Introduction

This chapter sets the scene for students in terms of the key issues that the book addresses. It provides an introduction and overview of the foundational concepts of the ‘sports industry’ and ‘marketing’. We then discuss the key events that have shaped the Australian sports industry. Although the sports industry is already a major industry, the business of sports continues to expand. To help us understand how sport maintains its economic, social and cultural currency this chapter provides an overview of the basic concepts of marketing.

How big is sport in Australia?

The Australian sports ecosystem has evolved to be a $32.2 billion dollar industry and is one that employs over 120,000 people all over the country^[1]. Leading sports industry experts have predicted that we are expecting a “golden decade” for employment, with Australia set to host the Olympic Games in 2032 and the Commonwealth Games in 2026.

However, in order to understand the sports industry and what employment in this field will look like, it is important we consider what the sport industry is. What is included in the sports industry and how has that evolved with social and technological developments within broader society? Whilst social media has been a major contributor to the growth of sport communication employment, there are many layers to the Australian sports sector.

What is the sports industry?

The sports and entertainment sector is a huge industry offering numerous products and services. It is estimated that the Australian sports industry generated approximately $32.2 billion in sales in 2016/17, resulting in a contribution to gross domestic product (GDP) of approximately $14.4 billion. It also supports approximately 128,000 full-time equivalent jobs^[2].

For context, this is approximately 0.8% of GDP and 1.5% of total Australian employment^[3]. The sports industry itself is incredibly diverse, encompassing three key sectors: public, non-profit and the commercial sector^[4]. It is important to consider however that rather than being independent, these sectors overlap, and sector boundaries are becoming increasingly blurred with multiple streams of income often coming from all three to fund and support sport all over the country.

• Public Sector: Australian governments at all levels play a leading role in delivering sport and sport related policies and programs. This includes providing support and funding to sporting organisations, clubs and individuals, being major investors and contributors to building and maintaining sports related infrastructure, and sponsoring the hosting of major sports events^[5]. For example, the Australian Government is committed to supporting sport in Australia from grassroots to elite, including: increasing participation in physical and recreational activities to promote physical and mental health; staging world class major sporting events; and utilising sport as a vehicle to address disadvantage and social inclusion challenges.

• Non-Profit Sector: The non-profit or voluntary sector is made up of community-based clubs, community-led governing associations and sport organizations that provide competition and participation opportunities, regulate and manage sporting codes but at a grassroots or amateur level^[6]. This group also comprises of the charity and other organisations that use sport as a tool for social development and inclusion.
  Some examples of this include;
• Commercial sector: The commercial sector is comprised of professional leagues and their member teams, as well as allied organisations such as sporting apparel and equipment manufacturers, media companies, major stadia operators, and event managers. It is a huge industry and one that has a purpose on making financial gain through sport^[7]. This section of the sport industry is very fluid and adaptable to change over time. For example, to remain successful in the sport industry commercial partners need to show creativity, innovation and adaptability. This includes accounting for changing consumer behaviours when it comes to consuming sport. We all know spectators want more from the game-day experience- and this is evident by the growth of more engaging and immersive experiences inside and around stadium areas. There is also rapid growth in sports not traditionally considered by this sector. For example, the growth of e-sports, extreme sports and combat sports (such as MMA fighting).

Case study: A stadium for Tasmania?

What is the relationship between marketing and sport?

The relationship between marketing and sport is a complex one. It can be used to increase fans interest, drive sports participation and/or the consumption of sports-related products (such as broadcasting events and merchandise). Sports marketing is a way that companies can use a persons love of sports to make a profit and reach out to people who may not otherwise be exposed to their brand.

Athletes and brands share a long history, which has made their relationship more prominent overtime. This is why athletes are a medium for advertising and promoting popular brands and their products. Fans of players and of sports perceive athletes as role models, which in turn raises the popularity of the sponsored brand of the athletes.

However, this relationship has not always been a comfortable one!

How does sport and marketing work together?

Companies have long recognised the value of sport as a catalyst for communicating to the masses and often use sport as a means to advertise their products. However, increased financial pressures, combined with a growing number of different sponsors has forced sports marketers to become more innovative and creative when designing and activating sports sponsorship. Marketers have the tricky job in ensuring that their brand aligns with that of the sport code and the athletes that sporting code represents.

There are two definitions that can help us understand on a basic level the relationship between sport and marketing.

Firstly, we have the “marketing of sport”, i.e. the set of activities and competences intended for the promotion and improvement of sports enjoyment and consumption. Then we have “marketing with or through sport” which is the use of sport as a communication tool for businesses to sell or position/market their product^[11].

Examples of marketing of sport include Electronic Arts (EA) Sports who have just signed a new partnership with Sky Sports, which will see the gaming firm sponsor the UK pay-TV network’s Premier League coverage. The deal, which kicks in from the 2022/23 season, will see EA Sports branded content used across Sky’s Premier League coverage until the end of the 2024/25 campaign, using a blend of gameplay video from the FIFA gaming series with real-life action. See the video below^[12].

Examples of marketing through sport include brands such as Gillette who have utilised the popularity of Raheem Sterling to promote its latest razor. The England footballer and anti-racism campaigner is the face of a new 2022 TV advert, which sees the star demonstrating the perfect shave before showing off some fancy footwork. Dominated by the black-and-green visual identity of the Gillette Labs Exfoliating Razor as a backdrop, the campaign conveys the message that your morning routine can be effortless when you have the right tools for the job. Take a look at the campaign in the below video^[13] and tell us what you think?

Now let’s have a go – using the examples below type into the box either “marketing of sport” or “marketing through sport”

What are the experts saying about the future of sports marketing?

According to some experts, the future of marketing could come from some technologies that until yesterday seemed almost science fiction. We’re talking about Virtual Reality, Augmented Reality, and Hybrid Reality^[14]. Many brands in the sports industry have made, or are making, interesting experiments in this direction. Throughout this unit we will be exploring these trends as well as the fundamentals of sports marketing.

Where we were, where we are now and where we are going in relation to the commercial side of sport will be covered throughout this unit.