The Uniqueness of Spectator Sport from a Strategic Management Perspective: The Case for Spectatoritis

Abstract

This conceptual paper uses a strategic management approach to assess the unique structure of the business of spectator sport. We argue there is a lack of business competition because franchises are simultaneous co-producers, collaborators, buyers, and suppliers. Consequently, mainstream strategic management frameworks that rely on competitive environments are ill-equipped to evaluate the nuances of spectator sport. In response to these observations, we develop multiple new and modified frameworks, including a spectator sport supply chain that inextricably links the participatory and spectator sport segments. Through this hierarchy of training, participants evolve from paying customers to inputs to production. Spectator sport and its supply chain are then positioned in the center of a revised industry model to develop a theory of spectatoritis, which is a rational explanation for why spectator sport is not only a natural focus for research, but also furnishes considerable promise for the development of unique sport management theory.

战略管理视角下观赏性运动的独特性：以观众病为例

本理论性论文采用战略管理的方法对观赏性运动交易的特殊结构进行评估。笔者认为, 由于共同生产者、合作者、买方和供应商同时拥有特许经营权, 导致观赏性运动交易缺少商业上的竞争。因此, 依赖竞争环境的主流的战略管理框架难以对观赏性运动发生的细微变化做出评价。为了对这些结论做出回应, 我们提出了多个新型的且经过修改的框架, 其中包括观赏性运动供应链, 该供应链将参与性运动和观赏性运动的片段紧密联系在一起。参与者经历训练等级的变化, 从单纯付钱的顾客转变为投入者, 再成为生产者。观赏性运动及其供应链因此被置于修订过的产业模式中心位置, 用以发展观众病理论, 该理论能合理解释为什么观赏性运动本身不仅是研究的重点, 还能为发展独特的体育管理理论带来诸多期待。

Keywords:

• Strategic management
• competition
• supply chain
• value chain
• theory

关键词:

• 战略管理；竞争；供应链； 价值链；理论

Disclosure Statement

No potential conflict of interest was reported by the authors.

Notes

1 In this paper, spectator sports refer to those that are designed for spectating elite athletic performance.

2 For more details on the differences between open and closed leagues see Noll (2003).

3 One could argue that because a league is a necessity, it should be the unit of analysis instead of the franchise. However, the league cannot be the unit of analysis because, by definition, a cartel is simply an association. It cannot produce anything on its own and instead regulates the production of its members. Even though cartel membership is required, franchises in closed leagues are uniquely incorporated, stand-alone business entities. We thank an anonymous reviewer for helping us clarify this issue.

4 Research on the home advantage demonstrates the importance of crowd size (e.g., Nevill, Newell, & Gale, 1996) and density (e.g., Agnew & Caron, 1994) on the outcome of sporting contests.

5 The term ‘customer’ refers to both individuals and other businesses, while ‘consumer’ refers to the end user.

6 Considerable research in the sport economics literature has investigated the nuanced differences in substitution between different leagues (for a summary, see Mills & Winfree, 2016).

7 As noted earlier in this section, franchises compete globally and locally to create avid fans who will only purchase one brand, but franchises also compete for the attention of less avid fans who are willing to purchase licensed goods of various franchises. In some cases, leagues pool licensing revenues, but in most, franchises are incentivized to spread their brand through licensed sales.

8 This discussion of the competitive environment is focused solely on the Primary Sport Product in the B2C landscape; however, the B2B side of the business has similar competitive features. In selling broadcast rights, the same suppliers are necessary to produce the live product. As a local monopoly in nearly every market, there are no rival franchises selling broadcast rights and a limited threat of new entrants. A media station that wants to broadcast local sports could substitute with another local professional franchise in the same or different sport, if one exists. Furthermore, franchises can forward integrate and create their own local networks if rights fees are deemed too low, leaving buyers with little bargaining power.

9 Although participatory events can be spectated, this is primarily parents in support of their children and is not the intent of the business.

10 Not surprisingly, it is at this intersection of the supply chain model where we also witness numerous legal challenges to the notion of “amateurism” in the NCAA (see Porto, 2016) and other developmental leagues, such as the Canadian Hockey League (see Cribb, 2014)

11 Though other industries require human resources with lengthy training periods (e.g., medicine, law, higher education) this training begins with elementary school education, which is a non-profit government service (i.e., public good) and not a B2C industry like participatory sports (private schools being an exception to this).

12 The subsectors in Li et al.’s (2001) model include: (1) administrative and regulatory athletic associations (e.g., NCAA, MLB, NHL); (2) sporting goods manufacturers, wholesalers, and retailers (e.g., Adidas, Li Ning, Dick’s Sporting Goods); (3) sport facilities and buildings (e.g., London Stadium, ESPN Wide World of Sports); (4) sports media (e.g., Sky Sport, TenCent, YouTube); (5) sports management firms (e.g., Endeavor, Wasserman), and; (6) state, municipal and county sport councils and authorities (e.g., Florida Sports Foundation, Niagara Sport Commission). See Li et al. (2001) for a more detailed description of each sub-sector.

13 Of course, alternate paths to becoming an elite athlete exist in other parts of the world, such as official government training academies in China or Russia, which illustrates the complexity of the sport industry.

Additional information

Notes on contributors

Nola Agha

Nola Agha (Ph.D., University of San Francisco, US) is an Associate Professor in the Sport Management Program at the University of San Francisco. She holds a BS from Indiana University Bloomington, a MA in Sport Management from the University of San Francisco, and a Ph.D. in Management from the Mark H. McCormack Department of Sport Management at the University of Massachusetts Amherst. Her primary research focuses on the economic impacts of teams and stadiums, the efficiency and equity outcomes of stadium subsidies, and a variety of issues related to minor league baseball. Dr. Agha worked in international business operations for several years and brings a multi-disciplinary approach to her research by combining her training in both economics and management. She has published sport-related articles in journals such as the Journal of Sports Economics, Journal of Sport Management, Sport Management Review, Managerial and Decision Economics, Contemporary Economic Policy, and more.

Jess C. Dixon

Jess C. Dixon (Ph.D., University of Windsor, Canada) is an Associate Professor of Sport Management in the Department of Kinesiology at the University of Windsor. He holds a Bachelor of Sport Management from Brock University, a Master of Human Kinetics in Sport Management from the University of Windsor, and a Ph.D. in Sport Management from the Mark H. McCormack Department of Sport Management at the University of Massachusetts, Amherst. Dr. Dixon’s research and scholarly interests are in the areas of strategic management in sport, executive leadership and human resource management, relative age effects in sport, and sport management pedagogy. He is Editor of Case Studies in Sport Management, a peer-reviewed academic journal that publishes teaching case studies related to the sport management discipline.