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Transcript
CHRISTOPHER BAUMOHL
08003563
CARDIFF SCHOOL OF SPORT
UNIVERSITY OF WALES INSTITUTE, CARDIFF
EXAMINE THE MAJOR EFFECTS COMMERCIALISATION HAS HAD UPON
ENGLISH FOOTBALL SINCE THE FORMATION OF THE PREMIER LEAGUE
AND THE RELATIONSHIP THESE HAVE WITH THE MARKETING OF ENGLISH
FOOTBALL CLUBS
Table of Contents
Page
Acknowledgements
i
Abstract
ii
CHAPTER ONE
EXTENDED INTRODUCTION
1
1.1 Commercialisation in Sport
1
1.2 Marketing in Sport
3
1.3 Research Expectations
5
CHAPTER TWO
METHODOLOGY
6
2.1 Introduction
6
2.2 Research Philosophies
6
2.3 Research Approach
7
2.4 Research Strategy
8
2.5 Research Design
9
CHAPTER THREE
CRITICAL REVIEW
12
3.1 Introduction
12
3.2 Commercialisation of English Football
12
3.3 Regulation of English Football
14
3.4 Ownership and Investment in English Football
16
3.5 Role of Media in English Football
18
3.6 Marketing Strategies of English Clubs
19
3.7 Impact of the Fans of English Football
22
3.8 Initial Conclusions
23
CHAPTER FOUR
EXPLICIT SUMMARY
25
4.1 Summary of Findings and Conclusion
25
4.2 Critical Reflection
26
4.3 Final Thoughts
27
REFERENCE LIST
References
28
Acknowledgments
My thanks go to Greg Dainty for his assistance, support and efforts throughout this
research project.
i
Abstract
This piece of research aims to examine the major effects that commercialisation
has had upon English football since the formation of the Premier League and the
relationship these have with the marketing of English football clubs. It assesses
the extent of the changes and the implications these have had on all aspects of
the game, before discussing the role marketing has played in these changes.
The research adopts a theoretical approach, utilising secondary data to examine
the research question. It finds that commercialisation has impacted on all areas of
the modern game in England, with a number of cases, particularly the impact on
fans, being negative. It goes on to suggest English football is heading towards a
shift to the North American model of commercialisation which could threaten its
popularity and heritage.
ii
I: Extended Introduction
1.0Extended introduction
The purpose of this piece of research is to examine the most prominent issues
brought about by the commercialisation of English football since the induction of
the premier league in 1992. This will be achieved, in part, by focusing on the
discipline of sports marketing and the marketing strategies which have been
employed by English football clubs along with the impact which they have had.
However, before this research can be undertaken a number of key concepts and
contexts within the title need to be defined and understood.
1.1Commercialisation in sport
Nellis and Shirley (1991) describe commercialisation as anything which entails
reforming public enterprises so that their operations become subject to market
forces and competition. This occurred in English football when the Premier league
was created in 1992. What is more, commercial sports are those which are played
and organised with the intention of gaining profit, football in England falls into this
category (Coakley, 2009). Coakley (2009) continues suggesting that never before
have economic factors dominated decisions about sports in the current way, with
organisations and corporate interests having large amounts of control over
meaning, purpose and the organisation of sports. This is supported by Horne et al.
(1999) who describe commercial sports as being a part of the economic system
and a potential way of creating profit.
Coakley (2009) suggests the success of commercial sport depends on gate
receipts, concessions, sponsorships, the sale of broadcasting rights, and a
number of other streams of revenue. In view of this there have been five social
and economic conditions outlined which allow for the commercialisation of sports
(Slack, 2005). These conditions have been identified in certain countries, and
especially those in North America and Western Europe where the
commercialisation of sports have been most prominent (Horne, 2006). According
to Coakley (2009) the first condition is the existence of market economies in which
athletes, team owners, sponsors and spectators are able to develop. The second
is that societies have large, densely populated cities, allowing for large numbers of
potential spectators. Thirdly the environment needs to have adequate
transportation and communication technologies, with a wealthy, urban society.
1
The fourth condition is that sports require large amounts of capital to build
stadiums and arenas in which events can be played and maintained. Finally,
commercial sports need cultures where lifestyles emphasize consumption and
material status symbols. This allows for sports to be marketed and sold and is
where the success of sports depends (Coakley, 2009). This final condition shows
how marketing has an important place in the commercialisation of sport, and also
that investigating the relationship between the two would help to establish specific
impact the commercialisation process has had on English football.
Whilst a number of sports have undergone successful commercialisation
processes in relation to these conditions, issues have developed along the way
which also need to be considered and are important when considering the
research topic. Money has been seen as the biggest problem in sport for a
number of reasons, with a number of its negative effects commented on (Eitzen,
2001). Horne (2006) suggests money has an impact on player motivations, in
addition to the outcomes of sports events and fixtures. Furthermore concerns have
been outlined about the profit motive which commercialisation has brought, with
monopolies over sporting success being desired. This has the potential for the
undermining of the uncertainty which sports events provide being threatened if
league and competitions become unfairly balanced (Michie and Oughton, 2004).
Another more recent source of negativity towards commercialisation comes from
money provided by sponsors or patrons of sport. This is particularly prevalent in
football with teams such as Chelsea FC and Manchester City FC receiving
massive financial backing from their owners, enabling them to purchase very
expensive players. A final issue which has been presented is the increased cost
which commercialisation brings to fans of leading professional sports, and the way
in which they are valued and treated by the clubs themselves (Horne, 2006). The
identification of these issues shows that the impact of commercialisation to sports
covers a number of areas with a number of these being particularly common in
football. These issues need to be investigated further to establish the extent of the
impact commercialisation has had on football in England.
The final area of commercialism in sport which needs to be discussed is the
different forms it can take in different societies at different times. Horne (2006)
2
suggests these differences come as a result of the balance between sport as a
feature of education and sport as entertainment. This influence comes from the
governing bodies and structures in place which regulate sport in certain countries
(Horne, 2006). The two main models for this come from Europe and North
America, where commercialisation has been most prominent. The European
model focuses on the relationship sport has with educational institutions and
principles. With the focus on sport being available to all, with everybody
encouraged to partake in it, from school throughout their lives. It features open
leagues, with systems of promotion and relegation and all abilities being
welcomed. The North American model however is more influenced by the
commercial entertainment side of sport. It tends to have closed leagues which are
only open to a certain number of franchises who have the ability to gain certain
levels of support and finance (Horne, 2006). In light of these two models a
research by Donnelly (1996) has suggested that globally there has been a shift to
the North American model, and it would be important to see if football in England
has gone in this direction (Horne, 2006). This change has also been linked to
marketing by Hargreaves (1986) who suggests that as sport has become more
reliant on gaining capital, it has also become more reliant on marketing techniques
to gain it. This also shows the relevance of this study looking at the impact
marketing has had on the commercialisation of English football.
1.2 Marketing in Sport
Marketing in sport has developed alongside commercialisation. It can be defined
as all activities which are involved in the exchange process (Mullin et al, 1993).
Torkildson (2005) goes into further detail describing marketing as providing
customers with the right products and services for their needs and then forming
the best relationships between them. It is a key area of operation for all modernday business and can be the difference between the success of a company and
its failure (Watt, 2004). This piece of research will look specifically at the marketing
of sport, in this case football and how the clubs in England market themselves
(Irwin et al, 2002).
Sports marketing consists of all activities designed to meet the needs and wants of
sports consumers through exchange processes. Sports marketing has developed
3
two major areas for doing this: the marketing of sport products and services
directly to the consumers of sport, and the marketing of other consumer and
industrial products through the use of sport promotions (Mullin et al, 1993). A
number of researchers describe the most important aspects of this process as the
four P’s, product, price, promotion and place. Kotler, et al. (1999) define product
as anything that can be offered to a target market for attention, acquisition, use or
consumption that may satisfy the need of the customer. Price is identified by
Torkildsen (2005) as having the ability to match people’s needs with products at a
price they are willing to pay. This comes from providing products and services
which allow consumers to feel they are getting a good return on their money. The
next of the four P’s, promotion, is wide ranging and includes publicity, media
relations, press and other areas (Watt 2004). These activities communicate the
product or service and its merits to target customers and persuade them to buy
(Kotler et al. 1999). Lastly place refers to the need for facilities to be physically,
socially and financially accessible to the target market, furthermore different
activities, times, space and opening hours need to be orientated to best serve, not
only customers, but staff as well (Torkildsen 2005). The fact that these four
aspects of marketing have been identified and described by so many authors and
researchers shows their importance, and means clear and concise definitions
have been established. It also shows that researching how these four areas of
marketing have been used in football would be beneficial in judging its impact in
the commercialisation of sport in this country.
4
1.3 Research Expectations
The above sections have outlined the context in which this piece of research sits
and allows for a better understanding of the research issue and for a key objective
to be made.
In light of this the main aim of this study is to:

Examine the major effects that commercialisation has had upon English
football since the formation of the Premier League and the relationship
these have with the marketing of English football clubs
The individual areas which are to be investigated in order to meet this objective
are stated in the critical review after a better understanding of the
commercialisation of English football had been gained.
5
II: Methodology
2.0 Methodology
2.1 Introduction
According to Miller (1983) the methodology is a body of knowledge which allows
researchers to explain and analyse the methods they use. An effective
methodology allows the researcher to make an informed decision regarding
research design. Also, it helps to show which approaches are applicable to their
study and gives knowledge of traditions within research allowing for the research
design to cater for constraints (Easterby-Smith et al. 2002). In order that this
proposal aligns with these statements a framework proposed by Saunders et al.
(2007), will be used to develop a methodology. This framework, named ‘the
research onion’, consists of a number of layers, or steps, which need to be done to
produce an effective methodology. The methodology will be based upon utilising
the most effective methods to answer the question regarding the impacts of sports
marketing and commercialisation on English football.
2.2 Research Philosophies
The outer layer of the onion alludes to deciding upon a research philosophy, this
influences the way the researcher thinks about the development of the study and
the overall way in which it is completed (Saunders et al. 2007). In this study there
are two main philosophies which need to be considered, the interpretive and
positivist philosophies.
Firstly the interpretive, or qualitative, approach generally involves data being
collected in the form of descriptions. The data is not measured numerically, as it is
argued that some concepts are too complex to be reduced to numbers (Gratton
and Jones, 2004). Qualitative researchers only use non-mathematical processes
to interpret and explain their research (White, 2000). This approach has a number
of strengths and weaknesses. A key strength is that it allows researchers to gain a
better understanding of the data through words of subjects and pieces of
research. Furthermore the approach allows for a more in depth exploration of
certain issues which the use of just numbers would not allow. However some
argue that the subjective nature of interpreting words and feelings can lead to
questions of reliability and validity. Finally this process can also take a large
6
amount of time as acquiring the resources and information can be time consuming
(Gratton and Jones, 2004).
On the other hand the positivist, or quantitative, approach takes on a more
scientific form, it aims to be objective and collects and uses numerical data (White,
2000). This approach relies on the measurements and mathematical pieces of
data which are not subject to the researcher’s values or interpretations, to this end
other researchers could see the same evidence and draw the same conclusions
(Gratton and Jones, 2004). This philosophy also has a number of strengths and
weaknesses. Its undoubted strength is the precision, control and objectivity which
its results bring. Moreover the use of statistical analysis removes the need for
individual interpretation of the data, giving more validity in doing so (Gratton and
Jones, 2004). A weakness of this approach is that it does not produce the means
to examine some subjects in the in-depth way they require.
Having discussed both the philosophies it is apparent that the bulk of this study
will involve using the interpretative approach, and utilising the qualitative way of
collecting data. This is most applicable to this study as it will involve interpreting
the words of others to develop a better understanding of the subject area. This
approach will also be beneficial and deemed more reliable as the use of
qualitative data in research involving sport studies has increased and gained more
importance (Gratton and Jones, 2004). The study will however use a small amount
of quantitative data to help explain and support the information supplied by
interpretive methods (Jayaratne, 1993). This blend on both philosophies should
produce the data required to bring about the correct results.
2.3 Research Approach
The second layer of the research onion involves deciding upon either a deductive
or inductive approach (Saunders et al. 2007). The deductive approach is more
generally associated with the positivist philosophy. It involves developing a
hypothesis from existing theory, testing this through the collection of data and
arriving at a conclusion through the use of logic (Gratton and Jones, 2004).
On the other hand the inductive approach is more commonly associated with
interpretive studies. It involves developing an understanding of the research
7
context, the collection of qualitative data, a flexible structure which allows the
project to adapt and draw conclusions from past experiences and research
(Saunders et al, 2007).
In light of these two approaches the most relevant for this study is the inductive
approach. This allows for qualitative data to be produced and interpreted which is
the basis of the study. A further advantage is that it allows the research to be
adapted, this will help if the situation occurs where a new piece of data is found
which impacts on the findings of the rest of the research.
2.4 Research Strategy
The final layer of the research onion which is of importance to this study and
methodology is the strategy which will be used. The strategy is a plan of how the
researcher intends to go about answering the research questions they have set
out (Saunders et al, 2007). In this case the most relevant strategy to use was an
applied theoretical study, and more specifically that of a case study. The use of an
applied theoretical study means that literature can be investigated and developed
alongside a subject area. This is important in this study as investigating the
different areas of commercialisation may raise more issues which then need to be
assessed. It also allows for the applications and effects of theories to be
indentified and examined (Walliman, 2004). This is relevant to this study in
showing how the theories and concepts of commercialisation and marketing have
affected English football.
The case study approach also aids this as it is a research strategy which involves
an empirical investigation of a particular phenomenon, in this case
commercialisation within a real life context, English football (Sanders et al. 2007).
This case study will take the form of a typical study, as outlined by White (2000).
This means it will focus on looking at how a large subject, English football has
been affected by a change, commercialisation. In more detail it will assess the
situation both before and after the changes which marketing and
commercialisation have brought, and in addition the benefits and limitations of the
changes (White, 2000). An advantage of using this approach is that it works well
when situations are complex and involves a number of different issues, as this one
8
does. Furthermore it can be carried out by a single researcher and will generate
the correct type of qualitative data needed (White, 2000).
A number of other strategies could have been implemented however they would
not have met the requirements of the study in the same way, and therefore would
not have been as effective. For example focus groups and questionnaires could
have been used but these would have resulted in unwanted quantitative data.
Moreover the required data is already available through the use of literature and
gaining more would have an adverse affect on the succinctness of the research.
2.5 Research design
Having identified the philosophies, approaches and strategies appropriate for
gaining the most effective and useful results, a design for acquiring the data to
allow this can be made. As this research is taking the form of a desk-based study
the majority of the information and data will come from secondary material on the
subject. Saunders et al. (2007) suggest there are three types of secondary data:
documentary data, survey based data and data from multiple sources. In this case
documentary data will be sought. This takes the form of written materials such as
books, journals, articles and reports; these will provide the qualitative data needed
in this study (Saunders et al. 2007).
Saunders et al. (2007) and Bell (2005) both describe processes for finding
required literature and the design for this study will use aspects of both. The four
main parts of this design are to establish:

The parameters for the search;

The key words and search terms for the search;

The databases and search engines intended for use;

The criteria used to select the relevant and useful pieces of literature.
Firstly the parameters for the search give an idea of which subject matter will be
relevant (Saunders et al. 2007). The following parameters suggested by Bell
(2005) will be used in this piece of research. These parameters have been
selected as they allow for the possible sources to be narrowed down to an
9
appropriate extent, with the important sources being found and the unwanted
being discarded :

Language of publication – English

Subject area – Commercialisation and marketing

Sector – Football

Area – England

Publication period – Last 20 years

Literature type – Peer reviewed journals, books, articles
Using these parameters will help in the search for literature, allowing useful and
non-useful sources to be differentiated between quickly.
The next part of the process was to generate the key words used in the search for
data (Bell, 2005). These terms are the ones which describe the research and
objectives, and will allow for the most relevant resources to be found. The key
words and terms used will be: sport commercialisation, sport marketing and
English premier league.
The next part of the design is to outline where the search for literature, using the
key terms, will take place (Saunders et al. 2007). Initially they will be used in a
library search to find relevant books and journals. Once journals have been
identified the key terms will be searched in the individual publications to find more
articles on the topic. In addition the terms will be used in searches within
newspaper websites to find any articles written on the subject. In addition once
particularly useful sources have been found an analysis of the bibliographies will
take place to identify any sources which have been used and could prove useful in
this study
The final part of the research design is to assess how the literature will be
evaluated in accordance with its relevance (Saunders et al. 2007). To begin with,
the parameters already set out will be used; if the piece of research meets these a
more detailed assessment will be made. This will take into account a number of
issues, including whether the research questions are sufficiently close to those of
this study and whether the arguments made in it could be used to support or
10
contradict (Saunders et al, 2007). This evaluation process is key to the method
and identifying the most appropriate sources, in differentiating between the
literature which has real worth to the study and that which is of little relevance will
allow for the most effective analysis of the objective to be made.
Using this method will allow for the most relevant and appropriate sources to be
found and incorporated into the study. It will also go some way to answering the
questions of reliability and validity as using this process will only highlight reliable,
peer reviewed sources. The use of these peer reviewed sources should help with
reliability because if the study was repeated and someone was to look at the same
types of sources again, they will have been through similar selection and quality
control procedures for identifying publications. It is therefore reasonable to expect
that a repeat of this method would produce similar results. Although as research
moves on, new material may be written and discovered which advances the
knowledge of the subject area. Therefore whilst the method will be reliable, the
results of a similar study may end up very different. The issue of validity will look to
be countered through the build up of a sound understanding of the research topic.
The method of undergoing a structured and in depth assessment of the literature
on the subject will allow for an effective conclusion to be made and increase the
validity of the study.
11
III: Critical Review
3.0 Critical Review
3.1 Introduction
This section will focus upon discussing and evaluating the research question
outlined in the first chapter. To do this, firstly, the commercialisation of English
football will be established in order to outline the main issues associated with it.
These specific issues will then be developed further along with the relationship
they have to the marketing of English football clubs.
3.2 Commercialisation of English football
Moorhouse (1998) suggests that football in England has undergone a fundamental
change as it looks to find a new economic position in capitalism. This process has
been labelled by a number of researchers as the new business of football (Wagg,
2004). Although the concept of new business in football made its pioneering steps
in the mid-1930s, the biggest changes in commercialisation have occurred more
recently with the new relationship football in England has gained with the media.
The first change has been the differences in the physical environment in which
football is played. This occurred during the 1990’s when a large programme of
modernising stadia, often in out of town locations was undertaken. Secondly, the
formation of the Premier League in England in the early nineties has caused an
increased division between the professional clubs in the higher and lower leagues
(Horne, 2006). This new league has also revitalised the economic situations of a
number of top football clubs (Deloitte and Touche, 2000). A third change has
come from the deals made with companies such as Rupert Murdoch’s Sky satellite
television network for the exclusive screening of live games. These deals have
brought huge economic benefits to Premiership teams (Horne, 2006).
The principal effect of this influx of new money was a steep increase in staff and
player wages. This in turn led to higher competition for top players with transfer
fees also rising (Hudson, 2001). This demand for more money to partake in
transfer activities and offer higher wages led to searches for additional sources of
income. Firstly clubs introduced big increases in their ticket prices. In addition they
became more adept at exploiting their fan base, especially in their merchandising.
Thirdly sponsorship opportunities have become more and more prominent, most
12
notably kit sponsorship deals and pitch side advertising leading to increases in the
proportion of incomes coming from these sources (Hudson, 2001). Moreover
partnerships have developed, for example the thirteen year agreement between
Nike and Manchester United which sees the former running the football clubs
worldwide merchandising. Deals like this have increased the feeling that football is
being transformed to a spectacle rather than practice, and a form of industry rather
than a form of play (Bourdieu, 1999). This suggests fans are now expecting an all
round experience when they go to see a football match, for example half time
entertainment, and reflects the whole concept of the effects commercialisation
have brought. Finally a number of clubs, such as Newcastle and Sunderland,
became subject to stock market flotation designed to raise capital (Lee, 1997).
However all these changes to English football during a period of commercialisation
have coincided with a relative decline in gate receipts and attendances (King,
1998). This area is something which needs to be discussed further to see if the
traditional fans have been neglected in English clubs search for finances.
The commercialisation of football has been continued in more recent times by the
introduction of new types of entrepreneurs, such as Roman Abramovich becoming
Chelsea FC’s owner. These investors look to make money from shares and
property deals involving the top clubs in England. This has also continued the
move away from clubs trying to meet the needs of the fans and more towards
meeting those of the shareholders and accountants (Horne, 2006).
This first section of the critical review has enabled the research objectives to be
clarified, as shown below. The description of how English football has undergone
the process of commercialisation shows the impact it has had on every part of the
game, and highlights which areas need to be developed in order to assess the
research question. The following issues will now be looked at in more depth:

Regulation of football in England

Ownership of English Football Clubs

Role of the media in English football

The marketing strategies of English clubs

Impact on the fans of English football
13
3.3 Regulation of English football
According to Horne (2006) the regulation of commercial sport in the UK has
undergone a number of developments in recent times, with the most notable
examples of this coming in football. Hudson (2001) agrees with this suggesting
that the election victory of Labour in 1997 marked the start of a new approach to
football policy and therefore regulation in England. This view comes from the
actions Labour took after their victory in establishing the Football Task Force
(FTF) which was charged to investigate issues such as racism, ticket prices,
disabled access and increasing commercialism in the game (DCMS, 1997). This
immediately points to the fact that commercialisation has had a large impact on
the regulation of football in England, and that the government have considered
that state intervention may be necessary in some aspects of it.
The FTF highlighted a number of areas for concern where the commercialisation
of football had impacted the most, and where there may have been a need for
regulation. Firstly a survey undertaken in 1998 showed that two thirds of football
fans were being priced out of the market from rising ticket prices. The issue with
this is that there is a possibility football clubs are becoming too powerful and are
not addressing the issue of neglecting their traditional fan base. They are able to
survive without the need to cater for the other two-thirds of their fans; this then
brings the subject of whether the government should intervene to protect the
heritage of the game into context. The main form of this intervention being the
possible capping on the price of tickets (Hudson, 2001). In addition to this,
concerns were raised over the price of replica shirts. In this case a two year
investigation was carried out by the Office of Fair Trading (OFT) into whether price
fixing had occurred. The results of the investigation led to combined fines of £18.6
million for price fixing of shirts and concluded that the clubs marketing strategies
had breached the Resale Prices Act 1976 (Horne, 2006). In addition this led to
the strengthening of OFT’s powers, enabling it to impose stricter penalties on
parties involved in price fixing (Hudson, 2001). These incidents demonstrate how
commercialisation has led to increased government intervention and regulation in
football, in addition showing that marketing has been heavily involved during this
process.
14
In addition more government intervention has occurred since the patterns of club
ownership have changed. With a number of clubs now listed on the stock market
and concerned with gaining investment, there was a call for a regulatory structure
to be initiated to keep the fans interests intact (Hamil et al, 1999). This was met by
the formation of the ‘Supporters Direct’ scheme which aimed to make clubs more
answerable to supporters through share owning trusts (Hamil et al. 2000). This
also shows the impact of commercialism on the regulation of English football, with
continued government intervention evident.
Despite these instances of government intervention there is also an argument that
impacts of commercialisation warrant even more regulation. This view is described
by Conn (1997) who suggests that the current state of English football has been
allowed to grow out of control by the FA, who has neglected their role as the
game’s regulator. Supporters of this view propose the solution to be by-passing
the FA with a modern day, independent regulator. This is supported by Taylor
(2000) and Lomax (2000) who both propose that a form of an independent
regulator is the only way to stop football becoming disengaged with its supporters,
and allowing wages to grow out of control.
On the other hand the authorities in football have opposed the suggestions of an
independent regulator. Instead of this they put forward an increase in self
regulation and public accountability, through an Independent Scrutiny Panel and
the development of Fans’ Charters at each football club (Hudson, 2001). The
overall aim of this would be to stop the threat of any outside body becoming the
chief regulator in English football.
From the evidence discussed above it is clear that commercialisation has had a
large impact on the regulation of English football. Most substantially it has led to
government intervention in a number of cases, such as the prices of replica kits
and the formation of Fans Charters. In making such decisions the government
have guaranteed that the issues of commercialism stay on the agenda and forced
the authorities in football to self-regulate more thoroughly. In addition
commercialisation of the English game has brought the regulation of football into
the public domain, which in turn has led to further issues such as those over the
ownership of clubs being raised.
15
3.4 Ownership and investment in English Football
The ownership of English football clubs is where the impacts of commercialisation
can perhaps be seen the most. Prior to the 1997 there were no foreign owners in
the Premier League, but as commercialisation has taken hold of the English game
more and more clubs have undergone takeovers from foreign investors. In
particular, since 2002 there has been a large increase in the number of foreignowned clubs in the Premier League (Nauright and Ramfjord, 2010). This is shown
by the fact that, as of the beginning of 2008, ten clubs in the Premier League were
owned by foreign investors. This shows that commercialisation has obviously
made football in England more appealing to possible investors; the best way to
examine this further is to look into the reasons for this investment.
The most obvious reason is the perceived increase in revenue streams that were
generated after the reorganisation of football in the 1990s (Nauright and Ramfjord,
2010). This came from the profits of increasing television contracts in both
domestic and international terms, and the enhancement in the global marketing
strategies of leading clubs (Nauright and Ramfjord, 2010). The scale of the
increase in revenue is shown by the financial expansion revealed by the Premier
League since 1992. Between the 1992/1993 season and the 2006/2007 season
the combined turnover of the clubs in the Premier League increased by 900% from
170m to 1530m (Hamil and Walters, 2010). This fact shows an obvious reason for
investment, however it is also extremely important to note that since the beginning
of the Premier League there has not been one year when the clubs have made a
collective pre-tax profit (Hamil and Walters, 2010). This lack of profitability shows
that there must be other reasons behind the investment of foreign owners in
Premier League clubs.
Nauright and Ramfjord (2010) suggest a number of alternative reasons that have
led to this investment. Firstly the increasing use of international marketing and
selling of products and television rights. In this respect the Premier League has
adopted the marketing strategies which were evident in North America, which
were based on securing revenue way beyond that of gate receipts. This also led to
the initiation of cross-marketed sports brands. This involves the expansion of
media and marketing interests globally, of two teams across different sports
16
(Nauright and Ramfjord, 2010). A notable example of this is the partnership
between the New York Yankees and Manchester United, who have used the
success of each other’s brand to increase global recognition.
A further reason is that of Nauright and Ramfjord (2010) who suggest that the
economic structure of English football, allows for direct ownership meaning it is
relatively easy to take a controlling stake in a club and run it in the way the owners
see fit. The ease in which a possible investor can gain the controlling stake in a
club also means that in some cases the acquisition of clubs is merely seen as a
way of improving an investor’s personal portfolio (Nauright and Ramfjord, 2010).
An example of this is Tom Hicks, owner of the Southwest Sports Group, which
holds a 50% share of Liverpool FC, in accordance with the Dallas Stars in NHL,
Texas Rangers in MLB and the Mesquite Championship Rodeo.
These perceived reasons for investment and ownership of English clubs have
sparked a number of protests from supporters groups who oppose such
takeovers. A prominent example of this came in 1998, when Manchester United
accepted an offer of £625 million from BSkyB for the sale of the club (Horne,
2006). This proposed takeover sparked a large scale campaign by the fans which
led to the bid being blocked by the government (Brown and Walsh, 1999). Other
foreign investors have also come under protest from the fans of their clubs in
recent times, such as Hicks and Gillett at Liverpool and the Glazer family at
Manchester United. These examples show how the changes in ownership and
investment in the Premier League have not always been popular.
The reasons above demonstrate that English football has become a lot more
appealing to possible investors since the major commercialisation of the industry
occurred. Furthermore despite the most obvious factor for investment appearing to
be personal gain through increased revenue, this is not the case. In fact, as Hamil
and Walters (2010) recognise few clubs make money and the actual motivations
come from non-direct financial gains, such as benefitting wider business interests
and the global marketing opportunities which have arisen. Ownership of an
English football club has become part of the marketing strategy of much larger
organisations, this has become a major factor in the recent increase in foreign
investment in the Premier League.
17
3.5 Role of Media in English Football
The overall changes to the media during commercialisation are summarised by
Barnett (1990), who suggests that the power of satellite television has risen
significantly, and there has been a shift from broadcasting being a public service
towards broadcasting as a product to be selected and purchased (Whannel,
2000). These changes were the visions of entrepreneurs who established
themselves as sports agents and the focal point of the relationship between sports
organisations and the media (Stoddart, 1990). What allowed these changes to
occur involved the construction of commercial packages and deals aiming to
maximise the opportunities for all parties invlolved (Whannel, 2000). The major
deal of this type came in 1992 with the beginning of the Premier League. It
involved the satellite operator BSkyB gaining the exclusive live broadcasting rights
during the Premier League’s first five seasons (Dobson and Goddard, 2001).
However this deal has continued right up to the present day. Over the first five
years of the contract the cost of Premier League coverage was £304million, and
then £743million for the next four years (Fynn and Guest, 1994). This brought
increased revenue to the clubs, which kept rising as commercialisation continued.
In 1993 clubs in the Premier League received around £40million each from the
BSkyB contract, this increased to £125million in 1998 (Dobson and Goddard,
2001). The growing amount of revenue available from media outlets shows the
obvious impact commercialisation has had on the role of the media, with it
becoming a key source of income for most clubs.
In addition to this the role of the media has had a number of other influences on
football since commercialisation. Firstly, Coakley (2009) suggests that commercial
sports such as football rely on media for the coverage of news, which in turn
generates interest in the sport. This comes from discussion within the media on
games, incidents and news well after they have occurred.
However the positive aspects described above have meant some changes have
had to be made to the scheduling of football. This has been dictated by companies
such as BSkyB, who because of the reliance on them for revenues and publicity
have gained a stronger influence over the scheduling of games (Coakley, 2009).
18
The main outcome of this is that schedules and starting times for games are
continually altered and fitted around programming needs.
As the above examples show, the commercialisation of football has coincided with
a number of changes to the media coverage of the game, most notably with the
deals done with the company BSkyB over exclusivity of live games.
3.6 Marketing Strategies of English Clubs
As outlined above one of the most prominent reasons for investment in the
English game is the marketing opportunities of the clubs in England. This section
will look into the marketing strategies which have been implemented since
commercialisation has occurred.
Reddy et al. (1994) suggest that the role of marketing and the competence with
which it is addressed is a key factor in the success of a club in commercialised
football. With this in mind, numerous premier league clubs have undertaken a
more strategic and professional approach to the way in which they market
themselves (Chadwick and Clowes, 2001). A major example of this is the use of
marketing professionals who have identified new markets and products that clubs
can develop (Longmore, 1994). This has led to the main marketing strategy
employed by clubs since the commercialisation of English football occurred,
namely extension strategies.
According to Chadwick and Clowes (2001) use of these extension strategies can
be attributed to three factors: the value held by the clubs unique brands, the
potential profits which could be made from these brands and the rivalry between
the clubs in the league. As shown by these points an imperative part of the
marketing strategies employed by football clubs is the brand. Establishing a brand
is vital for the success of such strategies and has been achieved in a number of
cases, a prime example being Manchester United football club. The creation of the
Manchester United brand has revolved around utilising line and brand extension
strategies and has led to the club becoming globally recognised. This has
occurred to such a positive extent that the level of sophistication and success of
the Manchester United brand is seen as the benchmark for other clubs to develop
their own marketing strategies around (Chadwick and Clowes, 2001).
19
The commercialisation of Manchester United FC has been the topic of a number
of studies. Manchester United FC is an exemplar of how important marketing has
been to the commercialisation of English football. Research by Boyle and Haines
(2004) found that elite clubs view marketing through channels such as
broadcasting and sponsorships, in Manchester United’s case with companies such
as Nike and Vodafone, as a very important way of expanding their image and
revenues. Moreover, the importance of marketing to Manchester United FC is put
forward by Howard and Sayce (2002) who describe the club as a brand and not a
specific product or range of products. The Manchester United brand encompasses
a range of activities, services and products which have evolved as a result of its
prominence in its core activity of being a successful football club. The article goes
on to say that this growth in the club brand has coincided with increased marketing
activity.
Studies have also been conducted on the marketing activities of smaller clubs. For
example Miles and Rines (2004) conducted a case study of Charlton Athletic FC
and their marketing strategy. The study goes into detail about the objectives which
Charlton FC have in regard to the commercial side of their club, and also
describes how they aim to entice potential sources of income through marketing.
The study also looks into how the club uses the four P’s in regard to extending the
club into new markets. These examples of studies into the marketing of different
clubs allow for the extent to which commercialisation has affected English clubs
marketing strategies to be shown. They show that a variety of different sized
clubs, from market leaders such as Manchester United, to lower league clubs like
Charlton, have been influenced by the need to adapt to the changes in marketing
which have come about since major commercialisation has occurred.
This process of brand extension through marketing also presents issues which
clubs have to consider. In particular Premier League teams, as the main
representatives of the English game, have high expectations put upon them by the
areas of the market they are expanding into (Chadwick and Clowes, 2001). In this
circumstance it is likely that purchases of club branded product will have
expectations about the quality and service they are receiving. In light of this
Chadwick and Clowes (2001) suggest it can be difficult not to disappoint the
supporters with their product offerings. They continue by suggesting the
20
expectations may be excessive, for example if the team is one of the better ones,
the market may demand the product to display the same characteristics. This
shows the balance between marketing, expansion and the actual consumers or
fans is delicate. The gains of expanding are obvious, as with the case of
Manchester United, and so the football clubs are continually extending their
marketing strategies (Chadwick and Clowes, 2001). However the clubs also need
to balance these strategies with the wants and needs of the consumers and their
expectations.
Another area which has been targeted in marketing strategies of clubs is that of
sponsorship. The need to gain different forms of sponsorship has come from the
increasing importance of finding new sources of income, and is a high profile tool
for continued marketing strategies in the future (Chadwick, 2007). The most
lucrative form of sponsorship comes from that of deals involving the sponsorship
of shirts; recently some huge deals involving premiership clubs have taken place.
Firstly a deal between Manchester United and AIG is reported as being worth
£75million over four years, and a deal between Arsenal and Emirates Airlines
which involves stadium naming rights is worth approximately £140million. Despite
the sheer size of these deals showing why English clubs’ marketing strategies
towards gaining sponsorship are so important, there are other reasons clubs are
focussing on gaining this type of investment. This is shown in the United/AIG deal
which is seen as the development of a partnership with both organisations looking
to work together in strengthening their position in the market in Asia (Chadwick,
2007). This form of sponsorship has only occurred since English football has
become more commercialised and shows how marketing strategies have been
influenced by commercialisation.
These specific pieces of research into marketing trends of football clubs in
England give valuable information into the extent of the impact which
commercialisation is having on sport marketing in English football. The articles
about the more specific aspects of individual clubs’ marketing strategies and how
they have changed since the commercialisation of football are important to the
research as they show the direct results marketing has had and is continuing to
21
have. For example, how some English football clubs are now completely based
around a marketing strategy and brand image with the results of this contributing
largely to their overall income. Finally, the use of this data and the brand
extensions strategies show how the clubs are targeting specific types of
consumers in their marketing strategies, this suggests the treatment of fans has
also changed during commercialisation and will now be looked into in more detail.
This is shown by further research into marketing strategies of football clubs which
suggest teams divide their consumers into categories. An analysis of sports fans
by research company AT Kearney (2003) identified six types of sports fan: Sports
Fanatics, Club and Team Loyalists, Star-struck Spectators, Social Viewers,
Opportunistic Viewers and the Sports Indifferent. Sports teams use these
categories to develop their marketing strategies to improve brand awareness.
3.7 Impact on the fans of English football
The commercialisation of English football has brought a number of changes in
terms of the consumption of the sport by its fans. Perhaps the biggest change for
the fans is the way they are now viewed by the clubs in English football. A number
of theories have been suggested since the commercialisation process began, in
relation to how fans are now viewed. King (1998) proposes that since
commercialisation began three groups of football fan have emerged. Firstly the
people driving the changes in football finance, such as owners and directors of
English clubs, secondly the traditional fans who contested the changes being
implemented, and lastly the new consumers who complied and became part of the
new direction of football (Horne, 2006). This view that commercialisation has split
the consumers of English football is also expressed by Sandvoss (2003). In this
case it is suggested that as the culture of football changes through increased
media interest and structural transformation fans become either victim or follower
(Horne, 2006). Both of these theories suggest that commercialisation has brought
about a choice for fans as to whether to accept the changes and become a new
consumer of football, or to reject them and continue to view the game as it was
before its increased commercialism. This categorising of fans has allowed clubs to
target specific groups through the marketing strategies they have employed. In
addition, according to Ross and Nightingale (2003) fans are now being viewed as
22
active consumers and not passive ones, suggesting that clubs have
acknowledged the changes in the types of fans and adapted accordingly.
In addition to this commercialisation has also had an impact on what the fans
expect from English football. Crawford (2004) suggests that the new relationship
which football has gained with the media, sponsorship and tourism, has led to the
expectation that football should be a larger means of entertainment and spectacle
than before. King (2003) agrees with this suggesting that before the
commercialisation of the 1990’s, fans viewed themselves as members of their
clubs which they supported through active participation. Furthermore that their
support for their clubs was shown through regular attendance to games and not
through financial means. This view has changed dramatically however through the
increases in ticket prices with fans becoming mere consumers whose mode of
support is now merely financial.
These examples above show how the role of the fan has changed and become a
complex and sophisticated consumer of a commoditised product (Hopwood et al.
2010). Commercialisation has led to fans being labelled by clubs in the search for
more consumers willing buy into the overall product they are selling. This has, in
turn, led to the growth of more professional marketing, advertising and public
relations strategies being developed to target these areas. Commercialisation has
also had a negative effect on the more traditional fan groups who have become
alienated from their clubs (Hopwood et al. 2010).
3.8 Initial Conclusion
In light of the critical review which has taken place above, the research has found
that commercialisation has made major fundamental changes to football in
England since the formation of the Premier League. These changes have affected
every aspect of the game, from the regulation of football, to the influence of the
media on the Premiership. In addition the changes have had a massive impact on
the fans of football in this country, leaving them in some cases feeling
disassociated from their clubs. In addition the relationship between the
commercialisation of football and the marketing of English clubs and the game
itself cannot be overlooked. The pair come hand in hand and have developed
alongside each other in most areas of the game. However the major finding of this
23
research is the movement of football in England to the North American model,
described by Horne (2006), of commercialisation of sport, and this will be
discussed further in the explicit summary which follows.
24
IV: Explicit Summary
4.0 Explicit Summary
4.1 Summary of Findings and Conclusion
This piece of research set out to examine the major effects that commercialisation
has had upon English football since the formation of the Premier League and the
relationship these have with the marketing of English football clubs through a
critical review of the existing research in this area. As a result of this procedure a
number of conclusions can be made in accordance with the research question.
Firstly, it is clear that the commercialisation process of English football has
affected almost every part of the game in this country and the differences from the
pre-Premier League years to now are vast. Commercialisation has brought
fundamental changes to the way football is viewed in this country, from the owners
and directors of the clubs themselves to the ever faithful fans. Football is now
seen as a business, where clubs are continually competing to gain new revenue
streams and extend their brand into new markets. This search for new revenue
seems to be at the forefront of the clubs thoughts as wage bills and transfers
increase and the amount money needed to keep afloat becomes higher. In turn
leaving the traditional fan bases feeling disengaged from their clubs and in some
cases priced out the market.
Some changes have also brought about cases of government intervention,
showing that some of the effects and changes that commercialisation has brought
have not been welcomed. These have meant the government have felt compelled
to step in and stop some developments in order to ensure some of the more
traditional values of the national game are not affected. Similar cases of
intervention on the government’s part may become more regular as
commercialisation continues.
Finally the evidence presented has shown how marketing within football has had a
close relationship with commercialisation throughout the time period discussed.
Different aspects of marketing have been evident in a number of the changes
which have occurred, with the type of strategies being employed by English clubs
completely changing. The relationship is so close that the new marketing
strategies being developed are now at the forefront of the commercialisation
25
process, leading to English football moving into new markets and gaining new
partnerships with other companies.
These findings point to the main conclusion which can be made from this
research. The changes commercialisation has brought indicate the direction
English football is taking towards the North American model of commercialisation,
as described by Horne (2006). The increasing issue of financing means that most
clubs in the Premier League are making losses every year and this can clearly not
continue forever. If this does more and more clubs will end up in financial difficulty
and possibly cease to exist. This could lead to the type of franchise system seen
in the United States, with a smaller number of regional teams competing between
themselves. The rise in foreign and especially American ownership in the game
also points towards this direction, with these clubs being the ones most able to
compete financially. However this move is combated by the traditional view of
football, and the view that it is part of the heritage of this country. The fans would
almost certainly not be in favour of this continued commercialisation, as seen by
their negative view of a number of the effects it has already had. This pressure
could lead to further intervention by the government in regulating the sport to force
clubs to pay more attention to their fans and assess the growing problems in the
clubs finances, furthermore impacting on the popularity of the game and it
heritage.
4.2 Critical Reflection
Having arrived at these conclusions it is important to reflect on the process which
led to these being made, and consider its overall effectiveness. In order to do this
each part of the methodology will be assessed. The philosophy adopted in this
piece of research was a qualitative approach. This was extremely successful as it
allowed for the previous research in the topic to be interpreted to form a detailed
account of the changes commercialisation has brought. It also allowed the general
feeling, in football, towards the changes to be identified and used to make more
comprehensive conclusions on their impact. These levels of insight and conclusion
could not have been made had a different philosophy been used. The decision to
use the inductive approach in this research was also a success. As the inductive
approach is commonly associated with interpretive philosophy it was the most
26
appropriate choice in this instance. It allowed for a thorough investigation of the
research question and most importantly allowed for a flexible structure. This was
needed as throughout the search for literature more issues became apparent
which then meant the process had to adapt to cater for these needs. The research
strategy is one area which could have benefitted from a few changes. Despite the
case study approach being effective in gaining a suitable understanding of the
research question and allowing for some in depth conclusion to be made, the
decision to use only secondary data had its limitations. Although the use of this
data did allow for some insightful conclusions to be made and the research
question to be assessed the use of primary data may have allowed for a better
understanding of some issues to be gained. The use of questionnaires, for
example, would have been useful in assessing the full impact of commercialisation
on the fans, and would have enabled a better understanding of this subject to be
gained. This is something that would be brought in were the study to be conducted
again. Finally the actual design of identifying and evaluating the secondary data
available proved very useful. It allowed for the most appropriate sources to be
identified and made sure a range of viewpoints were able to be considered.
To conclude, the overall process undertaken during this research was, for the
most part, effective. It allowed for a successful investigation into the research
question to be made with relevant conclusions to be made. However to improve
the study some forms of primary data would be sought to gain a better
understanding of the effects of commercialisation on the fans.
4.3 Final thoughts
This piece of research has identified how commercialisation has had a number of
major effects on football in this country, in addition to showing how marketing has
played a key role in a number of these changes. The findings have led to
conclusion that the game in England will continue on its commercialisation path
and head further towards the way sports are organised in the United States of
America. The approach the study took was, on the whole, useful and allowed for
the study to develop throughout. In addition it also paves the way for future
research into how commercialisation has really been felt by the fans.
27
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