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The Globalization of Professional Sports Dan Marmaduke


Globalization of Professional Sports

As the human population increases, technology bolsters international business, and as the world becomes increasingly accessible; the sports-world has followed suit. Home grown sports are now cheered-for and followed internationally more than ever before. The globalization of sports can be attributed to a bounty of reasons, the primary reason always boils down to one motive: business. The evolution of sports has gone from primitive competition for entertainment, to a lucrative $480-$620 billion international business. The strength and quality of competition in sports business has matched -- if not exceeded -- the level of competition on the field. Sports, like many internationally popular objects have emotional and cerebral appeal that can be extended to various cultures without requiring full-knowledge of the specific sport. For instance, the Harry Potter series was originally written and printed in English, and subsequently has been printed in sixty-seven various languages around the world selling roughly 450 million copies because of the series’ ability to provide entertainment regardless of the language. The international appeal of sports entertainment can be enjoyed in any language, and has fabricated an international business that continues to expand with many of the same principles as a successful team on the field: talent, speed, and innovation. Dan Marmaduke

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Globalization of Professional Sports

Many sports franchises have become global icons (Manchester United, FC Barcelona, the New York Yankees, etc.) and have experienced a high level of success on the field and in business. Success on-and-off the field tend to be synonymous with the world’s most-popular teams. The New York Yankees have won twenty-seven World Series championships, Manchester United won thirteen titles in a span of twenty years, and FC Barcelona has won twenty-two La Liga championships -- amongst a plethora of other international competitions. The on-field success of those teams has made the international business transition a smooth one; prompting many team owners and league officials in other countries thinking global. There are many benefits for globalizing a sports franchise or league beginning with the addition of new markets. In business, successful global expansion into new markets means more customers, more revenue, and it raises the ceiling for further expansion. “It (sports) is an existing product with minimal additional costs, it's been a profitable venture," said Laurence DeGaris, professor of marketing, University of Indianapolis. A substantial reason for teams -- especially in the United States -- to expand globally is that their domestic sports market has become over-saturated. Teams in the U.S. have been marketing to the same markets since their date of inception and have recently aimed their sights to nearly every corner of the globe to establish a brand image, and add new streams of revenue. The U.S. market consists of about 315 million people (only some of them being sports fans), and the world market consists of about 8 billion people, which has driven sports business professionals to seek-their-share of the densely populated global market. One of the more recent -- and most prominent -- examples of global expansion out of the U.S. is the globalization of the National Basketball Association. The NBA is the most popular it has been since the Jordan-era, due in large to the presence the league has internationally.

Dan Marmaduke

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Globalization of Professional Sports

In 1978, the NBA played its’ first game internationally when the Washington Bullets traveled to Israel to play Maccabi Tel Aviv for a preseason exhibition game. In addition to being the first international game featuring an NBA team, it was also the first matchup between an NBA team and an International Basketball Federation -- FIBA -- team. This game, in which Maccabi Tel Aviv won 98-97 (surprisingly) set the stage for international growth in the NBA. The following season, the Washington Bullets traveled internationally again to play three games instead of only one. The previous international loss against Maccabi Tel Aviv made an impression on the Bullets as they won all three games sweeping their international competition. The Bullets played two games in China -- Beijing and Shanghai -with the third game taking place in Quezon City, Philippines. The trend of international NBA games continued to grow as four different NBA teams played in a total of twentythree international games spanning from 1979-1988. The 1987 season featured the first-ever McDonald’s Open, which became increasingly popular in 1988 when the Boston Celtics (led by Larry Bird) traveled to Madrid to play the Yugoslavian national team, and Real Madrid -- the Celtics won both match-ups easily. Today, the international presence of the NBA is the strongest it has ever been in every segment. The NBA introduced the “Global Games” in 2013 featuring twelve different NBA teams playing abroad -- the highest total for a single-season in league history. The Global Games for 2013 include eight preseason games, two regular season games, and four first-time cities totaling six countries. Broadcasts for the Global Games reached two-hundred different countries. Last season’s NBA finals were available for viewing in 215 countries and territories, and translated into forty-seven various languages. ! The league -- going into the 2013-14 season -- features ninety-two players from thirtynine different countries. NBA merchandise is available in roughly 100,000 stores, spanning one-hundred countries. LeBron James -- the current face of the NBA -- has the most-popular NBA jersey in the world according to global sales; which accounts for 10% of overall league revenue ($5 billion in 2012). The global presence of the NBA has Dan Marmaduke

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Globalization of Professional Sports

drawn interest from investors all over the world -mainly China -- for everything from merchandise, T.V. rights, and even ownership. The Brooklyn Nets -- formerly the New Jersey Nets -- owned by Russian billionaire Mikhail Prokhorov, are the first NBA team to have an owner outside of North America. The international success of the NBA has resulted in other American sports leagues trying to replicate that success and globalize their respective sports, most notably the National Football League and Major League Baseball. The National Football League is without question the most-popular sport in the U.S. right now. The domestic success of the NFL has set the league’s sights on another run at international markets. An international presence is nothing new for the NFL, however, international sports fans are ostensibly more cognizant of the failure of NFL Europe; a league that stumbled out of the gates and failed to gain traction in the European markets. NFL Europe -- formerly the World League of American Football -- reportedly lost roughly $30 million per season. A year after the third name change to NFL Europa, the league disbanded in June 2007, effective immediately. New commissioner Roger Goodell announced the disbandment as a “business decision,” most-likely due to pecuniary issues. Goodell said the move was made to redirect the international focus on regularseason NFL games being played abroad, which is becoming increasingly popular with annual games played at Wembley Stadium in London, England. “I think it is more of a novelty there,” said former Chicago Bear Tom Waddle. “I’m not a true believer that playing overseas is the next frontier for new revenue sources.” Dan Marmaduke

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Globalization of Professional Sports

After NFL Europa ceased operations in the summer of 2007, the NFL began their International Series -- games played in London -- with a regular-season matchup between the New York Giants and the Miami Dolphins. The league has hosted a regular season game at Wembley Stadium every season since, and subsequently added a second game in the 2013 season and will expand to three games for the 2014 season. Goodell has even mentioned a possible expansion of an NFL franchise to London -- rumors have surrounded the Jacksonville Jaguars -- which has received more criticism than it has approval. An NFL team based in London that has to play eight away-games against teams in the states simply does not make much sense. The NFL will be an interesting sports league to keep track of in the coming years as Commissioner Goodell seeks to expand the international operations of the league, and has set a target figure for annual revenue: $25 billion by the year 2027. The international reach of the NBA and (growing) reach of the NFL has prompted Major League Baseball to get in on the action as well. The most diverse sport in America -- with the exception of the National Hockey League (NHL) -- is Major League Baseball. At the beginning of the 2012 baseball season, the league consisted of 38.2% players of color (27.3% Latino, 8.8% African American, 1.9% Asian, 0.1% Native American/Alaskan, 0.1% Hawaiian) with the remaining 61.2% of players being white. This level of diversity, including financial motives, has driven MLB to follow-suit and pursue international markets. MLB already has a strong following of international fans -- specifically in Asia, Latin America, and the Dominican Republic -which accounts for a combined $13.5 billion in sports television and merchandise, according to PriceWaterhouseCoopers. MLB currently nets roughly $7.5 billion in annual revenue, with hundreds of millions of dollars coming from international television deals alone. The sports market in the U.S. has become over-saturated, and baseball is as popular as ever in Japan, the Dominican Republic, various Latin American countries, and surprisingly Australia. MLB already has capitalized on its’ popularity in the Asian markets by hosting exhibition and regular-season games in Japan, China, and Taiwan. From 1986Dan Marmaduke

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Globalization of Professional Sports

2006, All-Stars from MLB played games against All-Stars from Japan in an end of the season Japanese tour known as the MLB Japan All-Star Series. This annual event ended in 2006 resulting in the creation of the World Baseball Classic, which was sanctioned by the International Baseball Federation. The WBC is played every four years and is considered the greatest international marketing move made by MLB. The WBC features sixteen teams -- during the finals period -- from all-over the world. Japan won the first two WBC’s in 2006 and 2009. The most-recent winner is the Dominican Republic who won the championship in 2013 behind MVP (and MLB All-Star) Robinson Cano.

To kick-off the 2014 season, the MLB has slated the Los Angeles Dodgers and the Arizona Diamondbacks to square-off in Sydney, Australia playing their first two regularseason games against each other. Prior to their games against each other, each team will play an exhibition match against Team Australia. The opening series in Sydney marks the largest internationally recognized event in Australia since the 2003 Rugby World Cup Final, and will bring an economic surge while boosting the popularity of the sport in Australia. Dan Marmaduke

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Globalization of Professional Sports

Major League Baseball, unlike the NBA or the NFL, doesn’t have any long-term plans for teams based overseas; but the globalization of sports around the world is a trend that will continue, especially out of the U.S. The over-saturation of domestic sports markets has almost forced sports franchises to globalize into international brands and leagues. International interest has created more revenue streams from potential investors, media contracts, and new fans spread out all over the world. A decade from now you could see multiple NBA teams playing home games across Europe, an NFL team calling London home, and championship events played and broadcast globally. Teams will continue to expand their markets, sports fans will continue cheering and breeding new sports fans as the human population grows in size, technology bolsters international business, and the world becomes increasingly accessible, the sports-world will be right there with it. !

Dan Marmaduke

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Globalization of Professional Sports  

An in-depth report I wrote about the globalization of professional sports while abroad in Barcelona, Spain.

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