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The sports network: insights into the shifting balance of power
Journal of Business Research 55 (2002) 611 – 622
The sports network: insights into the shifting balance of power Rosita Wolfea, Tony Meenaghanb,*, Paul O’Sullivanc a
b
Eircom International, Dublin, Ireland Department of Marketing, Graduate School of Business, University College Dublin, Backrock, Dublin, Ireland c Dublin Institute of Technology, Dublin, Ireland
Abstract This study applies network theory for the first time to the economically and socially important area of sport and examines relationships between National Governing Bodies (NGBs), media and corporate sponsors. Issues of power, dependency and relationship are examined in an empirical, qualitative, two-stage study of 51 respondents. These respondents range from the key actor groups to an ‘expert’ group, all examined within an Irish context. The impact of change drivers and the nature of relationships over time are assessed; transactions are mapped, and a model is proposed that seeks to articulate the power relationships in this network. The results indicate the applicability and potential of network theory in an area removed from the traditional industrial market setting of previous network-based studies. D 2002 Elsevier Science Inc. All rights reserved. Keywords: Network theory; Relationships; Sports; Media; Sponsors; Power; Transactions; Dependency
1. Introduction Network theory has developed a framework of ideas that represents one of the major advances in the understanding of marketplace phenomena. This development initially took place in Northern Europe and, more recently, has informed the work of theoreticians and practitioners on both sides of the Atlantic. Its initial application brought a new understanding of the nature, evolution and management challenges involved in relationships in an industrial marketing context. In more recent years, the application of network theory has been extended with considerable success to new domains beyond the original focus of businessto-business relationships. Sport as a global phenomenon and as a focus of major commercial potential has generated considerable interest from both the media and corporate sectors. This article offers an application of network theory to the high-profile area of sports, sponsor and media relationships. Developments in both sports and media, together with the spectacular growth of sponsorship as a key influence on the work of both, collectively impact on relationships and the balance of * Corresponding author. Tel.: +353-1-706-8958; fax: +353-1-7068019. E-mail address: [email protected] (T. Meenaghan).
power between these actors in the sports network. These developments have implications not only for the ‘owners’ of sport events and for the National Governing Bodies (NGBs) of individual sports; they also impact upon corporate sponsors employing sport as a marketing tool and on media owners who use sport as a crucial path to building and maintaining audience and market share. No research study, to date, has sought to examine the evolving relationship patterns in the sports network or the phenomenon of power in the relationships between the actors. The research study outlined in this article adopts qualitative research techniques to examine the shifting balance of power in the sports network through accessing the views of key informants in the field. Network theory provides both the theoretical framework and methodological approaches that help to articulate the nature of these relationships. This article argues that the network approach can provide insight for scholars, as well as a strategic map, which is of pragmatic value to managers grappling with the problems of the dynamic sports environment. Similarly, the application of network theory in the sports domain may provide worthwhile insights into how such theory can contribute to the understanding of exchange-based phenomena in situations far different from the classic business-to-business relationships, which were originally the focus of early network scholars.
0148-2963/02/$ – see front matter D 2002 Elsevier Science Inc. All rights reserved. PII: S 0 1 4 8 - 2 9 6 3 ( 0 0 ) 0 0 1 9 1 - 0
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2. Network theory and its application to sport Sport as an organised and codified activity is a late nineteenth and twentieth century phenomenon. Its current significance emerges from a complex interplay of social, economic, technological and cultural factors in industrial and postindustrial society. It has a pervasive presence in contemporary social reality in both the developing and developed worlds; it is the basis of an industry of truly global reach and importance. The scale of the sports industry is exemplified by reference to the US market. Some commentators have proposed that the US sports industry was worth US$93.8 billion in 1995, making it the 11th largest industry in the US (Harverson, 1997). On a worldwide basis, the sports industry has been calculated to account for 2.5% of world trade (British Sports Council, 1995). The empirical study reported in this article was undertaken in the Irish market, which displays broadly similar influences and characteristics to those evident in the sports industry worldwide, though the absolute scale of sports activity is obviously considerably less than in major sports markets such as the USA. With regard to the Irish situation, a recent report, Sports Strategy (1997) estimated that the aggregate expenditure on sport in the Republic of Ireland was £752.21 million. These statistics represent the activities of a broad set of actors in the sports network. While diverse drivers of sports as an industry can be identified, the emergence of the major commercial potential of sport has been, in many respects, a function of the parallel symbiotic relationships of sport and sponsorship, and sport and the media. As has been noted elsewhere: ‘‘. . . the full commercialisation of sport as a business is no older than the age of television’’ (Meenaghan and O’Sullivan, 1999, p. 242). This article is grounded in the belief that the network perspective can bring significant insights to the management of sport today. Proponents of network theory argue that ‘‘. . . a unique network can be identified for every specific problem or issue. In other words there are as many networks as there are situations’’ (Axelsson, 1992, p. 195) and thus, it is valid to propose applying network theory to the sports context. Aldrich (1979) cites a number of examples of contexts permitting meaningful network analysis, including the example of the relationships between sports associations, unions, television and radio broadcasting networks and sports institutions. Recent developments in the world of sports management clearly illustrate the applicability of the concepts of power, dependency and relationship outlined earlier. The relevance of power as a concept in the application of network theory to the relationships of sport, media and corporate sponsors is clearly illustrated through a recent instance. In 1997, the Five Nations Rugby Championships — involving a ‘round robin’ series of games — faced an uncertain future. The English Rugby Union, an individual actor in the network of rugby associations, attempted to unilaterally sell ‘its’ tele-
vision rights to BSkyB (a British and European satellite channel). The network phenomenon in this instance can be observed at two levels: a micro-level interaction amongst the five rugby unions making up the Five Nations Championship, and at a more macro level involving interactions with bodies external to the game such as corporate sponsors and media owners. The remaining ‘actors’ in the micro network, Ireland, France, Scotland and Wales, responded to the English initiative. They created an alliance to act in concert and used their power to suggest that they would force England (the most dominant actor) out of the competition if that country pursued its suggested strategy. The result of this consolidation and use of power was that the English Rugby Union had to cede some ground to the other ‘home’ nations on the issue of TV rights. However, when this obstacle was overcome, England managed to take a significant percentage of the revenues because of the power that it held in this network. Agostini (1995, p. 60) stated, with regards to relationships, that ‘‘sport is a social institution in which a number of actors and groups interact in its shifting daily constitution.’’ The development of relationships instils commitment to a network, and this should ensure that sports bodies, sponsors and media are better positioned for strategic development. A number of commercial interests have successfully developed long-term relationships with particular sports, for example, Benson and Hedges and snooker in the UK market, or Coca Cola and the Olympic Games on the international stage.
3. Relationships in the sports network The nature of network relationships in a sports context will, by definition, be different to the relationships encountered in traditional industrial-marketing settings. In the latter case, the actors broadly represent a model of business with common organisational and commercial objectives. These objectives may be susceptible to alignment even if there were differences in scale, position and power. The organisational models represented by the actors in the sports network — sports NGBs, media owners and corporate sponsors — are significantly different entities whose very provenance, mission, structure and outputs traditionally differ fundamentally from one another. Recently, a common ground has arisen, fuelled by common drivers, where success and growth of each is dependent on the relationships between these actors. Each of these major relationships shall now be examined in turn. 3.1. The sport –media nexus Sport has a proven and demonstrable capacity to build a media audience. Conversely, mass media have the capacity to confer status and build an audience for a sport or an individual event. From the beginning of the mass-media
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age, as more people have come to consume sport indirectly via media, a symbiotic relationship between sport and media has developed, which has become more accentuated with the emergence of electronic mass media. Sport has benefited from media attention (Blackshaw and Hogg, 1993; Williams, 1990) and in some instances such as that of professional boxing (print media and radio) or professional snooker (television), the acceptance of the legitimacy of the sport and the basis of its popularity has arisen almost exclusively from media attention. Print and radio have had a very important part in developing this relationship, particularly at a time when the rules for sport were being codified and the overall regulation and organisation of individual sports was being put in place. At present, the dominant medium is undoubtedly television and, more than any other single medium, it has played the key role in globalising sport. While media may be important to sport, the inverse relationship, i.e. that of sport to media, is equally important. Sport has been used very successfully as the key strategy for building the audience position of individual media operators. Comstock (1991, p. 64) encapsulates the two-way flow of benefit in a US context: ‘‘. . . television and professional football would form a symbiotic relationship beginning in the late 1950s that would make it the nation’s premier sporting pre-occupation. Sports would become one of the principal means by which the third place network, ABC, rose to first.’’ In a European context, a similar naturally advantageous alignment of sport and media can be observed. On the one hand, the broadcaster BSkyB, through its focus on English soccer, raised the profile and image of the Premiership brand. On the other hand, BSkyB used Premiership soccer at a crucial stage in its own commercial development to penetrate markets, build audiences and promote the sale of satellite dishes. There are many other instances of this reciprocation in the media/sports nexus given that sport represents a proven audience generator for all media today. The combination of popularity and immediacy continues to provide the synergistic potential between sport and media in which each contributes to a fruitful and dynamic interaction with the other (McRae, 1996). The relationship between media and sports may not always be mutually beneficial. Simpson (1996, p. 33) has suggested, ‘‘sport has been the making of BSkyB but some fear that conversely BSkyB could be the undoing of sport.’’ 3.2. The sport –sponsor nexus With phenomenal media interest in sport, particularly in the television scheduling of sports material, which consistently garners large audiences, marketers have naturally been attracted to sports. The marketer, wishing to address these audiences, has become a significant actor in the commercialisation of sport through advertising support and sponsorship. Current trends in marketing communica-
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tions have ensured the development of a parallel symbiotic relationship, that of the sports organisation and corporate sponsor, with the latter now also a major source of influence on the balance of power in the network. This relationship enables the sports organisation to generate revenue as well as to increase exposure for the sport itself. The sponsorship option is of particular importance to corporations in an age of global marketing. Indeed, it might be argued that the emergence of sport as a global commercial activity parallels ‘‘the rise of mass media and indeed, more latterly, the emergence of marketing as a global business phenomenon’’ because of ‘‘the potential of sport to speak a universal language and capture the interest of people across all political and cultural boundaries’’ (Meenaghan and O’Sullivan, 1999, p. 242). The capacity of sport to deliver access to large audiences for corporate sponsors is exemplified by the size and diversity of the audience reached by major events. For example, the World Cup 1994 had a cumulative audience of 32 billion viewers (52 games), while the 1996 Super Bowl reached an audience of 134 million viewers (Sponsorship Research International [SRI], 1997). The scale and recentness of this growth in commercial sponsorship are shown by the fact that sponsorship expenditure in the UK increased from £4 million in 1970 (Buckley, 1980) to £831 million in 1999 (Mintel, 2000). In the US market, corporate investment in sponsorship has grown from US$850 million in 1985 to an estimated 1999 expenditure of US$8.7 billion (International Event Group [IEG], 2000). Sponsorship expenditure worldwide has increased from US$2 billion in 1984 to US$23.16 billion in 1999 (SRI, 2000). On a worldwide basis, sponsorship as a percentage of advertising expenditure has increased from 2.5% to 3% in 1987 (Otker and Hayes, 1987), to 7.0% in 1999 (SRI, 2000). The growth dynamic of sponsorship is further indicated by the fact that it has exceeded both media advertising and promotion in terms of year-on-year growth in expenditure over the last decade (IEG, 2000). The continuing importance of sport for sponsor access to audiences is indicated by the fact that sports sponsorship accounts for 62%, 54%, 80%, 65% and 61% of all sponsorship activity in Germany, Netherlands, South Africa, Sweden and the UK, respectively (SRI, 1997). Corporate sponsors seek more than mere exposure and frequently seek to pursue sophisticated brand-related objectives through their association with sporting events. It has been argued that sport provides a rich repository of meaning and that marketers seek association with the values available in the world of sport to drive brand-image development for diverse and often unrelated products and services (Meenaghan and O’Sullivan, 1999). Empirical research demonstrates that a company’s sports sponsorship has a substantial effect on the company’s image, and the sponsorship literature is replete with case examples of successful brand-development strategies based on an association with sports through sponsorship (Crimmins and Horn, 1996; Easton and Mackie, 1998; Ferrand and Pages, 1999; Grimes
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Table 1 Revenue streams — Manchester United Revenue streams
£ millions
Gate receipts/programme sales Merchandising Television Sponsorship, royalties and advertising Conference and catering Total
36.6 23.6 30.5 18.5 6.7 116
(Source: Manchester United plc. Annual Report 2000).
and Meenaghan, 1998; Hansen and Scotwin, 1995; Hitchen, 1995; Meenaghan, 1996; Meenaghan and Shipley, 1999; Quester, 1997; Rajaretnam, 1994; Rajshekhar et al., 1994).
4. Implications of commercialisation If sports bodies are to achieve and maintain long-term success in terms of their central mission, then they need to create a balance between the demands of their various constituencies. The diversity of income sources in the revenue streams to Manchester United, the World’s richest soccer club, based on 1997/1998 financial accounts (Boon et al., 1999), indicates the commercial possibilities, as well as the implicit potential for conflict (Table 1). The sports body, team, or event must try to meet and balance the respective needs of sponsors and media while at the same time attracting spectators, in order to draw in the substantial revenue now needed to finance a sport. The trade-offs involved may result in conflict between the interests of various parties. For instance, United Distillers is understood to have terminated its sponsorship of the Scottish Open Golf Tournament because of the acquisition of television rights by BSkyB from the BBC. The successful higher bid of the satellite channel ironically resulted in lower levels of TV audience for the sport as compared to those delivered by the previous media partner (BBC), but met the market penetration and audience-building objectives of BSkyB.
5. The drivers of change in the sports network
market penetration. Changes in technology and regulation have led to a proliferation of media provision, in particular with the diffusion of cable and satellite systems and the advent of digital compression technologies, with consequent increased demand by media owners for access to sports events on an exclusive basis. Over the past 30 years this has caused accelerating inflation in the market for the sports property rights. Sport has proved particularly useful in building pay-TV subscriptions of all sorts, even more so than film. In turn, the spread of pay-television has led to hyperinflation in the sports-rights business, in both domestic as well as international contexts. This can be seen by the inflation in the price of TV rights to Premiership soccer in England as indicated in Fig. 1. Griffiths (1997) estimates that a global TV service on a digitalised pay-per-view (PPV) basis would generate about US$1 billion annually in 5 years for the single sport, Formula One motor racing. According to Carey (1996, p. 32), PPV is ‘‘certain to form the backbone of the broadcasters future plans.’’ 5.2. New technology Digital compression technology will dramatically increase the number of stations available compared to traditional analogue systems. Barnard (1996) predicts that sport will be used to sell digital television equipment, similar to the past where boxing was used to sell radio receivers and baseball to sell television sets in the US market. A likely significant effect of digital television is that it will result in greater demand for the major sports brands (such as the English FA Cup), while also possibly providing an opportunity for minority sports to gain more coverage. New advertising opportunities, new incentives for sponsors (and ambush marketers), the emergence of virtual advertising and the inflation of event rights can all be predicted. 5.3. Regulation Governments maintain an interest in sport and seek to frame regulation for a range of areas that impact upon the operations of the sports network. The right to provide an overall framework of regulation for broadcasting, to prohibit
There is an extensive literature, as indicated in the discussion to date, which shows that media and sponsors have, both separately and collectively, the potential to influence developments within the sports network. A number of specific drivers of change can be identified and are as follows. 5.1. New media Media owners, even in a public broadcasting context, have relied on sport for programming content and for
Fig. 1. Rising cost of TV rights to the English Premiership — (Source: compiled by the authors).
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the promotion and advertising of undesirable products (e.g. cigarettes), even constraining the free movement of professional players in certain instances, have all been asserted by various governments at various times. European governments show a particular interest in trying to ensure that certain high-status sports events that are perceived as being of particular cultural and social value remain accessible to the widest audience possible. This has the immediate effect of constraining the full exercise of the spending power of satellite TV.
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or subsamples. These pools were NGBs of sport, sponsors (of sport in Ireland), media (specifically broadcast media in the Irish market, including BBC, ITV and RTE). An additional subsample, termed ‘experts’ (who are not main actors and may be on the periphery of the sports network but who have an expert knowledge of the area), was added to provide further insight. These experts included sports consultants, government regulators and journalists. In total, 50 in-depth interviews were carried out. Across the four pools, actual interviews broke down as follows: 15 NGBs, 15 sponsors, 10 experts and 10 from the media.
5.4. Economic and social drivers A range of other factors impact upon media and sponsorship activity and on the network in general. These include levels of economic prosperity that can influence the ‘gate’ (receipts) at sports events, as well as consumer uptake of new technology and propensity to spend on PPV or to attend at events. It will impact on the level of corporate marketing expenditure and indirectly influence levels of available leisure time and the quality of facilities. In turn, the operation of all of these specific influences helps to advance the centrality of sport in society as does the general trend towards globalisation in culture and economy.
7. Research findings While the research addressed the five major themes listed above, the present article will focus mainly on the key findings regarding the balance of power issue. The format of the following discussion is: perceptions of change in the network and the perceived drivers of such change is examined first. Following on from this, relationships in the sports network are explored. This then leads on to an elucidation of the issue of power. Finally, the findings are used to suggest a means to model the sports network.
8. Drivers in the network-perceived changes 6. Research study A primary research study (Wolfe, 1998) was undertaken in order to examine the phenomenon of sport in a network context and the shifting balance of power within such networks. The main focus was on the balance of power. The actors identified as being of primary importance in exploring network theory in sport, as previously outlined, were the media owners, the sponsors and the NGBs of sport. An additional actor was added. This actor was derived from the category of ‘expert’ (journalists, consultants and government regulators). From these actors the data, empirically derived, allowed for an exploration of network theory in general, and the balance of power in networks in particular, in the working of sport in Ireland. The research study was multistaged. In the initial stage, exploratory research was carried out with key respondents within identifiable sectors in the sports network (i.e. drawn from sport, media and the corporate sponsorship sector in Ireland). As a result of information gleaned in this stage, discussion guides were constructed as research instruments to aid the gathering of data. A sorting technique developed five major themes: historical development, commercialisation in sport, media –sport – sponsor relationships, changing balance of power and future directions. These were employed to structure the interactions with the individual respondents. The second stage of the research involved the use of indepth interviewing with respondents drawn from four pools
In commenting on change in the network, a number of respondents perceived a change in emphasis over time in the varying importance accorded to different interest groups. For example, with regard to NGBs, a move was noted from the initial focus on spectator needs toward the needs of media and finally, and more recently, to the requirements of sponsors. The situation is one of constant flux with the direction of power/dominance subject to change as new technologies and other influences come to bear. Within the media context, a sharp differentiation has emerged between the needs of satellite and terrestrial channels. Respondents also perceive that the legislative framework is now emerging as more complex and more pervasive than heretofore, adding a further dimension to the demanding environment within which sport functions.
9. The spiral of success Respondents from all ‘pools’ broadly felt that the sources of revenue for NGBs are changing, as a result transactions with commercial actors are becoming more important and in some cases essential for competitive success. The most positive reading of this change would be a particular NGB describing their commercial relationship as a form of ‘partnership.’ This partnership is seen as encompassing four entities: the media, the event, the sponsor and the NGB/ association — all of which are deemed vital to the activity.
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Fig. 2. The cycle of success for NGBs.
Minority NGBs now recognise that access to media for their sport increases the popularity of their sport; it helps increase the participant and spectator base. This, in turn, has a knockon effect in terms of getting further broadcast media coverage and thus increased commercial revenue through sponsorship, as well as further growth in participant and spectator numbers. This can be illustrated in terms of a spiral as in Fig. 2.
10. Media revenue as a driver The ‘expert’ respondent group in particular recognised that in the future sport will certainly have to source more revenue from business. However, it will have to avoid becoming overdependent on the paymaster. The argument does stand, nevertheless (as the ‘media’ respondent sample stated), that if a media channel is prepared to buy the rights to an event for substantial fees, then it (as owner of these rights) must have some say, perhaps in terms of when and how the event is scheduled or how its presentation might be made more exciting. Demands in this area can even extend to structural alteration and changes of rule. An example of this is seen in the unfulfilled suggestions, from sponsors and advertisers prior to the World Cup in the US in 1994, that matches be broken into four quarters rather than two halves. This was designed to enhance opportunities for increased sponsor/advertiser exposure. NGBs, therefore, must discriminate between situations where media revenue inputs are helping to make the sport a success and situations where such inputs give rise to demands that may potentially compromise the integrity of the sport.
11. Satellite television as a driver Respondent groups diverged markedly in their opinions on this issue. Most ‘sponsors’ and terrestrial-television-
station respondents were in favour of legislation to prevent certain sporting events being sold to satellite broadcasters on an exclusive basis. These responses suggest that mutual interest may create new alliances amongst actors whose power may be threatened. NGBs with a particularly valuable property voice an opposing argument and regard this approach as discriminatory, recognising that prohibition will mean lower levels of potential income. The ‘expert’ group also felt that proposed regulation/legislation prohibiting exclusive satellite access was a restraint on trade. The dominant ‘expert’ view was that ‘Market forces should be allowed to prevail.’ Members of this group saw no reason why, for instance, BSkyB as a dominant European presence should not reap the benefits from a market that the satellite station was perceived to have helped create. Most respondents regarded the legality of framing regulation, protecting certain events, as questionable. A significant number of respondents across all groups felt that such proposals, in a European context, might be contrary to the Treaty of Rome. However, in all probability, such legislation will be implemented and individual governments across Europe will decide which events they want to ‘protect.’ Preventing NGBs from entering into an exclusive partnership with satellite channels may arguably be necessary in order to ensure that sport, as currently constituted, would remain widely accessible and that its ethos would not be damaged. As one NGB respondent stated ‘‘. . . there is an ethical and a social element . . . sport is for everyone and doesn’t really belong to the NGBs . . . they are only the custodians of it and they should not be allowed to sell the rights to satellite.’’ Legislation, of the sort proposed, may maintain the national interest in a sporting event by requiring that the event be accessible on a terrestrial basis (and therefore to as wide an audience as possible). This will protect access to long-standing emblematic events in popular culture.
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12. Relationships in the sports network All respondents agreed that the pace of change was accelerating and that it had a widening impact in the sports network. They further agreed that this was both driven by, and in turn drove, change in individual relationships in the network. For instance, NGBs have had to change their approach by adopting a greater level of professionalism in order to mirror the increasing investment that sponsors are required to make. This adaptation relates not only to their behaviour in the initial negotiation of rights, but also in their willingness to be a partner in leveraging the sponsorship. The relationship between NGB and sponsor has assumed centrality, and many NGBs seek to develop long-term relationships with sponsors. This of course is made easier for the NGB if it has an existing relationship with a media channel. In fact, the anticipation of such professional behaviour and performance on the part of a NGB has in itself become an important corporate criterion for choosing a particular sport as a sponsorship vehicle. Respondents broadly agree that exchange relationships between actors in the sports network are now more professionally conceived and managed than in the past. Consultants have emerged as key links in the chain, with their role defined as that of supporting other actors in the network. This professionalism changes the texture of relationships in the network, where a reciprocal expectation now exists that actors will behave in a professional and commercially focused manner.
13. Power in the network All respondents now more overtly acknowledge power as an issue, and actors are prepared to acknowledge their willingness to use the available power to improve their individual positions. As one ‘expert’ respondent commented ‘‘. . . if you have a good product, you should be able to negotiate. . .you should be able to manipulate the power you hold over others.’’ The influence of enhanced power, arising from satellite-driven price inflation, can clearly be seen in the changes in the network. Further commercialisation is stimulated by the very presence of the volume of money in the network. It may be inevitable in this situation that NGBs will have to cede some control to commercial interests in order to fund development of their sports. To view this phenomenon positively, they will have to look on it as a partnership of mutuality and anticipate that there will be win –win outcomes to the relationship. Respondents were asked to comment on the issue of the direction of power in the sports network. Having analysed the large range of directions indicated in the responses, it was concluded that a significant degree of continuous reconfiguration in the network could be observed as an ongoing feature. Analysis of these data provides a visual mapping of the distribution and direction of power gradients in the network. This is illustrated diagrammatically in Fig. 3.
Fig. 3. Influence of power gradients.
The overall consensus depicted by respondents in Fig. 3 does not favour the long-term interests of the NGB, especially that of the smaller NGBs. This is all the more so as the trend toward greater media influence is likely to increase due to technological change. However, it must be remembered that ultimately (as several NGB respondents pointed out) it is the NGBs who own the rights to the sport. This gives them the ultimate power and, perhaps, the ultimate right to control their sports destiny or at least to determine the shape of crucial alliances. The increasing influence of commercial interests (i.e. the media and sponsor) cannot be ignored because they have the capacity to alter power gradients that in turn alter the influence each actor has in the sports network. Realistically, it must be conceded that the ultimate power of the NGB is increasingly constrained by the growing influence of commercial interests. A number of interesting points emerged. All four sets of respondents felt that the small NGB was losing power. The ‘sponsor’ respondent group and the ‘expert’ respondent group both perceived that commercial interests were beginning to exercise a level of control over all NGBs. The ‘media’ respondent group recognised the importance of the growth of satellite TV and the threat that this might hold, but saw large NGBs maintaining their current position, given their inherent power reservoir. This change is clearly evident in the accompanying quotation: The governing bodies of sport have been left behind — not the big wigs of the Olympics or world athletics, for they attracted pacesetters in the snout-in-trough race a long time ago. But the national organisations, run with the blazered naivete´ of Old England, are being crushed. (Butler, 1996, p. 26)
14. Awareness, denial and strategic response A consistent pattern emerged in the responses of the ‘NGB’ respondent group when asked to comment specifically on the balance of power issue. A single dominant theme became evident across the responses. Respondents stated that they went to ‘every effort to accommodate the media’ and make changes for them. Yet, at the same time,
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Fig. 4. The sports network — presatellite television entry.
these respondents disagreed with the proposition that ‘‘the media are taking control’’ or had a greater power hold on them. Upon further probing, it emerged that certain NGBs, especially minority NGBs, were unwilling to admit that they might be potential losers in the power relationships in the network. It is evident that media are assuming pole position in the marketing of sport, and small organisations will literally ‘‘bend backwards,’’ as one respondent stated, in order to build a partnership with the media. This may have longer-term consequences.
15. Modelling the sports network — transactions The network might be viewed as a set of interactions that focus on exchange between the actors. Fig. 4 attempts to illustrate the network prior to the development and influence of satellite television. It articulates a very simple set of relationships where the actions of all of the actors revolve
around two available and central values, i.e. those of audience and money, with the intermediary or professional agent just beginning to have a role in shaping relationships. Fig. 4 represents a network characterised by the pursuit of largely mutual rather than purely sectional interests. On the other hand, the set of transactions taking place in the network of sport subsequent to the arrival of satellite television is mapped in Fig. 5. By way of explanation, it is important to remember that terrestrial television stations clearly differ from satellite in terms of their current greater level of penetration and their consequent ability to reach larger audiences. From the perspective of the minority NGB, the available transaction with terrestrial television is fairly straightforward. The NGB is given near blanket coverage from a terrestrial station, coverage that is limited in extent only by the capacity of the sport itself to appeal to an audience. This coverage is delivered in return for rights to show an event for free without a fee being demanded from the broadcaster. In certain cases, the NGB will actually assist the broadcaster with the coverage by providing either physical resources or even financial assistance. In contrast, the revenues offered by satellite stations for the purpose of building their own audience franchise may be regarded as quite exceptional. The advent of satellite actors has brought major changes to the original, relatively simple, set of relationships. For instance, for the sponsor, reduced exposure may be the outcome when the sponsored event becomes exclusive to satellite. To be successful in the network actors need to be flexible and adaptable in the face of these changes. Ultimately, their options still revolve, to a large extent, around the disposition of the audience. It might well be argued that the whole network is audience-driven, and this finds ultimate expression through the issue of money. On the one hand, the flows of money available determine the choices between terrestrial
Fig. 5. Transactions in the sports network — post satellite.
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and satellite television carriers. On the other hand, money flowing back to the sport may be regarded as the key outcome of accessing an audience or conducting a transaction with either a sponsor or a media owner in relation to that audience.
16. Choice and challenge The sports network is essentially dynamic in character. Further new relationships are emerging, and there is clear evidence of an increase in the importance of the pursuit of mutual goals in a context of trust between the actors. This is a feature of the responses in the study presented, as well as being a prominent issue in the current literature. There is substantial evidence in the literature that the maintenance of trust may influence the pattern of relationships, given the increase in importance ascribed to trust by various actors. Morgan and Hunt’s (1994) commitment – trust theory provides valuable perspective on these developments. Actors can be seen to concentrate on preserving relationship investments by cooperating with exchange partners. Some can be seen to be actively resisting apparently attractive short-term options in favour of the expected long-term benefits of staying with existing partners. This may provide at least a partial explanation for the behaviour of several large NGBs that would seem to have decided to
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continue a partnership with terrestrial stations despite lucrative monetary offers by satellite rivals. Other perspectives in the current literature can also help to illuminate the nature of change and to highlight characteristics that make for successful behaviour. Piercy and Cravens (1985) argue that a key characteristic of successful network participation is flexibility and adaptability to change. It may be important for individual actors to acknowledge the importance of these traits in achieving successful behaviours as network members and to take these principles on board, in the light of accelerating technological change. Furthermore, there is evidence that successful networks are indeed customer-driven, and sports bodies must prove sufficiently adaptable to continue providing satisfaction for their various audiences.
17. Modelling the sports network — power relationships The findings of the study provide the basis for an overall model of power relationships in the sports network. Fig. 6 models the actual network of power relationships in a sports context. In this figure, it can be seen that there are a number of primary actors, namely the terrestrial and satellite media, the sponsor and the NGBs (large and small) of sport. Each of the actors within the network holds different levels of power and will adopt divergent strategies influenced by the
Fig. 6. The sports network — beyond the triadic level — the direction of power.
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dominance/dependency gradient. They may also be able to influence the positions available to the other actors. Arrows represent the relationships of power and dependency; these seek to indicate the dominant direction and weight of power potentially available. The environment of the network offers a range of influences — technological, political, economic and social — as previously indicated impact on the network in different ways. A notable feature of the responses was that the position of minority NGBs is significantly different to that of large NGBs; the difference lying principally in the fact that the media actively courts large NGBs. These NGBs, for their part, can approach a sponsor either directly or through an agent whose participation may be valuable in making detailed arrangements with the media owner. In the case of the minority sport NGB, however, the likelihood is that they will continue to carry the responsibility for attracting the interest of, and making commercial contact with the media. In those cases where the NGB has an existing sponsor relationship, the two actors, namely, the minority NGB and the sponsor, may jointly approach and negotiate with the media owner. The model identifies satellite television as having a central position, with the potential to dictate to other actors because of its key role as a distribution source for revenues throughout the network. This highly significant positioning arises from the overall evaluation of the views of all respondent groups as to where the balance of power currently lies in the various relationships. A sample of the respondents’ views, grouped by respondent category, is reproduced, by way of quotation, in Table 2. Given the centrality that they are perceived to have achieved in the area of power relationships, it might be concluded that satellite television companies are pursuing organisational objectives with great effectiveness through their network relationships. The larger question remains as to whether satellite television will have the capacity or the regulatory freedom to apply coercive power against the large NGBs by introducing an element of fear into the exchange through the threat of reducing or withdrawing monies.
Other interesting issues are highlighted through viewing the relationships in an overall network context. Terrestrial television, at this point in time, can still offer fuller market penetration to the NGBs relevant to this study. This mutuality is illustrated by the direction and weight of the potential power flows. While terrestrial television tends to have a relationship of interdependence with the larger NGBs, it is frequently able to dictate to the smaller NGBs if and when it consents to broadcast their events at all (see Fig. 6). It could be argued that terrestrial television stations operate on a system of referent power, as they have a notional 100% market penetration, which is desired by NGBs and which, in turn, can be used by the NGBs to bring in lucrative sponsorship. In the case of print media, the larger NGB tends to hold the balance of power in the relationship as it does in its relationship with most corporate sponsors. Overall, the mutuality of interest between print media and sporting bodies is evident, one requiring a stream of content that constitutes a high proportion of the newspaper offering, the other achieving welcome anticipation of events and posthoc commentary that maintains the profile of the event. NGBs, of all sizes, seem to maintain a more balanced relationship with radio as a medium, perhaps because of the smaller stakes and the less acute issues involved. The radio rights issue has traditionally not created conflict with print and terrestrial TV media. There is evidence that satellite broadcasters regard print and radio as potentially valuable complementary generators of exposure rather than as a competitive threat to exclusive rights. Sponsors, on the one hand, tend to have the potential to control relationships with small NGBs, while on the other hand tending to work on a basis of greater mutuality with the larger NGBs, particularly in the vital business of cooperating to leverage the sponsorship. Agents work in a wholly interdependent way, though it could be argued that they too are ultimately dictated to by the contingencies of achieving media interest. Their position in the network is secured through the power, based on expertise, that they hold. It is clear that this expertise in the market is being called on increasingly to create and maintain an appro-
Table 2 Views on power from the sample NGBs
Media
‘‘There is ample evidence of sports that have lost control . . . schedules when games are being played are being changed every day by the media.’’ ‘‘I see NGBs losing control as money is now the dictator.’’ ‘‘Satellite has come in and dominated things already.’’
‘‘Sky could blast us out of the water tomorrow.’’ ‘‘NGBs have started to lose control already.’’ ‘‘The media are moving in to control sport.’’
Sponsors
Experts
‘‘It is going to be very difficult to stop Rupert Murdoch.’’ ‘‘If Sky said we want you to change season, take a winter break and start the season earlier, (the NGBs) would do it if the alternative was no money.’’
‘‘The truth in this is sport is losing control to the media.’’ ‘‘NGBs are taking the money now, and when Rupert has them all tied in and starts cutting the money, what do they do then?’’
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priate and workable balance in the relationships between major actors. In summary, the transaction sports network (Fig. 5) clearly illustrates the impact that the arrival of satellite television has had on previously established and relatively straightforward patterns of transaction. The sports network, modelled as a complex set of power relations, as opposed to a simple set (Fig. 6), testifies to the success of satellite television in achieving a central position of power within the network. This is seen through the volume of revenues it is responsible for distributing throughout the network and which it directs in particular to the large NGBs, despite the limited market penetration it can offer compared to the terrestrial broadcaster. This in turn offers a competitive advantage and a strategic option to the terrestrials that might be better exploited, so that they can at least attempt to maintain their current strength.
18. Recommendations In terms of overall strategy for the successful operation of the network, managers should consider the probability that network relationships will have to move from a transaction base to a partnership base. In the specific case of sport, there is a need for actors to move to a network perspective rather than a view of the network as a mere aggregation of relationships. Otherwise, all three actors end up in an exhausted stalemate, with sponsors paying too much, the media giving too much and the NGBs losing too much. This point has been made elsewhere ‘‘Creative network visions could open up the perceived environment, facilitate change processes and allow the company to benefit from these processes by realising which actors might be mobilised, for what, and when’’ (Johanson and Mattsson, 1992). In particular, the partnership network perspective offers a way for actors to move forward. To bring about this partnership mode in the network, the actors must be prepared to embrace and develop commitment – trust relationships. These have to be implemented by the actors to engender cooperation and reduce levels of conflict. As the volumes of money in the network grow, the potential for conflict will increase. To manage this, commitment and trust are the necessary processes that must be adopted in order to take the network and its actors forward in a positive and mutually productive way.
19. Future research Further areas for research are suggested by this study, which has established the value of the network perspective as a theoretical framework for examining relationships of the kind exhibited in sport. The study presented has articulated many of these issues from a qualitative point of
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view. Through the use of a mix of quantitative and qualitative methodologies, a larger sample of respondents could be studied and a quantitative empirical basis could be established for refining and adapting some of the key constructs in network theory. Further areas of research might focus on undertaking a gap analysis relative to the three main actors: the media, the sponsor and the NGB. This could establish what the key actors demand from each other now and in the future. By continuing to apply network theory beyond the traditional domain of industrial marketing, perspectives might be achieved that enhance original theoretical principles and in turn provide further new applications and insights.
References Agostini M. Media monsters on the prowl for Olympic flesh. The Sydney Morning Herald. 1995;70 (20th May). Aldrich HE. Organisations and environments. Englewood Cliffs, NJ: Prentice-Hall, 1979. Axelsson B. Corporate strategy models and networks: divergent perspectives. In: Axelsson B, Easton G, editors. Industrial networks: a new view of reality. London: Routledge, 1992. pp. 3 – 37. Barnard P. Danger of a shotgun marriage. The Times, 1996. p. 34 (12th June). Blackshaw IS, Hogg G. Sports marketing Europe Boston: Kluwer Law, 1993. Boon G, Philips A, Hann M. 20 richest clubs in the world. Manchester: Deloitte and Touche Consulting, 1999. British Sports Council. British Sports Council Report. London: Independent Television News (ITN), 1995 (19/5/96). Buckley D. Who pays the piper? Pract Rev. 1980;10 – 4 (Spring). Butler D. Sky’s limit. Accountancy — Int Ed 1996;12:26 – 9 (April). Carey B. Why they’re boxing clever at Sky TV. Sunday Bus Post 1996; 9(8):32 (24th March). Comstock G. Television in America. 2nd ed. Sage Commtext Series, vol. 1. London: Sage Publications, 1991. Crimmins J, Horn M. Sponsorship: from management ego trip to marketing success. J Advertising Res 1996;36(4):11 – 21 (July/August). Easton S, Mackie P. When football came home: a case history of the sponsorship activity at Euro’96. Int J Advertising 1998;17(1):99 – 114. Ferrand A, Pages M. Image management in sport organisations: the creation of value. Eur J Mark 1999;33(3/4):387 – 401. Griffiths J. Formula one on track for flotation. Financ Times 1997;33 (249):27 (10th March). Grimes E, Meenaghan T. Focusing corporate sponsorship on the internal corporate audience. Int J Advertising 1998;17(1):51 – 74. Hansen F, Scotwin L. An experimental enquiry into sponsoring: what effects can be measured? Mark Res Today 1995;23(3):173 – 81. Harverson P. The business of sport. Financ Times 1997;33(253):14 (14th March). Hitchen A. International sponsorship — sponsorship gold at ’92 Olympics. In: Meenaghan T, editor. Researching commercial sponsorship ESOMAR. Amsterdam: ESOMAR, 1995. pp. 119 – 38. International Event Group (IEG). Annual estimates of sponsorship expenditure. Chicago: IEG Sponsorship Report, 2000. Johanson J, Mattsson LG. Network positions and strategic action — an analytical framework. In: Axelsson B, Easton G, editors. Industrial networks — a new reality. Routledge, 1992. pp. 205 – 17. McRae H. What really turns men on? The Independent, 1996 (Feb. 8). Meenaghan T. Ambush marketing — a threat to corporate sponsorship. Sloan Manage Rev 1996;38(1):102 – 13 (Fall). Meenaghan T, O’Sullivan P. Playpower — sports meets marketing. Eur J Mark 1999;33(3/4):241 – 9.
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The sports network: insights into the shifting balance of power Rosita Wolfea, Tony Meenaghanb,*, Paul O’Sullivanc a
b
Eircom International, Dublin, Ireland Department of Marketing, Graduate School of Business, University College Dublin, Backrock, Dublin, Ireland c Dublin Institute of Technology, Dublin, Ireland
Abstract This study applies network theory for the first time to the economically and socially important area of sport and examines relationships between National Governing Bodies (NGBs), media and corporate sponsors. Issues of power, dependency and relationship are examined in an empirical, qualitative, two-stage study of 51 respondents. These respondents range from the key actor groups to an ‘expert’ group, all examined within an Irish context. The impact of change drivers and the nature of relationships over time are assessed; transactions are mapped, and a model is proposed that seeks to articulate the power relationships in this network. The results indicate the applicability and potential of network theory in an area removed from the traditional industrial market setting of previous network-based studies. D 2002 Elsevier Science Inc. All rights reserved. Keywords: Network theory; Relationships; Sports; Media; Sponsors; Power; Transactions; Dependency
1. Introduction Network theory has developed a framework of ideas that represents one of the major advances in the understanding of marketplace phenomena. This development initially took place in Northern Europe and, more recently, has informed the work of theoreticians and practitioners on both sides of the Atlantic. Its initial application brought a new understanding of the nature, evolution and management challenges involved in relationships in an industrial marketing context. In more recent years, the application of network theory has been extended with considerable success to new domains beyond the original focus of businessto-business relationships. Sport as a global phenomenon and as a focus of major commercial potential has generated considerable interest from both the media and corporate sectors. This article offers an application of network theory to the high-profile area of sports, sponsor and media relationships. Developments in both sports and media, together with the spectacular growth of sponsorship as a key influence on the work of both, collectively impact on relationships and the balance of * Corresponding author. Tel.: +353-1-706-8958; fax: +353-1-7068019. E-mail address: [email protected] (T. Meenaghan).
power between these actors in the sports network. These developments have implications not only for the ‘owners’ of sport events and for the National Governing Bodies (NGBs) of individual sports; they also impact upon corporate sponsors employing sport as a marketing tool and on media owners who use sport as a crucial path to building and maintaining audience and market share. No research study, to date, has sought to examine the evolving relationship patterns in the sports network or the phenomenon of power in the relationships between the actors. The research study outlined in this article adopts qualitative research techniques to examine the shifting balance of power in the sports network through accessing the views of key informants in the field. Network theory provides both the theoretical framework and methodological approaches that help to articulate the nature of these relationships. This article argues that the network approach can provide insight for scholars, as well as a strategic map, which is of pragmatic value to managers grappling with the problems of the dynamic sports environment. Similarly, the application of network theory in the sports domain may provide worthwhile insights into how such theory can contribute to the understanding of exchange-based phenomena in situations far different from the classic business-to-business relationships, which were originally the focus of early network scholars.
0148-2963/02/$ – see front matter D 2002 Elsevier Science Inc. All rights reserved. PII: S 0 1 4 8 - 2 9 6 3 ( 0 0 ) 0 0 1 9 1 - 0
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2. Network theory and its application to sport Sport as an organised and codified activity is a late nineteenth and twentieth century phenomenon. Its current significance emerges from a complex interplay of social, economic, technological and cultural factors in industrial and postindustrial society. It has a pervasive presence in contemporary social reality in both the developing and developed worlds; it is the basis of an industry of truly global reach and importance. The scale of the sports industry is exemplified by reference to the US market. Some commentators have proposed that the US sports industry was worth US$93.8 billion in 1995, making it the 11th largest industry in the US (Harverson, 1997). On a worldwide basis, the sports industry has been calculated to account for 2.5% of world trade (British Sports Council, 1995). The empirical study reported in this article was undertaken in the Irish market, which displays broadly similar influences and characteristics to those evident in the sports industry worldwide, though the absolute scale of sports activity is obviously considerably less than in major sports markets such as the USA. With regard to the Irish situation, a recent report, Sports Strategy (1997) estimated that the aggregate expenditure on sport in the Republic of Ireland was £752.21 million. These statistics represent the activities of a broad set of actors in the sports network. While diverse drivers of sports as an industry can be identified, the emergence of the major commercial potential of sport has been, in many respects, a function of the parallel symbiotic relationships of sport and sponsorship, and sport and the media. As has been noted elsewhere: ‘‘. . . the full commercialisation of sport as a business is no older than the age of television’’ (Meenaghan and O’Sullivan, 1999, p. 242). This article is grounded in the belief that the network perspective can bring significant insights to the management of sport today. Proponents of network theory argue that ‘‘. . . a unique network can be identified for every specific problem or issue. In other words there are as many networks as there are situations’’ (Axelsson, 1992, p. 195) and thus, it is valid to propose applying network theory to the sports context. Aldrich (1979) cites a number of examples of contexts permitting meaningful network analysis, including the example of the relationships between sports associations, unions, television and radio broadcasting networks and sports institutions. Recent developments in the world of sports management clearly illustrate the applicability of the concepts of power, dependency and relationship outlined earlier. The relevance of power as a concept in the application of network theory to the relationships of sport, media and corporate sponsors is clearly illustrated through a recent instance. In 1997, the Five Nations Rugby Championships — involving a ‘round robin’ series of games — faced an uncertain future. The English Rugby Union, an individual actor in the network of rugby associations, attempted to unilaterally sell ‘its’ tele-
vision rights to BSkyB (a British and European satellite channel). The network phenomenon in this instance can be observed at two levels: a micro-level interaction amongst the five rugby unions making up the Five Nations Championship, and at a more macro level involving interactions with bodies external to the game such as corporate sponsors and media owners. The remaining ‘actors’ in the micro network, Ireland, France, Scotland and Wales, responded to the English initiative. They created an alliance to act in concert and used their power to suggest that they would force England (the most dominant actor) out of the competition if that country pursued its suggested strategy. The result of this consolidation and use of power was that the English Rugby Union had to cede some ground to the other ‘home’ nations on the issue of TV rights. However, when this obstacle was overcome, England managed to take a significant percentage of the revenues because of the power that it held in this network. Agostini (1995, p. 60) stated, with regards to relationships, that ‘‘sport is a social institution in which a number of actors and groups interact in its shifting daily constitution.’’ The development of relationships instils commitment to a network, and this should ensure that sports bodies, sponsors and media are better positioned for strategic development. A number of commercial interests have successfully developed long-term relationships with particular sports, for example, Benson and Hedges and snooker in the UK market, or Coca Cola and the Olympic Games on the international stage.
3. Relationships in the sports network The nature of network relationships in a sports context will, by definition, be different to the relationships encountered in traditional industrial-marketing settings. In the latter case, the actors broadly represent a model of business with common organisational and commercial objectives. These objectives may be susceptible to alignment even if there were differences in scale, position and power. The organisational models represented by the actors in the sports network — sports NGBs, media owners and corporate sponsors — are significantly different entities whose very provenance, mission, structure and outputs traditionally differ fundamentally from one another. Recently, a common ground has arisen, fuelled by common drivers, where success and growth of each is dependent on the relationships between these actors. Each of these major relationships shall now be examined in turn. 3.1. The sport –media nexus Sport has a proven and demonstrable capacity to build a media audience. Conversely, mass media have the capacity to confer status and build an audience for a sport or an individual event. From the beginning of the mass-media
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age, as more people have come to consume sport indirectly via media, a symbiotic relationship between sport and media has developed, which has become more accentuated with the emergence of electronic mass media. Sport has benefited from media attention (Blackshaw and Hogg, 1993; Williams, 1990) and in some instances such as that of professional boxing (print media and radio) or professional snooker (television), the acceptance of the legitimacy of the sport and the basis of its popularity has arisen almost exclusively from media attention. Print and radio have had a very important part in developing this relationship, particularly at a time when the rules for sport were being codified and the overall regulation and organisation of individual sports was being put in place. At present, the dominant medium is undoubtedly television and, more than any other single medium, it has played the key role in globalising sport. While media may be important to sport, the inverse relationship, i.e. that of sport to media, is equally important. Sport has been used very successfully as the key strategy for building the audience position of individual media operators. Comstock (1991, p. 64) encapsulates the two-way flow of benefit in a US context: ‘‘. . . television and professional football would form a symbiotic relationship beginning in the late 1950s that would make it the nation’s premier sporting pre-occupation. Sports would become one of the principal means by which the third place network, ABC, rose to first.’’ In a European context, a similar naturally advantageous alignment of sport and media can be observed. On the one hand, the broadcaster BSkyB, through its focus on English soccer, raised the profile and image of the Premiership brand. On the other hand, BSkyB used Premiership soccer at a crucial stage in its own commercial development to penetrate markets, build audiences and promote the sale of satellite dishes. There are many other instances of this reciprocation in the media/sports nexus given that sport represents a proven audience generator for all media today. The combination of popularity and immediacy continues to provide the synergistic potential between sport and media in which each contributes to a fruitful and dynamic interaction with the other (McRae, 1996). The relationship between media and sports may not always be mutually beneficial. Simpson (1996, p. 33) has suggested, ‘‘sport has been the making of BSkyB but some fear that conversely BSkyB could be the undoing of sport.’’ 3.2. The sport –sponsor nexus With phenomenal media interest in sport, particularly in the television scheduling of sports material, which consistently garners large audiences, marketers have naturally been attracted to sports. The marketer, wishing to address these audiences, has become a significant actor in the commercialisation of sport through advertising support and sponsorship. Current trends in marketing communica-
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tions have ensured the development of a parallel symbiotic relationship, that of the sports organisation and corporate sponsor, with the latter now also a major source of influence on the balance of power in the network. This relationship enables the sports organisation to generate revenue as well as to increase exposure for the sport itself. The sponsorship option is of particular importance to corporations in an age of global marketing. Indeed, it might be argued that the emergence of sport as a global commercial activity parallels ‘‘the rise of mass media and indeed, more latterly, the emergence of marketing as a global business phenomenon’’ because of ‘‘the potential of sport to speak a universal language and capture the interest of people across all political and cultural boundaries’’ (Meenaghan and O’Sullivan, 1999, p. 242). The capacity of sport to deliver access to large audiences for corporate sponsors is exemplified by the size and diversity of the audience reached by major events. For example, the World Cup 1994 had a cumulative audience of 32 billion viewers (52 games), while the 1996 Super Bowl reached an audience of 134 million viewers (Sponsorship Research International [SRI], 1997). The scale and recentness of this growth in commercial sponsorship are shown by the fact that sponsorship expenditure in the UK increased from £4 million in 1970 (Buckley, 1980) to £831 million in 1999 (Mintel, 2000). In the US market, corporate investment in sponsorship has grown from US$850 million in 1985 to an estimated 1999 expenditure of US$8.7 billion (International Event Group [IEG], 2000). Sponsorship expenditure worldwide has increased from US$2 billion in 1984 to US$23.16 billion in 1999 (SRI, 2000). On a worldwide basis, sponsorship as a percentage of advertising expenditure has increased from 2.5% to 3% in 1987 (Otker and Hayes, 1987), to 7.0% in 1999 (SRI, 2000). The growth dynamic of sponsorship is further indicated by the fact that it has exceeded both media advertising and promotion in terms of year-on-year growth in expenditure over the last decade (IEG, 2000). The continuing importance of sport for sponsor access to audiences is indicated by the fact that sports sponsorship accounts for 62%, 54%, 80%, 65% and 61% of all sponsorship activity in Germany, Netherlands, South Africa, Sweden and the UK, respectively (SRI, 1997). Corporate sponsors seek more than mere exposure and frequently seek to pursue sophisticated brand-related objectives through their association with sporting events. It has been argued that sport provides a rich repository of meaning and that marketers seek association with the values available in the world of sport to drive brand-image development for diverse and often unrelated products and services (Meenaghan and O’Sullivan, 1999). Empirical research demonstrates that a company’s sports sponsorship has a substantial effect on the company’s image, and the sponsorship literature is replete with case examples of successful brand-development strategies based on an association with sports through sponsorship (Crimmins and Horn, 1996; Easton and Mackie, 1998; Ferrand and Pages, 1999; Grimes
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Table 1 Revenue streams — Manchester United Revenue streams
£ millions
Gate receipts/programme sales Merchandising Television Sponsorship, royalties and advertising Conference and catering Total
36.6 23.6 30.5 18.5 6.7 116
(Source: Manchester United plc. Annual Report 2000).
and Meenaghan, 1998; Hansen and Scotwin, 1995; Hitchen, 1995; Meenaghan, 1996; Meenaghan and Shipley, 1999; Quester, 1997; Rajaretnam, 1994; Rajshekhar et al., 1994).
4. Implications of commercialisation If sports bodies are to achieve and maintain long-term success in terms of their central mission, then they need to create a balance between the demands of their various constituencies. The diversity of income sources in the revenue streams to Manchester United, the World’s richest soccer club, based on 1997/1998 financial accounts (Boon et al., 1999), indicates the commercial possibilities, as well as the implicit potential for conflict (Table 1). The sports body, team, or event must try to meet and balance the respective needs of sponsors and media while at the same time attracting spectators, in order to draw in the substantial revenue now needed to finance a sport. The trade-offs involved may result in conflict between the interests of various parties. For instance, United Distillers is understood to have terminated its sponsorship of the Scottish Open Golf Tournament because of the acquisition of television rights by BSkyB from the BBC. The successful higher bid of the satellite channel ironically resulted in lower levels of TV audience for the sport as compared to those delivered by the previous media partner (BBC), but met the market penetration and audience-building objectives of BSkyB.
5. The drivers of change in the sports network
market penetration. Changes in technology and regulation have led to a proliferation of media provision, in particular with the diffusion of cable and satellite systems and the advent of digital compression technologies, with consequent increased demand by media owners for access to sports events on an exclusive basis. Over the past 30 years this has caused accelerating inflation in the market for the sports property rights. Sport has proved particularly useful in building pay-TV subscriptions of all sorts, even more so than film. In turn, the spread of pay-television has led to hyperinflation in the sports-rights business, in both domestic as well as international contexts. This can be seen by the inflation in the price of TV rights to Premiership soccer in England as indicated in Fig. 1. Griffiths (1997) estimates that a global TV service on a digitalised pay-per-view (PPV) basis would generate about US$1 billion annually in 5 years for the single sport, Formula One motor racing. According to Carey (1996, p. 32), PPV is ‘‘certain to form the backbone of the broadcasters future plans.’’ 5.2. New technology Digital compression technology will dramatically increase the number of stations available compared to traditional analogue systems. Barnard (1996) predicts that sport will be used to sell digital television equipment, similar to the past where boxing was used to sell radio receivers and baseball to sell television sets in the US market. A likely significant effect of digital television is that it will result in greater demand for the major sports brands (such as the English FA Cup), while also possibly providing an opportunity for minority sports to gain more coverage. New advertising opportunities, new incentives for sponsors (and ambush marketers), the emergence of virtual advertising and the inflation of event rights can all be predicted. 5.3. Regulation Governments maintain an interest in sport and seek to frame regulation for a range of areas that impact upon the operations of the sports network. The right to provide an overall framework of regulation for broadcasting, to prohibit
There is an extensive literature, as indicated in the discussion to date, which shows that media and sponsors have, both separately and collectively, the potential to influence developments within the sports network. A number of specific drivers of change can be identified and are as follows. 5.1. New media Media owners, even in a public broadcasting context, have relied on sport for programming content and for
Fig. 1. Rising cost of TV rights to the English Premiership — (Source: compiled by the authors).
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the promotion and advertising of undesirable products (e.g. cigarettes), even constraining the free movement of professional players in certain instances, have all been asserted by various governments at various times. European governments show a particular interest in trying to ensure that certain high-status sports events that are perceived as being of particular cultural and social value remain accessible to the widest audience possible. This has the immediate effect of constraining the full exercise of the spending power of satellite TV.
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or subsamples. These pools were NGBs of sport, sponsors (of sport in Ireland), media (specifically broadcast media in the Irish market, including BBC, ITV and RTE). An additional subsample, termed ‘experts’ (who are not main actors and may be on the periphery of the sports network but who have an expert knowledge of the area), was added to provide further insight. These experts included sports consultants, government regulators and journalists. In total, 50 in-depth interviews were carried out. Across the four pools, actual interviews broke down as follows: 15 NGBs, 15 sponsors, 10 experts and 10 from the media.
5.4. Economic and social drivers A range of other factors impact upon media and sponsorship activity and on the network in general. These include levels of economic prosperity that can influence the ‘gate’ (receipts) at sports events, as well as consumer uptake of new technology and propensity to spend on PPV or to attend at events. It will impact on the level of corporate marketing expenditure and indirectly influence levels of available leisure time and the quality of facilities. In turn, the operation of all of these specific influences helps to advance the centrality of sport in society as does the general trend towards globalisation in culture and economy.
7. Research findings While the research addressed the five major themes listed above, the present article will focus mainly on the key findings regarding the balance of power issue. The format of the following discussion is: perceptions of change in the network and the perceived drivers of such change is examined first. Following on from this, relationships in the sports network are explored. This then leads on to an elucidation of the issue of power. Finally, the findings are used to suggest a means to model the sports network.
8. Drivers in the network-perceived changes 6. Research study A primary research study (Wolfe, 1998) was undertaken in order to examine the phenomenon of sport in a network context and the shifting balance of power within such networks. The main focus was on the balance of power. The actors identified as being of primary importance in exploring network theory in sport, as previously outlined, were the media owners, the sponsors and the NGBs of sport. An additional actor was added. This actor was derived from the category of ‘expert’ (journalists, consultants and government regulators). From these actors the data, empirically derived, allowed for an exploration of network theory in general, and the balance of power in networks in particular, in the working of sport in Ireland. The research study was multistaged. In the initial stage, exploratory research was carried out with key respondents within identifiable sectors in the sports network (i.e. drawn from sport, media and the corporate sponsorship sector in Ireland). As a result of information gleaned in this stage, discussion guides were constructed as research instruments to aid the gathering of data. A sorting technique developed five major themes: historical development, commercialisation in sport, media –sport – sponsor relationships, changing balance of power and future directions. These were employed to structure the interactions with the individual respondents. The second stage of the research involved the use of indepth interviewing with respondents drawn from four pools
In commenting on change in the network, a number of respondents perceived a change in emphasis over time in the varying importance accorded to different interest groups. For example, with regard to NGBs, a move was noted from the initial focus on spectator needs toward the needs of media and finally, and more recently, to the requirements of sponsors. The situation is one of constant flux with the direction of power/dominance subject to change as new technologies and other influences come to bear. Within the media context, a sharp differentiation has emerged between the needs of satellite and terrestrial channels. Respondents also perceive that the legislative framework is now emerging as more complex and more pervasive than heretofore, adding a further dimension to the demanding environment within which sport functions.
9. The spiral of success Respondents from all ‘pools’ broadly felt that the sources of revenue for NGBs are changing, as a result transactions with commercial actors are becoming more important and in some cases essential for competitive success. The most positive reading of this change would be a particular NGB describing their commercial relationship as a form of ‘partnership.’ This partnership is seen as encompassing four entities: the media, the event, the sponsor and the NGB/ association — all of which are deemed vital to the activity.
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Fig. 2. The cycle of success for NGBs.
Minority NGBs now recognise that access to media for their sport increases the popularity of their sport; it helps increase the participant and spectator base. This, in turn, has a knockon effect in terms of getting further broadcast media coverage and thus increased commercial revenue through sponsorship, as well as further growth in participant and spectator numbers. This can be illustrated in terms of a spiral as in Fig. 2.
10. Media revenue as a driver The ‘expert’ respondent group in particular recognised that in the future sport will certainly have to source more revenue from business. However, it will have to avoid becoming overdependent on the paymaster. The argument does stand, nevertheless (as the ‘media’ respondent sample stated), that if a media channel is prepared to buy the rights to an event for substantial fees, then it (as owner of these rights) must have some say, perhaps in terms of when and how the event is scheduled or how its presentation might be made more exciting. Demands in this area can even extend to structural alteration and changes of rule. An example of this is seen in the unfulfilled suggestions, from sponsors and advertisers prior to the World Cup in the US in 1994, that matches be broken into four quarters rather than two halves. This was designed to enhance opportunities for increased sponsor/advertiser exposure. NGBs, therefore, must discriminate between situations where media revenue inputs are helping to make the sport a success and situations where such inputs give rise to demands that may potentially compromise the integrity of the sport.
11. Satellite television as a driver Respondent groups diverged markedly in their opinions on this issue. Most ‘sponsors’ and terrestrial-television-
station respondents were in favour of legislation to prevent certain sporting events being sold to satellite broadcasters on an exclusive basis. These responses suggest that mutual interest may create new alliances amongst actors whose power may be threatened. NGBs with a particularly valuable property voice an opposing argument and regard this approach as discriminatory, recognising that prohibition will mean lower levels of potential income. The ‘expert’ group also felt that proposed regulation/legislation prohibiting exclusive satellite access was a restraint on trade. The dominant ‘expert’ view was that ‘Market forces should be allowed to prevail.’ Members of this group saw no reason why, for instance, BSkyB as a dominant European presence should not reap the benefits from a market that the satellite station was perceived to have helped create. Most respondents regarded the legality of framing regulation, protecting certain events, as questionable. A significant number of respondents across all groups felt that such proposals, in a European context, might be contrary to the Treaty of Rome. However, in all probability, such legislation will be implemented and individual governments across Europe will decide which events they want to ‘protect.’ Preventing NGBs from entering into an exclusive partnership with satellite channels may arguably be necessary in order to ensure that sport, as currently constituted, would remain widely accessible and that its ethos would not be damaged. As one NGB respondent stated ‘‘. . . there is an ethical and a social element . . . sport is for everyone and doesn’t really belong to the NGBs . . . they are only the custodians of it and they should not be allowed to sell the rights to satellite.’’ Legislation, of the sort proposed, may maintain the national interest in a sporting event by requiring that the event be accessible on a terrestrial basis (and therefore to as wide an audience as possible). This will protect access to long-standing emblematic events in popular culture.
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12. Relationships in the sports network All respondents agreed that the pace of change was accelerating and that it had a widening impact in the sports network. They further agreed that this was both driven by, and in turn drove, change in individual relationships in the network. For instance, NGBs have had to change their approach by adopting a greater level of professionalism in order to mirror the increasing investment that sponsors are required to make. This adaptation relates not only to their behaviour in the initial negotiation of rights, but also in their willingness to be a partner in leveraging the sponsorship. The relationship between NGB and sponsor has assumed centrality, and many NGBs seek to develop long-term relationships with sponsors. This of course is made easier for the NGB if it has an existing relationship with a media channel. In fact, the anticipation of such professional behaviour and performance on the part of a NGB has in itself become an important corporate criterion for choosing a particular sport as a sponsorship vehicle. Respondents broadly agree that exchange relationships between actors in the sports network are now more professionally conceived and managed than in the past. Consultants have emerged as key links in the chain, with their role defined as that of supporting other actors in the network. This professionalism changes the texture of relationships in the network, where a reciprocal expectation now exists that actors will behave in a professional and commercially focused manner.
13. Power in the network All respondents now more overtly acknowledge power as an issue, and actors are prepared to acknowledge their willingness to use the available power to improve their individual positions. As one ‘expert’ respondent commented ‘‘. . . if you have a good product, you should be able to negotiate. . .you should be able to manipulate the power you hold over others.’’ The influence of enhanced power, arising from satellite-driven price inflation, can clearly be seen in the changes in the network. Further commercialisation is stimulated by the very presence of the volume of money in the network. It may be inevitable in this situation that NGBs will have to cede some control to commercial interests in order to fund development of their sports. To view this phenomenon positively, they will have to look on it as a partnership of mutuality and anticipate that there will be win –win outcomes to the relationship. Respondents were asked to comment on the issue of the direction of power in the sports network. Having analysed the large range of directions indicated in the responses, it was concluded that a significant degree of continuous reconfiguration in the network could be observed as an ongoing feature. Analysis of these data provides a visual mapping of the distribution and direction of power gradients in the network. This is illustrated diagrammatically in Fig. 3.
Fig. 3. Influence of power gradients.
The overall consensus depicted by respondents in Fig. 3 does not favour the long-term interests of the NGB, especially that of the smaller NGBs. This is all the more so as the trend toward greater media influence is likely to increase due to technological change. However, it must be remembered that ultimately (as several NGB respondents pointed out) it is the NGBs who own the rights to the sport. This gives them the ultimate power and, perhaps, the ultimate right to control their sports destiny or at least to determine the shape of crucial alliances. The increasing influence of commercial interests (i.e. the media and sponsor) cannot be ignored because they have the capacity to alter power gradients that in turn alter the influence each actor has in the sports network. Realistically, it must be conceded that the ultimate power of the NGB is increasingly constrained by the growing influence of commercial interests. A number of interesting points emerged. All four sets of respondents felt that the small NGB was losing power. The ‘sponsor’ respondent group and the ‘expert’ respondent group both perceived that commercial interests were beginning to exercise a level of control over all NGBs. The ‘media’ respondent group recognised the importance of the growth of satellite TV and the threat that this might hold, but saw large NGBs maintaining their current position, given their inherent power reservoir. This change is clearly evident in the accompanying quotation: The governing bodies of sport have been left behind — not the big wigs of the Olympics or world athletics, for they attracted pacesetters in the snout-in-trough race a long time ago. But the national organisations, run with the blazered naivete´ of Old England, are being crushed. (Butler, 1996, p. 26)
14. Awareness, denial and strategic response A consistent pattern emerged in the responses of the ‘NGB’ respondent group when asked to comment specifically on the balance of power issue. A single dominant theme became evident across the responses. Respondents stated that they went to ‘every effort to accommodate the media’ and make changes for them. Yet, at the same time,
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Fig. 4. The sports network — presatellite television entry.
these respondents disagreed with the proposition that ‘‘the media are taking control’’ or had a greater power hold on them. Upon further probing, it emerged that certain NGBs, especially minority NGBs, were unwilling to admit that they might be potential losers in the power relationships in the network. It is evident that media are assuming pole position in the marketing of sport, and small organisations will literally ‘‘bend backwards,’’ as one respondent stated, in order to build a partnership with the media. This may have longer-term consequences.
15. Modelling the sports network — transactions The network might be viewed as a set of interactions that focus on exchange between the actors. Fig. 4 attempts to illustrate the network prior to the development and influence of satellite television. It articulates a very simple set of relationships where the actions of all of the actors revolve
around two available and central values, i.e. those of audience and money, with the intermediary or professional agent just beginning to have a role in shaping relationships. Fig. 4 represents a network characterised by the pursuit of largely mutual rather than purely sectional interests. On the other hand, the set of transactions taking place in the network of sport subsequent to the arrival of satellite television is mapped in Fig. 5. By way of explanation, it is important to remember that terrestrial television stations clearly differ from satellite in terms of their current greater level of penetration and their consequent ability to reach larger audiences. From the perspective of the minority NGB, the available transaction with terrestrial television is fairly straightforward. The NGB is given near blanket coverage from a terrestrial station, coverage that is limited in extent only by the capacity of the sport itself to appeal to an audience. This coverage is delivered in return for rights to show an event for free without a fee being demanded from the broadcaster. In certain cases, the NGB will actually assist the broadcaster with the coverage by providing either physical resources or even financial assistance. In contrast, the revenues offered by satellite stations for the purpose of building their own audience franchise may be regarded as quite exceptional. The advent of satellite actors has brought major changes to the original, relatively simple, set of relationships. For instance, for the sponsor, reduced exposure may be the outcome when the sponsored event becomes exclusive to satellite. To be successful in the network actors need to be flexible and adaptable in the face of these changes. Ultimately, their options still revolve, to a large extent, around the disposition of the audience. It might well be argued that the whole network is audience-driven, and this finds ultimate expression through the issue of money. On the one hand, the flows of money available determine the choices between terrestrial
Fig. 5. Transactions in the sports network — post satellite.
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and satellite television carriers. On the other hand, money flowing back to the sport may be regarded as the key outcome of accessing an audience or conducting a transaction with either a sponsor or a media owner in relation to that audience.
16. Choice and challenge The sports network is essentially dynamic in character. Further new relationships are emerging, and there is clear evidence of an increase in the importance of the pursuit of mutual goals in a context of trust between the actors. This is a feature of the responses in the study presented, as well as being a prominent issue in the current literature. There is substantial evidence in the literature that the maintenance of trust may influence the pattern of relationships, given the increase in importance ascribed to trust by various actors. Morgan and Hunt’s (1994) commitment – trust theory provides valuable perspective on these developments. Actors can be seen to concentrate on preserving relationship investments by cooperating with exchange partners. Some can be seen to be actively resisting apparently attractive short-term options in favour of the expected long-term benefits of staying with existing partners. This may provide at least a partial explanation for the behaviour of several large NGBs that would seem to have decided to
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continue a partnership with terrestrial stations despite lucrative monetary offers by satellite rivals. Other perspectives in the current literature can also help to illuminate the nature of change and to highlight characteristics that make for successful behaviour. Piercy and Cravens (1985) argue that a key characteristic of successful network participation is flexibility and adaptability to change. It may be important for individual actors to acknowledge the importance of these traits in achieving successful behaviours as network members and to take these principles on board, in the light of accelerating technological change. Furthermore, there is evidence that successful networks are indeed customer-driven, and sports bodies must prove sufficiently adaptable to continue providing satisfaction for their various audiences.
17. Modelling the sports network — power relationships The findings of the study provide the basis for an overall model of power relationships in the sports network. Fig. 6 models the actual network of power relationships in a sports context. In this figure, it can be seen that there are a number of primary actors, namely the terrestrial and satellite media, the sponsor and the NGBs (large and small) of sport. Each of the actors within the network holds different levels of power and will adopt divergent strategies influenced by the
Fig. 6. The sports network — beyond the triadic level — the direction of power.
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dominance/dependency gradient. They may also be able to influence the positions available to the other actors. Arrows represent the relationships of power and dependency; these seek to indicate the dominant direction and weight of power potentially available. The environment of the network offers a range of influences — technological, political, economic and social — as previously indicated impact on the network in different ways. A notable feature of the responses was that the position of minority NGBs is significantly different to that of large NGBs; the difference lying principally in the fact that the media actively courts large NGBs. These NGBs, for their part, can approach a sponsor either directly or through an agent whose participation may be valuable in making detailed arrangements with the media owner. In the case of the minority sport NGB, however, the likelihood is that they will continue to carry the responsibility for attracting the interest of, and making commercial contact with the media. In those cases where the NGB has an existing sponsor relationship, the two actors, namely, the minority NGB and the sponsor, may jointly approach and negotiate with the media owner. The model identifies satellite television as having a central position, with the potential to dictate to other actors because of its key role as a distribution source for revenues throughout the network. This highly significant positioning arises from the overall evaluation of the views of all respondent groups as to where the balance of power currently lies in the various relationships. A sample of the respondents’ views, grouped by respondent category, is reproduced, by way of quotation, in Table 2. Given the centrality that they are perceived to have achieved in the area of power relationships, it might be concluded that satellite television companies are pursuing organisational objectives with great effectiveness through their network relationships. The larger question remains as to whether satellite television will have the capacity or the regulatory freedom to apply coercive power against the large NGBs by introducing an element of fear into the exchange through the threat of reducing or withdrawing monies.
Other interesting issues are highlighted through viewing the relationships in an overall network context. Terrestrial television, at this point in time, can still offer fuller market penetration to the NGBs relevant to this study. This mutuality is illustrated by the direction and weight of the potential power flows. While terrestrial television tends to have a relationship of interdependence with the larger NGBs, it is frequently able to dictate to the smaller NGBs if and when it consents to broadcast their events at all (see Fig. 6). It could be argued that terrestrial television stations operate on a system of referent power, as they have a notional 100% market penetration, which is desired by NGBs and which, in turn, can be used by the NGBs to bring in lucrative sponsorship. In the case of print media, the larger NGB tends to hold the balance of power in the relationship as it does in its relationship with most corporate sponsors. Overall, the mutuality of interest between print media and sporting bodies is evident, one requiring a stream of content that constitutes a high proportion of the newspaper offering, the other achieving welcome anticipation of events and posthoc commentary that maintains the profile of the event. NGBs, of all sizes, seem to maintain a more balanced relationship with radio as a medium, perhaps because of the smaller stakes and the less acute issues involved. The radio rights issue has traditionally not created conflict with print and terrestrial TV media. There is evidence that satellite broadcasters regard print and radio as potentially valuable complementary generators of exposure rather than as a competitive threat to exclusive rights. Sponsors, on the one hand, tend to have the potential to control relationships with small NGBs, while on the other hand tending to work on a basis of greater mutuality with the larger NGBs, particularly in the vital business of cooperating to leverage the sponsorship. Agents work in a wholly interdependent way, though it could be argued that they too are ultimately dictated to by the contingencies of achieving media interest. Their position in the network is secured through the power, based on expertise, that they hold. It is clear that this expertise in the market is being called on increasingly to create and maintain an appro-
Table 2 Views on power from the sample NGBs
Media
‘‘There is ample evidence of sports that have lost control . . . schedules when games are being played are being changed every day by the media.’’ ‘‘I see NGBs losing control as money is now the dictator.’’ ‘‘Satellite has come in and dominated things already.’’
‘‘Sky could blast us out of the water tomorrow.’’ ‘‘NGBs have started to lose control already.’’ ‘‘The media are moving in to control sport.’’
Sponsors
Experts
‘‘It is going to be very difficult to stop Rupert Murdoch.’’ ‘‘If Sky said we want you to change season, take a winter break and start the season earlier, (the NGBs) would do it if the alternative was no money.’’
‘‘The truth in this is sport is losing control to the media.’’ ‘‘NGBs are taking the money now, and when Rupert has them all tied in and starts cutting the money, what do they do then?’’
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priate and workable balance in the relationships between major actors. In summary, the transaction sports network (Fig. 5) clearly illustrates the impact that the arrival of satellite television has had on previously established and relatively straightforward patterns of transaction. The sports network, modelled as a complex set of power relations, as opposed to a simple set (Fig. 6), testifies to the success of satellite television in achieving a central position of power within the network. This is seen through the volume of revenues it is responsible for distributing throughout the network and which it directs in particular to the large NGBs, despite the limited market penetration it can offer compared to the terrestrial broadcaster. This in turn offers a competitive advantage and a strategic option to the terrestrials that might be better exploited, so that they can at least attempt to maintain their current strength.
18. Recommendations In terms of overall strategy for the successful operation of the network, managers should consider the probability that network relationships will have to move from a transaction base to a partnership base. In the specific case of sport, there is a need for actors to move to a network perspective rather than a view of the network as a mere aggregation of relationships. Otherwise, all three actors end up in an exhausted stalemate, with sponsors paying too much, the media giving too much and the NGBs losing too much. This point has been made elsewhere ‘‘Creative network visions could open up the perceived environment, facilitate change processes and allow the company to benefit from these processes by realising which actors might be mobilised, for what, and when’’ (Johanson and Mattsson, 1992). In particular, the partnership network perspective offers a way for actors to move forward. To bring about this partnership mode in the network, the actors must be prepared to embrace and develop commitment – trust relationships. These have to be implemented by the actors to engender cooperation and reduce levels of conflict. As the volumes of money in the network grow, the potential for conflict will increase. To manage this, commitment and trust are the necessary processes that must be adopted in order to take the network and its actors forward in a positive and mutually productive way.
19. Future research Further areas for research are suggested by this study, which has established the value of the network perspective as a theoretical framework for examining relationships of the kind exhibited in sport. The study presented has articulated many of these issues from a qualitative point of
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view. Through the use of a mix of quantitative and qualitative methodologies, a larger sample of respondents could be studied and a quantitative empirical basis could be established for refining and adapting some of the key constructs in network theory. Further areas of research might focus on undertaking a gap analysis relative to the three main actors: the media, the sponsor and the NGB. This could establish what the key actors demand from each other now and in the future. By continuing to apply network theory beyond the traditional domain of industrial marketing, perspectives might be achieved that enhance original theoretical principles and in turn provide further new applications and insights.
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