industrialization of sports

IE 356Business & Society

Corporatization of Sport Clubs

Selçuk S. Uzman 200931008Lecturer : Özay Özaydın

Presentation Overview• PART 1 (Business & Society)

Sports in Society Power of Sport Clubs in Society Sport Competitions for Charity

Extra: Importance of Sportsman as a Peacemaker

• PART 2 (Business & Society) Definition of Sports IndustrySports as a BusinessEvolution of Sport IndustryAssociations vs. CorporationsPurpose of being Corporatized Corporatization Models of Sport ClubsFinancial Incomes of Sports Business Sport Clubs in TurkeyFans/Supporters vs. Customers/Buyers

Sports in Society

• Sports can have a great impact on people and society.

• Watching sports competetions such as Olympic Games and the soccer/football World Cup inspires people with excitement.

• Playing sports can give people joy.

• Many people work as professional players, and many people work in areas which are related to sports.

• Sports provide people opportunity of physical fitness and health education.

• Any other?

• Besides these positive effects of sports on people and society, sports play important roles in social change in many areas of the world in many aspects.For instance;

• Peace building• Health promotion• Educating youth• Social inclusion• Promotion of living condition• Avoiding bad habits

Importance of Sports

Power of Sport Clubs in Society as an Example

FC Barcelona and UNICEF signed agreement which provided for the donation by FC Barcelona, of 1.5 million € per year to UNICEF. The

understanding also included incorporating the logo of the UN Children's Agency on the front of the FC Barcelona football shirt.

• From 2006 to 2011 the programs implemented have helped in the fight against AIDS, in countries: Swaziland, Malawi and Angola.

• Since 2011 projects applied in Catalonia, Ghana, South Africa, China and Brazil where sport serves to promote children's development, improve

infrastructure, school equipment and knowledge of educators.

Sport Competitions for Charity• On 13 May 2014, an explosion at a coal mine in Soma, caused an

underground mine fire.• 301 people were killed in what was the worst mine disaster in Turkey's

history.• Fenerbahçe, Beşiktaş and Chelsea played at Şükrü Saraçoğlu Stadium for

the victims’ families of the Soma mining disaster. • All of the income from the game went to the families of the victims of the

Soma disaster.

• The La Liga winners,Atletico Madrid,played a benefit friendly against Galatasaray on 8 August 2014 in Izmir Atatürk Stadium.

NBA Cares

• NBA Cares is the league’s global community outreach initiative that addresses important social issues such as education, youth and family development, and health and wellness.

• The NBA and its teams support a range of programs, partners and initiatives that strive to positively impact children and families worldwide.

• The NBA Community Assist Award for community engagement, humanist activity, and charity work. It is a monthly award, but season and off-season awards have also been given.

• The award is sponsored by Kia Motors and is part of the NBA Cares program.

NBA Community Assist Award

Anthony Davis Receives January 2015 NBA Cares Community Assist Award Presented by Kaiser Permanente

Importance of Sportsman as a Peacemaker

• Didier Drogba is a football player from the Ivory Coast. His biggest accomplishment is ending a civil war.

• From 2002 to 2007, Ivory Coast, was engaged in a civil war with the rebels in the north and the government loyals in the south.

• After leading his team to a win that would take the Ivory Coast to the 2006 World Cup, Drogba picked up a

microphone, dropped to his knees, and begged the warring factions to lay down their arms while on live

national television.

• Drogba then pushed for the Ivory Coast’s next game to be played in the rebel north’s capital of Bouake.

• They listened and for the first time in 5 years the whole country was brought together without any violence.

The cease-fire led to a peace agreement and the war was over. This is a picture of the “Flame of Peace”

which symbolized the end of the war.

The peace ceremony in 2007.

“I have won many trophies in my time, but nothing will ever top helping win the battle for peace in my country. I am so proud because today in the Ivory Coast we do not need a piece of silverware to celebrate.” - Didier Drogba

Definition of Sport Industry & Sports as a Business

Sport industry is a market in which people, business world, and related organizations are involved.

It is the market in which many variety of goods are produced and offered to people who work in such sports organizations and to huge number of people all over the world who likes sports and follow sport events.

In today’s world,the sport business industry has experienced phenomenal growth in a relatively short period. There are some stakeholders of that sport industry:

• Employees• Suppliers• Government• Shareholders• Fans or customers?

• Sports is an entertainment service and also show business.• Sports is not just about viewship.For some people,sports is like a

kind of worship.• Sport clubs have more financial power than past years.• Sport clubs are in a huge competition to improve their clubs

financially. • In the past, all sport clubs were established as associations by

which they used to have some advantages and disadvantages as well.

• But nowadays, sport clubs are changing into corporations instead of associations.

Evolution of Sport Industry

Association vs. Corporation

Advantages of being an association

Pay no income tax. Is exempt from VAT. Many taxation advantages. Ability to get donations.


Disadvantages of being association

Must have strict budget control and financial adminstration.

Cannot show any commercial activites just only can show sportive events.

Hard to cope with huge financial matters in today’s world of sport business.


Advantages of being a corporation

Can show any related commercial activity. Create and promote an international brand name of its

own. Ability to create and reach credit sources. Ability of stock market launch.

(Initial public offering) Eases to compete with another rich clubs and franchise

their brands easily.


Disadvantages of being corporation

Paying income tax. Becoming more transparent.*

Purpose of being Corporatized

• Main purpose of being corporatizated is that, club facilities is not just depending on to associations,foundations or people.

• Sports are changing into “industry” and being corporatizated is essential for sport clubs.

• Sport clubs must give account of supervisors, authories and government sides.

• Sport clubs have to become more transparent.

Corporatization Models of Sport Clubs

• Structures of new economics orders and commercial events are made sport clubs to being corporatizated.

• There are several models of corporatizing at sport clubs.

I. Classical Model• Gençlerbirliği,Ankaragücü,Köln,Bochum etc…• There is an administrative council and candidate presidents

which is chosing by club members.• There is no financial ties between all of members(including

president) and the club.• Success of club is depend on board of directors and president’s

talent.

II. Family Corporation• Chelsea,Liverpool,PSG,Portland Trail Blazers etc…• This type of sport clubs are belonging to an owner or a family.• Even if this model is discussing on it, that model is popular in

United Kingdom football clubs and NBA teams.• The advantage of this model is there may an owner who look

after club as a him/her business.

III. Corporated / Stock Market Based

• Beşiktaş*,Juventus,Ajax,Lazio etc…• Sport clubs would be launched to stock market as a company

or joint stock company.• There are many sport clubs using that model even they are

ascending and descending financially.• Stock-market based sport clubs can make their clubs to go

initial public offering.

IV. Corporated / Fan Based

• Real Madrid,Barcelona,and Major League Baseball(MLB) teams

• These clubs are owned by members. • That clubs are managing as a company.• In general assembly of that clubs,there are many members of

club and they can take rational decisions with these participants.

V. Mixed Model of Stock Market Based & Fan Based

• Fenerbahçe,Galatasaray,Trabzonspor,Borussia Dortmund etc…• This is the model which is between stock-market based

corporated clubs and fan-based corporated clubs.• These clubs are going to initial public offer and managing as a

company that have value at stock-market. • On the other hand, members of clubs have a great influence

at general assembly when taking decisions.

Financial incomes of sports business

Sport clubs are tending to develop their corporate facilities in terms of improve their clubs financial status in which competing with other sport clubs.There are several essential parts of financial incomes of sports business as given below:

• Sponsporships• Broadcasters• Clubs licenced product marketing(Franchising)• Ticket selling• Bets money

Sport Clubs in Turkey

Corporated Sport Clubs of Turkey

Football : Beşiktaş,Fenerbahçe,Galatasaray,TrabzonsporBasketball : Anadolu Efes,Pınar Karşıyaka,BanvitVolleyball : Eczacıbaşı Vitra,Vakıfbank SK,Arkas Spor

Fans/SupportersVs. Customers/Buyers

Some of sport clubs have just company,municipality or sponsor names.

How many sport clubs do you know like that?If we talk about watchers,are them supporters or

customers?

Business of Soccer1. What is result of that chart?2. How can Turkish sport clubs can

compete with that foreign sport teams?

3. Is it possible or fairy tale?

Thank you for listening

References

• http://www.bigpara.com/borsa/hisse-fiyatlari/• http://www.nba.com/cares/• http://www.nba.com/communityassist/• http://thechive.com/2014/11/23/retiring-soccer-player-is-so-good-he-ended-a-war-11-

photos/• http://www.forbes.com/sites/kurtbadenhausen/2014/07/16/the-worlds-50-most-valuable-

sports-teams-2014/• http://www.tsmplug.com/top-10/most-expensive-kit-sponsorship-deals-in-football/• http://www.totalsportek.com/football/expensive-shirt-sponsorship-deals/• http://en.wikipedia.org/wiki/Sport_industry• http://www.businessofsoccer.com/2014/07/15/manchester-united-adidas-suit-up-together-

in-record-deal/• dergiler.ankara.edu.tr/dergiler/17/1770/18731.pdf

industrialization of sports

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