Sports industry is a major global industry. Existing revenue estimates for the global sports industry range from $471 billion to $1.4 trillion, depending on how it is calculated. It requires skilled and educated managers and leaders in the same way that many other business sectors and industries do. Yet, there is a tradition in the sports world for leaders to be developed from within the industry itself. That is, athletes become coaches who then become general managers and so on. It is often assumed in the sports field that one needs to be an industry insider and a former athlete to understand this world. It is also often assumed that one can gain the skills and knowledge needed through moving up the ladders rather than through formal education. This is mostly a faulty assumption and harmful to the industry itself.
Operating a business of any kind requires many different competencies. Business administration, as a field of study, is consisted of five different disciplines: Management, finance, accounting, marketing, and economics. Earning an MA degree in sports management can be beneficial but also insufficient as it only focuses on one of the five. The differences between the sports industry and any other industry are not significant enough for a traditional and general MBA not to be able to navigate. There are nuanced differences but most of them are quite superficial. Sports is a business and as such requires sophisticated business skills and knowledge. Industry specific knowledge and history is not required although certainly can be beneficial. At the same time, it can also be harmful as sports leaders coming through the ranks and being former athletes can bias them and not allow new ideas and innovation to improve sports organizations.
Sports management is not just about managing athletes on the field. It is about selling tickets, concessions, and merchandise. A large part of this business involves negotiating sponsorships and media broadcasting rights. Sports is entertainment and activating fans is essentially important to secure sustainable success. Engaged and loyal fans are required to maintain goodwill and to create a brand. These fans are customers like in any industry and they have multiple reasons for their engagement. They look for value in anything that they spend money on, and seek for a holistic total experience. Their experience with sports involves much more than just watching games at an arena or stadium. Their engagement with sports spans to between games and every aspect of their lives. Sports organizations who understand this and cater to the fans’ needs of a complete lifestyle tend to be the most successful. To fully support the lifestyles of fans as customers requires specific marketing, sales, behavioral economics, finance, and accounting skills. It also requires finetuned management skills in events management, project management, risk management, and venue management.
The interesting thing about sports industry is that it not only differs somewhat from other industries but there are also differences between different sports. Managing team sports is quite different than managing individual sports. Some sports as substantially more complex than others. Imagine Formula 1, for example, and the logistical needs to move all the teams across the world and organize races in different countries. Every Grand Prix is a large event with many vendors and partners providing hospitality and other services that support the actual race. The scale of this is hard for a layperson to even comprehend. In every sport, security is also a big factor especially during the turbulent post pandemic days. Whenever large masses of people are brough together, there are security concerns that need to be managed. There are many complex risks to manage and to consider. We have all heard about soccer hooligans and the damage that they have caused to cities. We have also, unfortunately, heard about mass shootings and terrorist attacks.
Sports fans attending sports events are tourists and often visit other destinations and attractions in addition to the sports event that they are attending. Therefore, the economic impact of sports tourism can be very significant. Anyone who has visited the Northshore of Oahu in Hawaii during the surfing competitions understands how an entire island can be transformed by the surfers and fans coming from all over the world to attend the sporting event. In addition, there is another form of sports tourism. People take running vacations, for example, to visit exotic places where they can train and enjoy running while enjoying the scenery and to have a total sporting experience. People travel to hike, climb, sail, golf, bike, and many other sports activities, including the so-called extreme sports activities. Resorts around the world provide the amenities and facilities for these sports vacations.
Sports is about more than just large sporting events. Yet, sporting events certainly are important and contribute to the economies of the host cities in many meaningful ways. Olympic games require substantial coordination from numerous entities to be successful. To ensure such success, sophisticated management skills are required beyond just understanding of sports itself. The scale of these massive events is so large, and the systems involved so complex, that they require highly trained and experienced leadership. For those emerging leaders considering an exciting career option after earning an MBA, consider sports as an opportunity to make an impact.
