COLLEGE AND AMATEUR SPORTS

1. COLLEGE AND AMATEUR SPORTS Marketing College Athletics Economic Impact of College Athletics Amateur Sports

2. Effects of Collegiate Sports • A winning team has economic implications for school, community, region, and state • Fan expectation • Promotion of organization’s goods and services

3. FBS Revenue 2010 - 2011

4. Rules & Rankings • National Collegiate Athletic Association (NCAA) is the governing body of most college and university athletic programs • NCAA creates guidelines for recruitment, gender equity, scholarships, gambling prohibitions, and many ethical issues • The overall goal is the promotion of college athletics with a focus on the integrity of the athletes and their game

5. Joining the NCAA Must meet the following conditions: • Obtain accreditation by the recognized accrediting agency of its region • Offer at least four intercollegiate sports for men and four for women (one in each of the three traditional seasons) • Complies with all NCAA rules • Cooperates with the NCAA enforcement program and accepts penalties imposed by that program

6. NCAA as a Sponsor Magnet • The NCAA attracts sponsors that support intercollegiate athletics financially and provide business and personnel expertise • These advertising dollars support the NCAA Championship, as well as allow expansion of NCAA programs for young people

7. NCAA Revenue 2010 – 2011 NCAA Revenues $845.9 Million

8. College Team Rankings Rankings are based on past team performance, wins against ranked teams, losses against unranked teams and personal preference. • Why so much emphasis? • Early exposure promotes a team • A highly ranked team builds excitement and strong attendance at games (which creates fan loyalty and national respect) • Preseason rankings influence major television networks (more revenue for the team and its university)

9. BCS Bowl Background • Bowl games make $260 million in annual payouts to NCAA schools. More than $1.8 billion has been paid out in just the past 10 years and the bowls will conservatively pay out more than $2.6 billion during the next decade. • Most bowl games are nonprofit organizations. The more revenue the bowl brings in through ticket sales and sponsors, for example, the more money can be paid to NCAA schools. • Bowl games generate increased donations, valuable visibility and even increases in school enrollment applications. In addition, they also can increase long-term revenues in licensing, endorsement money, TV contracts and season-ticket sales. • Bowl games generate an estimated $1.285 billion in economic impact for host communities each year.

10. #1 Has Lingering Effects • A national championship brings favorable national recognition and increased potential for recruitment of top high school athletes • Retailers carrying national championship sportswear will experience tremendous growth in sales

11. Market Segmentation • Market segment is a group of individuals within a larger market that share one or more characteristics • Divides the marketplace into smaller interest groups

12. Market Segmentation • Geographic segmentation • divides markets into physical locations, such as eastern, northern, southern, and western regions of the United States or the urban and rural areas of a state • Example: US, South, Texas, Austin, 78738

13. Market Segmentation • Demographic segmentation • focuses on information that can be measured, such as income, profession, gender, and education • Example: males, $50,000+ income, college educated • Psychographics • focus on characteristics that cannot be measured, such as attitudes and lifestyle choices. Consumers frequently make decisions based on emotions. • Example: sports fans spend more money on clothing with a teams logo right after the team has a big victory

14. Product usage reflects what products you use, how often, and why. • Example: How often you eat pizza. • Benefits derived are the value people believe they receive from the product or service. Marketing-Information Management takes into consideration the elements of market segmentation to improve business decision making.

15. ECONOMIC IMPACT OF COLLEGE ATHLETICS • Winning college teams=money for the community and media attention year-round • Cities with college sport teams must have shopping areas, hotels, restaurants, and other tourist attractions

16. Biggest Collegiate Fan Base

17. Sponsorships and Licensing • Sponsorships • Generating revenue • Name-brand apparel • Create goodwill

18. Licensing • License—the legal right to reproduce a team’s logo in exchange for payment (known as a royalty) • Protect the use of the name and symbols • Identify and associate logos • In 1997, there were 2,000 licenses worth $2.5 billion • Items licensed include: clothing, posters, sunglasses, video games and photographs

19. NCAA Merchandising 2010 - 2011

20. Popularity of Amateur Sports • Professional athlete is someone who earns a living participating in a sport • Amateur athlete is someone who does not get paid but plays for the enjoyment, challenge, or both • There are millions of amateurs, which marketers see as millions of consumers

21. Marketing and Sponsoring Amateur Sports • Provides significant income for manufacturers (uniforms, shoes, equipment, etc.) • Minivan and sport utility vehicle • Retro sports jerseys

22. Local Promotion of Amateur Sports Local business support amateur sports because: • Promotion is good for the local team (many times a high school team) • Image of being an active participant in the community • People that attend the event will frequently shop with businesses that advertise in the sports program

23. Economic Benefits In 1987, the Minnesota State Legislature created Minnesota Amateur Sports Commission. The goals are: • To create economic development through amateur sports • Create the maximum opportunity for sport participation for all Minnesotans • To establish Minnesota as a national model for the Olympic and amateur sport movement • Generates over $70 million of direct economic impact to Minnesota communities