Objectives

1. 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

2. Sports and the Economy

3. 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.

4. 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

5. 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.

6. Creation of Spectator Interest in Sports • Quest for excitement • Success ideology • Childhood sports experiences • Media coverage Several factors contribute to spectator interest in sports:

7. 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?

8. 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 person’s everyday life depends upon a particular corporation and its products

9. 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. Isn’t this a sure sign of the success of corporate branding?

10. 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.

11. 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

12. 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

13. 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.

14. 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.

15. 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.

16. Owners, Sponsors, and Promoters in Commercial Sports • 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. Professional Sports in North America

17. 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.

18. 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

19. 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?

20. 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

21. 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.

22. 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

23. 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.

24. 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 athlete’s 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.

25. 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

26. 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.

27. 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?

28. For Next Class • Prepare for a quiz on chapter 11