Marketing sports is getting increasingly harder. The first and foremost problem is decreasing credibility of sports as a product, which is affecting its long-term salability to practitioners, spectators, investors, and media.
Calciopoli was the terminal stage in a series of corruption and financial scandals that have exposed the ethical inadequacy of Italian football. Cycling is repeatedly shaken by doping scandals: potential or actual winners are routinely weeded out for being tested positive for doping substances. We have now reached the stage of preventive exclusion from cycling competitions, thereby exposing the inability of distinguishing who is clean and who isn't. For instance, the German TV station ZDF gave up on Tour de France and has broadcasted only the last 15 minutes of the last world cycling championships, after the exclusion of the most awaited protagonists. The international motorbike circuit has been shaken by Valentino Rossi, one of the world's most sought-after advertising testimonials, being charged with fiscal evasion, while in Formula 1, the McLaren-Ferrari spy story has completely undermined the credibility of the main actors and the regulations overseeing car racing, with the grotesque conclusion that the racing house was guilty but its employees were not. Even the America's Cup could cancel its next edition, due to legal infighting and lack of participants.
And if this weren't enough, there is the problem of sponsorships. In fact, there are theoretical and managerial limits to sponsorships and to valuating the actual return of such investments. In practice, sponsorships are what the top management decides they should be. Furthermore, major sponsors tend to gravitate around mega-events, and focus on most popular sports and most popular teams and athletes. Only rarely they benefit secondary events, sports, and players. The result is a polarization between the visible few who don't need a sophisticated approach to sponsoring, and the many who cannot hope to attract sponsors. It often happens in sports that those who have the resources (because they control vast potential audiences whose attention can be sold to sponsors) do not have the competencies, and those who have the competencies (because they have managed to develop innovative projects that are in need of sponsors) do not have the resources.
The bimodality in distribution between the very few "rich" sports and the very many "poor" or secondary sports also applies to media revenues. In Italy, the lack of competition in the TV market, the biggest source of revenues for sports, prevents many disciplines from being shown on broadcast, cable, or satellite TV. Stronger competition in the media industry would give more pluralism to the Italian sport industry. In the few occasions when minor sports were shown on TV, the results have been encouraging. This suggests that in a more competitive market it shouldn't be hard to find TV stations willing to invest in not yet popular sports.
by Paolo Guenzi,
Associate Professor of Corporate Economics and Management at Università Bocconi