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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 References References AT Kearney. (2003). the New Sports Consumer. Chicago, IL: AT Kearney Inc. Marketing and Communications. Barnett, S. (1990). Games and Sets: the Changing Face of Sport on Television. 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