You might think that sports and business are completely different things, but they are more interconnected than you think. Doesn’t a sports team rely on investment, strategies, and teamwork? What do you think a business relies on? Please keep reading to see how sports and business are aligned and the benefits or challenges that may come with it!
Ways Business & Sports are Connected
Team Merchandising
One of the exciting parts of being a fan is getting your hands on some team merchandise. Wearing your team colors or logos makes you feel like you belong! Millions of fans worldwide buy official merchandise to show their support and loyalty to a team. As a result, sports companies utilize their loyalty always to be coming out with more products for fans to get their hands on as a form of profit or investment into the company.
Sponsors
Unless they have a huge bank of cash flows, no team can exist on its own. Sponsors to a team are like investors to a business, and they provide funding to a team in return for increased branding or famous players wearing their products.
Sports teams usually take up those sponsors that align with their team’s message and values. With the money, they develop their teams, equipment, and marketing!
Investment in Facilities
When you own a business, you want your employees to have access to the best equipment. You want the best laptops, the best cloud services, and the best security. For that, you’ll invest in fancy office spaces to make your employees more comfortable and create a great brand image. Similarly, sports teams will invest in facilities, such as stadiums, practice fields, and gyms to benefit their players and fans alike. Consider the evolution of college football, for example. Some universities are investing millions of dollars in continuing to grow and develop their football programs.
Investment in Athletes
Businesses want talented employees who can make a difference in their team. The talent could be the field they specialize in. They want leaders who bring a diverse team together and change the future. Sports teams are looking for the same. Athletes are also an investment for them.
Why? Because teams take them up for the sole purpose of hoping to create fans for the team, getting more wins, and generally making more money and popularity. When athletes don’t perform enough, teams drop them and find someone superior in talent.
Benefits of These Connections
Visibility
When businesses decide to sponsor teams, it gives them a chance to increase their visibility because of how large the sports market is. However, this exchange is not one-sided. Sponsored sports teams also benefit, especially when new investments, ads, and endorsements come into the picture. This can be observed in the form of a basic marketing campaign, Super Bowl commercials, cobranded merchandise, or an online forum geared toward Lakers news and rumors.
Improved Facilities
With the business aspect of the teams, they get investors because of which they can further invest in their teams. as mentioned before. It means improved facilities and training for this player. It allows the players to improve their game and eventually perform better at the sport. It makes the whole sport much more fun and engaging for the fans.
New Revenue Streams
By merchandising sports-related products, businesses can tap into a lucrative market of sports fans willing to spend money on merchandise. That is generally great for the economy since it builds employment opportunities worldwide.
Challenges When You Mix Business & Sports
Ethical Concerns
When sports teams become businesses, there is a new line that is often blurry. This line divides what is profitable and what is correct. Quite often, these two things are not the same. In the same way, teams might take up sponsors of businesses that are unethical simply because they need the investment. Team players are obligated to look the other way if they want to remain on the team.
Over-investment
Businesses need to consider the amount of investment they put into sports carefully. While sports can create valuable marketing tools and betting tools, businesses must weigh the potential return on investment against the cost of sponsorship or other forms of investment. Over-investment can lead to financial losses and even bankruptcy.
Legal Challenges
Sports teams are full of business contracts as very little can be carried out without signing a legally-binding agreement beforehand. This could be signing a player, taking a sponsorship, or even getting a license. The problem is that it is difficult to back out once these contracts are in place. If a player is unhappy on a team, he is contractually obligated to stay for the period of time specified in his contract.
Conclusion
In summary, sports and business are closely intertwined. As more and more fans become advocates for business, the interdependency is only bound to grow stronger.
