Academic journal article International Journal of Sports Marketing & Sponsorship

Developing International Sport

Academic journal article International Journal of Sports Marketing & Sponsorship

Developing International Sport

Article excerpt

Today, sport's international role is very concrete in business terms. To quote United Nations Director of Communications Eric Falt: "It is an industry with unparallelled global reach and power. Globally, sport-related turnover amounts to three per cent of world total economic activity." (1) In the United Kingdom, for example, sport-related turnover is equal to that of the automotive or food industries. Mega-sporting events such as the FIFA Football World Cup or Formula One Grand Prix races are watched around the globe. Cricket attracts huge interest in South Asia, and the International Olympic Committee alone earns more than US$2 billion from selling the sponsorship and TV rights for the Olympic Games.

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At the same time, the corporate practices of this worldwide industry can and do have widespread impact, socially and environmentally. And sport has a number of distinctive characteristics which may influence the way in which it internationalises and the extent of its globalisation.

Sports events have uncertain outcomes and evoke strongly emotional responses from consumers, resulting in intense loyalty among fans. These characteristics merit discussion, and this special edition, dedicated to the internationalisation of sport and sport-related industries, seeks to gain a better understanding of globalisation and to connect to experiences and lessons learned by international businesses in the course of going global.

Much of the business literature on internationalisation deals with the choice between export and foreign direct investment, mainly exploring areas such as market imperfections, strategic behaviour or location advantages. Other parts of the literature have focused on the sequential stages for an organisation that goes international--for example, Vernon's product cycle hypothesis. The Uppsala school takes this a step further and links the stages to growing experience aligned with a deepening and progressive commitment to each market. This enables firms to gradually increase their understanding of quality expectations, personnel requirements, distribution, media structures and buying behaviour particular to a foreign market.

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For the sports audience and sport management things are different: sports viewed by supporters is 'process consumption', a wider, more comprehensive experience than the consumption of physical goods, which is often called 'outcome consumption'. At the same time, the proliferation of information technology has made it possible to serve the needs of consumers all over the world. Fans are not limited by geographic location but can consume an event real-time or recorded from virtually anywhere in the world. Within this, the opportunities for the promotion of sport, and the benefits for sport and its partners, are significant.

Developing a global brand is a business decision to be made by the top management of a club or sports institution. within this process, the even must also be taken into account. Our interview with President and COO of the Indianapolis Motor Speedway LLC, Joie Chitwood III, conducted during the most recent Formula One United States Grand Prix event, in Indianapolis in 2007, and updated this autumn, highlights the complexity of the Formula One bid to appeal to fans in the US. There are six engine manufacturers competing in Formula One, with five of them having the United States fairly important to their business.

Is this alone sufficient to support and sustain a Formula One Grand Prix in the US? The interview explores the increasing difficulties faced by a privately owned racetrack to bid for hosting a Grand Prix as Formula One broadens its brand on a global scale.

James Santomier's paper New media, branding and global sports sponsorship discusses the importance of new media integration and its implications for the future of global sports sponsorship. …

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