How sports marketers maintain growth during global economic crises

¶ … Freakonomics (2005), the authors write, "Economics is, at root, the study of incentives: how people get what they want, or need, especially when other people want or need the same thing." In the midst of the global economic recession, an understanding of incentives is critical to how sport marketers sell their product to the public. Today, sports economics are inextricably tied to the fate of deep-pocketed corporations. Many sports facilities have been upgraded and located within gentrified business districts and teams cater to high-end clientele through luxury suites, driving up prices for all fans. As the general public sees their savings erode, they will probably be less willing to pay stratospheric ticket prices, which fund the cartoonish salaries of sports stars. Likewise, companies that dish out millions for sponsorships won't be able to justify sports-marketing expenditures to their shareholders. Therefore the intelligent market must seek new avenues to effectively reach the public.

The first way that sports can be marketed effectively is by utilizing increased public service by teams. Sports organizations can be worth over one billion dollars for the elite teams. By making an overt effort to distance themselves from banks and corporate entities, teams can build good will which can manifest as team loyalty and continued ticket sales even in the slow market. One example of this thinking is the U.S. Davis Cup's dropping of embattled insurance giant AIG, which has sponsored the golf tournament since 1999. Another example is the NBA's effort to promote community outreach by requiring teams to spend a certain amount of time sending players to volunteer in food shelters and after school programs in their cities (Rosner and Shropshire, 2004).

A second way that sports can adjust to a down economy is by avoiding using public money to fund their expansion. In the past, teams threatened to leave markets if they did not receive support from local governments to build stadiums, etc. In the current economic situation, this money averts much needed money for infrastructure and other urgent necessities to the pockets of team owners and players. This increases their profits, player salaries and raising the re-sale value of the team while jeopardizing public support and making team's look like money hungry corporations rather than public institutions. In recent years, teams have recognized this and turned towards private funding (Rosner and Shropshire, 2004). The Atlanta Braves' Turner Field was built in 1997 with 100% private funding; San Francisco Giants' SBC Park was built in 2001 with over 96% private funding. By pitching such efforts teams can build public trust which will ensure that citizens feel committed to a team and continue to buy tickets and merchandise.