Chapter 15: Business and enterprise in physical activity and sport

15.1 Sport-related advertising

Introduction: Discuss the role of sport in increasing sales of products through advertising and endorsements. – Apply to examples such as the GAA football championship or the Premier League. – Explain the golden triangle of sport, the media and business: how do they benefit each other?

TASK 15.1 ANSWER

From the images identify the range of products and services being advertised through sport. – Grocery shops (Centra) – Mobile phones (Tecno) – Airlines (Etihad) – Energy drinks (Red Bull) – E-commerce (QNet) – Energy suppliers (Bord Gáis) – TV (Sky Sports) – Catalogue shopping (Littlewoods) – Tyres (Pirelli)

Examine: How might sport-related advertising influence young people? – Ask the students if they feel influenced by advertising. – Do they feel they need to show brand loyalty to a club they support?

PRACTICE QUESTION ANSWERS

Q1. Use figure 15.1 to explain ‘The Golden Triangle’ in terms of the commercialisation of sport. – Businesses use sport to reach their target group of consumers. – Sport and sportspeople rely on the media to give them a platform and increase revenue from sponsors. – The media use sport to generate revenue and interest from sponsors for TV advertising. Q2. Discuss the influence of sports-related advertising on young people. – Young people may view an unhealthy product as healthy due to its links to physical activity. – Linking role models with brand names will influence young people to spend their money on expensive products in order to keep up with trends. – Many food and drink retailers invest heavily in sport-related advertising to target young people, despite being linked with childhood obesity – Businesses that sponsor local community events may be viewed in a positive light by young people regardless of the product they sell e.g. alcohol.

15.2 Sponsorship, endorsements and merchandising

Introduction: Discuss high-profile examples of: – sponsorship e.g. AIB and the GAA football championship – endorsement e.g. Lebron James and Coca-Cola and then Pepsi – merchandising e.g. Ronaldo and his Nike brand CR7.

Discuss: Ask the students to identify positive and negatives of sponsorship for the sport/ National Governing Body and the sportsperson.

Examine the factors that should be considered when selecting a sponsor – Identify the risk factors for sponsorship of underage teams/individuals

PRACTICE QUESTION ANSWERS

Q1. Explain the difference between sponsorship, endorsement and merchandising. – Sponsorship: A business providing money or support to a team, individual or event. – Endorsement: when a sportsperson or team promotes a product or service for financial rewards. – Merchandising: the act of commercialising the name, logo, badge or image of a team or sportsperson. Q2. Sport and its NGBS rely on money from sponsorship to fund grassroots sport. Examine the advantages and disadvantage of sponsorship for NGBs.

Advantages

– Creates interest – Increases revenue and funding for facilities, equipment, coaching and identifying talent – Creates role models who inspire other to participate in sport – Increases the number of competitions and events – Provides funding for technology to help officials make the correct decisions.

Disadvantages

– Sponsors can withdraw their support. – Loss of control for the sport as the large corporations exert their influence. – The location and start time of events could be changed to suit sponsors. – The vast majority of sponsorship is targeted at a small number of popular sports which are already well funded. – The format, rules and name of the competition may be influenced by commercial interests. – Minority sports suffer lower participation and funding. Q3. High-profile sportspeople often earn more from endorsements than prize money. Analyse the impact of this on the performer. – Increased earnings – May take their attention away from training with increased time spent on publicity – May reduce intrinsic motivation due to large extrinsic rewards – Become dependent on the endorsements as their main source of income – Loss of endorsements may financially ruin the sportsperson. Q4. The GAA took the decision to cease all sponsorship linked to alcohol. Suggest why the

GAA might be against such a sponsorship deal, especially for clubs with youth teams. – Alcohol is illegal for under 18s and promoting it at youth sport may encourage underage drinking. – Alcohol abuse plays a large part in premature deaths in Ireland. – It goes against the ethos of sport and promoting the physical/mental benefits of sport. – The GAA is a pillar of the community and must be seen to be setting an example.

15.3 Business and sport

Introduction: Discuss the two case studies: – AIB and the GAA football championship – Nike in athletics.

CASE STUDY QUESTION ANSWERS

Q1. Describe two ways that AIB might benefit from their association with the

Gaelic GAA Football Championship. – Advertising: their logo will be shown at all games in the football championship and broadcast regularly on TV. – Goodwill through links with the community e.g. sponsoring the All Ireland club championship competitions. – Gaelic football appeals to the youth market which is a prime recruitment area for AIB. – Corporate hospitality: complementary tickets for specific games or use of a corporate box in Croke Park to impress potential clients. – Associated with success: the football championship is considered a sporting success and therefore AIB can benefit from being associated with excellence and success. Q2. Outline the risks for AIB of committing to a long-term sponsorship deal with a sporting body. – Negative publicity if the sport falls into disrepute – Large financial commitment which may be difficult to sustain if profits fall – Reduced viewership or loss of TV rights from free-to-air channels to Sky may reduce their advertising exposure. Q3. Describe the benefits to athletics that Nike has provided. – The corporation offers large financial rewards to the top athletes. – It funds innovation such as sports shoes and clothing, – Sponsorship of national governing bodies provides valuable investment in the sport for high-performance and grass roots athletics. – It sponsors events. Q4. Examine the drawbacks for the sport of athletics of becoming heavily reliant a powerful commercial corporation. – Influence: becoming a major sponsor of athletics governing bodies gives them considerable influence in the direction of the sport. – Negative publicity: Nike set up the Nike Oregon project which was linked to doping of its athletes by head coach Alberto Salazar. – Athlete welfare: Nike has been accused of making their athletes sign complex legal documents that restrict their rights. – Nike has in the past been found to be using child labour and sweatshops to produce their clothing at a low cost in order to enhance profits. Q5. Outline the risks to athlete welfare that have been associated with Nike. – One-sided contracts that give power to the company over the athletes – Limited athlete rights – Sexism: pregnant athletes have had their payments stopped or reduced – Doping allegations plagued the Nike Oregon project.

TASK 15.2 SAMPLE ANSWER

Research one of your selected activities and identify a sponsor linked to it. Outline:

Activity and sponsor: Irish Cricket and Turkish Airlines

(a) the benefits the sponsor is likely to gain from the partnership – Increased revenue: Turkey is a popular tourism destination for Irish people. – Goodwill: Irish cricket fans may be more likely to use Turkish Airlines out of brand loyalty. – Advertising and publicity at matches all over the world (players shirts). – Associated with success: the Irish cricket team have been very successful in recent years. (b) the factors that should have been considered before selecting the sponsor – Their reputation: how they treat their staff and customers/rights. – Their financial stability: will they able to meet the commitments of the deal? – What they will want in return and whether it is in the players’ and association’s best interests. – Their ethos and ethics. (c) the benefits to the event, team or sportsperson – Financial support for high-performance and grassroots cricket. – Stability and financial security for the association. – Increased profile internationally. (d) the risks for the event, team or sportsperson – The company may withdraw support due to a breakdown in diplomatic relations between Ireland and turkey. – There may be negative publicity if the company is associated with financial irregularity or workers’ rights violations. – They may demand influence over the team or association.

15.4 Mass-participation sport

Introduction: Link examples of mass-participation events to its main features: – Large scale e.g. Dublin Marathon has 25,000 participants. – Inclusive: caters for people of all ages, genders and disabilities.

Discuss the reasons for the growth in popularity of these events and the opportunities for business from this growth: – Health and fitness, social, provides a challenge etc. – Tourism sector, transport, events companies, sports clothing.

TASK 15.3 (Group work) ANSWER

As a group, research and outline examples of mass-participation events from your local area and identify the likely economic benefits and potential opportunities for business.

Sample: Ring of Kerry Charity Cycle

– 10,000 participants – Increased domestic and international tourism – Lasts up to 14 hours and passes through local towns and villages where competitors stop for food and drink – Increased occupancy for accommodation providers – Increased footfall for local shops.

PRACTICE QUESTION ANSWERS

Q1. Explain what is meant by mass-participation sport. Describe three reasons why these events have increased in popularity. – Large-scale, competitive events that cater for inclusive participation – Provide a challenge and sense of achievement for individuals – Enhance motivation to increase fitness (setting a goal) – Seen as a fun way to keep healthy – Social events: a good way of meeting new people. Q2. Identify the types of business that benefit from mass-participation events and outline how they benefit. – Leisure industry such as gyms benefit from increased memebership. – Tourism industry such as hotels and guest houses benefit from sports tourism as it increases occupancy. – Retail industry may sell more sports clothes and equipment to participants. – The catering industry benefits from the increased sales in cafes and restaurants. Q3. Outline the possible commercial benefits of sponsoring mass-participation events. – Brand visibility: a large audience of potential customers for the business – Targeted marketing: identifying potential customers through entry form information and gathering participant information – Consumer perception: sponsoring events generates a positive image for companies – Generating leads: participants opting into direct marketing. Q4. Mass-participation events have seen considerable growth in popularity. Discuss the reasons for this increase in popularity and give examples of the types of events people are participating in. – Provide a challenge and sense of achievement for individuals – Enhance motivation to increase fitness such as setting a goal – Seen as a fun way to keep healthy – Social benefits: provide the opportunity to meet new people – Sports tourism: provide the opportunity to visit new places at home and abroad – Rewards including improved health, body shape or a finisher’s medal – Mental health and self-esteem enhanced as endorphins associated with exercise make you feel good and provide a sense of achievement and satisfaction – Positive media coverage of these events makes them attractive – Examples include marathons, adventure races, sportif cycling events.

15.5 Tourism and sport

Discuss: What is sports tourism? – Travelling to a destination to participate in or spectate at an event. – Visit a sporting attraction e.g. Olympic stadium.

TASK 15.4 (Group work) SAMPLE ANSWER

Work in groups to develop a mass-participation event aimed at attracting sports tourism to your area: • Describe the event. • Set a target for the number of participants you hope to attract. • Devise a strategy for attracting overseas participants. • Develop an advertising and marketing plan.

Adventure race in Lough Key Forest Park, Roscommon

• An adventure race incorporating a 10km run, 40km cycle and 3km of kayaking within the park. • 500 participants • Provide inclusive packages with accommodation, transfers, meals and entry fee included. • Advertise the amenities and natural beauty of the park through social media targeted at people interested in adventure races in scenic areas; provide information on the website; partner with other adventure races in Europe to promote the event.

CASE STUDY QUESTION ANSWERS

Q1. There was a significant economic impact of just 12 mass-participation events in Ireland. Outline three benefits to the Irish tourism sector of these types of events. – €46 million to the economy – 100,000 visitors – Over 95,000 bed nights for the accomodation sector – Higher spending category of tourist. Q2. How do sports tourists differ from regular tourists in terms of their spend and the ecomomic gains to Ireland? – Significantly higher spend per person – Seven times more likely to stay in high-value accommodation such as a hotel – An average spend per person of almost €800. Q3. How can a partnership between tourism and sport benefit rural Ireland? – Brings much needed economic stimulus to rural economies. – Markets lesser known parts of the country. – Sport is a means of enticing tourists away form the traditional tourist locations. – Income is generated from the natural terrain therefore preserving the natural beauty of rural Ireland.

PRACTICE QUESTION ANSWERS

Q1. Explain what is meant by sports tourism and provide examples. – People travelling to attend a sports event, either to participate or spectate – Big city marathons, European football matches, major championships – Travelling to visit sporting attactions such as a stadium or museum. Q2. Analyse the potential of sports marketing on the development of tourism in Ireland. – Tourism is Ireland’s largest indigenous industry. – Sport Tourism is the fastest-growing sector of the global tourism industry. – It targets the motivations of sports tourists such as participation or adventure. – Provides positive media coverage of successful international events hosted by Ireland e.g. the Giro d’Italia generated interest in Ireland as a cycling destination. – Provides a wide range of events across a range of sports and locations. – Uses the country’s natural resources and unique countryside to promote events. Q3. Identify how sports tourism can boost economic growth. – Spectators and participants will spend money in the local economy: – Travel: flights/taxi/buses/car rental – Hospitality sector: Food and drink – Leisure industry: entry fees/clothing/entertainment/gyms and leisure centres.