SBJ/Oct. 7-13, 2013/Marketing and Sponsorship

Sporting goods organization regrouping to battle inactivity

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Terry Lefton
What was labeled a “pandemic of physical inactivity” served as a call to arms at a recent conference of the Sports & Fitness Industry Association.

The trade association of sporting goods retailers and manufacturers (formerly the Sporting Goods Manufacturers Association)
hadn’t held its own conference since 2006. Still, they gathered 200-plus for a “leadership summit” and debated the ills facing the industry. Sports and exercise equipment, apparel and footwear remain healthy businesses, tracking last year at $79 billion in wholesale sales, an increase of 2.4 percent over 2011. But the threat of an increasingly inactive populace was as frightening to the audience as if every American high school suddenly banned sneakers and T-shirts.

Association President Tom Cove fired a warning shot the size of an ICBM when he presented research forecasting that if unchecked, a third of the U.S. population will be inactive by 2018 — resulting in $28 billion less in athletic footwear, apparel and equipment sales.

Photos by: DAVE MCINTOSH (3)
“Growing participation is the single best thing any of us can do for all of us,” Cove said. And if there was not yet consensus on a solution, the industry group took the gathering as a positive sign.

“The engine for change has to come from our industry,” said Mitchell Modell, CEO of the Northeast sporting goods chain that bears his name. “This is a problem that affects all of us — retailers, manufacturers and the leagues.”
Noting their symbiotic relationship, Under Armour founder and CEO Kevin Plank was one of many urging the sports and fitness business to forge alliances with the burgeoning health care industry.

“It’s not just about playing sports, but keeping
fit,” Plank said. “The challenge I will give to anyone here is how can we be proactive in the health care industry. Building bigger hospitals and the costs that come with them is not financially sustainable. … That’s our goal, that’s our opportunity, not just selling more basic T-shirts.”

The association’s research also showed that those participating in physical activities, so-called active Americans, were more likely to support some of the largest sports properties. For example, 37.8 percent of inactive Americans identified themselves as NFL fans, compared with 54 percent of active Americans.

“On a fundamental level, the most important thing is that people play or do something physical,” said Eric Grubman, NFL executive vice president. “If they do, we’ve got a fair shot at making them into a football fans, baseball fans, NBA fans.”

One by one, the major problems plaguing participatory sports were vetted, if not solved, including the growing specialization of youth athletes in one particular sport at the exclusion of others.

“I’ve seen too many kids get turned off to sports, simply because they didn’t make the travel team,” said Tim Brosnan, MLB executive
vice president of business. “There are no more pickup games of anything. It’s incumbent upon us to get the concept of ‘play’ out there again.”

Also cited as problematic were the marginalization of the recreational player, a lack of funding and trained coaches, the lack of physical education in schools and, of course, the concussion issue.

“America without football scares me a hell of a lot more than America with football,” said Plank, a walk-on at the University of Maryland, before citing Under Armour’s recent Head Health Challenge with General Electric Co. and the NFL, which is offering up to $10 million to stimulate innovation in head and brain protection. “Many of the lessons that I learned in building this company were first learned from playing on a team. … It’s not just a football issue. Football can and should take a leadership position, but every sport out there has this issue.”

After six years without a conference, the industry association rebranded and repaired some splintering. “We’ve come a long way just to identify and agree what the elephant in the room is [inactivity],” said Mizuno USA President and SFIA Chairman Bob Puccini.

With a plethora of programs advocating physical fitness — including the PEP bill, which helps fund sports equipment for school districts and community organizations; the association’s own PHIT America social media and marketing campaign promoting an “Active, Fit and Healthy America”; and the NFL’s Play 60 program — focus is a concern.

“There are all these different initiatives, but how do we coalesce?” Puccini said. “That’s the role of the SFIA now.”

> SELLING PROPERTY: An impressive group of top property execs — including Brosnan and Grubman; U.S. Olympic Committee Chief Marketing Officer Lisa Baird; Brian Jennings, NHL executive vice president of marketing; and Sal LaRocca, NBA executive vice president of global merchandising — debated the biggest issues at the top of the sports pantheon. Some interesting figures emerged when they were asked about the growing impact of social media. Jennings noted that sports represents about 1 percent of TV programming but accounts for more than 50 percent of Twitter conversations.

“Search engine optimization and sharing links is today’s word of mouth, and that’s how fans are consuming our games,” Jennings said. Grubman said the most recent “Hard Knocks” HBO show attracted 7 million viewers but catalyzed 80 million tweets. As for monetizing social media at a sports property? “The ad world is still learning how to make money off it,” Grubman said. “I doubt it is going to dramatically increase the amount of ad dollars that are spent, but it will shift them, so if a sports franchise or league can be on the receiving end of that, that’s better.”

> TED TALK: During his keynote, Monumental Sports Chairman Ted Leonsis chided those in attendance for not being more reflective of their increasingly multicultural consumer base. “It’s very important for all of your enterprises to be holding up mirrors to the communities you serve,” he said. Leonsis also
advised association members to prepare for a continuing wave of changes based on technology, including mobile payments becoming predominant, and the abundance of big data necessitating further corporate investments in that area. Also forthcoming: a boom in local business, fueled by a combination of mobile commerce and social media. “This is the biggest new business opportunity for you,” he said, “and it goes to your sweet spots: stores in neighborhoods.”

> CALLED FOR ICING: While there will be six NHL-sanctioned outdoor games this season, Jennings said the league is not yet looking at having al fresco hockey outside North America.

This year’s schedule includes a Los Angeles Kings-Anaheim Ducks game at Dodger Stadium on Jan. 25. “A lot of people have questioned whether we can make ice in L.A.,” Jennings said, laughing. “So tune in.”

Quipped Grubman: “Ice in L.A. is quite a trick. Could you build an NFL stadium there, too?”

Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.

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