As improvements in the at-home viewing experience and second-screen platforms like Twitter
have generated fan interest over time, teams in every sport face the challenge of creating game
experiences that measure up to modern expectations for interactivity, convenience, and
engagement. This applies to managers across the industry, as game attendance fuels many of
the primary revenue centers for teams, venues, and event management properties. Thinking
strategically about how game attendance can generate engagement data, which will then be
used intelligently to inform future strategies for continuous improvement, is front and center on
the mind of managers in the industry today.
Table 16-A outlines a relevant, timely example of the use of proximity marketing within a major
U.S. sport arena. In this case, an NBA team was able to accomplish its marketing goals and
increase its revenues through data collection and event customization, managed through in-app
communications on the front-end, and a comprehensive view of event guests’ behavior on the
back-end. Using proximity marketing technologies such as beacons, Wi-Fi, and near-field
communication (NFC; allows electronic devices to talk to each other when within a certain
distance), the team was able to track guest behavior and monitor activity such as bathroom
traffic, concessions demand, and seat upgrade experiences. Through improved services
communicated to guests in-app, the team was able to collect data and make alterations in real
time to the entire venue enterprise system. These data provided insights into communications
relevant to specific consumer groups based on their location, as well as real-time data on food,
beverage, and merchandise demand. User traffic in-app also allowed the team to sell
advertising revenue on the app, communicating products and services relevant to the consumer
group in-stadium.
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Questions for Discussion
1. Choose a sport organization, event, and consumer target, and sketch out a one-page
proposal for implementing an analytics project specific to that event that would deliver value to
the organization. Which data will you collect, and why? How will you collect the data? What
value—financial or otherwise—does the data hold for the organization in question?
2. Which component of the three-pronged analytics framework discussed in the chapter does
user-generated content, such as in-app behavior, apply most directly to?
3. In your opinion, does proximity marketing within the event/facility management sector of the
industry provide greater insight as descriptive analytics or predictive analytics, or both? Provide
a rational for your answer.
The Dominance of ESPN
ESPN has been a dominant force in sports television since the 1980s. It controls programming
rights to an unparalleled portfolio of major sports properties in the United States, including the
NFL, NBA, MLB, Southeastern Conference (SEC), Atlantic Coast Conference (ACC), College
Football Playoffs, the Masters, Wimbledon, U.S. Open Tennis, the Little League World Series,
and more. It operates eight domestic television networks, including ESPN, ESPN2, ESPNEWS,
ESPNU, and the SEC Network. Its ESPN website is among the most-viewed sport-related
websites in the United States, and its other digital assets include ESPNDeportes.com,
FiveThirtyEight.com, TheUndefeated.com, and ESPN3. It owns and operates the X Games, the
best-known action sports competition in the world. Its 30 for 30 movie and documentary series
has been acclaimed for high-quality content (including winning the 2016 Academy Award for
Best Documentary Film). In 2017, its parent company, the Walt Disney Company, purchased 22
regional sports networks from Fox.
Despite all of its success and market power, ESPN recently has been beset by a number of
challenges. Between 2013 and 2017, the network lost approximately 12 million of its 100 million
subscribers, worth an estimated $1 billion in annual revenue. In 2015, average ratings on the
ESPN network declined 7% from 2014, then dropped another 11% in 2016. Ad revenue for
ESPN’s flagship SportsCenter program declined by nearly 25% in 2016 (Berg, 2017).
At the same time, ESPN started a new nine-year rights agreement with the NBA that nearly
tripled its annual rights fee obligation, to $1.4 billion per year (Lombardo & Ourand, 2014). It
telecast the first year of the new College Football Playoff at a fee of $608 million per year
(Sporting News, 2012). Its annual $1.9 billion rights-fee payments to the NFL are more than
one-third higher than those paid by CBS, Fox, and NBC (Jackson, 2017).
Although ESPN reportedly is still profitable (Ozanian, 2017), the company laid off 550 workers,
representing more than 13% of its domestic workforce, from 2015 to 2017 (Duffy, 2015;
Thompson, 2017). The company also came under fire for statements by its on-air announcers
that were regarded as political instead of sport-related (Draper, 2017), and it has been the target
of claims of sexual harassment (Reimer, 2017).
Questions for Discussion
1. Identify the effects of the various marketplace changes and risk factors identified in this
chapter on ESPN, and rank those potential effects on ESPN.
2. Based on ESPN’s business model as of 2017—a $7.25 per month subscription fee, paid by
88 million cable/DBS subscribers, producing 75% of ESPN’s revenue—construct an alternative
model (including existing revenue sources as well as new sources) to generate equivalent
revenue.
3. If other networks besides ESPN also incur revenue losses that result in less revenue being
available for rights-fee payments, what would be the consequences for the sports industry?
The Challenges of Entering a New Market
New Balance (NB), the privately held footwear and apparel manufacturing company
headquartered in Brighton, Massachusetts, has deliberately inched its way up in sales and
growth in the past decades. NB benefited from the running boom of the 1970s, with sales
growing from $200,000 annually to $80 million, and has found a niche with middle-aged and
older consumers who were more concerned with performance than fashion. Many consumers
rate the company’s products as particularly high in comfort.
Following a few failed attempts at taking on Nike and becoming a flashy and “cool” brand to
attract a bigger share of the market, former NB chair and CEO Jim Davis said a lesson was
learned: “If we try to be like everyone else, if we try to stress fashion over quality or marketing
over performance, we won’t be successful” (Reidy, 2005, p. E4). This sustainable approach to
growth has allowed NB to retain its core market, and NB’s annual sales are approaching $4
billion. NB has made great strides into the baseball cleats market over the past several years in
part through endorsement deals with MLB stars and sponsorship agreements with organizations
like the Boston Red Sox.
However, another recent effort to try and play the hip game fell flat when NB tried to break into
the soccer market with one of its subsidiary brands, Warrior, which is known much more as a
lacrosse and hockey brand. With cleated products curiously called “Murder Hole” and “Glory
Hole,” the launch failed.
Although only 29 years old, Bronwen Morrison is an industry veteran. When she first came out
of her undergraduate sport management degree program, she took a job with Liberty Sports
Group, where she had interned while in college, and managed the launch of the “Beckster,” a
skateboarding shoe targeted toward the market’s smaller grassroots users where smaller niche
companies tend to dominate. The shoe was a modest success, so much so that Morrison, when
spotted wearing a throwback 1976 San Diego Padres jersey at the sporting goods Super Show
in Atlanta, was asked to head the creation of a line of throwback-inspired urban fashion clothes
for women by Trey Luce, creator and owner of Thugstaz. The line, dubbed “Hugstaz,” was also
a solid market success and put the line in positive competition with similar products by other
urban fashion companies. Bronwen then went on to work at the apparel retail chain Lululemon
Athletica (which describes its products as “yoga-inspired athletic apparel”), helping the company
create a product line targeted toward men.
Her next professional challenge brought her back to the footwear market—specifically, to NB, to
increase sales for the company’s “Minimus” line of minimal running shoes. While that trend has
flattened out, NB has asked Bronwen to turn her efforts to New Balance Football, the rebooted
attempt by NB to step into the soccer market.
One established connection to the international soccer market is NB’s annual uniform and
apparel deal at a cost of $35 million per year with English Premier League club Liverpool F.C.
That EPL club is owned by John Henry, who is also the principal owner of the Red Sox. But
unlike going after the baseball market, which means competing more directly with the like-sized
Under Armour, chasing the soccer shoe market means trying to match the resources of adidas
(which spends more than $1.6 billion alone in a uniform and apparel deal with Real Madrid) and
Nike (which spends more than $1.3 billion alone in a uniform and apparel deal with Barcelona)
(Brennan, 2016). Since NB can’t outspend adidas and Nike, Bronwen has to take a different
approach.
Questions for Discussion
1. Explain how Bronwen can begin to identify a main target market group for NB Football’s cleat
market.
2. Explain how NB should use both traditional and nontradtional retailers to help sell this new
product line.
3. Explain how NB can employ specific social media platforms to support this sales effort.
4. Explain whether NB should continue to pursue endorsements and sponsorships to support
this sales effort.
5. Identify and explain any concerns about manufacturer conduct that NB can promote as a part
of this sales effort.
Collegiate University Embracing Technology
Collegiate University recently finished construction of a $56 million student recreation center.
Prior to construction of the facility, the director of campus recreation, Aaron Burgoon, surveyed
the student population to better understand their wants and needs for the facility. The
administration aimed to take everyone’s opinion into consideration and design a facility that
would become the epicenter of campus life and fulfill the recreational needs of the student
population. Although the benefits of the recreation center would reach faculty, staff, alumni, and
the greater community, student participation was the major goal of the facility.
Highlights of the 8,000-square-foot state-of-the-art facility include the following:
3 pools
8 racquetball courts
A 6-court gymnasium
A quarter-mile elevated track
A 40-foot rock-climbing wall
3 multipurpose rooms
200 pieces of cardiovascular equipment
100 weight machines
More than 20,000 pounds of free weights
Student membership fees for the facility are incorporated into the student activity fee and are
included in tuition. Faculty, staff, alumni, and community members pay approximately $50 per
month to use the facility.
Collegiate University was excited to unveil the new facility at the beginning of the 2016–2017
school year. Considering that the primary goal for the facility was to engage the student
population in recreation participation, Aaron, as the director of campus recreation, collected
baseline participation data for the facility and programs throughout the first year. He knew that
the national average for participation in recreational opportunities on campus was approximately
75% (NIRSA, 2013) and was very disappointed to see that after the first academic year of
operation, only 40% of students at Collegiate University had used the recreational facility and
programming.
To address this problem and make changes for the 2017–2018 year, Aaron held a focus group
meeting at the end of the school year with 50 of his student employees. The student employees
provided very insightful feedback, making statements such as “Everyone knows the facility is
here, but no one really understands what we have to offer,” “Many students do not read their
university email,” and “A lot of people are afraid to participate alone.” Aaron assessed the
information he gained through the focus groups, along with the initial survey data he had from
the facility.
Through his analysis, Aaron realized that one of the major factors associated with student
participation had to do with communication. The facility itself met all of the needs of the student
population, yet if students did not know what was offered and when, they would not attend. After
doing more research, Aaron realized that the vast majority of students were on some, if not
many, social media platforms. He recognized that embracing social media might be a
cost-effective and efficient way to reach his target student population. Considering that Aaron
was nearing retirement and had yet to embrace technology and social media into his lifestyle,
he once again sought the assistance of his student employees.
Put yourself in the shoes of one of the student employees hired by Aaron and answer the
following questions.
Questions for Discussion
1. How can the recreation center use technology and social media to better communicate with
the student population? Which platforms would you use? Which types of messages would you
send through each platform? Why? Identify specific messages that you could potentially use.
2. In addition to raising awareness about the recreation center, how else could the facility use
social media? What else could the recreation center do to embrace technology (in addition to
the social media platforms previously addressed)? Explain.
3. Create an event that the recreation center could organize that would both embrace
technology and aid in the goal of increasing student participation.
4. What are your recommendations to Aaron on how to assess the recreation center’s use of
technology? How could you tell if your social media efforts were truly helping to increase student
participation rates?

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