The Growing Relationship between Sports and Big Business
Summary
There exists a strong relationship between sports and big business. Therefore, this paper presents a research proposal that will guide the implementation of a research to investigate this issue. This research proposal is divided into three main parts. These are the preliminary part that is made up of the problem statement, justification, background information, and the research questions and objectives. The second part of this research is the review of the literature. The literature review is subdivided into several subtopics to help in conducting an extensive review of information on the topic. The third section of this proposal contains the research methodology. This section carries the research design or method. This includes 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.
Background information
Sports and their related events have been prevalent in human civilizations for a very long time (Mason, 1999). 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 up from the mid of the 20th century. This is the century that witnessed the development of many sporting events. The sporting events developed on national, as well as international arena. From this period, huge prizes were rewarded to the winners of sporting events. In addition, the whole concepts of organizing and running sporting events have begun to involve transactions of huge sums of money. Therefore, sports have become significantly organized in the way they are conducted during the modern times. Sports are now organized basing on budgets and real plans. They are planned just like any other business events. Also, sporting events 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 mere sporting events, but as businesses. However, some societies are still operating in the ancient setup. In this case, such societies are still considering sports as mere social events. Nevertheless, 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 income earning activities. This is not only to those who directly take part in the events, but also to the organizers of the sporting events. Sports are organized with the aim of fetching income for both the participants and the organizers. This is what is now being referred to as the commercialization of sports. Sports have been commercialized to a big extent, and the trend is not about to stop any soon. This is because stakeholders are increasingly interested in fetching ways to generate considerable income. The commercialization of sports is making them important entities in economies that can compare to other conventional business firms. The other important thing to note is that the sporting industry has been growing at a very fast pace. Today, the sports industry employs thousands of people with many others benefiting indirectly from the industry.
Walters & Chadwick (2009) observed that the sporting industry is very competitive. Also, this industry raises more revenues than most business entities around the world. In fact, the sporting industry is supportive to many other industries. These are industries, which serve as suppliers to the sporting industry, and their businesses and survival depends on the existence of the sporting industry. Sports are run for the purpose of fetching profits. This has brought about a lot of organization in conducting or running of sporting events (Chanavat & Bodet, 2009). The numbers of sporting clubs have been on the increase with their management being streamlined to enable the clubs to bear profits. Therefore, sports can no longer be separated from business (Lawrence & Moberg, 2009). This is notable in a number of sporting zones around the world. For instance, in Europe and the United States where there are big sports clubs that control huge revenues in the economy. There are big footballing clubs in Europe that control huge revenues. Examples include Real Madrid football club, Barcelona Football Club and Manchester United Football Club among many others. These clubs operate on huge budgets. Some of the budgets surpass the budgets and operating capitals of many big companies (Kase, Urrutia, Marti Sanchis & Opazo, 2007). This also applies to 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. A lot 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 directly and indirectly. Many other business firms end up enhancing their businesses through getting business contracts (Herstein & Jaffe, 2008).
Adcroft & Teckman (2009) argued that sports and sporting events are major business enhancers. This is especially when they are organized on bigger platforms. They equate sports to a big business basing on the financial transactions that are done in the organization of sports. The benefiting business or economic segments from the sporting events are Hotel and Tourism sectors. The principle of management has been introduced and is being emphasized in sports. This is due to the benefits that are ripped from sports. This same principle is used in business firms while 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 a strong relationship between sports and big business. In fact, many people regard sports as being real business. This is because of the financial opportunities that are found 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 fail to associate sports and sporting events with 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. This means that the development in human civilization has been accompanied by the development in sports. The number of sports and sporting events began gaining momentum at the beginning of the 20th century. However, for all this time, sports have been widely viewed as just social events. In the recent times, the magnitude of sports and sporting events has significantly grown resulting to a shift in how people view or take sports. The social aspect of the roles of sports in the society remains intact. However, sports are now being viewed in business or commercial terms too. This emanates from the budgets that go into the preparation and running of sporting events. Also, this is triggered by the financial returns that are derived from these sporting events.
It is argued that sports have huge impacts in economies. This is 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. In this case, sports should be viewed 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 can be treated like 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 be noted that some people 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. These individuals have even gone ahead to conduct sports and sporting events as a business. Therefore, there is a need to ascertain whether it is worthwhile to treat sports as business entities or not. Thus, it is worthwhile to investigate whether sports can be treated as big businesses and in which sense or on what basis this can be achieved.
There are many researches that have been done in the field of sports. These researches have been focused on investigating what are considered to be the business of sports such as 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 sporting events and big business. In 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 exists between sports or sporting events and big business.
Research questions
Is there a relationship between sports or 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 regarding 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 relationship between sports or 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 that will help bring into picture the relationship between sports and big business. The research objectives include the following:
To inquire into sports and establish the relationship between sports and business
To ascertain whether sports and sporting events are treated as businesses, and if so, 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
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 amongst the ancient societies. Sports date back to the 19th century and even far beyond that period. The ancient sports had no aspect of organization. Also, sports were organized with the aim of entertaining people. They were organized to boost social growth of the society by bringing people together thus encouraging the growth of social relations (Giannoulakis & Apostolopoulou, 2011). Many sporting events were periodic in the ancient societies. In this regard, sports were performed basing on seasons. 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. However, they did not get financial benefits from participating in the sports (Chanavat & Bodet, 2009).
Sports were pure social events that earned the participants social rewards like fame. Sports enhanced social relations in society by bringing people together and encouraging peaceful co-existence within 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 organized on a large scale. Here, they attracted many participants with high prize rewards given to the winning teams. This started to call for considerable organization in sports as significant value began to be attached to sports. Towards the mid of the 20th century, big sporting teams and clubs were formed attracting sponsorship deals from business companies. Therefore, sports began to be seen from the commercial sense. This trend has grown and become very strong in those sports. In this case, sports are 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 restructuring of sporting activities. The aspect of management has been fully incorporated in sports in order to derive significant benefits from sports. In essence, the sporting industry has been developed to work like any other business industry. The industry has many players who are conducting business within the industry, and are deriving huge profits out of the activities in which they are engaged. Modern sports have totally turned away from 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 being practiced in sports. These include the planning, branding, marketing and many other business activities (Schwartz, 2010). 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 are thus managed with the expectation that they will bear profits. All aspects that appertain to business management such as planning, marketing, and branding are also 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. These sports clubs have attracted fans from across the globe. Examples include Arsenal and Manchester United football clubs which have fans have a huge fan base from all corners of the globe. These strong brands help in positioning the sporting event in which these clubs participate (Chanavat & Bodet, 2009). The traditional markets of sports are undergoing transformation as seen in the recent developments within sports. These developments include the embracing of 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).
Sports organizations are being formed to solely deal with the developing of sports and sporting events. These sporting organizations are considered as a distinct business firms and are expected to fetch profits. Sports and sporting events can no longer be separated. In this respect, there is a very thin and blurred line separating the two (Dionı´sio, Leal & Moutinho, 2008). Otherwise, sports and sporting events fall under the definition of business entities. This is because they employ all the principles that characterize businesses. What is going on now is the effort to expand the sports industry and make it significant to economic growth and development (Schwartz, 2010; 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 has been a center of interest for many researchers. A research that was conducted by Tsiotsou (2011) revealed that no gains were made by firms after signing deals of sponsorship. The results pointed to the fact that most shareholders in the sporting industry do not perceive these sponsorships as real business investments. This is related to the fact that much information is not availed to the shareholders, and this makes them act naively. However, further research reveals that there are many gains that accrue to these sponsorship deals. Most companies get many opportunities to expand after signing these contracts (Tsiotsou, 2011).
According to Madeiro (2007), billions of dollars are exchanged in different sports especially football. Also, powerful, sporting organizations have been formed to manage sporting events. This includes the International Athletics Association Federation, Federation Internationale de Football Association, and the International Olympics Committee. There are also many other sporting bodies that are formed to work at the national and regional levels. Many investors are developing interests to invest in sports. This is because of the seemingly many opportunities that are being created in the sporting industry. Sports like football are argued to have grown to become super-businesses 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 of sports to economic development is 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 Olympics and Paralympics games, international world athletic events and other sporting events that are organized regionally. Several industrial sectors benefit significantly by virtue of planning and executing these sporting events. This denotes that sports have both direct and indirect contribution to the economic development. A lot of finances are invested in sports development and infrastructure. Benefits are 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, a lot of money is raised from the booking and selling of sports tickets. The English Premier League can be quoted as one of the best examples. Billions of dollars are raised from the sale of a 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 those spectating basketball matches (Schwarz & Hunter, 2008).
Sports and sporting events as big businesses
The management of sports follows the principles of managing business. There are many transactions that are made in sports. Such transactions involve the signing of contracts between different sporting companies and sporting and other business companies. The contracts involve sponsorship and advertising deals, as well as the transfer of players (McKelvey & Grady, 2008). 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 on the national, regional, and global scale. Sports and sporting events spur economic development by introducing money in the economy and by backing many other firms that are found in other industries. Therefore, the performance of economies cannot be delinked from sports as they spur and enhance business on a very expansive scale (Ratten, 2011).
There are massive support and investments in sports. Several sports clubs have embraced the business model and are selling shares to investors (Friedman & Mason, 2007; Kaynak, Salman & Tatoglu, 2008). They are even trading on national and international security exchanges. International branding and marketing of sports has been found to be a major force in attracting investment within the sports industry. Therefore, this leads to a 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 they are ripping good profits from this venture. In the near future, there will be big business tycoons in the world with their major investments being in sports (Ratten, 2011). Different aspects of management within sports have been introduced in academic institutions. This is encouraging the growth in sport entrepreneurship and management. This means that sports are regarded as business ventures where people can invest in and get many benefits out of the investment and management of sports. Notably, people either invest in already running sporting entities or new and significantly promising sporting segments (Wolcott & Lippitz, 2007).
Consumer and corporate attraction to invest in extreme sports has been on the rise. This has been caused by the increase in the advertisement and media coverage of the sports, which is regarded as a lucrative business. There are many media that have been developed, and they only focus on the marketing of sports and sporting events. This includes ESPN and Sky Sports among many others (Shannon, 1999). Action sports incorporate many cultural elements that are attractive to the spectators. They guide the formulation and implementation of strategies of marketing. These strategies help in strengthening and helping them to survive in the large and competitive sports industry. The sports industry has many booming business that 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. Such companies operate as big multinational companies in the world (Gladden & Funk, 2002; Giannoulakis & Apostolopoulou, 2011).
Apart from investment in sports, business leaders have been requested to learn management aspects from sports. Many sporting fraternities are well managed, and this has made them attain 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 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 this is 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. This research aims to collect information and use the information to establish the relationship that exists between sports and big business. The information will mainly be derived from academic resources that have been published in recent years. These sources are deemed to have information on the latest developments concerning the relationship between sports and big business.
Data collection/sampling technique
As mentioned earlier, this is a secondary research that will mainly use data from secondary sources. Therefore, data will mainly be collected from authentic secondary sources. This will include journals, books, and magazines. Data will be collected through reading and research from 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 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 during 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 and 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 based on the founded facts related to the topic. The information will be synthesized using analytical tools like charts, tables, and graphs. These will help to 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 in accordance with the objectives of the research. This will be the basis on which recommendations or directions on future research will be made. However, this will only be the case if the research will be considered not to have exhausted the problem under research. Clear findings are expected as considerable time will be dedicated to the analysis of the information collected.
Conclusion and recommendations
The conclusion will give certain responses, 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, objectives, and findings. Recommendations are important since they ascertain the research that has been done. They also give guidance on the steps to be followed in conducting advanced 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 information collected.
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