Are Major Sports Brands at Risk of Falling Out of Favour with their Fans?
Sports brands are amongst the most powerful in the world.
Clubs, players, leagues and franchises today are more valuable than many household consumer brands.
This value is derived not only from the commercial, broadcast and media rights modern sport attracts but because the brands are well integrated into the communities they serve, in some case defining the cities which host them and, perhaps most importantly, command and receive great loyalty, through good times and bad.
But with all that respect comes additional responsibility.
Free market guru Milton Friedman declared, the “Business of business is business” and if you follow his line of thought, the business of sport is winning. Dollars on the balance sheet, points on the board, trophies in the cabinet – nothing else matters.
I, as do many others, disagree.
As a foot soldier in the early Corporate Social Responsibility (CSR) wars, I recall immense reluctance from business to accept the wider economic, social, environmental and community responsibilities their organisations held.
Stony-faced executives could only see costs and barriers to growth by correcting social or environmental problems in their business and supply chains – “so long as what we do can be described as legal, it’s not our problem” they parroted at conferences and stakeholder events.
Slowly, and with varying degrees of success, senior business leaders, analysts and stockholders accepted their remit extended further than simply providing products and services for profit, and that the long-term health of their organisation was shaped as much by meeting and addressing the expectations of their consumers as it was in selling more stuff.
Today, business has broadly incorporated social responsibility into its strategic planning and built C-suite advisory departments, governance structures and dedicated budgets to address these wider issues.
The same must be true for professional sports brands, surely?
As sport organisations have become multi-national businesses, or in some cases proxies for them, their responsibilities within and to society have grown too, and in our multi-channel, multi-platform and multi-screen universe, the commercial and business behaviour of sport is now coming under greater scrutiny from both fans and the public.
YouGov’s recent survey reports two thirds of Britons think its important for sports clubs, brands and teams to actively pursue CSR goals.
While many sports brands have charitable and philanthropic programs, there are still gaps in managing their broader social responsibilities. Remember, back in those early days of CSR, reluctant businesses pointed to their charitable giving and cheque cutting as a sign of their social commitment, but often that was more about public relations or public affairs than any deep-seated commitment to tackle injustice, inequality or negative impacts in their communities, supply and value chains.
Fans are unlikely to accept that cop-out from their sports teams and organisations for much longer. As the YouGov survey reveals, the next generation of fans care about how sports franchises are making an impact on issues facing society. They are more consistently holding organisations accountable than any fan cohort before.
Sports fans want their heroes and teams to share their concerns and be visible in fixing the problem.
Following some tragic events in the US, sport superstars used their platform to speak out on violence, racial injustice, and police brutality.
Some sports owners – Leagues, Formula One, NFL teams - got it horribly wrong trying to ban their stars and players from speaking out, wearing badges of support, taking a knee and other expressions of support. Clearly, they still just wanted the issue to ‘go away’ and leave it to someone else to address.
But when former LA Laker superstar Carmelo Anthony declared ‘the system is broken’ – the internet responded swiftly pushing the issue to the front of what was being debated. In response, The NBA - the suits and owners – got together with the NBPA – the players – and created a strategic plan with more than 70 initiatives to work with communities, connecting youth and basketball, mentoring and education and economic development.
Speaking on CSR to the media, Christa Stout, Vice President of Innovation & Impact, Portland Trail Blazers said:
“We know that future fans, especially Gen Z, care about what the teams they’re supporting are doing to make the world better. CSR used to be a nice to have, and now it’s a critical role at successful teams.”
The opportunity is huge. The runway for sport to embrace and even lead in CSR is there. Sports teams are visible, authentic, and connected.
For those clubs and leagues who do embrace their social responsibilities, the opportunities to strengthen their brand’s health are vast.
Sport is Authoritative – Leverage the Power.
Sport holds a prominent position in nearly every market and is supported and promoted by governments, communities, and local authorities, it therefore has engaged stakeholders who want it to succeed. It attracts and secures global media attention so its actions are highly visible, and it can easily talk to huge audiences willing to watch and listen. And sport is perceived as authentic, especially amongst younger audiences who follow every utterance and promotion of their favourite teams and star players.
Improve Communication – We Can’t Hear You
In the age of social media, platforms like SNAP, Instagram, YouTube and TikTok connect brands and fans. Clubs and leagues can use the message sharing and amplifying fans generate on these channels to their advantage. While lots of sports social, broadcast and mainstream media focus is on ‘on-pitch’ activities, sports organisations aren’t always as effective communicating their social actions. It may be that clubs assume their fans, who are very engaged with the team and its performance, also follow the business and other elements of the brand with equal loyalty – spoiler alert, they don’t.
Bring Your Sponsors with You – Choose Partners Who Share Your Goals
With politicians, civic leaders, sponsors and business partners hungry for the huge positive association sport can bring, clubs and sports brands can leverage this into programs and projects which deliver social value. Sports brands are smothered by fast food, alcohol and gambling sponsorships – and while, greenwashing allegations and all, I see a place for them in the mix, why not also pick your partners for what they can do for you and your community as much as what you can do for them. The world’s largest consumer brands, national governments and technology partners have their identity and logo emblazoned on every square inch of available advertising space sport can muster. Why not divert some of that effort, revenue and visibility into long term social change programs which connect with a global fan base?
Famously, FC Barcelona shunned on-shirt advertising for decades – arguing the club was the only brand worthy of that exposure. When they succumbed to the power of the euro and changed their mind, they chose UNICEF as their shirt sponsor, a welcome nod to the tradition, but now they are a walking billboard for whoever Spotify’s artist of the week is – let’s hope for the Catalans’ sake it’s not Kanye!
Strategic and Altruistic Programs – Engage and Involve Communities
Sports brands who maximise the value of their CSR efforts do so because they recognise these twin motivations and correctly balance them. If initiatives are perceived as simply self-serving or opportunistic the value is greatly diminished and may even be seen as negative. Today, many sports clubs support a huge range of seemingly unrelated initiatives – a mile wide but an inch deep – instead of choosing a few issues or themes to own and deliver on. Therefore, it is imperative that Sports CSR be aligned with an organisation or brand’s values, strategy and operating practices to be appreciated by its many fans, supporters and stakeholders. It is also important that the programs and causes being addressed are influenced by both internal and external stakeholders, with the wishes and expectations of fans, players and community members carrying as much weight as the owners, chairman’s and board members preferences.
Measurement – How do you Know if You are Making a Difference?
Everything else in a well-run business or enterprise is measured, so why not CSR programs? Not only does good measurement allow for clubs, brands or players to know if the projects they support are making a difference and improving conditions for local communities, suppliers or customers, but also provides ways to report those impacts and progress. Historically, brands reported the total sum invested in charitable giving but little more. Now, with most mainstream businesses issuing formatted and reviewed reports into their social, economic and environmental performance, having robust metrics which show the impact and effect of a club’s investment in communities is demanded.
There is no going back. Like with other businesses, CSR and community initiatives are set to play a bigger role in defining sports properties and valuations. As clubs and leagues are listed on public exchanges, billion-dollar takeovers become the norm, and leagues merge and expand their field of operations, scrutiny will only increase.
In the coming months there are conferences taking place from Riyadh to London, Liverpool to New York discussing the business of sport. In-between the panel discussions about maximizing broadcast rights, leveraging new technology, and creating and commercialising global fan bases, look out for me starting a conversation on the fringe, exploring the reputation, regulatory and financial risk of being out of step with the social and environmental expectations of your favourite sport’s fans.
Martin Liptrot is a strategic communications advisor. He has led Communications, Public Affairs and Corporate Responsibility programs for blue chip, government and sports organisations - including Philip Morris Companies, FedEx Corporation, GE Energy, Wirral Borough Council, Labour Party and Saudi Pro League.