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Trends and Perspectives in the International Sports Industry:
The Dance between the Individual and the Group

Lynn R. Kahle*
Professor of Sports Marketing
Warsaw Sports Marketing Center
University of Oregon, USA

As an American visiting Korea, I cannot help but have in the back of my mind what experts say are the major differences between America and Korea. The difference that gets the most attention is that the individual is supposedly more important in North America, and the group is supposedly more important in Korea and Asia. This difference is interesting to consider in the context of trends in the sports industry. Sport itself is a dance that is at once individual and collective. The individual athlete usually is part of a team whose success depends upon both the individual and the collective working jointly. Several areas in sports business trends also manifest this joint set of characteristics and deserve special attention. The tension between the individual and the group is at the base of much of what we are observing in the changes in sports business strategy.

1. The first trend involves the role of organizations. The relative importance of individual athletes versus organizations goes through flux from time to time. During the middle of the twentieth century, for example, the AAU in the US held strong sway over individual athletes and dictated which track and field athletes, for example, could compete where, and what rewards they could reap. After many battles, individual athletes won more control over their fates. We see now a trend toward more power on the part of professional organizations. League unions, federations, and sport associations now are exerting greater control over the fate of individual athletes. Nike now may look more to organizations and less to individuals for agreements. For example, in US college sports the individual coach used to negotiate a deal directly with a sneaker company. Today, most contracts are negotiated between companies and universities, with the university determining how much reward the coach will receive from the sneaker company. Leagues themselves are also negotiating deals that override the contracts of individual athletes. For example, the National Basketball Association has a clause in its contracts that no more than 53% of all revenue can flow to individual athletes. Athlete salaries have money withheld until the League determines whether the level of the salary is adequate. Situations such as Yao Ming’s, where a portion of his salary goes directly to the CBA organization that nurtured him, will probably become more common in the future. Sponsors and advertisers look to have sustaining agreements with organizations more than individuals, and with higher levels of organizations, for example, leagues rather than teams. This trend will never totally replace the importance of the individual athlete, but we see much evidence that power today is moving away from the individual and toward the group. David Stern, Commissioner of the National Basketball Association, said that everyone in sports business would be better off if we spent less time worrying about the size of our own slice of the pie and more time worrying about the overall size of the whole pie.
   
2. Internationalization. The world is shrinking because of improved communication and transportation, and sport is not immune. The popularity of sport is spreading worldwide. Soccer (football) has been growing tremendously in the United States, although historically the US has been one of the least interested countries in soccer. In the US today “soccer moms” raise kids who often experience their first exposure to their first organized sport on the soccer field. Basketball has long been popular in the U.S., but basketball has been spreading from the U.S. to the rest of the world. This change is the result of a specific and deliberate strategy. The NBA now has more than 50 players from countries other than the USA, and it has 5 offices in Asia (Beijing, Tokyo, Taiwan, Shanghai, and Hong Kong), in spite of having no franchises in Asia. It also has offices in Paris and Barcelona. Yao Ming has propelled the popularity of basketball in China, for example. The National Basketball League of Australia and New Zealand is expanding to Singapore. Basketball is certainly not the only sport to think internationally. Manchester United already has a fan shop in Singapore, even though Singapore is a long way from Manchester. One of the most basic rules of business strategy is to think internationally, and the world of sports has been doing just that more aggressively and more effectively than ever. The population of the whole world is much greater than the population of any one country, and any business model that internationalizes strategy is likely to increase opportunities. Again we see movement from the individual to the group.
   
3. Branding. More organizations are attending more to their brand images and working more purposefully at developing a strong, consistent and appropriate brand. Every aspect of successful marketing, from positioning to segmentation to public relations (sports information), depends on the brand image. Thus, brand image is far too important to leave to chance. Leagues, teams, sports organizations, and even individual athletes must monitor their brand images and work on those images constantly. The brands of all of these intertwining entities influence each other. The Portland Trailblazers of the US National Basketball Association experienced a commercial meltdown because the family-friendly image that the team wanted to project was not supported by the images of individual athletes, earning the team the mock nickname the Jailblazers. Individuals who do not fit the group brand may find themselves left behind in spite of individual athletic talent. The collective brand must always be at the front of strategic thinking in sports.
   
   Sports branding has improved in complexity, and will continue to improve in complexity. For example, when advertisers selected a sports hero to serve as a spokesperson for a brand, that spokesperson would traditionally be selected based on fame and likeability. Today many more aspects of the hero’s image enter into the choice. How do the image, personality, and values of the hero help to convey the brand message the advertiser seeks to communicate? Alan Iverson may not be likeable to everyone, but he has been a very successful spokesperson. Anna Kournikova may not have been the most successful tennis player on the court, but she ruled the world of tennis endorsements by creating a complex image that appealed to many fans.
   
4. Brand extensions. Marketers seek new opportunities to sell their brand and brand image on a variety of products from t-shirts to mugs for beverages. In many cases the profit potential from licensed goods is greater than the profit potential from selling media rights or even tickets. People who identify with their favorite athletes and teams often want to announce their association to the world through displaying various brand extensions from the products. One trend is that marketers have become more sophisticated at tapping into this fan desire. Individuals want to announce their connection to the collective body of fans.
   
5. New media. How people enjoy sports will change as new media become more prevalent. The digital revolution may play itself out more dramatically in sport than anywhere else. People enjoy sport through media, and the media are changing. The relationship between the collective and the individual grows ever more complex. Everyone has thought for some time that at one point that media would converge into one device, and most people speculated that the device would be the personal computer. It now appears that in fact the device will be the cell phone. Cell phones today can do almost everything except launch small thermonuclear devices, and that may be coming, too,
   
   Sports marketers have always focused on how the entertainment is delivered to individuals. The internet has allowed individuals to receive “broadcasts” or webcasts at their own convenient times and in their own convenient ways. The individual can interact with the entire world of sports fans through accessing vast amounts of information, blogging with fellow fans, and following esoteric sports (my favorite is canoe polo) in greater detail and more geographic isolation than ever before. The individual can link with the group in ways that previously did not exist. The individual can select what to watch with almost infinite variety, whereas a generation ago maybe only one sporting event was broadcast in a country for the entire country to consume at once.
   
   But the recent explosion in video sharing has changed the direction of sharing from one-way to two-way communication for the visual image of sports. The cell phone with a video camera and internet access makes every individual a potential broadcast network. The National Hockey League in North America encourages posting video clips of League action on YouTube for everyone to watch or download. Individual fans will more and more determine what is worth watching, as opposed to only network executives deciding what the public will see. Thus, the individual has gained much control over the substance of sports, away from the collective forces.
   
6. Better research. Individuals are also telling the sporting world what they want more clearly as sports marketing research improves, again forcing the networks to devise better and more entertaining sports. The Winter Olympics have traditionally failed as televised entertainment and even as a draw for the kinds of crowd sizes we expect at the summer Olympics. The Salt Lake City Olympics marked a transition in popularity of viewing the Olympics because the focus has been more on attracting the interest of young individuals. Events such as the half pike in snowboarding capture the fascination of the younger generation and draw them to consume the Winter Olympics at a more mass-market level. Sports marketers know they must reach younger demographics better if they want to sustain their franchise with consumers. Sports marketers must approach individuals with a sincere desire to understand their motivations for becoming fans if they want to maintain collective enthusiasm. Marketers must develop relationships with fans.
   
7. Nostalgia. Individuals do not just want entertainment that is “new and different.” They also are showing signs of desiring greater nostalgia. They remember the “good old days” and want to re-live the idealized images of sports from the past. Tradition has always been an important part of sports, and marketers who want to change sports too much run the very real risk of hurting their chance to connect with place and history. “Old school” fans want to preserve the integrity and honest competition of traditional sports.

Conclusion

Smart sports marketers now spend more time listening to consumers than ever before. Owners now interact with fans on a regular basis, knowing that the group of fans consists of many individuals who do or do not enjoy many aspects of sports consumption. Ted Leonsis of the Washington Capitals hockey team (and also a minority owner of the Washington Wizards NBA team) listens to fans and does everything he can to please them. The oldest bit of wisdom in marketing is, “The customer is always right.” I do not believe that that view is always true, but it is a great place to start and a great attitude to instill in any sports marketing operation. The collective will be most appreciative and happy when everyone in it is individually happy. The most modern trend in sports marketing is trying to keep this oldest bit of wisdom fresh. Perhaps the one person who best symbolizes these changing trends is Yao Ming, an international hero from the CBA and now NBA, where brand and brand extensions encompass new media research and traditional skills.

The dance between the individual and the group goes on. Thank you.

References

Bee, Colleen C., and Lynn R. Kahle (2006). “Relationship Marketing in Sports: A Functional Approach.” Sport Marketing Quarterly, 15, 101-110.

Jones, Scott, Bee, Colleen, Burton, Rick, and Kahle, Lynn R. (2004). “Marketing through Sports Entertainment: A Functional Approach.” In L. J. Shrum (Ed.), The Psychology of Entertainment Media: Blurring the Lines Between Entertainment and Persuasion. Mahwah, NJ: Lawrence Erlbaum, 309-322.

Kahle, Kevin E., and Lynn R. Kahle (2006). “Sports Celebrities’ Image: A Critical Evaluation of the Utility of Q Scores.” In Lynn R. Kahle and C. H. Kim, Eds. (2006). Creating Images and the Psychology of Marketing Communication. Mahwah, NJ: Lawrence Erlbaum, 191-200.

Kahle, Lynn R., and Carla Meeske (1999). “Sports Marketing and the Internet: It’s a Whole New Ball Game,” Sport Marketing Quarterly, 8(2), 9-12.

Kahle, Lynn R., David M. Boush, and Mark Phelps. (2000). “Good Morning, Vietnam: An Ethical Analysis of Nike Activities in Southeast Asia,” Sport Marketing Quarterly, 9(1), 43-52.

Kahle, Lynn R., Kenneth M. Kambara, and Gregory M. Rose (1996). "A Functional Model of Fan Attendance Motivations for College Football," Sport Marketing Quarterly, 5(Dec.), 51-60.

Kahle, Lynn R., Mark P. Elton, and Kenneth M. Kambara (1997). "Sports Talk and the Development of Marketing Relationships," Sport Marketing Quarterly, 6(2), 35-40.

Kahle, Lynn R., Robert Madrigal, Nancy P. Melone, and Kerry Szymanski (1999). "An Audience Survey from the first Gridiron Cybercast." In David W. Schumann and Esther Thorson, Eds. Advertising and the World Wide Web. Mahwah, NJ: Lawrence Erlbaum Associates, 275-286.

Kahle, Lynn, Marc Duncan, Vassilis Dalakas, and Damon Aiken (2001). “The Social Values of Fans for Men’s Versus Women’s University Basketball,” Sport Marketing Quarterly, 10(2), 156-162.

Kotler, Phillip, and Kevin Keller (2005). Marketing Management, 12th Edition. Upper Saddle River, NJ: Prentice Hall.

Shank, Matthew D. (2005) Sports Marketing: A Strategic Perspective. Third Edition. Upper Saddle River, NJ: Prentice Hall.

Shoham, Aviv, Gregory M. Rose, and Lynn R. Kahle (1998). "Marketing of Risky Sports: From Intention to Action." Journal of the Academy of Marketing Science, 26(Fall), 307-321.

Shoham, Aviv, Rose, Gregory M., and Kahle, Lynn R. (2004). “Risky Sports: Making the Leap.” In Lynn R. Kahle and Chris Riley (Eds), Sports Marketing and the Psychology of Marketing Communication. Mahwah, NJ: Lawrence Erlbaum, 87-104.

Sukhdial, Ajay, Damon Aiken, and Lynn Kahle (2002). “Are You Old School? An Investigation of the Sports Fans’ Attitudes and Values,” Journal of Advertising Research , 42 (July/Aug)., 71-81.

The author acknowledges helpful suggestions from Steve Miller. This talk was originally given as the keynote address at the SPOEX Sports Marketing Conference in Seoul, Korea, in 2007.