Editorial

Citation

Chadwick, S. (2015), "Editorial", Sport, Business and Management, Vol. 5 No. 4. https://doi.org/10.1108/SBM-07-2015-0020

Editorial

Article Type: Editorial From: Sport, Business and Management: An International Journal, Volume 5, Issue 4.

F1, Qatar, uncertainty of outcome and next steps for sport, business and management research

Sadly, this is my final editorial for Sport, Business and Management before I pass the responsibility on to Dr Constantino Stavros and his new deputies Dr Kwame Agyemang and Dr Mathieu Winand. To begin with, I would like to thank the three of them for agreeing to take on the exciting challenge of managing a maturing and increasingly important journal.

I would also like to thank members of the journal’s editorial board, as well as the numerous academics who have contributed to and reviewed papers on behalf of the journal. The journal’s readership is also thanked too; one hopes that research published in the journal over the last five years has influenced a whole range of activities from new research projects through to student dissertations and seminar discussions.

When I was first approached by Emerald in 2009 asking if I would like to work with them in starting a sport business journal, I had little hesitation in accepting. For several decades, North America had led the field both in terms of business practice and academic research. The opportunity makes a new and different contribution to work in the field, was a strong motivation for the Emerald team and me to make the journal a success.

We believe we have achieved what we set out to do, providing an outlet for people whose work is typically rooted in business and management disciplines but with a clear focus on sport. Furthermore, while the journal has opened-up a new route to publishing for academics from Asia and elsewhere in the world, it has still retained string links with the sport management heartlands of North America, Europe and Australia.

There is an old adage in England that “a week in football is a long time”, which effectively translates as “significant changes can take place within a very short period of time”. In which case, during the six years since Emerald and I held our first meetings to discuss this publication, a great deal has changed.

Consider one example: as I sit writing this editorial the big sports story is that America’s RSE Ventures (owner of the Miami Dolphins American football team) and Qatar Sports Investments (QSI) (one of the Middle East nation’s sovereign wealth funds) are seeking to acquire the 35.5 per cent of Formula 1 (F1) motor racing owned by CVC Capital Partners.

At the time of writing, it is being predicted that any such deal would be worth between $7 billion and $8 billion. Significantly, should the deal go through then it will probably see F1 supremo Bernie Ecclestone selling his 5 per cent holding in F1 too. It is also being suggested that QSI will use its purchase of the two shareholdings to ultimately launch a complete takeover of F1.

Back in 2009, the USA’s indifferent engagement with F1 and Qatar’s almost complete anonymity in the sporting world would have provided scant evidence that such a joint ownership bid could ever take place. And yet in this single case, are some the changes which the business and management of sport are going through.

Changing ownership has become a staple of sport as investors buy and sell sporting assets for commercial gain, and for geopolitical, soft-power and country branding purposes. At the same time, the US sporting model (of commercializing sports rights) has spread around the world, deeply infiltrating a majority of sports and the competitions associated with them.

Meanwhile, the rise of Qatar is unique yet symptomatic of a global shift currently taking place in world sport. Although some commentators were shocked when the Middle East nation won the right to stage FIFA’s World Cup in 2022, the country’s name is now ubiquitous in the sporting landscape. For Qatar, read China or Azerbaijan too; these are countries that are newly wealthy and have adopted sport as a focal point for the development of an industry, the basis for nation branding, the promotion of healthy living, the realization of social cohesion and the deployment of soft-power.

And yet, for all the dynamism in sport’s operating environment and the powerful global shifts taking place, the counter view to the one presented above is that sport has hardly changed at all in the last six years. Good competition remains at the heart of all sport, but recent doubts about the appeal of F1 (which is currently being dominated by one team) highlights the importance of uncertainty of outcome, competitive balance and competition design.

Furthermore, while Bernie Ecclestone’s reign as F1 supremo would appear to be coming to an end, his control over the series has frequently raised questions about the sport’s governance. This problem is not unique to F1; as the recent FIFA scandal also illustrates, governance and the attendant problems of corruption prevail in too many sports organizations which emerged during the late nineteenth and early twentieth centuries but which are now having to operate in a very different environment.

In the midst of change, sport therefore seemingly remains the same; and in both contexts, there remain ample opportunities for academic researchers. As such, one sees the role and importance of this journal becoming ever stronger as we move towards the close of this decade. There is still much to understand about sport, as well as new ways of progressing in terms of research and practice.

I therefore look forward to the journal continuing to grow and develop – addressing new research challenges as they emerge, while continuing to confront the significant issues facing sport today. I therefore invite everyone with an interest in the fields of sport, business and management to be part of this process.

Notes on papers in this edition

In the first paper, O’Reilly et al. examine purchase drivers of merchandise sales rank in professional sport at both a conceptual and an empirical level. A database was constructed for all 30 clubs in the National Hockey League based on a conceptual model of relevant variables. Both public and private data sources were accessed, covering an extensive 12-season period (1999-2011), including the 2004-2005 lockout when the season was cancelled. Principal components analysis was used to reduce the number of variables for regression analysis to distinguish relatedness and to gauge the influence of those variables on merchandise sales rank. The results reveal that six club-based factors impact merchandise sales rank: overall fan satisfaction; media exposure; on-field performance; strength of a club’s brand; local market dynamics; and fan capacity to pay. These six categories of purchase drivers form a strong predictive model of merchandise sales rank in the National Hockey League. The resulting model could be extended in future research by adding extra categories to our conceptual framework and by developing alternative or better measures of the variables we use. It could also be tested with other sales data as the dependent variable since our study was limited to ranking data on merchandise data for the NHL clubs for each year. Future research could use the actual merchandise dollars for each club in a league to test the model. A further extension would be to model subparts of merchandise (such as jersey sales, impacts of brand changes, etc.). A similar area of future research would be to look at the role of individual athletes as opposed to clubs in driving merchandise sales rank or volume. For managers in professional sport, the results suggest that there are steps that can be taken to improve merchandise sales rank (and, by extension, merchandise sales volume). Practitioners can develop and follow strategies in this regard. Results also suggest that practitioners should put the achievement of high regional television ratings – the strongest influencing variable on merchandise sales rank – as a priority. The results confirm that brand is important when attempting to increase merchandise sales rank. Club managers need to be cognizant of their brand and its impact on merchandising in all decisions. The business of professional sport is evolving globally with new sources of revenue, including merchandising increasing in prominence. This research explores the drivers of merchandise sales rank in professional sport provide direction on key antecedents and proposing and testing a conceptual model.

In the second paper, Morrow demonstrates the implications of power imbalance and over-emphasis on commercial logic on the structure and governance of Scottish football. The study is an in-depth analysis of secondary sources is used to identify the logics at play in Scottish football and to explore implications of the liquidation of Rangers for the structure of the game. Over-emphasis on commercial logic has led to power being concentrated in two clubs, Celtic and Rangers, and to other clubs and the league itself becoming financially dependent on those clubs. The collapse of Rangers thus threatened the stability of other clubs and the league. The case highlights the challenge of reconciling competing logics and the role played by previously peripheral actors in bringing about change in the field. The on-going nature of the case, related investigations and legal process meant that it was not possible to supplement the secondary source material with primary evidence. It demonstrates the multi-faceted nature of elite contemporary football and of the challenges faced by leagues and governing bodies in accommodating logics and multiple stakeholder interests. It also highlights the need for more effective financial regulation of corporate football clubs and their officials and emphasizes the importance of inclusive stakeholder governance. The paper highlights the risks inherent in football business in small markets dominated by one or a few clubs. It highlight the role that previously peripheral actors can play in bringing about change within a field.

In the third paper, Jalilvand and Nasrolahi Vosta examine the impact of five dimensions of power (coercive, expert, legitimate, referent and reward) on employees’ affective commitment in the sport organizations using social exchange theory. Data were collected using a questionnaire including managerial power and affective commitment measures. A sample of 318 employees from a number of sport organizations operating in the Iran was used. Structural equation modelling was used to test the relationship between managerial power and affective commitment. There are two major findings in this research. First, the relationships among expert power, legitimate power, reward power, referent power and affective commitment are positive and significant. Second, the construct of coercive power was not associated with employees’ affective commitment. The findings suggest that managerial power relates with a social exchange relationship where employees exchange positive outcomes including strong affective commitment. When people perceive manager power, they feel more affectively attached to their organizations. Sampling was one of the limitations identified in this study. The fact that convenience sampling was used meant that results were not immediately transferable to the general working population. In addition, the sample subjects in this study were mostly employees who worked in the sport sector of Iran. Future research could look into extending the study population to include collect input from other types of organization. If samples were drawn from a wider range of demographics, then the results become more meaningful. Power generally refers to the ability, capacity or potential to get others do something, to command, to influence, to determine or to control the behaviours, intentions, decisions or actions of others in the pursuit of one’s own goals or interests despite resistance, as well as to induce changes. By utilizing expert power, reward power, legitimate power and referent power, managers can promote affective organizational commitment and, thus, individual and organizational performance. It is likely that this occurs because people react reciprocally towards an organization that satisfies their needs, makes them feel that they are valued as human beings and that they deserve respectful treatment, and allows them to experience senses of purpose, self-determination, enjoyment and belonging. That power can be used as an effective tool to coordinate and manage others appears to be largely ignored in the literature. The paper contributes by filling a gap in the organization and management literature, in which empirical studies on managerial power as an antecedent of affective organizational commitment have been scarce until now.

In the fourth paper, Breesch et al. analyse whether the fitness industry in Belgium is financially viable in its position as a growing commercial player within the framework of the European sport model where non-profit and public sport providers still have a strong impact. The authors evaluate the financial performance of the Belgian fitness industry using a time-trend analysis applying a cross-sectional research design for the years 2002 through 2007. The analysis shows that the Belgian fitness industry is not able to generate positive income figures despite large increases in sales revenues. In particular fitness chains generally accumulate losses. However, the Belgian fitness industry pursues an active investment policy resulting in high non-cash expenses in depreciations negatively influencing accounting profit numbers. The operating cash flow generated by the Belgian fitness industry is, nevertheless, largely positive. Although no immediate liquidity problem exists, the fitness industry needs to improve its profitability in the long run in order to stay in business. This study can be a starting point for further and more in-depth financial performance evaluations of commercial actors in the field of sport. Differences and similarities between European countries should be investigated in order to generalize our findings. The conclusions could support regulators in policy decisions and business managers in strategic decisions relying on financial information in order to pilot their organization. Analysing the financial performance of a sport industry at a national scale is challenging. However, this kind of analysis is not frequently performed for commercial sport providers such as the fitness industry. This is precisely where this paper wants to contribute.

In the fifth paper, Arnold et al. investigate the factors perceived to be associated with the design and delivery of an effective Olympic Games preparation camp. To identify and explore such factors, interviews were conducted with eight members of a preparation camp delivery team for the London 2012 Olympic Games, and with two athletes who had participated in Olympic preparation camps. The results identified four overarching factors that should be considered when designing and delivering an effective Olympic preparation camp: planning; operations; environment; and the delivery team. To illustrate the interrelationships between these factors and situate them within the holistic preparation camp context, an operational model was developed. This model also portrays the chronological ordering of events, individuals involved at each stage and athlete-centred nature of an Olympic preparation camp. Despite the significant amount of Olympic-related research at organizational, environmental and individual levels, no research to date has holistically examined Olympic preparation camps per se. This study provides the first insight into the factors associated with the design and delivery of an effective Olympic preparation camp, and potential interrelationships between these factors.

Simon Chadwick