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Globalization of the sports industry – part 2

“Sport is probably the most universal aspect of popular culture” (McKay et al., 2001). Football (a.k.a. soccer in North America) is no. 1 when measuring what constitutes the popularity of a single global sport (Giulianotti, 1999). In that regard, Giulianotti has been involved in studies investigating the multifaceted and increasingly vital interrelationships of football and globalization as it refers to the historical, economic, cultural, political, and social factors. Football has reached that position due to a number of reasons. Among others, football has like no other sport gone beyond international borders and expanded its marketplace with success. People in all regions of the world enjoy football; football consumption centers on the live experience but has also taken advantage of technological innovations and massive media coverage in traditional media (primarily pushed by television). The role of sport managers is to leverage brand loyalty, i.e. exemplified in the passion of fans. At a global scale, the football industry is a ‘good benchmark’ for what constitutes a global sport. The management, promotion and execution of the football product has continued to evolve and has been nursed highly by the widespread television exposure and additional media content, which shape the promotional celebration of the sport in all corners of the world, i.e. there is a high level of brand loyalty connected to football. From an economic perspective, football has also undergone a forceful economic development. Manchester United was the first sports team ever to be valued above the $3 billion mark and according to different studies revenues for the world’s leading football clubs have seen significant growth. No matter what, the commercial platforms linked to sports offer an answer to the global potential and significance of sport, which is highlighted in the citation below:

“The global diffusion of modern sport that gathered momentum in the course of the twentieth century involved a number of networked elements, including transnational communications media and commercial corporations for which sport, especially through the iconic figure of the transnational celebrity sport star, constitutes a universally appealing globally networked cultural form. Association with sport events and sporting figures through global broadcasting, sponsorship and endorsement arrangements offers commercial corporations unique access to global consumer culture.” (Smart, 2007)

These commercial platforms have already been exploited by the media and communications industry but also by other industries acknowledging the global appeal of sport and sport stars. Sport equipment manufacturers like Nike, Adidas or Puma (and even the Danish sports brand Hummel’s popularity at specific markets) have strived to blur the borders between sports wear and fashion. Caroline Wozniacki is sponsored by Adidas and Stella McCartney has designed Wozniacki’s Adidas tennis collection. David Beckham, the world’s most valuable football brand tied to an individual athlete for the past 10-15 years, has been a fashion icon for years. That shines through when you investigate Beckham’s endorsement deals and the enormous merchandise and licensing revenues gained by the clubs, for which he has played. Or consider Gatorade’s deal with Tiger Woods, which gave Tiger his own brand of sports drinks. Annika Sörenstam, the female golfer and no. 1 in the world for many years, has extended her brands of businesses to form a solid revenue stream even after the end of her playing career, which stresses the identification with the biggest athlete brands in the world and the corporate potential associated with these brands.

 

Now, new regions in the world add to the globalization of sports and hence the consumption of sports. The Beijing Olympics was a ‘tipping point’ in opening up the Chinese market for commercial sport entities (primarily from Europe and the US). In football, we have seen the impact of ‘oil money’ from Russia and the Middle East. The latter is a tendency, which has affected the sponsor market and the ownership of clubs and in the years to come this may shift the power balance in football (Paris Saint-Germain has suddenly re-emerged at the European football scene).

So what does the future of globalized sports entail? Lately, there have been numerous big scandals in the sports world. Lance Armstrong, Oscar Pistorius, matchfixing in football, doping in cycling, and Bruno (the Brasilian goalkeeper accused of killing his ex-girlfriend), racism in football just to mention some topics under that umbrella, see more here. So sport can be damaging or filled with stories of immoral or illegal conduct. Moreover, sport is also associated with a ‘direct’ environmental or community effect linked to storytelling, infrastructure, events, commercialization etc. so I guess that as globalization in the sports world goes on we will see even more focus on ‘sustainability’, i.e. as it relates to initiatives of sport entities as well as forming the basis for discussion in the media and the industry in general. After all, sport affects so many people that it serves a ‘GREATER GOOD’ to discuss ‘sustainability’.

Finally, here are some trends related to sport globalization (inspired by Westerbeek & Smith, 2003):

  • Explosion of sports in the media.
  • Constant increase in value of authentically global sport entities, including athletes.
  • The conversion between sport and entertainment.
  • Horizontal and vertical integration of sport entities by media and entertainment corporations.
  • Integration of sport into the experience economy and ‘popular culture industries’.
  • Increased economic growth and impact in the world of sport, including the increasing impact of sport on other industries.
  • More venture capital and investment actitivies in global sports entities.
  • Changes in the role of ‘sport governance’.
  • Synchronized professionalization and marginalization of smaller sports and leagues (these entities wish to professionalize their management and marketing but the gap between the sport entitites that are globally flourishing and those, which remain only domestically feasible, will grow).
  • Junction of economic power in sport ownership. Fewer and fewer will own more and more of sport.
  • Technology innovation will improve entertainment value and will boost the diffusion and circulation of sport to new markets.

Sources:

Giulianotti, R. (1999). Football. Blackwell Publishing Ltd.

McKay, J., Miller, T., Lawrence, G., & Rowe, D. (2001). Globalization and sport: Playing the world. Sage Publications. California, the US.

Smart, B. (2007). “Not playing around: global capitalism, modern sport and consumer culture”. Global Networks, 7(2), 113-134.

Westerbeek, H., & Smith, A. (2003). Sport business in the global marketplace. Palgrave Macmillan.

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