Influx of Money in Sports Assignment

Influx of Money in Sports Assignment


Sports had previously been taken as games but now have encompassed a socio-economic aspect that gives it a business-like identity. Staggering volumes of money are being exchanged in the world of sports. Millionaires who have earned their riches through sports have risen has increased significantly. TV contracts of world class sporting events are net a worth in billions. Huge budgets are offered by sponsors to teams and individual athletes.

Influx of Money in Sports AssignmentIt’s not just private sponsors that cause the massive inflow of money in sports. Government sponsors provide sponsorships to sports for numerous reasons. Unity in a nation and its sense of self-esteem may be propelled by successes in sports. Medals and championships had a significant role to play in communist nations and societies in the world today as well. Sporting policies of nations have been assessed on the basis of the number of Olympic medals collected by them. Sports has become an important aspect of political agendas and scores of nations put great effort into facilitating a medal-winning sporting environment through establishment of adequate infrastructure (stadiums) and providing financial aid and perks.

However, majority of the money that goes into sports may be attributed to the private sector. Sponsoring and the sale of TV rights have enhanced earnings in professional sports like never before. TV money is often given importance in this regard.

Kolah (1999) considers sports to hold a tremendous amount of exploitable commercial potential. This is due to several reasons – First, sports provide immense advertising opportunities: the large number of television programs often leads viewers to change channels during advertisements. But, the viewer has no way of avoiding the secondary advertising messages that is part of the sports broadcast. Therefore, sponsoring sports efficiently informs viewers of a product or company. For instance, MasterCard generated an estimated media value of EUR 107 million during the 1998 World Cup. This was significantly higher than the EUR 17.5 million that had been spent on sponsorship. Second, sponsoring sports adds to the image of the sponsor: sports are associated with youth, dynamism, achievements and successes. Additionally, a successful athlete sponsored by product is associated with the product thus lending his brand value to the product. Third, the opportunity of giving direct product information: the equipment provided to top athletes automatically lends an image of reliability and high-performance products. This works for sport clothing and equipment producers (Nike, Adidas, etc).

A reason for why there is such a strong correlation between sports and money is that sports speak a universal language. The visual cue provided by it is relevant all over the world. Increased globalization further prompts national and multinational entities to engage in sponsoring of sports. Major European sporting events, like the Champions League and Wimbledon, are dominated by US multinational corporations, while the Japanese and Korean companies by estimates account for about 30% of the money spent.

The need for communication with consumers through advertising is what prompts investments in sports form the private sector. Sports serve as highly efficient means of communication. Thus, they are of immense use to companies that communicate through the media. TV channels depend rather heavily on sports and derive their basic profits from them. The next segment, shall examine the correlation between sports and media.


Influx of Money in Sports AssignmentSports are an integral part of our lives. Mass media lays particular emphasis on sports. On the TV, there are a number of channels dedicated exclusively to sports. Newspapers carry sporting news on a daily basis. There are countless sports magazines. Thus, sports are everywhere and the consumers/fans love it. The more information and details they get about their teams and idols, the more information they want.

They wish to be intimately involved in the process of preparation and performance of their teams. They want to know of post-tournament or match emotions, off-season routines etc. Thus, sports serve as an important corridor of news. In terms of entertainment, sport creates situations to be remembered which demarcate a particular moment or era in time and bring generations together through the same.

The following are some of the reasons for the prominence and popularity of sports amongst the public and the mass media (Rosentraub, 1999):

  • The competition between two or more parties causes heightened emotions Reactions of athletes prompts emotional responses to a similar tune from fans too. However, these things have no long-term impact.
  • Every sporting activity and event is different from another. All matches are different with many variables determining the outcome. Such events have a huge potential for ushering in drama, joy or a historic moment in the lives of people which may be examined over and over. Fans become a part of the collective and forget about their personal worries for the time being;
  • Unforseen events like underdog or modern-day David toppling a Goliath lead to the rise of emotions like hope and desire in the lives of fans;
  • Majority of the sports end in one side winning and the other(s) losing (though draws/ties are possible in some sports) and hence fans get a story with a clear-cut ending;
  • The losing side(s) has/have the opportunity to redeem their name in the next instalment of the sport. Thus the dram is subsisted with hope and potential;
  • Since sports have a constant risk involved with them, a sense of courage and bravery always permeates sporting events. In dangerous sports (i.e. car/motorbike racing), athletes literally risk their lives.

The large number of possible results, the flurry and outpour of emotions and the limited timeframe, that characterize sporting events make them ideal means of communication, particularly television. Drawing arguably the largest number of satisfied consumers, television provides a direct means of advertising cues and revenues from the same. Additionally, expenses incurred in covering sporting events are relatively lesser than the production of TV shows, whose viewership does not even come close to that of major sporting events. Hence, sports are prime commodities for any TV channel to sell.

The large number of TV channels operating within the same region often entails excessive bidding over broadcast rights of major sporting events. Huge sums of money are paid by TV channels to ensure exclusivity of their broadcast, which would in turn ensure exclusive and massive viewership. Content is the most significant attributing that TV and for that matter the internet can have. TV channels are merging with other channels across regional and national borders (horizontal integration) to have bargaining power and ascending higher for more lucrative content. Simultaneously, distributors (cable network companies or television stations) are merging businesses with owners with rights to movies, series or sports, or internet companies. America On Line/Time Warner, Telefonica/Endemol, Clt-Udf/HMG and Chello (UPC)/SBS5 are some instances of such mergers. Aside from these, TV channels are offering pay TV and pay-per-view options to viewers.

Our examination of sports and media has ascertained two things for us. First, the ‘businessification’ of sports has led to a massive inflow of money into sports. Second, the inflow of money is done by the media and by the sponsors, with media playing the part of messenger (facilitating communication between sponsor, clubs/athletes and audience), sponsor (donating money to clubs or athletes or, sometimes, even holding shares) and business partner (bidding for TV rights as a regular resource). What factors in such environments lead to a situation where doping becomes a popular practice? The following segment shall examine the laws of economics which leads to a situation where sportspersons may engage in unethical actions for success.

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