Marginal Revenue and Over-Paid Athletes Term Paper

  • Length: 5 pages
  • Subject: Sociology
  • Type: Term Paper
  • Paper: #54342665

Excerpt from Term Paper :

S.'. Babe Ruth and Herbert Hoover have commanded huge payments. The social obsession with sport and celebrity stems from the human need to display physical and psychological prowess and the sport evolves for the 'body and spirit'. The culture of a place assigns different values to different sport, and they that excel in the sport and make a name for themselves make a mark and command more of the revenue for themselves.

Conclusion

It is observed that celebrities are a marketable commodity by them. They command following, and many individuals aspire to imitate them and hold them as role models. The reach and influence of celebrities differ in the sectors that they attain fame. Persons in the media like Britney Spears command a different set of returns and create a totally new kind of revenue potential as do many film stars, and musicians. Their use is also for such economic concerns that deal with the media, entertainment and targeted sectors like the domestic sector and households where the charisma of the celebrity can win markets. The viability or returns to scale in terms of marginal revenue to the user of such celebrity power can be equated with the cost of using the celebrity and the difference in the marginal advance of the position of the variable they were trying to better- for example sales, customer base or readership. The return in terms of marginal increase of the revenue ought to be seen with a comparison of the return to another entity that did the identical marketing without the celebrity endorsement. If the difference in costs was justified by the vast chasm created in the marginal revenue of the two different campaigns, then the payment made to the celebrity and the cost incurred is justified. However the company or entity that embarks on a project leaning on the celebrity power must take care to see the effectiveness of the celebrity endorsement on the market for the product and suit the celebrity, endorsement and campaign for its target market. The fortunes of the celebrity will affect the system in the long run and therefore a change of persons of ten is also recommended. One method of lowering costs will be to identify potential stars and then encourage them with long-term contracts sponsoring the proposed star.

Citations

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Paul D. Staudohar. Playing for Dollars: Labor Relations and the Sports Business. Cornell University Press. 1996. p. 1

Staudohar, p. 1

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