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Chapter 22 Controversial Issues in Sports Marketing McGraw-Hill/Irwin 22-1 ©2007 The McGraw-Hill Companies, All Rights Reserved Controversy • Marketers Face Continuous Scrutiny • For Sports Marketers, Criticism Emanates from Many Different Groups – – – – – – Consumers Consumer Advocacy Groups Community Residents Fans Media Government 22-2 “Do The Right Thing” • Ethics Is Subjective • Any Decision May Evoke Controversy • Critics Are Vocal • Issues for Both the Marketing of Sports and Marketing Through Sports 22-3 Controversial Issues in Sports Marketing • Target Market Decisions • Marketing Mix Decisions – Product – Distribution – Pricing – Promotion • Broad-Based Controversies 22-4 Target Market Decisions • Exclusionary Membership Policies – Private Clubs Excluding Women or Minorities – Protests Regarding Masters Golf Tournament • Targeting Children – Expensive Products – Creating Unrealistic Expectations 22-5 Product Decisions • Oversaturation of Spectator Sports – More Teams, Longer Seasons, More Sports – More Post-Season Participants • Gimmick Sports – Contrived Competitions – Athletes Outside of Their Sport – Focus on Sexuality Rather than Sport 22-6 Product Decisions • Appearance Money – May Cause Ticket Prices to Go Up – May Not Be a Good Investment • TV’s Role in Spectator Sports – Media Time-Outs – Event Scheduling 22-7 Product Decisions • Changing the Spectator Sport Core Product – Traditionalists Will Resist – Did the Change Make the Game Better • Player Mobility – Often Cited as the “Business Side” of Sports – Players Deemed “Greedy” - Moving for Money – Owners Deemed “Cheap” – Money over Fans 22-8 Product Decisions • Unwholesome Nonsports Products Sold Though a Sports Platform – When Appropriate Segment Is Targeted – When Non-Targeted Segments Are Reached – Examples of Unwholesome Products • Alcoholic Beverages (Miller Lite Beer and the NFL) • Tobacco Products (Marlboro and Indy Car) • Products of a Sexual Nature (Viagra and MLB) 22-9 Distribution Decisions • Franchise Mobility – Loyal Fans Even When Overall Support Is Low – Team Moves because of Financial Incentives 22-10 Distribution Decisions • Taxpayer-Funded Venues – Billionaire Owners with Millionaire Players – New Stadium May be Required to Keep Team – Taxpayers “Held Hostage” – Better Ways to Spend Tax Moneys 22-11 Distribution Decisions 22-12 Pricing Decisions • Ticket Prices – Fan Cost Index Documents High Cost – Focus on Corporate Ticket Buyers – Exorbitant Prices for Special Events • PSLs – Personal Seat License – Permanent Seat License – University Contribution 22-13 Examples of University PSLs 22-14 Pricing Decisions • Pay-per-View (PPV) – When Event Moves from Free to PPV Format – Will Mainstream Events Go to PPV Format? • Team “Scalping” of Tickets – Often Illegal for Individuals to Sell Tickets at Prices Exceeding Face Value – Some Teams have “Premium Ticket” Unit – Court Cases Ruled in Favor of the Teams 22-15 Pricing Decisions • High Prices for Participation Sports and Athletic Shoes – Greens Fees – Ice Time – Shoes Endorsed by Popular Players 22-16 Promotion Decisions • Overcommercialization – Proliferation of Event Sponsors – Olympics – Cluttered Sports Environment – NASCAR – Perception of Emphasis on Bottom Line • Naming Rights – Venue Names Often Ignored – Title and Presenting Sponsors 22-17 Promotion Decisions • Signage Issues – Too Many According to Fans – Too Few Say Many Sponsors – Clean Stadia Concerns • Athlete Endorsements – Create Unrealistic Expectations Among Kids – Create Demand that Parent May Rebuff – Believed to Exert Upward Pressure on Prices 22-18 Promotion Decisions • Virtual Advertising – Ability to Manipulate Environment – Ability to Block Out Actual Signage – Opportunities for Ambush Marketers – May Distract Viewer from the Action 22-19 Broad-Based Controversies • Overstated Estimates of Economic Value – Estimate Used as Rationale for Investment – Governments Invest Millions on this Basis – Critics Doubt Investments Will be Recouped – Critics Argue Much of the Money Would be Spent in the Area Even without the Team, Stadium, or Event 22-20 Sweatshop Production • Outsourced Manufacturing • For Example, Athletic Shoes in Vietnam • “Emergence of “Hate Nike” Web Sites • Led to New Policies at Some Universities 22-21 Gender Equity • Title IX • Led to More Female Participants • Has Resulted in Cuts to Men’s Programs • Most Universities Have Compliance Officer 22-22 Handling of Performance Enhancing Drugs (PED) • Steroids and Human Growth Hormones • Rules Against Use, But Penalties Have Been Relatively Mild • Have Leagues Condoned Use for Economic Reasons? • Recent Government Intervention 22-23 Closing Capsule • Sports Marketers Have Many Critics • Questions Arise Regarding Each Element of an Organization’s Marketing Strategy • There Are Also Several Broad-Based Controversies Surrounding the Sports Marketing Environment 22-24 Closing Capsule • We Market Through Sports • We Market Sports Products • It May Sound Easy, But It’s Not • As a Business, There Is A Focus on the Bottom Line – And the Industry Has Critics 22-25