Welcome to a new regular Business Lexington column - "The Business of Sports," which will address the many issues that come under the broad umbrella of sports business. While the specific concept of "sports business" has been identified only in the past several decades, the collective sports industry has climbed from 25th to 11th on the list of largest industries in the United States, over which time all facets of this broad accumulation of interests have been identified.
This column will cover such areas as sports facilities, sports-related tourism, sports ticketing, concessions, branding, merchandising and licensing, television rights, economic impact, sponsorship, enhancing the fan experience, potential team and conference geographic alignment and many others. A subset of sports business - sports marketing - has been much more visible in recent years and its issues will be included, but our overall area of interest will be much broader.
While Kentucky does not have any major league-level professional teams, it is home to major collegiate programs and to significant amateur sports activity as well as to successful minor league sports teams - all of which have elements that should be of interest and will be covered here. As an example of the type of issue that will be discussed, it has been estimated that the true economic impact to American communities from adult softball and youth soccer tournaments significantly exceeds the real economic impacts from all major league sports. We will explore this specific issue in more detail in a future column.
One ongoing theme and topic that will be woven into many columns and that seems to be of general interest (even if very much misunderstood and generally inaccurately reported) is economic impact - real economic impact - from sports and sports events and the ability for cash flow from these activities to justify major new facility construction. The in-process consideration of both the new arena in Louisville and the recent tentative announcement of a privately financed UK proposal in partnership with IMG College to utilize future potential related revenue streams to construct new world-class athletic facilities are prime examples.
This recent IMG/UK athletic department announcement and the even more recent innovative announcement by the University of Texas that they are exploring a UT-only television network (also being considered in association with IMG College) remind us that colleges and universities and other amateur sports may be the incubators and proving grounds for many innovative and productive new ideas.
Much of what we will examine and discuss here will be financially related (it is "business") but we will also be looking at and attempting to better understand emerging trends. One of my personally most anticipated topics will be that of sports ticketing, as it is still ticket revenue that determines the overall success of most events. From the earlier days of hard, pre-printed tickets only being available at the event facility or by mail, over the past few decades there have been significant changes in providing opportunities for ticket re-sale as well as other ticketing changes, particularly in the ease of ordering. These changes, which began with the ability to order tickets first by phone and then online, now includes a full range of electronic purchasing options, as well as changes in how tickets can be delivered at generally minimum cost. No more long lines at the stadium or arena as ticketholders can arrive with barcoded pieces of paper looking like online boarding passes that can be easily scanned on site.
There are many more topics that we will address here, with some being as contemporary or timely as this publication format will allow, some being seasonal and others being timeless. We will attempt to not only report what is happening or could happen but to also include relevant input from local sports businesses. We are blessed here in Lexington to not only have the colleges and universities previously mentioned but to have well run (in some cases, very well run) professional franchises such as the Lexington Legends and our constantly evolving Arena Football League franchise. In addition, the local presence of Host Communications/IMG College provides the possibility of access to and insights from the organization that leads the way in inventing and defining sports business. The continued presence of Jim Host, the "father" of sports business, is also an asset hard to overestimate. Top flight sports apparel companies based locally add another facet to what we will address as well.
We will also take a look at the aftermath of the Ryder Cup and, over the next two years, at many of the business aspects of the upcoming World Equestrian Games.
Not to be forgotten, and which will each be seasonally examined in detail as to their unique content and impact, will be major local annual events such as the Fifth Third Tennis Tournament, the Rolex Kentucky Three Day Event, the High Hope Steeplechase, the Sweet Sixteen basketball tournament, and others that each have their own following and value. While we all are aware of these events, their underlying value and relative impacts may not be fully understood.
As with all sports-related activities, there is likely to be debate and disagreement and varying points of view. Yours will be welcome and carefully considered. Ideas for possible columns or other feedback will also be most welcome.
I'm very much looking forward to this opportunity and hope you are as well.
Jack Kelly is former CEO of the World Games Foundation 2010. He can be contacted at jkellyepi@aol.com