A recent article in Readers Digest estimates that most Americans spend at least 3% of their income on sporting events and sport related products. Sports has entertained American people and drained money out of their pockets making sporting events an arena of pure economic activity. It has been proven that Americans will purchase tickets to attend sporting events, but this alone does not create enough revenue to keep sports teams profitable. While sports for the spectators are merely entertainment, the economics of the industry are what drives businesses to become involved.
Sports have become more of a business entity rather than an entertainment industry due o the strong economic perception of the over all industry. There are several instances in which economics may contribute to the effect on the sports industry, such as: the success of a team, the price of a ticket, the amount of money an athlete will make, and the amount of profit a team will make. The success of any single entity solely relies on the current economic market situations.
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Sports could not exist without the presence of money. Sports are a business that relies heavily on the involvement of society to be successful. Society’s direct involvement is what promotes the advertising industry. Advertising in many ways can control the destiny of sports. The desire for one to be involved with a specific sport team or player is what stimulates the demand for advertising business. Advertising creates enormous amounts of revenue for sports teams, as well as individual athletes.
There are many ways in which advertising is achieved in sports. Corporations advertise their products through sponsorships, merchandising. Television, and printed materials. Sponsorship corporations will sponsor individual players or even whole teams and hope that people will go out and buy the product being pondered by their favorite player or team. A perfect example of sponsorship was stated in Sports Illustrated a couple of years ago. The New York Yankees signed a ten year 93 million dollar contract with Aids.
Aids supplies the team with things like cleats and T-shirts, so not only do the Yankees make a lot of money, Aids will too because people will see the Yankees players wearing Aids and they will want to go out and buy their products. Individual players may also be sponsored, such as tennis Star Pete Samaras. They are paid to wear a particular brand of clothing or shoes creating a emend for others interested in the sport to go out and buy these products. Another way for corporations to advertise sports is through merchandising.
Merchandise includes everything from clothing apparel and shoes, to book and video games, to watches and backpacks with distinctive sports logos and names of star athletes. Getting a branded shoe with one of the top basketball names in the world is the desire of many. Merchandising is profitable for both the company selling the goods and the team or player being marketed, because the team and player will receive a certain amount of he profits. While sponsorships and merchandising are important advertising means, television controls fan interest in sports.
Networks and advertisers choose games that will be attractive to the viewers and more profitable for them. What better way for a team to receive national attention, than to be a featured “game of the week”. Television and radio networks pay teams for broadcasting rights. This benefits both the teams and the broadcasters. The teams receive money and the media advertising exposure and the broadcasters make money by selling commercial time to advertisers. Many athletes, as well as whole teams, are now being featured in advertising commercials as well as printed advertisements.
Michael Jordan, the Nab’s biggest star of all time has endorsed and advertised products such as Hands, Mike, and Storage. Competition in the sports world is tight, athletes are physically fit, and the margin for victory is slim. Managers, coaches, and players are realizing that to get ahead they need an added resource. While advertising may not be one of the key ingredients in developing a successful team or player, it is definitely one of the building blocks in keeping them successful.