PROFESSIONAL SPORTS
Big League Sports
Top 10 Sports in the World
• #10
American Football
– 400 Million fans
• Half come from the US and Canada
– Evolved from rugby in late 19th century
• Mainly a club or collegiate sport
– NFL established in 1920
– No teams outside of North America
Source: http://www.top10zen.com/most-popular-sports-1584
Top 10 Sports in the World
• #9
Basketball
– 400 Million fans
– Developed in America in the late 19th century
• Originally dominated by Americans
• Slowly spread throughout the world
– Growth spurred by urbanization
– International leagues in Greece, Israel, Japan
– Top talents from
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Germany – Dirk Nowitzki
France – Tony Parker
Spain – Pau and Marc Gasol
Canada – Steve Nash
Source: http://www.top10zen.com/most-popular-sports-1584
Top 10 Sports in the World
• #8
Golf
– 450 Million fans
– Dates back to 13th century
– Home of origin – Old Course at St. Andrews – has
been used for the last 500 years
– Indirect nature of competition creates a lack of
conflict or perceived competitiveness
– American players have dominated sport
• Asian countries are beginning to catch up
Source: http://www.top10zen.com/most-popular-sports-1584
Top 10 Sports in the World
• #7
Baseball
– 500 Million fans
– Developed in England from the game of rounders
– One of the longest-standing codes of play
• Major rules have not changed since 1901
– National League founded in 1876
– Direct competition of single players – the batter & pitcher –
within a team sport
– Global appeal
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Leading spectator sport in Japan
National sport in a number of Central and South American countries
Cuba won numerous Olympic golds
Japanese won 2-of-3 World baseball Classics
Source: http://www.top10zen.com/most-popular-sports-1584
Top 10 Sports in the World
• #6
Table Tennis
– 850 Million fans
– Hugely popular in China and gaining acceptance in
Europe
– Been around for less than a century
– Attractive because of ease of play and inexpensive
equipment
– International play dominated by the Chinese,
particularly the women
Source: http://www.top10zen.com/most-popular-sports-1584
Top 10 Sports in the World
• #5
Volleyball
– 900 Million fans
– Played around the world
– Simplicity of play and flexibility of what kind of playing
surface has made game wildly popular
– Introduced into Olympic Games in 1964
• Pretty evenly matched over the years with numerous
countries winning medals and no one country dominating
– Beach volleyball introduced as Olympic
sport in 1996
• Dominated by the American and Brazilians
Source: http://www.top10zen.com/most-popular-sports-1584
Top 10 Sports in the World
• #4
Tennis
– 1 Billion fans
– Top ranking solo competition
– Dates back before the 14th century
• Modern rules written mid 19th century
– World appeal as no single player or country has
truly dominated sport
• Last 10 years, #1 ranking held by
14 different players representing
8 different countries
Source: http://www.top10zen.com/most-popular-sports-1584
Top 10 Sports in the World
• #3
Field Hockey
– 2 Billion fans
– Developed independently in Europe and Asia in the 3rd
century B.C.
– Modern rules developed in the 19th century England
– Dominated by India & Pakistan mid 1900s
– Now Australia & the Netherlands a major force
– Viewed as a female-dominated sport
in US, across the globe it is maledominated
Source: http://www.top10zen.com/most-popular-sports-1584
Top 10 Sports in the World
• #2
Cricket
– 2.5 Billion fans
– Thanks to the British Empire, this sport has spread
across the globe
– Played as far back as the 16th century, modern
rules developed in the early 1700s
– Large teams and long games –
sometimes up to 5 days in length
– England, India, Australia, South
America top teams
Source: http://www.top10zen.com/most-popular-sports-1584
Top 10 Sports in the World
• #1
Soccer
– 3.5 Billion fans
– Simplicity of the sport and the ease of play make it the
most popular sport in the world to play and watch
– Versions of a game kicking a ball towards a target have
been around for centuries
• Mid-19th century modern rules developed
in England
– No particularly powerful clubs
• Dozens in contention for international
and top-league titles every year
Source: http://www.top10zen.com/most-popular-sports-1584
Soccer
• 260 million participants worldwide
• Truly global appeal
– National, cultural, religious, gender, class
• Federation Internationale de Football Association (FIFA)
– $700 million annual income
– 2014 World Cup most widely viewed sporting event in the world
• 715.1 Million people watched final match on TV
• 3.2 Million attended one of 64 games
• Highest paid soccer players in world
3. Zlatan Ibrahimovic, PSG ($40.4 million)
2. Lionel Messi, Barcelona ($64.7 million)
1. Cristiano Ronaldo, Real Madrid ($80 million)
Top 10 Sports in the USA
10. Martial Arts
9. Wrestling
8. Motor Sports
7. Golf
6. Tennis
5. Soccer
4. Hockey
3. Basketball
2. Baseball
1. Football
Source: http://www.therichest.com/sports/most-popular-sports-in-america/ /
Financial Impact
• Most valuable NFL football teams
5. Houston Texans ($1.85 billion)
4. New York Giants ($2.1 billion)
3. Washington Redskins ($2.4 billion)
2. New England Patriots ($2.6 billion)
1. Dallas Cowboys ($3.2 billion)
Financial Impact
• New Dallas Cowboy Stadium (2009)
– Originally estimated to cost $650 million, actual cost
$1.15 billion
• Financed through approved sales tax increases by the city of
Arlington; $325 million from city of Arlington (bonds); $150
million NFL loan; over runs paid by Jerry Jones
• One of the most expensive sports venues ever built
– Seats 80,000 (110,000 including standing room)
• 3rd largest NFL stadium
– AT&T Naming Rights Deal
• $17-$19 Million/year for 20 years
• City gets 5% to help offset cost to build
Cowboy Stadium
• Since opening, has hosted:
– Super Bowl XLV (2011)
– NBA All-Star Game (2010)
• Highest attended basketball game in history
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Big 12 Championship Game (2009, 2010)
Cotton Bowl (2010-2012, 2015)
Texas UIL State Championship (2010-2012)
NCAA Final Four (2014)
College Football Playoff
Championship (2015)
Financial Impact
Sport
Yearly Revenue
National Football League (NFL) $9 Billion
Major League Baseball (MLB)
$7 Billion
National Basketball League
(NBA)
$3.8 Billion
National Hockey League (NHL) $2.9 Billion
Major League Soccer (MLS)
$280 Million
Source: http://www.statisticbrain.com/professional-sports-average-salary-revenue-salary-cap/
Financial Impact
Sport
Average Salary
National Basketball League (NBA) $5.2 Million
Major League Baseball (MLB)
$2.5 Million
National Football League (NFL)
$1.75 Million
National Hockey League (NHL)
Professional Golf Association
(PGA)
Women’s Tennis
$1.3 Million
Men’s Tennis
$0.260 Million
Women’s Golf
$0.162 Million
$0.973 Million
$0.345 Million
Source: http://www.statisticbrain.com/professional-sports-average-salary-revenue-salary-cap/
Financial Impact
Sport
Salary Cap
Major League Baseball (MLB)
$178 Million
National Football League (NFL) $133Million
National Hockey League (NHL)
$64.3 Million
National Basketball Association
$58.04 Million
(NBA)
Major League Soccer (MLS)
$3.1 Million
Source: http://www.statisticbrain.com/professional-sports-average-salary-revenue-salary-cap/
Highest Paid Athletes
Source: http://www.forbes.com/sites/kurtbadenhausen/2014/06/11/cristiano-ronaldo-leads-the-biggest-athletes-on-social-media/
Athletes on Social Media
Source: http://www.forbes.com/sites/kurtbadenhausen/2014/06/11/cristiano-ronaldo-leads-the-biggest-athletes-on-social-media/
Athletes on Social Media
Source: http://www.forbes.com/sites/kurtbadenhausen/2014/06/11/cristiano-ronaldo-leads-the-biggest-athletes-on-social-media/
It’s All About the Money
• Professional sports are big business
• Depend on a large financial commitment and
a large financial return
• A city gains a special identity with a
professional team, and a winning tradition
fuels the financial fire
How Teams Make Money
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Ticket Sales
Merchandise
Sponsorships
Naming Rights
Media Revenues
Ticket Sales
Ticket Sales
Average
Average Average Ticket
League Ticket Price Attendance Sales per Game
MLB
$
26.98
30,884
$
833,250
NFL
$
78.38
67,358
$ 5,279,520
NHL
$
57.39
17,455
$ 1,001,742
NBA
$
48.48
17,274
$
837,444
•
• Fan Cost Experience
# of Games
per Season
2,421
254
1,230
990
Average Ticket
Earnings per
Season
$ 2,017,299,025
$ 1,340,998,090
$ 1,232,143,214
$ 829,069,085
Merchandise
• NFL Top Sellers
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Pittsburgh Steelers
Dallas Cowboys
New Orleans Saints
Philadelphia Eagles
New England Patriots
Chicago Bears
New York Giants
Green Bay Packers
Indianapolis Colts
New York Jets
• NBA Top Sellers
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Chicago Bulls
New York Knicks
Los Angeles Lakers
Miami Heat
Dallas Mavericks
Boston Celtics
Oklahoma City Thunder
Los Angeles Clippers
Denver Nuggets
Orlando Magic
Top Selling NFL Jerseys
April 1 – October 31, 2014
Top Selling NBA Jerseys
Sponsors
• NFL Top Sponsors
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Gatorade
Marriott
Pepsi
Bud Light
Visa
General Motors
Verizon
Fed Ex
Papa Johns Pizza
• MLB Official Sponsors
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Anheuser-Busch
Bank of America
Bayer
Captain Morgan
Citi
Firestone
Frito-Lay
Gatorade
General Motors (Chevrolet)
Intel
Holiday Inn
MasterCard International
Nike
Pepsi-Cola
Scotts
Sprint
State Farm Insurance
U.S. Army
Sponsors
•
NASCAR Official Sponsors
3M
Bank of America
Camping World
Canadian Tire
Chevrolet
Coca-Cola
Coors Light
DIRECTV
Dodge
DRIVE4COPD
DuPont
Exide
Featherlite Coach
Featherlite Trailers
Ford
Freescale
Freightliner Trucks
Growth Energy
Gillette
Goodyear
Head & Shoulders
•
NASCAR Official Sponsors
Mars
Mobil 1
McLaren
Nabisco (Kraft)
National Corn Growers Assoc.
Nationwide Insurance
Office Depot
Old Spice
Safety- Kleen
SIRIUS XM Radio
Sprint
Sunoco
Toyota
Unilever
UPS
USG
Visa
K&N
Whelen Engineering Inc.
Naming Rights
Facility
Key Tenants
M & T Bank Stadium
Bank of America Stadium
Invesco Field at Mile High
Ford Field
Office Depot Center
Reliant Stadium
RCA Dome
ALLTEL Stadium
Gillette Stadium
Network Associates Coliseum
Lincoln Financial Field
Heinz Field
Qualcomm Stadium
Monster Park
Qwest Field
Edward Jones Dome
Raymond James Stadium
FedEx Field
Baltimore Ravens
Carolina Panthers
Denver Broncos
Detroit Lions
Florida Panthers
Houston Texans
Indianapolis Colts
Jacksonville Jaguars
New England Patriots & Revolution
Oakland Raiders
Philadelphia Eagles
Pittsburgh Steelers
San Diego Chargers
San Francisco 49ers
Seattle Seahawks
St. Louis Rams
Tampa Bay Buccaneers
Washington Redskins
Winning is Everything
• In order to keep ticket sales strong and charge
high prices, owners must provide a winning
team
• A team fresh off of a national championship
will probably have sold-out games the next
season because fans expect continued success
Most Winning Teams
Most Winning Teams
League
MLB
NFL
NHL
NBA
FIFA
City
New York
Green Bay
Montreal
Boston
Franchise
Yankees
Packers
Canadienes
Celtics
Brazil
# of Wins
27
13
25
17
5
Prestige, Power, Profitability
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Perks and payoffs
Political clout
Professional teams and the community
Sociological ties to a professional team
The bottom line
Prestige, Power, Profitability
• The value of sports franchises has skyrocketed
due to prestige, power, and profitability
• Jerry Jones paid $140 million for the Dallas Cowboys in
1989 ($65 million for the franchise and $75 million for
the stadium)
• The Cowboys franchise is currently valued at
$3,200,000,000
Perks and Payoffs
• Perk—a payoff or profit received in addition to a
regular wage or payment
• The position of team owner has many perks,
including money and media exposure
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Jerry Jones (Cowboys)
Jerry Beuss (Lakers)
George Steinbrenner (Yankees)
Ted Turner (Braves/Hawks)
Mark Cuban (Mavericks)
Political Clout
• Franchise owners who bring millions of dollars
in business activity to a city often find
themselves with political clout or influence
• Political Clout is frequently associated with
wealth
The Bottom Line
• Winning is everything in sports
• Teams often provide players with special
contract incentives for winning
Competition or Collusion?
• Teams are paid big money to win
• Sports clubs cannot operate independently
– Must cooperate with one another in order to sell
their entertainment services to the public
Role of the League
•
Teams that are members of a professional sports
league are contractually obligated to one another
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The league determines:
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the schedule of games
makes and enforces game rules
sets the guidelines for hiring new players
determines when a new team will be admitted to the
league and allowed to compete with its members
League Rules
• Competition on the field would diminish if any club
had the ability to hoard the best athletic talent
• League rules are designed to ensure that each club
has the opportunity to employ and retain quality
players
– Contracts, Drafts, etc.
• Because specific clubs may hold the exclusive right to
contract with a player, athletes are not always free to
work for the highest bidder
What Happens if No League Rules?
• More successful clubs would sell more tickets and
team merchandise
• Earn higher profits
• Have the ability to attract the best players with
higher salaries
• Over time, these clubs would become so much
stronger than the less successful teams that
competition on the playing field would deteriorate
and become boring for spectators
• If spectators don’t come, then everyone loses…
How Does it Work?
• Individual teams are separately operated
businesses
• Cartel—a combination of independent
businesses formed to regulate production,
pricing, and marketing of a product
Cartels
• In the case of professional sports, the cartel is a number
of independent sports teams grouped together and
governed by a league agreement of operations
• The league controls the distribution of the teams,
including the locations of the teams and the number of
teams allowed to operate within the league
• Typically, Cartels are NOT allowed in business
– special legislation exempting the professional sports leagues
from antitrust laws
League Set Up
League
Year
Established
Commissioner
# of Teams
MLB
1869
Rob Manfred
30
NFL
1920
Roger Goddell
32
NHL
1917
Gary Bettman
30
NBA
1946
Adam Silver
30
Expansion Plans
• Team owners must prove financial viability before
the team can find a home city
• Owners and managers must convince the city that
the costs of a team or new stadium will be repaid
through increased spending by fans and by increased
tax revenues
An NFL team can be a financial asset to a city if:
1. Everyone and everything involved with the team
stays within the home city area
2. The stadium/arena is used for events other than
those for which it was built
3. The team attracts other business development
like hotels, restaurants, and retail shops
How Easy is it to Add a New Team?
• Bringing a new team to a city takes more than just an
owner’s desire for a new team
– League must approve expansion plans
– Potential owners have to have the financing to pay the
current NFL owners for an expansion team
– The new team must have a place to play to attract fans
How Easy is it to Add a New Team?
• Since there are more cities that want pro teams than
there are teams available, the leagues control the
location of the teams based on the business benefits
to the leagues and owners.
• The leagues are in business to make a profit
Houston Texans
1997
1997
1998
Houston denied NFL expansion team
Houston Oilers allowed to move to Tennessee
Jacksonville awarded 31st Expansion team
learn 32nd Expansion team coming in next 2 years, cities being considered:
LA (5.5 million households)
Houston (1.8 million households)
Toronto
1999 Team awarded to LA contingent on ownership team & stadium plans
LA financers offering $540 million
Houston financers offering $700 million; won bid
2000 Begin building Reliant Stadium
2001 Hire Head Coach Dom Capers
2002 Expansion Draft to get athletes
9/8/2002 Home opener against Dallas Cowboys
2004 Hosted Super Bowl XXXVIII
Cashing In
• Super Bowl XXXVIII was played in Houston’s Reliant
Stadium in the venues 2nd year of existence
• The Super Bowl deal was a part of the financial
contract and agreement between the Texans &
McNair & the NFL
• Houston’s city government used the economic
impact of the Super Bowl to justify tax support for
the stadium
– Taxpayers paid 60% of the $310 million stadium
It Pays Off…
• In addition to the 69,500 ticket-holding fans (paying anywhere
from $1,950 - $4,800+ per ticket), another 10,000 – 40,000
non-ticket holders visited the city during the weekend
activities
• The associated business that benefited from the crowdlodging, food, beverage, & entertainment-generated about
$300 million for the host city
• McNair bought franchise in 1999 for $700 Million, Houston
Texans now valued at $1.85 Billion
Super Bowl
• To host the Super Bowl obligates to a city to meet 20
pages of NFL requirements including:
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Having at least 17,500 hotel rooms available
65 limos exclusively for NFL use
1,000 buses for transporting fans
And many private and public golf courses for fan use
Super Bowl Rewards
• If a city does a good job hosting the Super Bowl; then the host
city can expect to host the Super Bowl about every five years
Super Bowl Venues
Stadium
Location
Louisiana/Mercedes-Benz Superdome
Miami Orange Bowl
Joe Robbie/Pro Player/Dolphin/Sun Life Stadium
Rose Bowl
Tulane Stadium
Jack Murphy/Qualcomm Stadium
Los Angeles Memorial Coliseum
Tampa Stadium
Georgia Dome
Raymond James Stadium
University of Phoenix Stadium
Rice Stadium
Pontiac Silverdome
Stanford Stadium†
Hubert H. Humphrey Metrodome
Sun Devil Stadium
Reliant Stadium
EverBank Field
Ford Field
Cowboys Stadium
Lucas Oil Stadium
New Orleans, Louisiana
Miami, Florida
Miami Gardens, Florida
Pasadena, California
New Orleans, Louisiana
San Diego, California
Los Angeles, California
Tampa, Florida
Atlanta, Georgia
Tampa, Florida
Glendale, Arizona
Houston, Texas
Pontiac, Michigan
Stanford, California
Minneapolis, Minnesota
Tempe, Arizona
Houston, Texas
Jacksonville, Florida
Detroit, Michigan
Arlington, Texas
Indianapolis, Indiana
# hosted
7
5
5
5
3
3
2
2
2
2
2
1
1
1
1
1
1
1
1
1
1
Years hosted
1978, 1981, 1986, 1990, 1997,
2002, 2013
1968, 1969, 1971, 1976, 1979
1989, 1995, 1999, 2007, 2010
1977, 1980, 1983, 1987, 1993
1970, 1972, 1975
1988, 1998, 2003
1967, 1973
1984, 1991
1994, 2000
2001, 2009
2008, 2015
1974
1982
1985
1992
1996
2004
2005
2006
2011
2012