MGMC30H3 Lecture Notes - Lecture 10: Mastercard, U Live, Yankee Network

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Published on 23 Apr 2016
School
UTSC
Department
Management
Course
MGMC30H3
Professor
Globalization & sports branding: The Case of Manchester United
May 2005 - US Businessperson Malcolm Glazer bought financial control over Manchester
United
Structural Factors:
21st century - the trend of globalization became apparent in the world economy
Since then many sports have benefited from international media exposure
Background:
Soccer made its first experience in 1908 Olympics
1st world cup was in 1930, Uruguay
After 1980s, increasing # of pro soccer clubs have sought to capitalize on the sport's
global brand
o2 main clubs have emerged victorious
Manchester United
Innovative branding & marketing strategies were at the leading
edge of the contemporary trend in sport globalization
75 million global fans
Real Madrid
Has high global awareness & highest turnover ($$$)
Structural Factors: Industry Environment
EPL formed in 1992-93 signalled an era of hyper competitiveness
Upstream pressures - player scarcity effects
Formation of EPL added pressures on clubs as they competed for a limited supply of
talented players
1995 - competition intensified further when professional soccer players could become
free agents at the end of their contracts
Maximum of 3 foreigners rule was also removed in British soccer clubs
oEnabled European born players to move freely in any club in EU
As competition for talent went up
oClub costs increased under impetus of player salary costs increases
oAdditional revenue streams were sought to bolster finances & attract star players
in inflation affected transfer markets
Widening of soccer's downstream appeal to spectators, sponsors, sports
merchandisers & tv viewers - local & global
Downstream pressures - broadening player appeal
In 2004 - EPL recognized need for increased gate receipts, set a goal to increase game
attendances from 16 to 21 million by 2010
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oMade feasible by creating all-seater stadia, expanding investment to expand
capacity and making them more family-friendly, which broadened appeal among
middle-class
oMAN U followed this trend
Current facility has nearly 76 000 seating capacity, largest club facility in
England
Club placed emphasis on heightening of matchday experience
Dining facility, in stadium & online betting, Red Café, megastore,
ad displays
Downstream pressures - Attracting sponsors
Man U had an 18 year primary sponsorship deal with Sharp that started in 1982
Replaced with record breaking 9 million pound deal with Vodafone from 2000 - 2006
oThey pulled out early, citing decision to become Champions League sponsor
Speculation abt clubs failure to advance in the latter stages of Champions
league in recent seasons & concerns abt Glazer takeover
Signed with AIG for 4 yrs, 56 million, 2nd biggest deal in club football
Technical sponsor was Umbro until 2002 when a 13 yr deal was signed with Nike
Downstream pressures - Merchandising Deals
Premiership clubs in 2002 earned 335 million from merchandise ops, more than
admittance tiks less than tv deals
Downstream pressures - Competing for TV viewers
Late 1980s - Rupert Murdoch entered the UK tv market
BSkyB channel offered 304 milion - 5x original deal - to broadcase top their games
oFollowed by 670 million in 1997 & 1000 million later on
MAN U supplemented this package when in 1999, it launched its own dedicated tv
network, MUTV
oThey had rights to the club games after their airing on Sky network
oAlso negociated rights to show archive footage through broadband service
oProposal underway in 2004 to promote club products & services through MU
Interactive, MU Mobile & MU Picture Facilities
Downstream pressures - Competing for global audiences
BSkyB contract added both benefits & pressures through international connections as
EPL clubs were given global exposure
o2004 - Murdock agreement with Direct TV increased viewership in North
American & ESPN Star Sports in Asia ( went up by 150 mill households)
Today, EPL reaches audiences of 1 billion on TV
oGives the league worldwide marketing platform to reach new fans & sell their
wares to broader consumer wares
oLed to increased tickets, adveritising & merch revenues
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oIncreased turnover for top 20 English clubs from 160 mill in 1992 to 1130 mill in
2003
oProvided new opportunties for clubs to build brand profiles & promote themselves
to broader audiences
oMAN U seized the moment to capitalize on its reputation
Building Brand Identity:
Resource based view (RBV) of competitive advantage posits that corp. resources -
including intangibles such as brand identities - are key factors in sport
Brand Identity provides direction, purpose & meaning for the brand
oIts core values are how it is perceived , what traits it projects & the relationships it
engenders
oEssence of the brand - makes it unique & valuable
Aaker's brand identity strcuture concepts to figure out the distinctive features of the MAN U
brand :
The Brand as a Product:
oPresent day popularity was established in Britain b/w the 8th & 19th centuries
Product Scope: defined as the broad industry environment in which the brand operates
The game of soccer
Global appeal of soccer is based on its history
Many nations & cultures have been playing a variation of this for
thousands of years
FIFA bases the origins in the Han Dynasty in China b/w the 2nd &
3rd centuries
1871 - English Football Association was formed with 50 clubs
Early organization of british football became a blueprint that laid
the foundation for the sport
Club based template took root in Europe & through colonization
spread to Latin America, Africa & Asia
Product attributes : Soccer has many features that contribute towards its 300- million player
following & a fanbase that is measured in billions worldwide
It builds stamina & aerobic conditioning
It has few physical size or age limitations
Rules are relatively simple to understand
Require minimal equipment & facilities
Very team-oriented
Can be played in many climates
On-field strategies are largely created
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Document Summary

Globalization & sports branding: the case of manchester united. May 2005 - us businessperson malcolm glazer bought financial control over manchester. 21st century - the trend of globalization became apparent in the world economy. Since then many sports have benefited from international media exposure. Soccer made its first experience in 1908 olympics. 1st world cup was in 1930, uruguay. After 1980s, increasing # of pro soccer clubs have sought to capitalize on the sport"s global brand: 2 main clubs have emerged victorious. Innovative branding & marketing strategies were at the leading. Manchester united edge of the contemporary trend in sport globalization. Has high global awareness & highest turnover (6164$) Epl formed in 1992-93 signalled an era of hyper competitiveness. Formation of epl added pressures on clubs as they competed for a limited supply of talented players. 1995 - competition intensified further when professional soccer players could become free agents at the end of their contracts.

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