Sport Business in Leading Economies

James J. Zhang, Haiyan Huang, John Nauright, James Roger H. Zhang, John Nauright, Haiyan Huang

• Publisher: Emerald Publishing Limited
• Year: 2017
• ISBN:
  9781787435704
• Topic: Economics
• Subtopic: Economic Theory
• Index: Economics

From a renowned group of international scholars, this new work examines how leading economic countries use sport business, particularly individual sports events (such as the Olympics or FIFA Men's or Women's World Cup) as well as participant sport, in comprehensive plans toward driving and furthering economic development, raising brand awareness (country as a brand), transforming lagging communities, and enhancing travel and tourism in the country.
Comparative sport studies are fundamentally designed for cross-country and cross-cultural understanding, learning, and improvement. By recognizing the achievements, administrative procedures, and management practices of peer countries and using them as a mirror or referencing parameter, government agencies and sport organizations of a country may be able to identify areas that need improvements in their own administration and cultivate development and growth in the country's sport industry.
Exploring how China, Japan, South Korea, Russia, the UK, Germany, the US, Canada, Brazil, South Africa, and Australia have all used sport as a catalytic agent, each chapter delves into the country's sports industry by looking at: recent history and stages of the industry; current state including scope, magnitude, structure, governance, policies, facilities, and programs; developmental characteristics, strength, and highlights; contemporary challenges and issues; and trends of development and advancement.

1

Introduction

James Jianhui Zhang, Roger Haiyan Huang and Jerry Junqi Wang

This chapter illustrates the significance of examining the sport industry development in selected leading economies and sport-driving forces. Criteria for choosing representing countries in different continents are documented. These elements are prefaced by an overview of the evolving landscape of a globalized sport marketplace and its impact on Asian sport development, and concluded with a brief summary.

A Globalized Sport Market Place

The 21st century has seen a rapid growth of free flow of capital, ideas, people, goods, and services that lead to the interaction, exchange, and integration of economies and societies. Globalization has resulted in companies, organizations, and even countries forming links and partnership through trade, investment, and activities that strive for border-transcending competitiveness. The global flows that shape the sport industry have several dimensions, including the following: (a) international movement of people such as human resources (e.g., coaches, athletes, and students), tourists, and even migrants; (b) technology and goods that are created and manufactured by corporations and government agencies; (c) economic investment and stimulation that are centered on the rapid flow of money and its equivalents around the world; (d) media production that entails the flow of images and information through newspapers, magazines, radio, film, television, video, satellite, cable, and the internet; and (e) ideology linked to the flow of values centrally associated with state or counter-state beliefs, attitudes, and opinions (Hill & Vincent, 2006). As a matter of fact, globalization has benefited the sport industry in a number of ways, including but not limited to (a) spread of sports throughout the world; (b) diversity in athlete origins participating in many of the professional and amateur leagues around the world; (c) increasing number of countries participating in international sport events; (d) increasing number of athletes participating in a diverse range of sports, often crossing gender and religious lines and climate barriers; and (e) increased opportunities in sport participation and also employment for athletes, coaches, and leaders to access (Thibault, 2009).

For a variety of reasons, such as seeking access to new markets, development of new customers, enhanced marketing opportunities, sport and brand growth, acquisition of resources, and profit generation, increasingly more professional and amateur sport leagues and teams, sporting goods manufacturers, sport service companies, and other sport organizations are seeking to compete in the international marketplace than ever before. For instance, more and more sport organizations in the United States are embracing a global vision as their domestic target markets have become saturated. For many sport organizations, globalization is the result of stagnant or declining home markets. Many sport managers believe that the potential for long-term growth and stability can be realized through international operations (Walker & Tehrani, 2011). For instance, in addition to developing international broadcasting programs and conducting exhibition games, the National Basketball Association (NBA) has developed and launched such programs as Basketball Without Borders, which is aimed as a synergistic approach for youth development through basketball and grassroots expansion of NBA markets (Means & Nauright, 2007).

Today, a corporation can successfully operate in countries around the world. Shifts in technology, transportation, and communications are creating a world where anything can be made and sold anywhere on the face of the earth. Although internationalizing of sports has been ongoing since the late 19th century, the past two decades have marked the speediest rise of a globalized sport production and consumption marketplace due in part to the advancement of modern technology. Globalization has been used to describe ideologies in the following two areas: consumerism versus capitalism. In an era of globalized sport marketplace, sports have become a commodity to meet the needs of commerce (Gupta, 2009; Nauright, 2015). Numerous forces have in recent years led to greater diversity in sport coverage, events, and participants. Technological changes have transformed broadcasting revenues, creating more sport entertainment options for fans and more revenue streams for organizations than ever before. Capital investment has moved with great speed, creating new stadia, teams, and ssdising opportunities. Athletes are perceived (and oftentimes act) like entertainment celebrities. The economic impact of sports can be felt in the areas of media, the aforementioned corporate sponsorship and influence, branding and celebrity culture, and the general sense of commercialization of sport. When sport managers are driven by the search for diversification in assets, capital flows, and new markets to enter with existing products or product associations, changes do occur. Approaching modern sport management with an international focus from the outset would better serve sport managers in the development of their organizations. There has been an escalated rise of North America- and Europe-based organizations as multinationals (Pfahl, 2011).

To achieve global reach and influence, North American and European sport organizations are increasingly embracing a global vision as their regional target markets have become saturated, and they are selling products far beyond their initial focused markets. A globalized marketplace has brought increased complexity in organization operations in terms of interdependence, ambiguity, and multiculturism. Unlike domestic settings, global leaders have to face greater challenges in such areas as connectedness, boundary spanning, ethical standards, dealing with tension and paradoxes, and understanding diverse culture (Mendenhall, 2013). Traditional management models derived in the western contexts were rarely designed for broader, international applications. Due to differences in cultural norms and a variety of other factors, domestic management models from one part of the world generally do not work well in other parts of globe. Likely, management models developed in Africa, Asia, and Latin America are often different than those adopted in the western countries, because common values, ethics, beliefs, perceptions, and attitudes vary from culture to culture, country to country, and even region to region. The importance of such variables as relationships, short-term profits, hierarchies, employment security, diversity, and risk may also be different. Apparently, if a business cannot integrate a global perspective into its management, its capability of competing in the globalized marketplace would be tremendously hampered. For an organization to maintain its competitive edge in a global setting, its leaders must develop competences that overcome cultural, national, and regional difference and embrace the best practices in various parts of the world (Morrison, 2000; Yeung & Ready, 1995; Zhang, Chen, & Kim, 2014). Sport professionals, scholars, and administrators responsible for making the strategic, cultural, political, and economic decisions for sport organizations must be prepared for the challenges of the new sport landscape. They must be equipped with knowledge, skills, abilities, and worldviews that are inclusive yet can differentiate cultural and other related elements (Thibault, 2009; Zhang, Cianfrone, & Min, 2011). The new demands within a global perspective are one of the primary reasons students from countries with growing economies to seek graduate education in Western countries where sport management programs are comparatively better developed and more advanced (Danylchuk, Baker, Pitts, & Zhang, 2015; Mao & Zhang, 2012; Zhang et al., 2014).

Within the duality of global and local, sport organization personnel must make strategic decisions to establish and sustain a brand presence in local markets while identifying ways in which to establish or increase an international presence. Differences in global, national, regional, and local communities make this task a challenging one. The sport managers responsible for making the strategic, cultural, political, and economic decisions for sport teams or organizations must be prepared for the challenges of the new sport landscape. They must be equipped with skills, abilities, and worldviews that are inclusive yet can differentiate cultural elements. The international nature of modern sport requires sport organizations to modify their personal and management practices in order to remain effective and competitive in a border-transcended market place. Those sport organizations that seek to compete globally must recognize that entry into the global marketplace requires substantial commitment to the planning, investing, organizing, leading, and monitoring process of organizational operations. A strategic plan along with clearly articulated goals and objectives serves as the cornerstone of a successful global expansion; to develop and implement such a plan, effective leadership is crucial. With more concerted efforts to understand the concept and application of global sport leadership, policies, regulations, best practices, and training programs can be formed to develop managerial skills, guide management functions, and ultimately, ensure the high achievement level of sport organizations that provide goods and services in a boarder-transcending, continent-transcending, and culture-transcending market environment and climate (Zhang et al., 2014).

The growth trends of sport on different continents and regions increasingly resemble those observed in North America. In North America alone, the estimated size of the sport business industry has risen sharply in recent years, from USD 213 billion at the end of the 1990s to over USD 485 billion in 2016. Of the gross domestic sport product, sport business transactions are primarily in the following segments: advertising and endorsements (14.1%), sporting goods (13.2%), spectator spending (12.9%), operating expenses (11.99%), gambling (9.86%), travel (8.38%), professional services (7.95%), medical expenses (6.57%), licensed goods (5.48%), media broadcast rights (3.64%), sponsorships (3.34%), facility constructions (1.29%), multimedia (1.15%), and internet (0.12%). While not relying on hosting international mega sport events, large-, medium-, and small-scale events generated by sport leagues, conferences, and teams have been an integral part in forming the cultural and economic basis for many communities and have become one of the most popular leisure and entertainment options in North America. Spectator sports, in particular, have shown steady and tremendous growth in the last two decades, and the revenue produced by spectator sport has shown a 5–6% annual growth rate in recent years. Participation in health, fitness, and sport club activities is another sector of the sport industry that has expanded rapidly. This trend is in part due to increased concern about the obesity epidemic, medical costs, consciousness of disease prevention, and adoption of a physically active lifestyle. For instance, over 50 ­million Americans regularly participate in sport or fitness activities at least 100 days per year (Plunkett Research, 2014; Zhang et al., 2011). According to Chelladurai and Riemer (1997), participation in organized sport provides physical and psychological outcomes at both individual and team levels. At the individual level, sport participation enhances athletic performance, goal attainment, skill improvement, personal growth, contribution to team, immersion/involvement, belongingness, friendship, social support, and perseverance; at the team level, sport participation contributes to team performance, goal attainment, team maturity, group integration, interpersonal harmony, norm and ethics, equality, decision making, and leadership.

Former UN Secretary General Kofi Annan once made the following observation about the power of sport: “People in every nation love sport. Its values, fitness, fair play, teamwork, the pursuit of excellence are universal. It can be a powerful force for good in the lives of people devastated by war or poverty, especially children. The International Year of Sport and Physical Education is a reminder to governments, international organizations and community groups everywhere to draw on the promise of sport to promote human rights, development and peace” (United Nations, 2005, p. 2). The core values that are integral to sportsmanship make sport a valuable tool for promoting peace, equality, health, and education for everyone.

Impact on Asian Sport Development

The Asian Continent currently has 51 countries, with over 4.2 ­billion residents (United Nations, 2011). Accounting for over 60% of the world population, in recent decades Asian countries have experienced powerful boom in both their economies and sport industry. Successful hosting of mega sport events highlights the achievement, growth, and potential of Asian countries, such as the Seoul Summer Olympic Games in 1988, the Nagano Winter Olympic Games in 1998, the 2002 World Cup co-hosted by Japan and South Korea, and the 2008 Beijing Olympics. According to Bloom, Canning, and Malaney (1999), Asian countries, particularly those located in East Asia, have nearly tripled income per capita during the last 30 years, which is one of the most extraordinary economic phenomena of this century, although there is a mixture of developed, developing, less-developed, and least developed countries that are primarily located in South and Southeast Asia. To a great extent, the “miracle” economic growth is attributed to an accumulation of trade and industrial policies, technological progress, savings and capital accumulation, effective governance, investment in education, and improved provision of healthcare.

Dolles and Söderman (2008) noted that just as the trend in other regions, mega sport events in Asia have become central stages today, on which athletes represent their nations in competing for excellence and the host countries promote their national identities, present their cultures, and utilize the initiatives associated with hosting the event to rejuvenate community and economic development. This is a rather new observable phenomenon in Asia, where sport and recreation have been assumed of a new relevance in the Asian society, attracting attention not just from the residents but also from political and business sectors. The future holds great promise for Asian countries due to a strong calendar of major events, growth in spons...

Table of contents

• Title
• 1 Introduction
• 2 The Australian Sport Industry
• 3 The Sports Industry in Brazil
• 4 The Canadian Sport Industry
• 5 The Chinese Sport Industry
• 6 The German Sport Industry
• 7 The Japanese Sport Industry
• 8 The Russian Sport Industry
• 9 The South African Sport Industry
• 10 Sport Market Value Network in Korea
• 11 The US Sport Industry
• 12 The UK Sport Industry
• 13 Comparative Analyses
• About the Authors
• Index