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Spectator sports industry

Last reviewed: December 2017

Industry Snapshot

General Industry: Sports

Career Cluster: Business, Management, and Administration

Subcategory Industries: Independent Athletes; Racetracks; Sports Agents; Sports Promoters; Sports Teams and Clubs

Related Industries:Apparel and Fashion Industry; Broadcast Industry; Motion Picture and Television Industry; Sports Equipment Industry

Annual Domestic Revenues:US$42.9 billion (US Census Bureau Quarterly Services Survey, 2016)

NAICS Number: 7112-7114

The spectator sports industry comprises professional, semiprofessional, amateur, and tournament sports that are conducted live before a paying audience. It includes high-profile sports leagues such as the National Football League (NFL) and Major League Baseball (MLB), as well as horse, dog, and car racing. Participants in the industry include owners, athletes, trainers, managers, coaches, promoters, referees, and administrators, as well as groundskeepers and facility managers.

History of the Industry

The history of sports and games dates back to ancient times. Artifacts of an ancient Egyptian board game called enet have been extracted from pyramids, and the game's origin has been traced back to 3000 b.c.e. Likewise, Egyptians were fond of sporting competitions that involved running, jumping, and fighting. Egyptian wall paintings from around 1850 b.c.e. depict a wrestling competition that involves techniques still used by wrestlers today.

The ancient Greeks epitomized a culture obsessed with the human form and the pursuit of physical perfection. Competitive sport was a feature of many Greek religious and social ceremonies, and the Greeks constructed sporting arenas that were designed for spectator viewing. They also inaugurated the first sporting competition at Olympia in 776 b.c.e., founding a tradition that continued to be observed every four years for more than a millennium. The Olympic Games' schedule would eventually be expanded from a singular running race to include sports such as javelin, discus, chariot racing, wrestling, boxing, and the pentathlon (featuring five events). The Olympics were outlawed in 393 c.e. by the Romans, but after a fifteen-hundred-year hiatus the modern Olympic Games were founded in 1896, continuing the tradition of sporting competition among the world's elite athletes.

Horse racing also dates back to ancient times, when people held chariot races, jousted, and played a team game that was a predecessor of polo. The modern concept of horse racing, however, can be traced to England in the 1600's, when it found favor with King Charles II and the English aristocracy. The sport popularized gambling and formalized the concept of pedigree in animal breeding. In fact, some scholars contend that the fascination with genealogy in horse racing has roots in English aristocrats' obsession with their own lineage.

Modern sport, with standardized rules and regulations, began evolving in the 1800's in Europe as schools increasingly mandated sports in their curricula. At the same time, advances in transportation technology facilitated sporting competitions between villages and towns, and an increasing proportion of the population moved to large cities, where it became easier to form sporting leagues. Over time, standardized rules and faster, cheaper travel made it possible to conduct national and international sporting competitions.

The development of spectator sports as an industry has been accelerated by communication technologies that make sports accessible to increasingly large audiences. Today, revenue generated from ticket sales and concession spending is dwarfed by the revenue generated from broadcasting rights, merchandising, advertising, and sponsorships. Consequently, sport in the United States and around the world has become big business. In fact, since the 1920's, when expenditures in the spectator sports industry were first tracked in the United States, the industry has seen rapid growth. From 1920 to 1930 alone, spending on spectator sports more than doubled, from $30 to $65 million. In the 1990's, spending was estimated at more than $11 billion.

The Industry Today

Sport cuts across national boundaries and demographics and is no less woven into the contemporary cultural fabric than it was woven into that of the ancient Greeks. Moreover, as a form of entertainment and recreation, sport is incredibly multifaceted. It accommodates players and managers from amateur to professional levels, and it offers a wide variety of allied pursuits, not least of which are gambling and spectating.

The 2004 Summer Olympics in Athens, Greece, made history when television broadcasts of the competition were viewed by 3.9 billion people worldwide. They generated over thirty-five thousand hours of broadcast viewing spread across thousands of stations. In the United States, 203 million people-nearly 70 percent of the population-watched at least some part of the games. The 2008 Summer Olympics in Beijing, China, comprised more than 302 events involving around ten thousand competitors, and they were covered by 24,500 media representatives from fifty-nine countries. Audience demand for the Olympics has grown strongly, if the increase in supply is any indication. Measured by the number of broadcast hours dedicated to Olympic events, there was a 27 percent increase in the supply of Olympic coverage between 1992 and 2004.

In the United States, the spectator sports industry employed over eight thousand professional athletes and sports competitors in 2014, with thousands more individuals in support and related occupations. The other leading occupations in the industry include office and administrative support; service and guest attendance (ticket takers, ushers, and so on); food preparation and service; maintenance and repair; security services; transportation and freight; general and operations management; coaching and training; and business support (human resources, convention planning, accounting, auditing, and so on).

In 2014, the combined Big Four leagues-the NFL, the National Basketball Association (NBA), the National Hockey League (NHL), and MLB-accounted for an estimated annual revenue of $27.2 billion, according to spokespeople for each league. Other significant spectator sporting leagues in the United States include the National Association for Stock Car Auto Racing ( NASCAR), Indy Car, the Professional Golfers Association (PGA), the National Collegiate Athletic Association (NCAA), and Major League Soccer (MLS). Growing professional sports subsectors include previously marginal sports such as motocross, skateboarding, monster trucks, aerobatics, and poker. Amateur and semiprofessional sports also create strong spectator demand. Some of these include cycling, poker, bowling, bodybuilding, beach volleyball, rodeo riding, figure skating, and rally-car racing.

Today, the majority of spectator sports revenue is generated from the sale of broadcasting and sponsorship rights. If a league engages in a profit-sharing business model, it distributes league-generated revenues among its franchisees. Coupled with salary caps that limit the earning potential of players, this arrangement can make franchise ownership incredibly profitable. However, statistics belie the vast scope of the disparity between the richest and the poorest sectors of the industry. In competitive leagues that do not engage in profit sharing, teams and individuals must privately fund their enterprises, and they must do so in an economy where consumer, sponsor, and investment spending can contract in response to economic downturns. As highlighted by the 2007-2009 global financial crisis and its economic impact on consumer spending, contracting spending in professional sports is a relatively new paradigm in an industry that has enjoyed decades of skyrocketing growth.

The spectator sports industry is undergoing a transformation in the early twenty-first century, as teams and their governing bodies diversify their business interests. Likewise, the industry is coming to terms with new technologies and how these may change the way in which spectators view and interact with sports and sporting events. Some examples include online fantasy leagues, video gaming, digital television, and Internet video streaming. The domestic spectator sports industry is also challenged by questions of how best to market its products to potential international and foreign audiences.

The sports agency field is dominated by large companies that manage professional athletes, coaches, celebrities, and events. Demonstrating the high value placed on sports managers and promoters in the industry, the career tournament earnings of Tiger Woods (the world's highest-paid athlete in the early twenty-first century) were overshadowed by the $500 million he earned from endorsements and other activities. Some leading sports agencies include IMG, Octagon Worldwide, BDA Sports Management, and the William Morris Agency.

Industry Outlook

The outlook for the spectator sports industry shows it to be stable. Between 1998 and 2005, revenue in the spectator sports sector skyrocketed by 32 percent, and that of the agency and promotion sector increased by 36 percent. This meteoric rise was slowed somewhat by the global economic recession of 2007-9, with the valuations of the major US sports leagues remaining relatively stable, but long-term media broadcast deals and sponsorships helped offset other declines. By 2011 the industry had begun to grow yet again. In 2015, the valuation and revenues of the NFL, MLB, NBA, and NHL all reached record highs and appeared poised to continue to rise.

While overall the industry is still expected to grow, some observers expect to witness corrections in overvalued salaries and company stocks. These pricing corrections follow decades of unfettered growth that resulted in ticket, merchandise, salary, and company values that may not be sustainable in the postrecession economy. In keeping with general employment trends, spectator sports organizations are working toward smaller, leaner workforces. While wage and salaried jobs in the arts, entertainment, and recreation industry are expected to grow generally, job competition in the spectator sports sector will tighten and intensify. This trend is likely to result in keener competition in the amateur and semiprofessional sectors as well.

These economic factors are forcing sports businesses to look beyond their traditional markets and means of distribution. Foreign markets, especially in Asia, are proving particularly attractive. The key to opening these foreign markets, however, is to develop awareness and appreciation for new sports within them. Such initiatives demand long-term investment. The NFL, for example, has established a youth flag-football league in China. In 2007, the NFL also scheduled a regular season game at Wembley Stadium in the England, in an attempt to generate European interest in American football. NASCAR, meanwhile, is attempting to broaden its audience demographic by broadcasting in Spanish.

Sporting organizations are also competing in the new media space, as consumer demand for instant and interactive services increases. The rising demand for Web-based services challenges traditional marketing paradigms, as the industry grapples with expanding its audience and cementing viewer loyalties beyond traditional broadcast technologies. The challenges of leveraging new communication technologies and media methods cannot be understated, given increased competition among various sports in a saturated domestic market.

Revenue in the spectator sports industry is expected to grow generally, but many businesses (especially those competing in nonfranchise leagues) will experience lower profit margins resulting from increased competition. While revenue from consumer sales is likely to plateau, income from the sale of long-term broadcasting and sponsorship agreements assures financial security for most high-profile leagues. Business survival will be more cutthroat in sports whose officiating bodies do not share profits from broadcasting or event sponsorship with teams or athletes. NASCAR, a privately owned, family-operated business, is a good case in point: Sponsorship and broadcasting revenues earned by NASCAR remain solely with NASCAR. This situation can lead to tension when competing teams accuse NASCAR of stealing their sponsors and of pocketing huge broadcasting revenues that leverage the teams' participation without providing any reimbursement. Meanwhile, many teams are reducing their workforces, cutting salaries, and scrabbling for sponsorship dollars.

Employment Advantages

Despite slowing growth and increased employment competition in the spectator sports industry, opportunities will continue to exist for talented, motivated, and qualified individuals. Practical experience is highly regarded in this industry, so candidates are encouraged to seek relevant experience through volunteering, community involvement at local schools and clubs, amateur leagues, and hobby activities. Candidates who combine relevant practical experience with high levels of academic achievement or athletic talent will be best positioned for opportunities, as will those who can apply their skills in new and high-demand areas. Although employment entry may be difficult, competition keen, and the work demanding, those who do become successful are likely to be remunerated generously.

Annual Earnings

The total sports industry in the United States was valued at $498.4 billion in 2015 according to Plunkett Research; This figure includes the spectator sports, sporting equipment and apparel, health, fitness and recreation, and promotions industries. The spectator sports industry specifically (including sports promoters, managers, and agents) in 2016 brought in revenues of around $42.9 billion, according to the US Census Bureau. In 2014, the NFL was the most valuable league, with other major contributors as follows:

*NFL: $9.5 billion

*MLB: $9 billion

*NBA: $5 billion

*NHL: $3.7 billion

*Other sporting leagues: $3 billion

*Horse racing: $4 billion

*Promotion: $10.1 billion

The NFL is one of the world's most profitable sporting leagues, with the average team valued at $1.43 billion in 2014. Second place goes to MLB, with an average value of $1.2 billion per team. The NFL's value can be attributed mainly to broadcasting rights and a player-salary cap that ensures that franchise teams realize strong profits. The top teams also own or control their own stadiums, which garner strong income from ticket and concession sales, as well as multimillion-dollar naming deals. The NFL has also identified unique business opportunities by entering into preferred supplier arrangements with relatively small, burgeoning organizations in return for stock options in these companies. This tactic has paid large dividends, as these partnerships drive up sales and company stock values. The NFL also owns its own broadcasting network.

These domestic statistics are dwarfed by the potential revenues offered by burgeoning sports markets overseas. In China, for example, increasing professionalism in sports, coupled with wider media coverage, is resulting in massive growth in the sports industry. In 2014 the Chinese State Council announced that according to its estimates the country's sports and fitness industry would reach $800 billion by 2025.

Bibliography

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Fowler, Elizabeth M. "Careers: Learning to Manage a Race Track." The New York Times, May 1, 1990. http://www.nytimes.com/1990/05/01/business/careers-learning-to-manage-a-race-track.html.

Funk, Daniel C. Consumer Behaviour in Sport and Events: Marketing Action. Boston: Butterworth-Heinemann/Elsevier, 2008.

Gunnion, Lester. "Behind the Numbers: Professional Sports and the Merits of Being Big and Connected." Deloitte University Press. Deloitte Development, 7 Aug. 2015. Web. 1 Oct. 2015.

Hart, Chris J., Corinne M. Daprano, and Peter J. Titlebaum. "Rules of the Game: Ethics in Sports Marketing." Sports Media 33 (March, 2005). http://www.sports-media.org/newpedimension7.htm.

Horrow, Richard B., and Karla Swatek. Beyond the Box Score: An Insider's Guide to the $750 Billion Business of Sports. New York: Morgan James, 2010.

"Industry Statistics Sports & Recreation Business Statistics Analysis." Plunkett Research. Plunkett Research, 11 Nov. 2014. Web. 1 Oct. 2015.

Jozsa, Frank P. Global Sports: Cultures, Markets, and Organizations. Hackensack, N.J.: World Scientific, 2009.

López-Egea, Sandalio Gómez, Kimio Kase, and Ignacio Urrutia. Value Creation and Sport Management. New York: Cambridge University Press, 2010.

Mather, Victor. "Two Horse-Racing Syndicates Flourish on Line. The New York Times, June 4, 1998. http://www.nytimes.com/1998/06/04/technology/2-horse-racing-syndicates-flourish-on-line.html.

PayScale.com. "Salary Survey for Industry: Spectator Sports." http://www.payscale.com/research/US/Industry=Spectator‗Sports/Salary.

PayScale.com. "Salary Survey for Industry: Sports Agency." http://www.payscale.com/research/US/Industry=Sports‗Agency/Salary/by‗Company‗Size.

PayScale.com. "Salary Survey for Job: Referee, Umpire, or Other Sports Official." http://www.payscale .com/research/US/Job=Umpire%2c‗Referee %2c‗or‗Other‗Sports‗Official/Salary.

Plunkett, Jack W. Plunkett's Sports Industry Almanac, 2010. Houston, Tex.: Plunkett Research, 2009.

Quinn, Kevin G. Sports and Their Fans: The History, Economics, and Culture of the Relationship Between Spectator and Sport. Jefferson, N.C.: McFarland, 2009.

Szymanski, Stefan. The Comparative Economics of Sport. New York: Palgrave Macmillan, 2010.

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Van Riper, Tom. "The Most Valuable Teams in Sports." Forbes, January 13, 2009. http://www.forbes.com/2009/01/13/nfl-cowboys-yankees-biz-media-cx‗tvr‗0113values.html.

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Derived from: "Spectator sports industry." Survey of American Industry & Careers (Online Edition). Salem Press. 2013.

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89088223;;20180418;DataLoaderFramework.EpMarcCitation;5.8.0.0 Spectator sports industry Last reviewed: December 2017 Industry Snapshot General Industry: Sports Career Cluster: Business, Management, and Administration Subcategory Industries: Independent Athletes; Racetracks; Sports Agents; Sports Promoters; Sports Teams and Clubs Related Industries:Apparel and Fashion Industry; Broadcast Industry; Motion Picture and Television Industry; Sports Equipment Industry Annual Domestic Revenues:US$42.9 billion (US Census Bureau Quarterly Services Survey, 2016) NAICS Number: 7112-7114 The spectator sports industry comprises professional, semiprofessional, amateur, and tournament sports that are conducted live before a paying audience.

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Event Planning: The Ultimate Guide To Successful Meetings, Corporate Events, Fundraising Galas, Conferences, Conventions, Incentives and Other Special Events.

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Event Planning: The Ultimate Guide To Successful Meetings, Corporate Events, Fundraising Galas, Conferences, Conventions, Incentives and Other Special Events.

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https://books.google.com/books?hl=en&lr=&id=6VKSzfku7ukC&oi=fnd&pg=PR9&dq=Event+Planning:+The+Ultimate+Guide+To+Successful+Meetings,+Corporate+Events,+Fundraising+Galas,+Conferences,+Conventions,+Incentives+and+Other+Special+Events&ots=hAtoZcBQ-z&sig=dG2qkWUcQB0QsX0hx7nZhgQxGWA#v=onepage&q=Event%20Planning%3A%20The%20Ultimate%20Guide%20To%20Successful%20Meetings%2C%20Corporate%20Events%2C%20Fundraising%20Galas%2C%20Conferences%2C%20Conventions%2C%20Incentives%20and%20Other%20Special%20Events&f=false
The core of event planning.

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1.The definition of sports and sports management.

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Macro-and micro-functional sports management functions will be fully strengthened. In the management authority, the state no longer do everything matters, the powers to do sports community to exercise, give full play to the basic units and individual self-management, self- development initiative, the state administrative organs only macroeconomic decisions, coordination, supervision, The combination of macro and micro management more closely and better, so that the macro-and micro-functional sports management functions are fully strengthened. Government management and social management based management system will coexist for some time. Because unbalanced Chinese economy, cultural development, government management and social management system managed coexist, but also to maintain a considerable period of time. In some economic backwardness, cultural enclosed areas (such as the western region), the cause of sports-loaded, because of the social economy is weak enough to assume responsibility for the support and management of sport, government managed system had to be retained, and its responsibilities should be strengthen; while in a developed economy, sports market is relatively mature areas, sports socialization and high degree of industrialization, industrial nature of the prominent, gradually formed social managed system. Government and community management model is combined with the basic orientation of Sports Management System.

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The representative examples of sports agencies and organizations.

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The representative examples of sports agencies and organizations.

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The Big Four Leagues
In 2014, the combined Big Four leagues—the NFL, the National Basketball Association (NBA), the National Hockey League (NHL), and MLB—accounted for an estimated annual revenue of $27.2 billion, according to spokespeople for each league. Other significant spectator sporting leagues in the United States include the National Association for Stock Car Auto Racing (NASCAR), Indy Car, the Professional Golfers Association (PGA), the National Collegiate Athletic Association (NCAA), and Major League Soccer (MLS). Growing professional sports subsectors include previously marginal sports such as motocross, skateboarding, monster trucks, aerobatics, and poker. Amateur and semiprofessional sports also create strong spectator demand. Some of these include cycling, poker, bowling, bodybuilding, beach volleyball, rodeo riding, figure skating, and rally-car racing.

http://katalog.baskent.edu.tr/client/en_US/default/search/federateddetailnonmodal/$N/EDS/ers$007c$007c89088223?qu=Ethics+--+Greece+--+Early+works+to+1800.&rw=10&ic=true&ri=51991963-8ade-4c51-a1e7-fab9f6971e40.RVztrQbMcqK2yXlO1DApMhswDPto%2F5GsEDMVBXE0fG0%3D&te=1083500324&lm=ALL&ps=300

Spectator sports industry.
Hughes, Kylie Grimshaw
Salem Press Encyclopedia, January, 2015.

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The history of sports can date back to the ancient time. The ancient Greeks epitomized a culture obsessed with the human form and the pursuit of physical perfection.The Olympics were outlawed in 393 c.e. by the Romans, but after a fifteen-hundred-year hiatus the modern Olympic Games were founded in 1896, continuing the tradition of sporting competition among the world’s elite athletes.
Back to the sports industry today. In the United States, the spectator sports industry employed over eight thousand professional athletes and sports competitors in 2014, with thousands more individuals in support and related occupations. The other leading occupations in the industry include office and administrative support; service and guest attendance (ticket takers, ushers, and so on); food preparation and service; maintenance and repair; security services; transportation and freight; general and operations management; coaching and training; and business support (human resources, convention planning, accounting, auditing, and so on).
They are both extremely big industry in ancient time and today. So, there must be some people to manage the big industry.

http://katalog.baskent.edu.tr/client/en_US/default/search/federateddetailnonmodal/$N/EDS/ers$007c$007c89088223?qu=Ethics+--+Greece+--+Early+works+to+1800.&rw=10&ic=true&ri=51991963-8ade-4c51-a1e7-fab9f6971e40.RVztrQbMcqK2yXlO1DApMhswDPto%2F5GsEDMVBXE0fG0%3D&te=1083500324&lm=ALL&ps=300