The Business Dimension (Leaving Cert Physical Education): Revision Notes
Physical Activity and Sport – The Business Dimension
Business in Sport
Sport has increasingly become commercialised, shifting the focus from participation to business. Media companies and sponsors have significant influence over aspects such as kick-off times and scheduling of sports events.
Smaller or less popular sports, such as badminton and table tennis, tend to receive less media coverage and sponsorship, which results in lower funding and reduced participation. Additionally, media companies can exert pressure on sports to make changes, such as incorporating technology into refereeing or allowing longer breaks during games to accommodate more advertisements.
Spectatorship
Spectatorship refers to the act of watching sports or events without active participation. This plays a vital role in the sponsorship value of sports, as higher viewership attracts greater interest from businesses.
The level of spectatorship has a significant influence on the sponsorship potential of a sport. The more popular the sport and the larger the audience, the more attractive it becomes to businesses and sponsors. High levels of spectatorship provide greater visibility for brands, which can help them connect with a larger number of potential customers.
For instance, over 3 billion people watched the 2020 Olympic Games, a massive audience that attracted substantial commercial sponsorship interest. Large events like the Olympics, with such high levels of spectatorship, are particularly appealing to sponsors who want to capitalise on the exposure to promote their products or services.
Case Study: Sky and the Business Dimension
Sky, a broadcasting and telecommunications company, has invested significantly in sports sponsorship and TV rights. By acquiring exclusive rights to broadcast games, Sky ensures its dominance in the sports media market. This strategy is seen in their investment in Irish sports, including GAA matches, where they pay for TV rights and encourage people to subscribe to their sports services. Their initiative, Sky Sports Living for Sport, focuses on increasing sports participation among school children by using athletes as role models.
Key Notes:
- Business Influence on Sport: Media and sponsors have significant control over how sports are scheduled and played, with financial incentives sometimes taking precedence over traditional values.
- Spectatorship Impact: Popular sports with large viewership attract more sponsors, increasing revenue and global recognition.
- Sky Case Study: Sky's involvement in sports extends beyond broadcasting, focusing on long-term investments in grassroots participation and community engagement.
Knowledge Check:
- Explain the concept of spectatorship.
- What are the benefits of commercial sponsorship for a business?
- How does media ownership influence the scheduling of sports events?
- In what ways does Sky's involvement in sports go beyond broadcasting?
The intersection of physical activity and sport with business is significant, as both domains influence and drive each other.
Sporting Contracts
Sporting contracts are crucial in the business of sports, establishing the terms of sponsorship and endorsement deals. These contracts can have significant financial implications and help promote both the sport and the business involved.
Example:
- Coca-Cola has contracts with major sports events like the MLB, NBA, and Olympic Games, providing beverages and promotional support.
Business Innovations
Business innovations in sports involve creative and strategic approaches to enhance the relationship between businesses and sports. These innovations can include new marketing strategies, advanced technologies, and unique sponsorship activations.
Example:
- During the 2016 Olympic Games, Coca-Cola used augmented reality apps and facial recognition technology to engage fans and activate its sponsorships creatively.
Inappropriate Partnerships
Inappropriate partnerships occur when the association between a business and a sport is deemed unsuitable due to conflicting values or potential negative impacts on public perception and health.
Concerns with Inappropriate Partnerships
Inappropriate partnerships can arise when businesses that promote unhealthy products sponsor sports events. These associations can undermine the positive values of sports and encourage unhealthy behaviours among audiences, especially young people.
Example:
- There is a growing belief that it's inappropriate for soft drink companies, like Coca-Cola, to sponsor sporting events due to the promotion of products high in sugar, which can contribute to obesity.