Skip to content Skip to sidebar Skip to footer

Mondays with Rick: The lucrative business of sports

Dr. Rick Franza, Professor of Management for the Hull College of Business at Augusta University, discusses a different, timely business topic each Monday in this column. This week, he talks about the business aspects of sports. The interview has been edited for clarity and impact.

Editor’s note:  This column originally appeared in December 2022. Since then, Georgia has won back-to-back National Championships, UConn won the NCAA Basketball Championship, baseball season is in full swing, and the first major tournament for 2023 in golf, the Masters, is in the books. This interview with Gary Kauffman and Dr. Rick Franza is even more relevant now.

ABD: As fans, we generally think of sports as a form of entertainment (or life-and-death, depending on how into it we are) but behind the scenes, sports is a business. How should we, as fans, process that?

Rick: It depends on how you as an individual treat it. If it’s only entertainment for you, then the business side can be annoying, like the labor lockout in baseball – even though it’s hard to call people making millions of dollars “labor.” The average individual doesn’t want to be bothered by it until it has implications for their game.

We see more of that now, especially in college football, but also in the World Cup, where it’s not just business, but also politics. In some states, like Georgia and Texas, high school football is big business. But a lot of what we enjoy about sports wouldn’t exist if not for the business side.

Even college football has been affected by the growing amount of money available through TV broadcast deals.
ABD: It doesn’t seem like the business side intruded as much on the game when we were younger (although that was more than a few years ago). What has changed?

Rick: Baseball is the one that made the monumental move toward free agency. That goes back to Curt Flood (Flood challenged the exclusive rights owners had over players and, although he lost, it led to free agency for players five years later). That meant a lot more freedom of movement for athletes. It made it more of a business from the player’s perspective. It had always been a business for the franchise owners, who had two metrics: The success of the team on the field and the success at the box office.

We’re seeing it more in college football. If you look back at the 1960’s, ‘70s, and even into the ‘80s, many of the college athletic directors were coaches who had evolved into athletic directors. Now, that’s a rare instance. Athletic director is now a career path. The AD used to be a coach of coaches, now, they run a multimillion-dollar enterprise.

ABD: In college, athletes now have a lot more ability to earn money from their image. How does that affect, say, college football?

Rick: In isolation, it sounds good, but I think there’s a danger of the game really changing. It gives the college players the opportunity to make money from selling things like jerseys with their names and number, whereas before, the school made all the money. But it’s kind of like the wild, wild West now with all kinds of marketing deals. The amount of dollars out there has permeated the decision-making of everybody. A lot of people are getting disgusted with the state of college football.

ABD: One thing that seems strange is to see the increased emphasis on sports betting. That used to be taboo. Is there a danger in allowing that?

Rick: There are still important rules in place. There’s increased scrutiny with increased allowance. But it’s amazing how sports have truly embraced this – even golf! It could go off the rails, but there are still a lot of guardrails in place.

Having a minor league team like the Augusta GreenJackets is a boon to the local economy. (Photo by Gary Kauffman)
ABD: Locally, we have the Augusta GreenJackets baseball team. What are the business aspects of having a minor league team in the area?

Rick: Minor league baseball can be a difficult business. I go to GreenJackets games no matter what because I’m a baseball junkie, but people like me are a very small part of the market. To drive attendance, they have to make it about more than just baseball. They’ve done a good job of that – each day during the season is some kind of “night” and there’s in-game entertainment.

The other challenge is that when you have a facility like SRP Park, is to not just make it a six-months-a-year facility. They’re finding other ways to utilize the facility year-round.

The impact of having sports in a city is an economic development bonus. There’s a certain prestige to cities that have a major sports team, but minor league teams are also valuable assets. People might not move here because of a minor-league team, but it’s just another thing that makes the city attractive.

At the end of the day, it’s fighting for entertainment dollars. That’s why sports have to be looked at from a business angle at all levels.

Leave a comment

This Pop-up Is Included in the Theme
Best Choice for Creatives
Purchase Now