programming (and that doesn’t include the seventeen “specialty” packages that require an additional subscription like the NBA League Pass, NFL Ticket or NHL Center Ice)

    4. Attendance increases had an enormous influence on the size and scope of the sports and entertainment business industry

      1. Despite playing just half a season thanks to a lockout that drew plenty of fan and media criticism, NHL league attendance for the 2013-2014 season was 21,960,043, despite missing several weeks of the season during the 2014 Winter Olympic Games in Sochi

        1. To put the league’s growth into perspective, the NHL’s attendance in 1978-79 was just 7,758,0516

        2. Click here for an updated link for more attendance figures for other U.S. professional sports leagues

      2. Over 75 percent of movies in the top 50 all-time highest-grossing films (before inflation) were released after the year 2000. The highest grossing film in the 70s was Star Wars, at just under $800 million and in the 80s was E.T., at just $750 million (click here for the full list). 17

        1. In the summer of 2013, Iron Man 3 needed just 23 days in theater to surpass $1 billion in gross sales

        2. Later in 2013, Disney’s holiday blockbuster Frozen would become the highest grossing animated film of all-time and pass Iron Man 3 as the 5th highest grossing film ever

This is a good time to gauge your student’s familiarity with the concept of inflation (great way to tie in a quick economic lesson)! Ask students if they think twice as many ticket buying patrons attended Titanic as they did Star Wars. Introduce the concept of adjusted box office gross (reflecting inflation). See the discussion topic presented in the PowerPoint slides for more details and an example illustrating this valuable lesson.

    1. Media coverage of sports and entertainment has grown significantly in the past half-century, placing athletes and entertainers in the public eye with incredible frequency

      1. Television and radio provide alternative news sources to newspapers while social media provides an even newer alternative to all other forms of media

      2. Profit potential for media centers encourage increased competition for top stories

      3. Introduction of Internet makes information available “on demand” with increased frequency and accessibility

        1. Tiger Woods explains “Arnold Palmer…came along at the same time television was exploding in America. Now we’ve got global Internet access. Our sport wasn’t global when I began playing the Tour. Now it is. You can log on anywhere in the world and see what any player did in any tournament or for the year. With that international boom, that international stream of information, golf is getting exposed to parts of the world that it never even thought of getting into.” 18

    2. The international marketplace continues to provide a platform for driving sales of sports and entertainment products and services

      1. J.K. Rowling’s (UK) Harry Potter series

      2. Athletes like the NBA’s Dirk Nowitzki (Germany), MLS’s Julio Cesar (Brazil), the NHL’s Alexander Ovechkin and Evgeni Malkin (Russia), the PGA Tour’s Rory McIlroy (Ireland), Tennis stars Maria Sharapova (Russia), Novak Djokovic (Serbia), Rafael Nadal (Spain) and Roger Federer (Sweden), Track star Usain Bolt (Jamaica), Boxer Manny Pacquiao (Phillipines) and MLB’s Yasiel Puig (Cuba), Ichiro Suziki and Yu Darvish (Japan) help their respective sports, teams and leagues draw fans from all over the world

        1. A record 12 international players were selected in the first round of the 2013 NBA Draft while opening-night rosters for the 2012-13 NBA season featured a record-tying 84 international players

      3. European musicians like the Rolling Stones, U2, Adele and Coldplay, Columbian artist Shakira, Canadian Justin Bieber and Barbados-born Rihanna sell millions of records (and downloads) to consumers all over the globe

      4. Actors and actresses such as Cate Blanchett, Kate Winslet, Colin Farrell, Emma Watson and Russell Crowe help boost International box office sales for the films in which they have a prominent role

      5. Global events like Wimbledon, the Tour de France, FIFA World Cup, Olympic Games, the Iditarod and Cannes Film Festival attract world-wide attention, providing an exceptional marketing opportunity for ticket sales, sponsorship sales, licensing and merchandise opportunities while providing a tremendous economic impact for host cities

        1. ESPN, CANAL + Events and Tignes Ski & Snowboard Resort (in France) launched the first Winter X Games to be held outside the United States and X Games Munich 2013 demonstrated the growth in global appeal of the event when 47.5 hours of action were broadcast across ESPN’s various platforms, including 26.5 hours on live television

      6. The global demand for footwear and sports apparel continues to grow with international brands like China’s Li Ning, South Korea’s Fila, Japan’s Mizuno and Germany’s Adidas and Puma fiercely competing with American brands like Nike and Under Armour for market share

        1. Click here for a recap from on how several apparel brands utilized the 2014 World Cup in 2014 to compete for consumer attention

        2. A number of NBA All-Stars have recently opted out of relationships with American brands to pursue deals with Chinese sportswear brands, including Dwyane Wade who left Jordan Brand for Li-Ning, Steve Nash who left Nike to sign with Luyou, Kevin Garnett left Adidas to sign with Anta, and Kevin Love wears a new Chinese shoe brand, 361 Degrees 19

        3. In 2013, Reebok intensified its marketing efforts to reach consumers in India (with its population of more than 1.2 billion people) by signing Indian cricket captain M. S. Dhoni as its ambassador, along with other yet-to-be-revealed “well-known personalities from different walks of life such as musicians, entertainers and professionals" (according to the Economic Times) 20

      7. Prominent American sport properties are making a push to expand their presence overseas by hosting regular season games (not exhibition games) outside of the U.S.

        1. Major League Baseball continued its recent history of internationally hosting season openers when the Arizona Diamondbacks and Los Angeles Dodgers played in Sydney, Australia to kick off the 2014 MLB regular season

        2. NFL Commissioner Roger Goodell has been very public with his sentiments that he would like to see a much bigger NFL presence in London, even suggesting the possibility of bringing an expansion franchise to the city

          1. Click here to view one writer’s opinion on why the NFL should not aggressively pursue a stronger presence overseas

        3. Viewers of the 2014 NBA Finals in the United States had the option of listening to ABC’s broadcast of the game in Spanish by simply pressing the 'Audio' menu button on the television’s remote control

        4. The UFC staged a bout (UFC 120 featuring Michael Bisping and Yoshirio Akiyama) at London’s O2 arena and the event was attended by 17,133 fans, breaking the European attendance and gate receipts record which was set by the MEN at UFC 105. It was also the biggest box office sporting event in O2 Arena history.21

  1. Signs of continued industry growth

    1. Indications point toward heavy increases in consumption of sports and entertainment

      1. Overall industry revenues continue to climb, domestically and internationally

        1. The worldwide video game industry is poised to reach $70.1 billion by 2015, thanks to the combined growth of console, portable, PC, and online video games, according to market researcher DFC Intelligence.22

        2. Global total digital recorded music revenue will exceed physical recorded music revenue for the first time in 2014, according to analysts at PWC 23

          1. Click here to see a graph illustrating the sales growth of digital music

        3. Pandora radio now boasts over 250 million users 24

        4. The global theme parks market is projected to reach $29.5 billion by 2015, according to a report by Global Industry Analysts, Inc. 25

        5. Also according to Global Industry Analysts, Inc., the global footwear market is expected to reach $195 billion by 2015 26

        6. For the first time in history, ebook sales generated more revenue than hardcover books in 2012 while overall ebook sales have increased 4,456% since 2008 27

        7. In 1994, Nike’s soccer brand revenues were $40 million. In 2014, the company reported soccer revenues of more than $2 billion (adidas’ soccer division reported $2.7 billion in sales according to 28

        8. NFL media fees are projected to double to $8 billion annually by the end of the decade 29

        9. According to a story published on ESPN’s website, former NBA commissioner David Stern told industry executives at a 2013 meeting that the league estimated revenues would be a record $5 billion, an increase of about 20 percent from the league's last full season in 2010-11 (the 2011-12 season was shortened by a lockout) 30

        10. Centerplate, the leading hospitality partner to North America's premier sports, convention and entertainment venues, is now also the fastest growing restaurant chain in America, according to Nation's Restaurant News. Centerplate serves over 115 million guests per year. 31

          1. Click here to see an infographic featuring an interesting comparison from Centerplate examining the eating habits at games of US fans vs. UK fans

        11. In 2013, Forbes suggested that ESPN had grown to a valuation of $40 billion 32

      2. Television audiences continue to grow in size while sports and entertainment properties expand the various means for distributing content (social media, streaming etc)

        1. The 2014 NBA Finals on ABC between the Miami Heat and San Antonio Spurs was broadcast in 215 countries and 47 languages

        2. The 2014 NBA Finals averaged 15.5 million, up from 15.1 million viewers through five games of the 2013 series between Miami and Oklahoma City.

        3. The NBA continues to be a leader in embracing social media surpassing 400 million likes and followers combined across all league, team and player pages on Facebook, Twitter, Instagram, Sina and Tencent. The NBA was the first professional sports league to exceed one billion videos viewed on its YouTube channel and now has more than 1.3 billion videos viewed overall (according to

        4. The 2014 World Cup shattered a number of viewership records, including double digit growth across ESPN’s digital platforms, while the U.S.A. vs. Portugal match was the highest rated soccer match in ESPN history, and the World Cup final between Germany and Argentina drew bigger TV audience than entire Stanley Cup finals. The World Cup, as a whole, enjoyed a 29 percent increase over the 2010 tournament in South Africa.

      3. The value of major league sport franchises continues to grow at a furious pace. In 1973, the late George Steinbrenner bought the New York Yankees for just under $9 million. In 2014, Forbes magazine valued the historic franchise at $2.5 billion (click here to view the entire list of MLB franchise valuations).34

        1. Also in 2014, Forbes reported that the Dallas Cowboys franchise was the most valuable in the NFL at $2.3 billion (click here to view Forbes’ list of the 50 most valuable sports franchises in the world)

        2. According to Forbes, the average Major League Soccer franchise is now worth over $100 million, an increase of more than 175% over the last five years

  2. Fandom

    1. The level of “fandom” in today’s culture shows no signs of slowing down

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