Sporting activities are not only a hobby for people. It has been recommended by medical practitioners as a remedy for numerous health-related complications. In addition, sporting activities have developed to be a source of income not only to the sportsmen but also to sponsoring companies, individual businesses, and a country at large (Shank 89).
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Our discussion will focus on the commercialization of sports and the contributions of sports and sporting activities to business entities and the hosting countries, the effect of commercialization on sports and sportsmen, why non-profit making organizations are showing interest in sporting promotions, sponsorship of sports, and its drawbacks, benefits accrued by countries that host sporting events, money factor in soccer games and how corporate sponsorship affects the enjoyment of the sporting games (Mullin, et al. 78).
As Asian Football Confederation (AFC) president, Mohammed Bin Hamman would have it said, “sports would cease to exist without the investments made by the business community” (Abratt & Grobler 350). Money, through sponsorship and other related ways, has a lot of contributions to soccer and sports in general. In fact for the sports to continue thriving, they must take commercial road; clubs need to transform into business entities and come up with leagues that consider the collective financial interest of the clubs (Hollensen 45).
With this regard for example the European clubs such as Real Madrid and Manchester United have acquired a status of successful businesses that make multimillion gains every year from lucrative TV rights, merchandising, and ticket sales (Shank 92).
Sports sponsorship according to Shank (1999) can be defined as a consumer (in most cases) involves exchanging the right of product or name to be associated with a particular sporting event with money or product. The emergence of sponsorship can be traced from ancient Rome during which time the Roman patriarchs sponsored gladiator games (O’Sullivan & Murphy 350). Since the 1950s modern sponsorship began to take root in the United States, for example when president Eisenhower’s physical fitness program was sponsored by two companies (Shannon 560).
During this time, however, sponsors were bent on satisfying the interests and aspirations of their executives rather than being profit-oriented (Stotlar 56).
When serious sports began in Europe, sponsorship took a crude form with the athletes and sports clubs engaging in small business kinds of activities to help raise the support money that they were in need of (Abratt & Grobler 353). They engaged in selling lottery and match tickets. Later, the government and local authorities chipped in to lend a hand, through taxation policies. This came from the realization that sports formed a better avenue for spending time and bore other socio-economic benefits that come with it (Jiffer & Roos 28).
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Jiffer and Roos (1999) mentioned that sports would not survive without the financial support given by industries and businesses. This was carried in the research on sports commercialization of 1974 (Jiffer & Roos 32).
Sponsorship has evolved from being a charitable undertaking to a symbiotic kind of relationship where both parties involved are bound to benefit. Sports has remained to be the only avenue for companies to showcase their sponsorship interests (Jiffer & Roos 35). The challenge, however, arises from the fact that a sports sponsorship is becoming over-commercialized, that is, the commercialization, the money factor is becoming the driving force for the sporting activities (Stotlar 36).
New trends in sponsorship of sports are noticeably emerging in the sporting arena with companies not only continually sponsoring lifestyle and extreme sports but also purchasing sports stadiums in an attempt to increase the awareness of the companies (Hollensen 54).
Several sports always operate under sponsorship due to the heavy amount of capital outlay required in their undertaking. Such sports include professional football, tennis, and basketball. According to Bennett (1999), he however observes that sports like motorsports and football ought to be given more precedence by sponsors (Bennett 290).
In our current global world, sports have become so valued by the business community. Football, for example, provides the right platform for the sponsoring companies to communicate directly with their consumers. Commercialization and communication in that respect, therefore, improve the image of the clubs (McDonald 31). This can be derived from the fact that it uses universal language which is accessible to a global audience. It also transverses cultural and language barriers (O’Sullivan & Murphy 349).
It is therefore an exclusive and appropriate medium for promoting and conveying homogenous messages the world over (O’Sullivan & Murphy 345). It is appealing to most businesses and organizations due to the fact that it can reach the targeted audience/customers in a less crowded/cluttered environment. This is an advantage over the other modes of advertisement of promotional techniques that have been used initially. Sporting besides reaching the audiences also takes the promotional messages in a more effective manner (Stotlar 55).
According to Bennett (1999) sponsorship provides extensive coverage by the major media channels that are accessible to a majority of people. This has ensured extensive press and television coverage, which transcends cultural obstacles thus ensuring high visibility and provides an opportunity to reach both narrow and broader potential customers (Hollensen 54).
Sporting also involves an element of patronage, a term referring to the mental sympathy that people get to develop by associating the product of the company with the philanthropic nature in the company’s pursuit of promoting sports and sportsmen. This gives it a comparative advantage over the traditional modes of advertisement (Quester & Farrelly 539).
Due to the promotional benefits sponsoring companies derive from using sports, several major companies use hefty capital to venture into this field. American Tobacco Company’s Philip Morris is reported to have spent a cool $150 million into motorsports sponsorship every year, in about all its competitions including Formula One (Quester & Farrelly 542). On the other hand, sponsorship undertakings have been proven to be well rewarding. Ferrari Company for example is presumed to gain $63 million in sponsorship from Malboro, who is alleged to be paying half of Michael Schumacher’s $25 million contracts (www.globalfl.net).
Apart from the benefits that businesses reap from sponsoring sporting events. The countries that host such events also get their share of benefits. This has led to cutthroat competition in which countries strive to be the host. The benefits of sporting activities to hosting countries cover a wide range of government priorities and can act towards stimulation of other government objectives (Abratt & Grobler 356). Preparation programs, competition, programming, and facility development can be of benefit to the participating athletes, coaches and officials involved.
The sports organization body also reaps benefit from increased exposure and influenced through continued participation in the sports (O’Sullivan & Murphy 357). The hosting country also benefits economically through the numerous job opportunities that come along with the sporting events. The tourism sector of the economy is also to reap benefits through the natural exposure of the fans to the tourist sites (Shank 95).
This can have a long-term advantage on the country’s economy. There would also be a remarkable increase in export volume, enhanced infrastructural development, and an increased tax revenue base (Stotlar 49). For example, before the 2006 World Cup held in Germany, the government was expecting the event to help boost the economy with cash inflows estimated to the tune of $3.8 billion (www.globalfl.net).
In the social sector, the country is deemed to benefit from unique work experiences that include training and youth participation to volunteer promotion and increased emphasis on fitness and health (Hollensen 58). It will also leave an aftermath of sorting syndrome that might help in the fitness area. The sporting event also offers a forum for the hosting country to celebrate athletic, artistic, and cultural excellence and showing the case of one’s identity (McDonald 33). It is a key moment for a country to show a sense of national pride.
Though countries fight to host sporting events, they can bear defective consequences that may adversely affect the hosting country. For example, it may be a good spot where terrorists and hooligans display their prowess (O’Sullivan & Murphy 360). In addition, its organization requires heavy financial investments that could be used in the more deserving sectors of society (Shank 97).
Sponsoring and sponsorship can also bear negative effects for the companies undertaking the sponsoring tender and the club or sports being sponsored. To the sponsored clubs or individuals, the sponsoring company may develop dictatorial tendencies (O’Sullivan & Murphy 361). This is mostly so on the wear of the players, causing friction between the company and the players who have existing contracts and signature boots to promote. On the other hand, sponsorship of perceived ‘illicit’ or ‘anti-ethical products’ is causing controversies and negative attitudes (Abratt & Grobler 357). This is especially so with alcohol and tobacco product promotions through sports.
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McDaniel and Mason (1999) had argued that sports had acted in perpetuating the protection and continued consumption of alcohol and tobacco products. In his suggestion, he feels that not everyone welcomes or is in agreement with the companies continuing to sponsor sporting events (Stotlar 63).
This contentious issue however is being taken up by the sporting regulation bodies that carry out the drug usage diagnosis test on the athletes for example the World Cup, the International Olympic Committee (IOC), and the National Association of Collegiate Athletic (NCAA) to consider the issue of regulating the promotion of alcoholic beverages and tobacco products (Hollensen 61). This is due to the fact that most business organizations that collaborate in sporting activities and the media involved are more concerned with profits to be gained from brewing industries rather than the effect on customers or society (Shannon 530).
Sponsorship can also bring about ambush marketing, a situation that can act against the intended companies’ pursuit goals. In such a case, an unfavorable behavior displayed by the sponsored team can bring negative publicity hence tarnishing the image of the sponsoring company (McDonald 32). Companies always rely on their good image to attract and retain/ensure the loyalty of the customers to their products. Such negative publicity affected ATP Shanghai Masters, a company that sponsors Tennis players and was branded to sponsor immorality when the player Brayan brothers were reportedly involved in immoral behavior (McDonald 34).
Though the product or name promotion through sports reach a vast majority of customers the world over, the message content itself is weak compared to other promotional tools (Jiffer & Roos 29). Sometimes the product of the company cannot be easily correlated with the message being conveyed through sports promotion. More often than not companies communicate their image and the sporting event itself rather than the products (McDonald 36).
Promotion of a company’s name or product through sports is only effective during the promotion period and is easily forgotten afterward. This is due to the fallen impact or recall of the message. Messages being conveyed through this mode might not have an impact on distant fans who listen to or watch the sporting events since they are usually viewed as distracters to game enjoyment by the fans (Mullin, et al. 83). This might further lead to a negative attitude towards the product or the company being promoted through the sporting event.
Moreover, the business or the company’s undertaking the promotion through a sporting event could be facing challenges related to evaluation (Stotlar 47). The positive changes in the revenue turnover might not necessarily be attributable to the promotional undertakings. Due to such evaluation challenges, sponsorship could just be any other unnecessary expense.
Promotion activities apart from the aggregate long time benefits could be eating into the precious time and resources that could be channeled through more rewarding business activities such as increased production, increased quality of the products, employing direct methods of immediately promoting sales volume such as after-sales service or free gifts to attract more customer and promote the employees well being (Mullin, et al.91).
Though sponsorship has taken symbolic relationship where both parties are bound to benefit. Sports have developed to be such potential donors themselves. This has resulted from the commercialization of sports where clubs are making hefty incomes on a daily basis (Abratt & Grobler 359). Due to this non-governmental organizations are seeing it fit partner with sporting clubs in pursuit to get them involved in reaching out to the needs of the society through their donations to such organizations (O’Sullivan & Murphy 360).
On this basis, UNICEF entered into a five-year contract with FC Barcelona on 14th July 2006 where the UNICEF logo was to be on the Barcelona shirts (Hollensen 61). This saw Barcelona donating $1.9 million annually to UNICEF to promote in helping meet the international cooperation programs for development and support United Nation Millennium Development goals (Hollensen 63). It is also an attempt towards lending a hand to UNICEF’s humanitarian aid programs.
Money matters in sports are taking a concerning twist in determining the membership of clubs, being able to buy the best players to join the clubs, and even pay to retain the best players. This can be in reference to Manchester United striker, Cristiano Ronaldo’s saga (Shank 111). The striker had shown interest in joining Real Madrid but this was never to be due to Glazer Family’s (family that owns Manchester United) insistence in retaining him (Hollensen 59).
The family had repeatedly insisted that Ronaldo will not be sold at any price. This called for the intervention of the FIFA president Sepp Blatter who called for giving freedom to players to make their own decisions and join any club of their choice (McDonald 32). He called for an overhaul of the Bosman law which is bound to making a long-lasting contract with a view to keeping players that any decision to terminate an already sealed contract would amount to demand to pay for the damages (Stotlar 69).
Sporting has become such a valuable avenue for promoting and developing human capital thus contributing to the country’s economic growth. This has made the United States go off its way in spending a lot of money to promote the soccer game, including buying players to boost their local clubs (McDonald 37).
Sporting activities have done well economically to countries that have a good endowment of sportsmen like Brazil. It has made it possible for such countries to access Foreign Direct Investment (FDI), a component of a country’s National Financial Account (Shank 15). This form of investment brought about by sport and sporting activities is more useful to a country than investment in the equity of its companies since equity investments are ‘hot money’ which can disappear with any slight indication of economic maladjustment (Shank119).
The international flow of capital as a result of sporting activities has several benefits too. Firstly, it reduces the risk faced by investors by allowing them to diversify their lending and investment (Abratt & Grobler 362). It also enhances global mobility of capital limiting the ability of governments to pursue bad policies (Hollensen 64).
It can be noticed that money matters has taken the center stage in sports and sporting activities. It is the driving force that determines who joins what club, which country hosts the sporting event, what attire the sportsmen wear as well as which media channel transmits the sporting activities. To individuals and clubs, sponsorship has made it possible for talent and careers to be developed.
In the soccer industry, money matters are continuing to be a major issue. The demand for famous players is on the increase with secret persuasions going on. Giant clubs want to maintain their titles and upcoming clubs are looking forward to climbing up the ladder. In addition, due to monetary factors, there are currently mass exoduses of major players from one club to another. Ronaldinho, the Barcelona winger is moving to AC Milan, Robinho is moving to Chelsea after being bought to a tune of £20 million. Samuel Etoo is also moving to a Ukrainian club.
In my opinion, though soccer cannot be divorced from money matters, it ought not to depend too much on the money. This is because it is bound to promote bitter rivalries that might turn fatal, like the one witnessed when Chelsea and Manchester United fans turned on each other. On the other hand, the bitter competition to attract more sponsors is putting the lives of players at risk by any attempts to weaken the rival clubs.
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