Table of Contents
Summary. 3
Introduction/background information.. 3
Problem statement 4
Justification of the research.. 5
Research questions. 5
Research objectives. 5
Literature review.. 6
History of sports. 6
Commercialization of sports. 7
The magnitude of sports and sporting events and their contribution in the modern economy 8
Sports and sporting events as big businesses. 8
Research methodology. 9
Research design.. 9
Data collection/sampling technique. 10
Data collection tools. 10
Analysis of information and findings. 10
Conclusion and recommendations. 10
References. 11
The Growing Relationship between Sports and Big Business
Summary
There exists a strong relationship between sport and big business. Therefore, this paper presents a whole research proposal that will guide the implementation of a research to investigate this problem. This research proposal is divided into three main parts. These are the preliminary part which comprises of the problem statement, justification, background information, and the research questions and objectives. The second part of this research is comprised of a review of literature. The literature review is subdivided into several subtopics to help draw diverse information. The third section of this proposal contains the research methodology. This section carries the research design/ method, the data collection methods and tools, the sampling techniques and the data analysis tools. All the parts carry information on how the research will be conducted.
Introduction/background information
Mason (1999) makes this important observation that sports and their related events have been prevalent in human civilizations for a very long time. The generative goal of sports was to bring people together and encourage social development in the society. The change in the manner in which sports are viewed came about from the mid of the 20th century which also saw the development of many sporting events. The sporting events developed both on national and international arena. From this period, huge prizes were tagged on the winners of sporting events. Also, the whole concepts of organizing and running sporting events have begun to involve transactions of huge sums of money. Therefore, it is being noted that sports have become more organized in the way they are conducted in the modern times. Sports are now organized basing on budgets and real plans. They are planned just like any other business events and are implemented basing on the plans that are crafted prior to their happening (Carenys and Sales, 2012). Therefore, these are true pointers to the fact that sports are no longer seen just as sports bust as businesses. However, some societies are still operating in the ancient setup and are thus still considering sports as mere social events. However, the sporting events in these societies are still organized on the basis of business principles (Giannoulakis & Aspostolopoulou, 2011).
According to (Carenys and Sales, 2012) sports have become more of incoming earning activities not only to those who directly take part in the events but also to the entire organizers of the events. Sports are organized with the aim of fetching income for both the participants and the organizers as well. This is what is now being referred to as the commercialization of sports. Sports have been commercialized to a big extent and are still being more commercialized so as to fetch more income to economies. The commercialization of sports is making them important entities in economies just like business firma are. The other important thing to note is that the sporting industry has been growing at a very fast pace. The industry now employs thousands of people with many others benefiting indirectly from the industry.
Walters & Chadwick (2009) observe that the sporting industry is very competitive and raises more revenues than most industries in the world. In fact, the sporting industry is supportive to many other industries. These industries are suppliers to the sporting industry and their businesses and survival depends on the existence of the sporting industry. Sports are treated and run for the purpose of fetching profits which has brought about a lot of organization in conducting or running of sports (Chanavat & Bodet, 2009). The numbers of sporting clubs have been on the increase with their management being streamlines so that they can bear profits. Therefore, sports can no longer be separated from business (Lawrence & Moberg, 2009). This is notable in a number of sporting zones in the world for instance Europe and the United States where there are big sports clubs that control huge revenues in the economy. For instance, there are big footballing clubs in Europe which control huge revenues. Examples include Real Madrid football club, Barcelona Football Club and Manchester United Football Club among many other football clubs that operate on huge budgets. Some of the budgets highly surpass the budgets and operating capitals of many big companies (Kase, Urrutia, Marti Sanchis & Opazo, 2007). This also applies top other sports Like basketball clubs in the United States which also control huge revenues.
In essence, there is a pointer that sports are becoming highly commercialized. Lots of money is collected by sporting bodies out of hosting major sporting events. Also, the entire process of running any major sporting event; from planning to the real sporting action presents many business opportunities both directly and indirectly. Many other business firms end up enhancing their businesses through getting business contracts (Herstein & Jaffe, 2008).
Adcroft & Teckman (2009) argue that sports and sporting events have been found to be major business enhancers especially so when they are organized on bigger platform. They equate sports to big business by basing on the financial transactions that are done in the organization of sports. The main benefiting business or economic segments from the sporting events are Hotel and Tourism sectors. Due to the benefits that are ripped from sports, the principle of management has been introduced and is being emphasized in sports. This same principle is used in business firms in streamlining operations in order to achieve the best business outcomes. Sports are now being managed like business entities in order to maximize the outcomes or benefits. Therefore, this denotes that there is strong relationship between sports and big business. In fact, many people see sports as being real business because of the financial opportunities that lie in the sporting industry (Burnes & O’ Donnell, 2011).
Problem statement
Sporting is argued to be one of the fastest growing industries in the world today. However, many people still fails to associate sports and sporting events to big business. Sports and sporting events have been in existence for a very long time. In fact, it is argued that sports are as old as human civilization meaning that the development in human civilization has been accompanied by the development in sports. The number of sports and sporting events began gaining momentum towards at the beginning of the 20th century. However, for all this time, sports have been widely viewed as just social events. However, in the recent times, the magnitude of sports and sporting events has really grown resulting in a shift of how people view or take sports. The social aspect of the roles of sports in the society remains intact. However, sports are also now being viewed in business or commercial terms. This resonates from the budgets that go into preparation and running of sporting events and the financial returns that are derived from these sporting events.
It is argued that sports are having huge impacts in economies because they fetch a lot of money. However, with the seemingly significant value to economic development, many people are still considering sports as only social entities. They argue that sports should not be taken as business entities and that they should be treated more from the social and non-profit sense rather than being approached from the commercial or business sense. Therefore, the question that remains to bog the mind is whether sports have any relationship with business or whether sports are and can be treated as other businesses. This is a question that is pushing many people to start looking into sports and assessing them from the commercial perspective rather than just the entertainment or social sense.
Justification of the research
It can easily be noted that a gap still remains between people who believe that sports are non-profit entities and should be treated that way. On the other hand, there are those who believe and have likened sports to big business entities and have even gone ahead to conduct sports and sporting events as business. Therefore, there is a need to ascertain whether it is worthwhile to treat sports as businesses. Also, it is worthwhile investigating whether sports can be treated as big businesses and in which sense and on what basis that can be done.
There are many researches that have been done in the field of sports which is also referred to as the sports industry. These researches have been focused on investigating what are considered to be the business of sports for examples sports merchandising, planning and organization, branding, marketing and many other aspects of sports. While this is good, either no or very little research has been done to establish the link that exists between sports and sporting events and big business. In the reality, sports are already being treated as business events. Therefore, it is important to conduct this research as it will help in ascertaining the relationship that there is between sports and sporting events and big business.
Research questions
Is there a relationship between sports and sporting events and business?
Are sports treated as businesses? To what extent are sports treated as business?
What principles of business prevail in sports and sporting events? Can they point to the terming of sports as businesses?
Are sports and sporting events organized basing on principles of conducting business? What relationship exists between sports and big business?
What is the real relationship between sports and sporting events and big business? Do sports and sporting events have a relationship? What is the nature and strength of the relationship?
Research objectives
This research seeks to investigate a number of things which will help bring into picture the relationship between sports and big business.
To inquire into sports and establish the relationship between sports and business
To ascertain whether sports and sporting events are treated as businesses and to what extent
To identify principles of business that is evident in sports and sporting events.
To investigate the relationship between sports and business events
To draw a relationship that exists between sports and booming businesses.
Literature review
History of sports
According to Giannoulakis & Apostolopoulou (2011) sports have been in existence for a very long time. They are argued to be as old as the civilization of human beings. However, sports are no longer viewed in the same way they were viewed and attended to in ancient societies. Sports date back to the 19th century and even far beyond that period. The ancient sports had no aspect of organization and were organized with the aim of entertaining people. They were organized to boost social growth of the society by bringing people together thence encouraging the growth of social relations. Many sporting events were periodic in the ancient societies and were performed basing on seasons in societies. They were performed with the aim of bringing glory to the participating communities. An example of such a sport is the tag of war where the winning person brought a lot of glory and fame to his community. Communities attached a lot of value to sports even though they did not get financial benefits from participating in the sports (Chanavat & Bodet, 2009).
Sports were pure social events which earned the participants social rewards like fame. Sports enhanced social relations in society by bringing people together and encouraging peaceful co-existence in the society. Recent developments in sports have changed the way the society view sports. From the beginning of the 20th century, sports have been put together to form what is referred to as the sports industry. Sporting events began to be organizing on a large scale and attracted many participants with high prize rewards given to the winning teams. This started to call for more organization in sports as more value began to be attached to sports. Towards the mid of the 20th century big sporting teams and clubs has been formed attracting sponsorship deals from business companies. Therefore, sports began to be seen from the commercial sense. This trend has grown and become so strong in those sports and considered and managed like businesses. Sports and sporting events now attract high lucrative business deals that come in different processes of sports. The commercial worth of sports is being realized leading to the structuring of sporting activities. The aspect of management has been fully incorporated in sports in order to derive more benefits from sports. In essence the sporting industry has been developed and woks like any other business industry. The industry has many players who are conducting business in it and are deriving huge profits out of the activities that that they are taking part in. Modern sports have totally turned away for the ancient amateur club format in which sports were organized Sports have been turned into lovable events by the improvement of the scale of management (Madeiro, 2007).
Commercialization of sports
Research points out that there are many business activities that there are many business activities that are being practiced in sports. These include the planning, branding, marketing and many other business activities (Forbes, 2007). The commercialization of sports is an activity that has grown and gained prominence in the last three decades. According to (Carenys & Sales, (2012) Sports have been turned into real business ventures and a re thus managed with the expectation that they will bear profits. All that appertains to business management for planning to marketing and branding is done in sports. As it is now, there are well established sports brand across the world. Some of the most established brands include sports clubs like football clubs in Europe which have attracted fans from across the globe. Examples are Arsenal and Manchester United football clubs which have fans have large clientele of fans from all the corners of the earth. These strong brands help in positioning the sporting event in which they participate which is the English Premier League. (Chanavat & Bodet, 2009). The traditional markets of sports are undergoing transformation in the recent developments in sports which is embracing the internationalization of sports. More investors are attracted to invest in sports because of the cross-border publicity emanating from the branding and extensive marketing of sports (Desbordes, 2007).
According to Dionı´sio, Leal & Moutinho (2008) sports organizations are being formed which solely deal with the developing of sports and sporting events. These sporting organizations are considered as distinct business firma and are expected to fetch profits. Sports ad sporting events can no longer be separated and there is a very thin and blurred line separating the two. Otherwise, sports and sporting events fall under the definition of business entities since they employ all the principles that are based on to define what a business is. What is going on now is the effort to expand the sports industry and make it more significant to economic growth and development (Forbes, 2007, DeSarbo & Madrigal, 2011).
There are many sponsorship deals that are being signed between sporting clubs and firms from other industries. The impact of performance of the firms prior to the signing of sponsorship deals have been a center of interest for many researchers. A research that was conducted by Tsiotsou (2011) revels that that no gains were made by firms after signing deals of sponsorship. The results pointed to the fact that most that shareholders in the sporting industry do not perceive these sponsorships as real business investments. This is related to the fact that mush information is not availed to the shareholders making them to act naively. However, further research reveals that there are many gains that accrue to these sponsorships. After signing these contracts, most companies get many opportunities to expand. The research was based on the tools the firms that signed sponsorship deals prior to the 2004 Olympic Games (Tsiotsou, 2011).
According to Madeiro (2007) billions of dollars are exchange in different sports especially so football. Also powerful sporting organizations have been formed which manage sporting events for example International Athletics Association Federation, Federation Internationale de Football Association and the International Olympics Committee. There are also many other sporting bodies that are formed and work at the national and regional levels. Many investors are developing interests to invest in sports because of the seemingly many opportunities that are being created in the sporting industry. Sports like football are argues to have grown to become super- businesses that are operating on a global scale. Football is considered to be a multinational business in the sense that there exists hundreds of internationally recognized football clubs. There are many inter-club business transactions taking place between different football clubs. There is also a lot of marketing of sports events with the media being used as one of the major marketing tools (Madeiro, 2007).
The magnitude of sports and sporting events and their contribution in the modern economy
The contribution of sports can no longer be ignored. In fact in a number of sporting instances, the contribution to economic development is so much diverse in the sense that it overshadows the contribution of many other industries (Carenys & Sales, 2012). Examples are the major sporting events organized globally like the FIFA world cup, the Olympic and Paralympic games, international world athletic events and other sporting events that are organized regionally. Several industrial sectors benefit significantly for the virtue of planning for and executing these sporting events. This denotes that sports have both direct and indirect contribution to economic development. A lot of finances are invested in sports development and infrastructure. Benefit is also ripped out of the investment that is done in sport development. For instance, in places where there are good sporting structures and highly developed sporting events, lots of money is raised from the booking o selling of sports tickets. The English Premier League can be quoted as one of the best examples here. Billions of dollars are raised from the sale of football match tickets every season. The same happens to other sporting events like the American Basketball Association League where billions of dollars are raised from the entry fee that is charged on spectating basketball matches (Schwarz & Hunter, 2008).
Sports and sporting events as big businesses
McKelvey & Grady (2008) ascertain that the management of sports now follows more the principles of managing business. Many transactions are made in sports. Such transactions involve the signing of contracts between different sporting companies and also between sporting and other business companies. The contracts involve sponsorship and advertising deals as well as the transfer of players. Also, huge budgets are prepared and expended in the sporting arena. Some of the budgets even outweigh the budgets that are prepared and implemented by most firms in the service and manufacturing sectors (Sweeney, 2007). Sports boost business both on the national, regional and the global scale. Sports and sporting events spur economic development by introducing money in the economy and by backing many other firms that lie in other industries. Therefore, the performance or economies cannot be de-linked from sports as they spur and enhance business on a very expansive scale (Ratten, 2011).
There is massive support and investments in sports. Several sports clubs have totally gone business and are selling shares to investors (Friedman & Mason, 2007, Kaynak, Salman & Tatoglu, 2008). They are even trading on national security exchanges. International branding and marketing of sports has been found to be a major force in attracting investment in sports thence growth in sports and sporting business (Chanavat & Bodet, 2009, Schwarz & Hunter, 2008).
The aspect or trends of investing in sport is bringing up what is called entrepreneurship in sports. Well renowned businessmen are opting to strongly invest in sports and are ripping profits from doing so. Soon, it is expected that there will be big business tycoons in the world with their major investments being cited in sports (Ratten, 2011). Different aspects of management in sports have been introduced in academic institutions which are encouraging the growth in sport entrepreneurship and management. This means that sports are taken like business ventures where people can invest in and get many benefits out of investment and management of sports. Wolcott & Lippitz (2007) note that people either invest in already running sporting entities or in the already or in new and more promising sporting segments.
Consumers and corporate attraction to invest in extreme sports has been on the rise with many people. This has been cause by the increase in the advertisement and media coverage of the sports as lucrative businesses. There are many Medias that have been developed which only focus on the marketing of sports and sports. They include ESPN and Sky Sports among many others (Shannon, 1999). Action sports incorporate many cultural elements that are attractive to the spectators. They thus guide the formulation and implementation of strategies of marketing. These strategies help in strengthening them and helping them to survive in the large and competitive sports industry. The sports industry has many booming business which have sprouted their roots across the world. For instance, there are companies that deal in the manufacture of sporting kits and attires like Puma, Nike and Adidas which operate as big multinational companies in the world (Gladden & Funk, 2002, Giannoulakis & Apostolopoulou, 2011).
Apart from investment in sports, business leaders have been in the recent times been requested to learn management aspects from sports. Many sporting fraternities are well managed making them attaining the success they have attained to date. Sports and sporting events are thus acting as management benchmarks for many business leaders and managers. It is attractive to see the organization that goes into the organization of mega scale sporting events like the Olympic Games. This organization is superb and is highly desired in the management of business functions in different firms. Many aspects of excellence in sports are being applied to the entire business world and are bearing fruits (Burnes & O’Donnell, 2011).
Research methodology
Research design
This research will mostly apply qualitative approaches since secondary data will be collected and analyzed to help in meeting the objectives of the research. The descriptive research design is best suited for this research hence it will be used. This research aims to collect information and use the information to establish the relationship that exists between sports and big business. The information will be mainly derived from academic resources that have been published in recent years. These sources are deemed to have information to have the latest developments concerning the relationship if there is any between sports and big business.
Data collection/sampling technique
As mentioned earlier, this is a secondary research which will mainly use data from secondary sources. Therefore, data will be mainly collected from authentic secondary sources; mainly journals, books and magazines. Data will be collected through reading and research in the academic sources with the related information. Secondary observation will be the main way in which the required information will be collected. The information will be sampled from among the many cases and other researches that have close relations with the research topic. Data will be collected basing on the research questions to ensure that all the objectives of the research are met in the implementation phase.
Data collection tools
The information collected from the secondary sources will be recorded inform of a comprehensive literature review. This will form the main source of data for analysis in order to respond to the research questions thence the research objectives.
Analysis of information and findings
The main points and examples will be pinpointed and analyzed depending on the questions that are being investigated in the research. Data will be analyzed basing on the founded facts on the topic as it will be denoted in the collected data. The information will be synthesized using analytical tools like charts, tables and graphs. These will help simplify the information in order to derive viable findings. The findings will be well recorded. The recorded findings will be again reviewed in relation to the research objectives. The findings will then be arranged and presented systematically; according to the objectives of the research. This will be the basis on which recommendations or directions on future research will be made if at all the research will be considered not to have exhausted the problem under research. Clear findings are expected as more time will be dedicated to the analysis of the information collected.
Conclusion and recommendations
The conclusion will give specific response and will point out whether the research was positive or not. It will guide the crafting of recommendations. It will give a final statement concerning the research topic and objectives and the findings. Recommendations are important since they guide they ascertain the research that has been done and recommend and give guidance on the steps to be followed in conducting more research. The recommendations will be derived from the analysis and the findings of this research. The recommendations will be limited to the findings that will be arrived at after the analysis of all the information collected.
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