How Sports Became Big Business and Its’ Implications for All Stakeholders

How Sports Became Big Business

Nowadays, sports mean big bucks for all stakeholders. Whether they are sportspersons, corporates, advertisers, or the sports bodies tasked with administering the game, all of them stand to gain from the infusion of Million Dollar deals that have become the norm rather than the exception.

Indeed, the move to make even the least commercialized sports into money-spinning ones is indicative of the huge and tremendous interest in such disciplines for all stakeholders. It was not always like this and there was a time before the 1970s and 1980s when sports to be played for sport’s sake and not for the money’s sake.

Of course, when spectators are willing to pay to watch or lap up the ads on TV, and when advertisers see big monies to be made in promoting their brands around the time of major sporting events, and when the players themselves benefit from these aspects, there is nothing inherently wrong in professionalizing and commercializing sports.

It is also the case that excessive commercialization tends to take the focus of the sports away from the action and instead, make the sideshows more relevant and essential.

The Economics of Sports and How the Advent of TV was the Game Changer

Let us now look at the economics of sports how sports have become a money spinner for all stakeholders. To start with, the advent of Television can be said to have been the game changer as far as commercialization of the same is concerned. Until then, the money could be generated only from spectators paying to watch the games in stadia.

With TV, Millions and even Billions more could tune in thereby providing a humungous platform for advertisers and marketers to reap the benefits of this viewership. Thus, it is routinely the case that the TV rights for major sporting events are sold for Millions of Dollars.

Indeed, the Olympics and Football World Cup, along with the Tennis Grand Slams and the Formula 1 series, and to some extent, the Cricket World Cup, as well as the bilateral series, are all events that bring out the moneybags.

Further, it is not only the TV ads that bring in the money. Brand Endorsements and Brand Ambassadorships, wherein famous sportspersons are signed up to endorse Brands and this leads to more such arrangements which are the collateral benefit.

In other words, the trickledown effect works here as when famous sportspersons endorse brands, they are helping to promote such brands because they have the necessary visibility and fame along with Top of the Mind recall among the fans and viewers to be taken seriously.

Internet and Sports Reaching to the Remote Corners of the World

If the advent of TV was the first game changer as far as sports was concerned, the second and perhaps, more consequential turning point was the advent of the internet. While TV rights could be sold to corporates who would then beam the live action in regions around the world, the internet leveled the field by reaching out to everyone irrespective of the country or region they were based in.

This resulted in TV Majors tying up with leading online portals to access more viewers worldwide. The impact of these trends can be seen in the way people in remote regions and interior hinterlands now watch sporting events and the children and the teenagers among them aspire to be like the famous sporting personalities.

Indeed, the other impact of this has been in the way many youngsters worldwide are now encouraged and motivated to make a mark for themselves in sports thanks to all the money as well as the fame in addition to the glamour associated with sports.

Drawbacks of Excessive Commercialization of Sports

Having said that, there are some drawbacks of excessive commercialization. For instance, it is now widely known that the hosting the Olympics makes money for everyone except the hosting cities. While the infrastructure and other paraphernalia is built and outlasts the games, it also becomes a White Elephant after some time.

Moreover, corruption and shady deals are the hallmarks of major sporting events in recent times and this is definitely something that is a negative as far as impacts go. In addition, the obsession with celebrity sportspersons means that lesser known players and especially those players in games that are not yet commercialized are marginalized leading to youth flocking to become players in select sports and disciplines.

Apart from that, the entry of politicians and other figures in the running of the sports bodies’ means that sports is no longer the priority and the other aspects take over. For instance, it is now very common to find major sporting events being the center of deal-making and wheeling and dealing instead of focusing on the sports alone or even at the detriment of the sports.

Lastly, all this fame and glamour tends to have a corrupting influence on youngsters among the players who cannot resist the temptation to take their status for granted.

Concluding Thoughts

Thus, it is the case that there needs to be a balance between the commercialization of sports and the focus on sports for sports sake. Unless all stakeholders realize that ultimately, what sustains them all is the sport itself and once sports take a back seat, it is akin to killing the Goose that lays the Golden Eggs. In addition, there is a need for all stakeholders to act more responsibly so that moneyed interests do not hijack the spirit of competitiveness.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


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