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DOCUMENT DE TRAVAIL 2003-026

BUILDING THE BRAND EQUITY OF PROFESSIONAL

SPORTS TEAMS

André Richelieu

Version originale : ISBN – 2-89524-176-7

Original manuscript :
Version original :

Série électronique mise à jour : 06-2003

On-line publication updated :
Seria electrónica, puesta al dia
 Building the brand equity of professional sports teams

André Richelieu, Professor

Marketing Department
Faculty of Business Administration
Université Laval
Québec, QC. G1K 7P4
Canada
Phone: (418) 656-2131 Ext. 7710
Fax: (418) 656-2624
E-Mail: andre.richelieu@mrk.ulaval.ca

Abstract: A sports team can become a brand of its own. And in an effort to capitalize on
the emotional relationship they share with their fans, professional sports teams are
starting to position themselves as brands. In this paper, we propose a framework for
helping sports teams build their brand equity, taking into account catalyst and
constraining factors, as well as “moderating” variables.

Key words: brand, brand equity, professional sports, strategy.

Autobiographical note:

André Richelieu is an Assistant Marketing Professor at Université Laval. In 2002, he

completed his PhD at the joint doctoral program in administration in Montréal. His
research interests focus on: i) the development of brand equity by professional sports
clubs; ii) the internationalization of the firm and the institutional levers which firms can
use in order to enter foreign markets.
Prior to his academic career, André Richelieu worked in the business industry, spending,
among others, over two years in Romania.
 A new brand world for sports teams

Manchester United, Real Madrid, the New York Yankees, the Dallas Cowboys
and the Chicago Bulls. These professional sports teams, among others, have
established themselves throughout the years as a reference in their respective sports,
going beyond local recognition to gaining, in some instances, worldwide popularity. In
fact, we could argue that these teams can no longer be considered as mere sports
teams; they are also brands in their own right (Bobby, 2002; Shannon, 1999).

In this regard, the purpose of our research is to study how a professional sports
team can position itself as a brand and leverage its brand equity. But why should a
professional sports team try to become a brand in the first place?

In this paper, which is the result of our investigations of professional sports teams
in Europe and in North America, we shall try to identify the main factors a sports team
can exploit in order to become a brand and reinforce its brand image in the eyes of fans.
These factors shall be referred to as catalyst factors. Furthermore, we shall identify the
main obstacles encountered in the establishment of a team as a brand. These shall be
called constraining factors. Also, “moderating” variables will be presented. But more
important, we shall propose a framework for building the brand equity of a sports team.
In other words, we will introduce the process through which a sports team can build and
leverage its brand.

The conceptualization of how a team can develop its brand could have both
theoretical and practical applications. First, theoretical studies on the topic are still
relatively limited (Desbordes, 2000). Second, professional teams are in need of some
guidelines in the context of sports merging with the entertainment and communications
industries (Sport Business Group, 2002a). Third, “brand” is now part of the vocabulary
and strategic mindset of sports teams’ managers, at least of the most visionary ones, as
we shall see. Truly, teams have had the potential to become brands heretofore, but it is
only recently that sports teams seem to have started to capitalize on the opportunity.
 With this idea in mind, we will start by introducing the notion of brand. Second,
we will answer the question of why a sports team can become a brand. Third, we will
present how a sports team can become a brand and which variables can help or hinder
the development of brand equity by professional sports teams. We will end our
presentation with a recap of the key points. The paper will follow the structure of a
hockey game.

The pre-game show: What is a brand?

A brand is “a name, a word, a sign, a symbol, a drawing, or a combination of

these, which aims at identifying the goods and services of a company and differentiates
them from the competitors” (Kotler, Filiatrault & Turner, 2000, p. 478). Truly, a brand has
both marketing and accounting value for a company; but here, we will specifically focus
on the former.

A brand is a differentiating asset for a company (Kapferer, 2001). Through its

brand, a firm creates and manages customers’ expectations. As such, brand image and
brand quality are intertwined and instrumental in developing a successful brand (Cateora
& Graham, 2001). Successful brands are able to quickly establish a strong emotional
and personal relationship with the customer; and thus, potentially trigger trust and loyalty
toward the brand (De Chernatony, 2001) (Figure 1). For this reason, companies that own
strong brands are trying to focus the customer’s attention on their brand image.

-- Insert Figure 1 about here --

As Bedbury & Fenichell (2002) underline it, a company needs to have a brand
that evokes trust from the customers and will inspire, rather than just inform through
advertising and marketing. The brand should create an environment that supports the
fulfillment of customer expectations, in the message and in the product (Haynes,
Lackman & Guskey, 1999). A brand is a promise a company makes to its customers,
and this promise is built on the coherence and continuity of the brand’s products
(Kapferer, 2001). For instance, no matter where I drink a Coca-Cola, it should have the

2
same great taste (coherence). Furthermore, the Coca-Cola that I drink today is as good
as the one I had yesterday and as good as the one I will drink tomorrow (continuity).

According to Fanning (1999), there would be two golden rules of successful

brands:
i) continuous innovation; and ii) telling the story of a company’s brands. Continuous
innovation is done in order to take into account the taste of customers, and also to stay
ahead of the competition by anticipating change. Telling the story of a company’s brands
means underlying the core values of the brands and adapting them according to
changes in public taste. Well-managed brands are continually telling stories about
themselves. Combining branding and innovation can help boost a brand, like Apple did
with the introduction of the iMac desktop computer. This initiative helped revive the
Apple brand and sell six million of the desktop computers in four years (Mazur, 2002).

Some authors have developed the notion of “concept brands”, which offer
visions, attitudes, convictions, motivations, and not necessarily intrinsic quality or
improvements (Rijkenberg, 2002). Rather than defining a market segment and then
trying to satisfy the particular needs of that segment, concept brands arise from
emerging social and cultural trends. Richard Branson, the founder of Virgin, likes to say
that what he sells is “a way of life”, in order to justify the array of activities his company is
involved with (Rijkenberg, 2002; Travis & Branson, 2000).

The official face-off: Why my team is a brand?

Companies have been using branding to develop a strong and enduring

relationship with customers since the pre-industrial age (Kotler, Filiatrault & Turner,
2000). A relatively recent trend has seen the emergence of brand strategy as a tool for
professional sports teams, so that they could nurture the relationship they have with their
fans and leverage their brand asset (Cavanagh, 2001; King, 1999; Passikoff, 2000;
Sport Business Group, 2002a).
In fact, with the exception of movie stars and actors, teams generate an emotional
response from their fans, one that is stronger than in any other industry (Future Brand,
2002). Unfortunately, this potential emotional attachment is still underexploited by sports

3
teams. It is only since the mid-1990s that sports teams have started working on
leveraging their brand equity, and still relatively few teams seem proactive in this regard.
As an executive from Manchester United stated:

Everything is in the brand. […] We must think in terms of products in order to

develop the company. The brand is the team, its logo, the red shirt, the
players, the story; it is everything related to Manchester United. It is a
precious asset in developing the business (France 2 Télévision, 2002).

As a matter of fact, becoming a brand can enable a sports team to position itself
against other teams and entertainment offers in the market (Figure 2). This is becoming
increasingly important, because sports teams are battling for the entertainment money of
customers against other leisure alternatives, such as festivals, movies, restaurants,
camping, traveling, etc. So why should the customers spend their time and money on a
sports team?

This brings us to the next point: beyond the value the team represents to the
customers, a strong brand can help the team capitalize on the emotional attachment with
the fans, in order to instil trust and trigger fan loyalty. In return, this trust and loyalty can
help the sports team generate additional revenues through the sale of a variety of goods
and services, within and beyond the sports arena (Gustafson, 2001) (Figure 2). Indeed
strong brands in sports are able to make the customers live the brand at different
moments of their daily life: they live their sports team and the respective brand, just like
customers who wear Levi’s and not another brand of jeans, and others who drink Coca-
Cola and not Pepsi (or vice versa)

-- Insert Figure 2 about here --

For instance, the Glasgow Celtic soccer club (2003) initially started with
traditional products, such as replicas, training kits and gifts. It has now gone into fashion
wear, even branded pies and sausages. The Celtic has three stores in Ireland and
makes more money from merchandise than from TV rights and sponsorship combined
(Worsley, 2001).

4
 Another example of building brand equity through brand extension is the
Girondins de Bordeaux soccer team in France. The Girondins de Bordeaux (2003)
soccer team has five different brands: the game brand (Adidas Collection), a sportswear
brand sold in superstores (Club Collection), a leisure brand (Girondins Sport Collection),
an upscale brand (Scapulaire Collection) and a brand that has products associated with
their Brazilian star, Pauleta (Pauleta Collection).

Battling along the boards: How my team can become a brand?

In Figure 3, we propose a framework for building the brand equity of professional

sports teams. This framework is a result of our investigations of professional sports
teams, based on a review of the literature and interviews with sports managers in
Europe and in North America1, to see how these teams are working to build their brand
equity. There are three steps that lead to brand equity: i) Defining the identity of the
sports team; ii) Positioning the sports team in the market; and iii) Developing a brand
strategy. We shall elaborate on each of these components.

-- Insert Figure 3 about here –

Defining the identity of the sports team

There are two main elements included in the identity of the sports team: the
attributes of the team and the value the team represents to its fans.

First, the attributes refer to the values of the team and what the team stands for.
In other words, what does the team want to be associated with and recognized for:
simplicity, reliability, ambition, innovation, modernity, conviviality, solidarity, fighting spirit,
etc.? These values give a strong meaning to the team, while providing a direction to the

1
Montréal Alouettes, Ottawa Senators, Toronto Maple Leafs, Vancouver Canucks; Girondins de Bordeaux,
Lille Olympique Sporting Club, Olympique de Marseille, RC Lens. We deliberately didn’t want to limit the
examples given in this paper to these teams.

5
brand. The values of a team are the starting point in defining a long-term brand strategy
for the sports team (Kashani, 1995).

In this regard, the history of a team and its presence in the community can be an
asset. Top sports brands have been located in their respective cities for an extended
period of time, which helps establish the brand over time (Future Brand, 2002). As a
result, the team becomes part of the social, economic and cultural landscape of the city,
even the region it is in: Juventus of Turin, Newcastle United, the Toronto Maple Leafs
and the Boston Celtic are examples. Thus, the team is able to trigger emotional value
and psychological proximity with its fans (Kapferer, 2001). We mentioned earlier that
telling the story helps emphasize the values of a company in the eyes of the customers
(Mazur, 2002). This applies also to professional sports teams.

Second, once the values of the team are defined, it is important to see what they
mean to the fans. Indeed, the values of the team must be translated into a clear
message, one that underlines the benefits of the brand for the customers, in order to
trigger the buying decision. This is referred to as the value proposition (Kashani, 1995)
or value creation. The benefits can be tangible, as in a cell phone, for instance, which is
compact, portable, reliable, and provides autonomy, offers e-mail and other applications
at a reasonable cost. But in the case of a sports team, the benefits are mostly intangible
or emotional. And because the benefits are emotional, it is even more important to
nurture the flame by replenishing the “emotional bank account”. This will help maintain
the sense of belonging of the fans to the team, as well as the trust and loyalty of the fans
toward the brand. You do exactly the opposite with repeated fire sales and
mismanagement, which affect the trust of the fans and dilute the brand.

Moreover, without compatibility between the vision of the managers and the
perception of the fans in relation to the values of the team and the value proposition,
there is an incoherence that hinders any further development of the brand by the team
(Figure 3). Thus, it is important for teams to ensure that what they believe they stand for
is understood in the same way by their fans. That is why teams that we interviewed tend
to do surveys at the end of the season, but also throughout the season in order to
measure the image of the team in their community.

6
Positioning the sports team

The positioning of the sports team relates to two elements: the selection of
market segment(s) and the differentiation of the brand on the market.

First, defining the market segment(s) means that the sports team will identify the
customers that are supposedly the most sensitive to the value proposition of the team.
These customers represent the target market for the future development of the brand
(Kashani, 1995). In the case of a sports team, these potential customers include:

i) The fans that go see the games and follow the team’s performance very
closely;
ii) Those (die hard) customers who take their passion of the team beyond the
playing field and are willing to buy Manchester United ketchup (Bobby, 2002)
or Toronto Maple Leafs (2003) B-B-Q sauce, take a driving lesson with
Olympique Lyonnais Conduite (Le Monde, 2002) or drink the Racing Club de
Lens milk (L’Équipe, 2000);
iii) Those who relate to the team outside of the sports arena because the team’s
brand has been represented by a popular singer or actor. A case in point are
the New York Yankees, whose variety of colourful hats and models have
been promoted following a concert given by a rap singer who wore a red
Yankees cap that night. Now, New Era, the official supplier of Major League
Baseball’s game caps, produces New York Yankees hats in an array of
colours in order to fulfill the demand of young consumers who relate to the
rap singers as much as they do with the team. And in fact, Yankees hats can
be found worldwide;
iv) Those who follow the team from a distance and are willing to show their
association with the team in a more subtle way. That’s why some sports
teams, especially in Europe, have introduced lines of casual and everyday
products, from jean shirts to dress shirts and ties, where the logo of the team
is visible but elegant. We made reference to the Girondins de Bordeaux
(2003) and the Glasgow Celtic (2003) earlier, but the Real Madrid (2003), and

7
 both Major League Baseball (2003) and National Hockey League (2003)
clubs are also good examples.

Second, the differentiation of the brand on the market means that the sports
team tries to underline how its brand is unique and why the customers should buy it,
instead of another brand, either from a rival sports team or from a company outside of
the sports arena. If the team is able to show and sell the uniqueness of its brand, it can
provide the team with a powerful position on the market. Strong brands are indeed able
to generate trust and loyalty from their customers and reinforce the emotional and
personal relationship with their fans (De Chernatony, 2001; Kapferer, 2001) (see Figure
1). Hence, these customers are less willing to be tempted to buy another brand.

We should mention that both the identity and the positioning of the sports team
contribute to the strategic construction of the brand, which provides the foundations for
the brand strategy of the team (Kashani, 1995) (Figure 3).

A case in point is the French soccer team, Lille Olympique Sporting Club
(LOSC). Following a market research, the team identified four key values the fans
wanted the club to promote: fighting spirit, solidarity, conviviality and modernity, which
are displayed on the LOSC website (2003) (Figure 4). Both the fighting spirit and
solidarity are considered to be acquired by the team, and refer to the playing field.
Indeed, LOSC is looking for players who are hard-workers (fighting spirit) and team
players (solidarity). The LOSC management deliberately refuses to hire good players
that are known for not espousing these two values.

Moreover, conviviality refers to the interaction between the team and its fans, and
the involvement of the players in their community. The management believes it has
some work to do in this regard, even though some initiatives have already been
launched. For example, LOSC sponsors youth soccer teams in the Lille region, which
play with a LOSC badge on their jersey. This can potentially trigger the sense of
belonging to the team among young customers who can become LOSC fans, if they are
not already, and remain fans for years to come.

8
 Finally, modernity relates to the construction of a new soccer stadium in
downtown Lille. In fact, the team plays in an old and relatively small stadium
(Grimonprez-Jooris, 23,000 seats). According to the research performed by the team,
the fans expressed the wish of having a facility that will better reflect the image and the
ambition of a modern French soccer team (LOSC, 2003). But it takes both the new
stadium and the right management to build or strengthen the team’s brand equity (Todd,
2003).
-- Insert Figure 4 about here --

Developing a brand strategy

Once the identity and the positioning are clearly determined, the sports team can move
forward with its brand strategy, working on catalyst factors, while dealing with constraints
and “moderating” variables (Figure 3 and Table 1). We intend to highlight some key
variables that can help a team build and reinforce its brand equity and some that can
prevent it from doing so.
-- Insert Table 1 about here --

Internal catalyst factors. We define catalyst factors as variables that can help a
professional sports team leverage its brand. Catalyst factors can be seen as a set of
tools a team might use in order to establish itself as a brand and reinforce its brand
image. Internal factors are usually under the control of the sports team, or belong to the
latter. We will focus on two categories of internal catalysts: “fans bonding with the team”
and marketing actions.

“Fans bonding with the team”: Inspired by the work of Underwood, Bond and Baer
(2001), this category emphasizes on the experience the sports team provides to its fans.
We structured this category around three variables: i) the entertainment experience, ii)
the team’s involvement in its community, and iii) the physical facilities of the sports team.
- Entertainment experience for the fans: Sharing the experience with other fans
helps stimulate, increase and nurture the sense of belonging of the fans to the

9
 team, and contributes to leveraging the sports team’s brand (Underwood, Bond &
Baer, 2001). A team can improve the group experience and leverage its brand by
exploiting its entertainment appeal, such as at the Stade Vélodrome in Marseille.
Going to a game becomes a unique experience, an event you enjoy yourself and
with other fans, whose experience can influence your own experience
(Desbordes, 2000). As the Vice president marketing of the Montréal Alouettes
football club said: “We create and sell emotions to the fans”.

For example, rituals enhance the ambience of a game and help promote the
game as an event. The more attractive the ritual, the more it can potentially
enhance the brand. Examples include the Anaheim Angels’ (2003) Rally Monkey
and the slogans fans from rival teams exchange in the bleachers at European
soccer matches. In this instance, fans are both consumers and actors; being part
of the event is a “must” from the standpoint of social actualization of the fans
(Keyes, 1998).

The concept of entertainment could even take the form of alternate competitions,
such as the Premier 1 GP (2003), where competing cars represent European
soccer teams (Anderlecht, Benfica, Chelsea, Feyenoord, Leeds, Olympique
Lyonnais and Valencia). Such an initiative could help a team capitalize on
synergies that exist between soccer and auto racing, soccer fans generally being
auto-racing fans as well.

- The team’s involvement in its community: When players participate in sports

clinics, visit hospitals, sign autographs in a shopping mall and tour the region in
the team’s caravan, they show some willingness to be part of the community.
This increases the sympathy fans have for the players of their team, which can
reinforce the identification of the fans to the team, their sense of belonging, and
help the team go beyond its sports club status. To a certain extent, the sports
team becomes a brand with a kind of social conscience:

At a cost of more than $100,000 per season, Théodore [Montréal Canadiens’

goaltender] rented a loge for three years […], then donated its use to the
Montréal Canadiens Children’s Foundation. Every home game, four or five

10
 children are entertained here, treated to hockey and refreshments and
delightfully spoiled with souvenirs to celebrate their night (Stubbs, 2003, p.
C1).

- Physical facilities: The stadium can become a mythical place over time, which
creates a special ambience and helps trigger a unique attachment of the fans to
the team. Wrigley Field in Chicago and Fenway Park in Boston are good
examples (Clancy & Kelly, 2001). But a new stadium can also be associated with
modernity and a refreshment of the brand, as the example of LOSC shows
(Figure 4).
Furthermore, a team can improve the group experience and leverage its brand by
exploiting its entertainment appeal. For example, the Dallas Cowboys football
team owns a golf course and has turned their stadium into a theme park. This
shows the fans what the Dallas Cowboys product is all about: entertainment
(King, 1999).

Marketing actions. This category encompasses six variables a team can trigger in order
to leverage its brand: i) on-field jerseys, ii) sale of team’s merchandise, iii) players’
management, iv) promotional campaigns, v) commercial partnerships and vi) customer
relationship marketing programs (CRM).
- On-field jerseys: The attractiveness of the logos and colours worn by players are
worth considering, as well as the brand of the jersey (Adidas, Nike, Puma,
Umbro, etc.). Truly, the playing jersey or uniform is the most exposed product of
the team. It is the team’s trademark, and an excellent way to catch the attention
of potential customers and leverage the team’s brand beyond the hardcore fans.
This is why more teams are redesigning their team jerseys with new colours
(Edmonton Oilers, Colorado Avalanche, New York Islanders) or a modernized
logo (Arsenal, Toronto Blue Jays).
In some cases, nostalgia favours the sale of replicas of older uniforms, which
represents a stream of revenues for teams which face mounting pressures on
income (Cavanagh, 2001), but also for companies such as Mitchell & Ness
(Major League Baseball, 2003) or Toffs (2003). Furthermore, in 2003-2004, the
National Hockey League (NHL) teams will wear white jerseys on the road and

11
 dark jerseys at home, as it used to be until the 1960s, in order to increase the
sale of white jerseys around the league.

- Sale of team’s merchandise: Teams try to leverage the emotional attachment to

their brand through licensing and merchandising, among others (Future Brand,
2002). A rationale for the licensor to license a product “is linked to brand
extension and the enhancement of brand image and goodwill at a consumer level
[almost] without having to develop, produce, or market a new product” (Sport
Business Group, 2002a, p. 10). The success of merchandising can even be
increased when pop stars or actors wear team gear, or when it is inserted in a
movie (Heim, 2000).

Merchandise sales in Canada and the United States accounted for $3 billion in
2001. They represent 18% of the global sales for sports licensed products (Sport
Business Group, 2002a). And the potential is high in North America and in the
rest of the World, especially among teenagers who are avid consumers of
licensed products (Parmar, 2002), but also among women. Said the Vice
president marketing of the Ottawa Senators hockey club: “some women are more
enthusiastic than men in supporting their team”.

However, merchandising goes beyond selling jerseys, caps and bobbleheads: “In
several sports, licensed [video] games are now generating more revenues than
traditional forms of sponsorship and are catching up with the mega sums being
paid for sports broadcasting rights” (Sport Business Group, 2002a, p. 15).

We could say that the sale of team’s merchandise has a dual role: on the one
hand, it definitely helps build brand equity for the team among customers; on the
other hand, as the team increases its brand equity, fans buy more licensed
merchandise (Bobby, 2002; Cavanagh, 2001).

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- Players’ management: Acquiring a star player can have a strong popular impact,
draw support and enhance the brand (Bobby, 2002). In Europe, soccer teams
started pursuing Asian players prior to the 2002 World Cup, in order to promote
the sport and their team in a huge and fertile Asian market. In 2000, the AS
Roma soccer club signed the Japanese star Nakata, and now more teams are
willing to follow suit.

The same could be said, to some extent, of local players. Having on its roster a
local player that has a certain reputation and has established himself on the field
can help draw fan support and generate loyalty to the team. These players are
also more inclined to be recognized by the community and become involved
locally. For instance, French Canadian players are very important to the Montréal
Canadiens hockey team, which now can count on José Théodore as their
number one goaltender. Ever since he won two prestigious trophies in 2001-
2002, Théodore appears in several commercials on television and has become a
central figure in the Montréal Canadiens (2003) marketing campaign. This brings
us to the next variable: promotional campaigns.

- Promotional campaigns: First, advertising campaigns can potentially leverage the

brand by enhancing what makes its value. In the case of the Seattle Mariners
baseball team, the ads underline the efforts players put in to win, despite having
lost two of their superstars two years in a row: Ken Griffey Jr. and Alex Rodriguez
(Buckman, 2000).

Second, we should consider the tours professional sports teams go on when

promoting the sport and their team. For instance, in the summer of 2003, FC
Barcelona will meet Juventus of Turin and Manchester United during exhibition
games in the United States. The tour is part of an agreement with the National
Football League (NFL) in order to promote and leverage the FC Barcelona brand
(Football 365, 2002).

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- Commercial partnerships: Two examples are the agreements between
Manchester United and the New York Yankees on one hand, and AS Roma and
the New York Yankees on the other. Under these agreements, teams promote
one another, sell products from the partner’s franchise in its team stores,
broadcast each other’s games and share information on player fitness, health
and training. Teams that share similar brand equity could benefit from reinforcing
each other, especially when they are not part of the same sport (Team talk,
2001).

Moreover, sports teams can create “subsidiaries” abroad in order to strengthen

their image and become a brand of reference in potentially lucrative markets. For
instance, Ajax Amsterdam launched a new franchised soccer team in South
Africa in 1999: the Ajax Cape Town (Browne, 1999). Newcastle United acquired
a team called Hong Kong United, in order to compete against the commercial
hegemony of Manchester United in Asia (Sport Business Group, 2002b).

Also, agreement with distributors should be considered. The Lille Olympique

Sporting Club (LOSC, soccer) has an agreement with Auchan supermarkets,
which sells LOSC merchandise across France. For the LOSC, this agreement is
part of a marketing strategy in order to leverage its brand and position itself as a
reference in France, and eventually in Europe (La Voix du Nord, 2001).

- Customer relationship marketing programs (CRM): CRM encompasses sales

force automation, contact management, telemarketing, lead generation,
advertising campaign management, and customer service (Waltner, 2000). First,
teams collect detailed information about their fans’ demographics and
psychographics when fans apply for a loyalty team card or when a team
conducts a standard survey. The San Francisco Giants were pioneers in this
area in the nineties. Nowadays, teams from smaller (Ottawa Senators, hockey)
and bigger (San Diego Padres, baseball) markets use this system.

Second, sports teams can analyze the information and better market to their
customers; they get the fans out to the game and buy their products. This
enables teams to offer variable ticket pricing, depending on who is playing

14
 against the local team. The Toronto Raptors (2003) and the Vancouver Canucks
(2003) have adopted this approach. Third, CRM helps sports teams generate
sponsoring revenues in other areas. For example, the Nashville Predators
hockey club found out that their fans’ favourite participant sport is golf. This
inspired the team to attract a local golf course to sponsor a direct mail initiative
offering a free round of golf (Waltner, 2000). However, it should be pointed out
that CRM programs can be very expensive to manage and they provide
information on the current fans, not on the potential ones. This is why the Ottawa
Senators are actually revisiting their loyalty program.

External catalyst factors. External factors are environmental elements or factors that
are not under the immediate control of the sports team. There are three categories of
external catalysts: i) market size, ii) industry changes and iii) technological advances.

Market size. We will focus on the influence the fan base and TV deals have on the ability
of a team to leverage its brand.

- Access to a large fan base and lucrative TV deals: Stronger media markets
generally produce stronger brands and franchises (Future Brand, 2002). These
franchises have indeed access to a larger fan base, lucrative TV deals and
higher potential income from stadium operations. Following this reasoning too
closely, though, small market teams could be condemned to anonymity, which is
a very deterministic view. Indeed, the Green Bay Packers football team has
managed to create brand value through a unique ownership structure, a winning
record and quality merchandising (Future Brand, 2002). And the identification to
the Green Bay Packers goes beyond North America, as Packers merchandise is
popular in Europe, Asia and South America.

At the same time, it is true that smaller market teams can feel cut off. But poor
management seems to be more responsible for the problems encountered than
market size, as the expected dissolution of the FC Malines soccer team in
Belgium illustrates. Malines, now in a state of bankruptcy, was once the winner of
a European Cup in the nineteen eighties (Le Soir, 2002).

15
Industry changes. Some connections are appearing among three industries: sports,
entertainment and communications.

- Merger of sports with the entertainment and communications industries: An

increasing number of sports teams are now owned by communications and
entertainment companies (Toronto Blue Jays, Paris Saint-Germain, etc.).
Although convergence has been withheld by some companies, firms still try to
take advantage of new synergies in order to leverage their brand (Sport Business
Group, 2002a). Professional sports teams offer content to those who own the
pipeline (TV, Internet, radio, etc.) or add content to those who already own some
content. At the same time, teams should realize that they now compete with a
number of entertainment offerings to attract customers and get the latter to spend
their discretionary revenue.

For professional sports teams, this merger between three industries is an

opportunity to exhibit the attributes of the brand and showcase them to a larger
audience. An example is the exclusive contract the Réseau des Sports (RDS)
has signed with the Montréal Canadiens hockey team for the 2002-2003 season.
RDS is partly owned by one of Bell Canada Enterprise’s (BCE) subsidiaries, Bell
Globemedia Interactive; and BCE owns the arena where the Canadiens play their
home games.

Technological advances. These advances bring new means of communication, such as

the Internet.

- Development of new means of communication: The development of new means

of communication opens new frontiers for professional sports teams. The Internet
could bring a substantial increase in advertising revenues and electronic
commerce with the sale of licensed products (Desbordes, 2000). A web site can
strengthen the relationship between a team and its fans, and create a larger
community on a global level (Inc., 2000). Unfortunately, the potential of the
Internet still seems underexploited. A team website does not always provide the
fans with real info, focusing instead on promotional material and merchandise. As
a result of this, sports teams may be losing hits and ultimately money, because if

16
 fans do not visit the site, advertisers will have no reason to advertise there
(Dunleavy, 2000). Ideally, teams should move from a site that only provides
information to one that can help build a virtual community with the fans, beyond
their local market. Most of the professional teams seem to be in this transition
phase.

The constraining factors (constraints). Constraining factors are variables that can
stop or prevent a team from leveraging its brand. Constraining factors can be seen as
obstacles in a team’s pursuit to establish its brand. We have identified four categories of
constraints: i) fashion, ii) decline in loyalty, iii) life cycle of sports leagues and iv) the
general entertainment offering.

Fashion. Customers do not always know why they buy what they buy, which can dilute
the brand in the long run.

- Trend phenomenon: Though it can appear to be positive at the beginning, a

fashion trend is very short lived (Kotler, Filiatrault & Turner, 2000). Once the
trend is gone, what was once considered “cool” could become “dull”, especially
when the success comes too fast and the team is unable to sustain its success
on the field over time. As such, sports teams can become victims of their own
success and should be careful in exploiting a fashion trend among customers,
especially teenagers whose loyalty is extremely volatile (Parmar, 2002). Brands
can be misused and recuperated by gangs, as is the case with some American
sports teams (Los Angeles, Detroit).

Decline in loyalty. Players, but also fans, are showing signs of decreasing loyalty toward
sports clubs. And generally speaking, there is a decline in customer loyalty toward
brands.

- Decrease in customer loyalty toward brands: Customers seem to have less and
less loyalty toward brands, moving from one product to the other very quickly and
very often (Kotler, Filiatrault & Turner, 2000). At the same time, if a brand is not
clearly established, people will buy it for the price or not at all (Clancy & Kelly,
2001). In the world of professional sports, fans seem to start taking their distance

17
 from both management and players (Burton & Howard, 1999), as fans grow tired
of greedy battles between team owners and players’ unions (Daley, 2003). This
will become a challenge for professional teams, which try to build their brand and
leverage it by exploiting the emotional attachment of fans, at a time when the
emotional attachment of fans seems to be eroding.

- Less and less loyalty from the players toward their team: Players are becoming
less and less loyal to a team, because of the free agent phenomenon and
skyrocketing salaries, but also because team owners freely trade players. The
latter phenomenon is often expressed before the trading deadline when teams
are making a late roster move for the post-season. It becomes difficult for the
fans to associate with players that can be traded at any time, or develop a
committed relationship with a team that does not even keep its nucleus of players
from one year to another. Less attachment means less loyalty, which in turn
makes it more challenging for teams to leverage their brand (see Figure 1 and
Figure 2). Fans want authentic players and authentic brands (Davis, 2002, p. 21):
“credibility, integrity and honesty sell just as well as -- if not better than -- celebrity
endorsements”. That is a reason why professional sports teams try to get closer
to their fans: through community involvement by the players as we mentioned
earlier, but also, in some instances, by giving nicknames to their players
(Vancouver Canucks, 2003).

Life cycle of sports leagues. We refer here to the maturity or decline phase of sports
leagues.

- Maturity or decline phase of professional sports leagues: This is especially true in

North America, and transpires in the attendance and TV ratings steady decrease
over the last few years: since the 1994 strike, the attendance at Major League
Baseball games has dropped steadily. In 2002 alone, the decrease was 6.3%
(Godin, 2003). But in several European countries, TV rights have dropped
significantly as well in 2002, reducing the expected revenues of the teams and
forcing the latter to get rid of pricey veterans, such as in the German Bundesliga.
That’s why professional sports leagues aim at increasing their visibility and

18
 expanding overseas. Major League Baseball, for one, had regular games
scheduled in Japan, in March 2003, and plans to play some games in Europe, in
2004. And the NBA is now drafting Asian players, which increases the notoriety
of the league as a whole and of some teams in the region.

General entertainment offering. As underlined earlier, a sports team must sometimes

fight hard for the entertainment money of the customers.

- Competition from other entertainment alternatives: Because sports teams

compete against other entertainment offers in a respective city, fans could be
turned away by a lack of victories and chronic mismanagement. In such an
environment, a sports team needs to position itself on the market and highlight
the value it brings to the customers (see Figure 3). Otherwise, people will spend
their entertainment dollars on activities that do not involve professional sports
teams. This holds especially true in cities where customers have the choice
among a wide variety of entertainment options (arts, sports, restaurants, etc.).
Professional sports teams cannot take for granted the emotional attachment of
the fans; it needs to be nurtured in time. As the Vice president marketing of the
Montréal Alouettes football team said: “You cannot betray the emotion of your
fans. Otherwise, you alienate them, they go somewhere else, and they may
never come back”.

“Moderating” variables. Finally, we have identified three categories of “moderating”

variables, aside from the other variables. They can help a team build and reinforce its
brand equity, as much as they can hurt the team’s brand equity or restrain its expansion:
legal framework, finances and on-field performance of the sports team. We refer to them
as “moderating” variables because of i) the relative lack of control teams have on these
variables and ii) the impact on brand equity that is both generally difficult to assess for
sports teams and ambivalent.

Legal framework. We shall look at the mode of operation of the league and at the legal
status of the team within the league.

19
- Centralization in managing the league’s brands: For most North American
professional sports teams, the league governing body oversees the marketing
and protection of individual trademarks and products. Each officially licensed
product bears the logo of the league, as a seal of approval.

One of the benefits of a centralized approach to licensing and merchandising is

the preservation of the quality and uniformity of official merchandise around the
world. This applies to the introduction of new jerseys: for instance, the Ottawa
Senators’ (2003) third jersey was approved by the league and before the
beginning of the season, the team knows during which games the jersey will be
worn.

Moreover, with this centralized approach, the revenues from merchandising are
shared among the teams, which helps smaller market teams. This centralization
provides homogeneity and strengthens the overall quality of the league in itself
(Mullin, Hardy & Sutton, 2000).

However, centralization in managing the league’s brand handcuffs teams in their

initiatives. For example, in the National Hockey League (NHL), teams can exploit
their brand within a 75 mile radius of their local market. Outside of this area, the
NHL controls the marketing initiatives and teams must associate with companies
that are authorised NHL sponsors for any promotional campaign. As the Vice
president marketing of the Ottawa Senators hockey club told us: “The NHL does
not see the specificities of the markets. As a result, teams are not able to
leverage the brand as they could. We believe we would benefit more if we had
more control over merchandising, for instance. The Senators could build more
loyalty and leverage the brand better“.

For the Vice president marketing of the Toronto Maple Leafs hockey club, “the
geographical limits imposed on us by the league are a constraint. The same
applies to the equal sharing of revenues among the 30 teams. Toronto could
become the Real Madrid of hockey but not the way the NHL operates now”.

20
 In Europe, trademarks are held and marketed by individual teams, and no single
body oversees trademark portfolios. Consequently, if this gives more room to
manoeuvre for sports teams, there is a risk of inconsistencies in registration and
enforcement of the teams’ brands (Sport Business Group, 2002a).

- Legal status of the team: In North America, professional sports teams are
franchises. In other words, business people acquire the right to exploit a team
and its brand from the league, but the team remains the property of the league.
The advantage of this system is a more coherent image of the league and of the
teams’ brands (Tourret, 1992/1993). At the same time, franchises can be
contracted or moved to another city for business purposes, which can alienate
fans and threaten the integrity of both the sport and the league. The balance
between business and ethics is sometimes difficult to find within this system.

In Europe, professional sports teams are increasingly being managed as

companies, as showcased in England. In France, to better compete with teams
from major European championships (England, Germany, Italy and Spain), first
division soccer teams are putting more pressure on the league to change the
legal framework in relation with television rights, stadium lease, financing of the
team, etc, which should give them more flexibility to leverage their brand equity
(Le Monde, 2002).

Finances. The financial state of a team is important in enabling a club develop its brand
equity. However, it is not enough.

- Resources of the team: Resources, especially financial ones, can tremendously

help a team in establishing its brand: the New York Yankees are probably the
most convincing example in North America, whereas Real Madrid is a good case
in point in Europe. At the same time, the Oakland Athletics baseball club show
that it is also how you spend your money that matters (Future Brand, 2002). And
what about the Racing Club Lens soccer team, which has managed to preserve
its well-known family spirit in a city of 300,000 people, while taking into account
the demands of modern soccer? Its budget is the equivalent of US$50 million,
and 10% comes from the sale of licensed merchandise. The team also sells its

21
 milk in a region where the attachment to the region and to the soccer team runs
deep in the heart of the fans (L’Équipe, 2000).

On-field performance. This category has different facets. It encompasses both winning
and a winning tradition.

- Winning: People like to associate themselves with winners. A team that is

competitive can help leverage its brand, especially in the case of teams that are
younger or those that do not yet have a Stanley Cup or a World Series under the
belt. They need to build a fan base and loyalty to the team: “The best sales tool
any team has is a winning record. […] But teams can’t always be winners”
(Waltner, 2000, p. 113).

But there is more to it than winning: the style of play or the fight for survival of the
team can trigger an attachment toward the club and its brand. The team
becomes the underdog the fans like to follow. In 2002, the Montréal Expos and
the Minnesota Twins generated some sympathy, which went crescendo in the
case of the Twins, as the team qualified for the playoffs. Minnesota Twins
merchandise became strongly visible even on the website of Major League
Baseball (2003), which is an irony considering the league plans to contract the
team prior to the start of the 2002 season.

In fact, we could say that the ideal would be to build enough of a strong brand to
protect the team from the contingencies of on-field performances, at least in the
short term. As a manager of Lille Olympique Sporting Club said during our
interviews: “One or two bad seasons can be forgiven, but more than that, it can
alter the loyalty of the fans toward the team, harm the fan support and damage
the brand image of the club. And if you relegate in Second Division, that could
well be the point of no return, as fans throw the towel”.

In the same vein, if you dilute the product with repeated fire sales, the message
you send to the fan is that your product is not worth being bought. If the owners
do not believe in their team, it becomes very difficult to ask the fans to associate
themselves with the team and develop any emotional attachment and loyalty

22
 toward it. If there is little or no trust in a brand, the brand equity is very weak, as
we showed in Figure 1.

The three stars: From a local to an international brand

By exploiting the strong emotional relationship they have with their fans, which is
quasi unique to the sports industry, professional sports teams can build their brand
equity in order to position themselves as brands in the market. With this idea in mind, we
have developed a three stage framework, i) starting with the identity of the team, ii) then
building its positioning, before iii) developing and implementing a brand strategy.

In the discussion around brand strategy, we have looked at catalyst factors a

team can exploit, while managing the various constraints and the “moderating” variables
it may have to deal with. A certain emphasis has been put on marketing strategies and
merchandising. However, we should note that a brand strategy goes beyond selling
caps, jerseys and memorabilia. Often do we see teams that start working on their brand
equity focus exclusively on merchandising; this approach is very limitative, as are its
potential benefits. A brand strategy includes merchandising, but is not limited to the
latter.

As the managers of the Vancouver Canucks hockey club mentioned to us: “we
are looking to build a community brand that appeals to customers beyond our home
market”. Indeed, every solid brand is a community brand, in the sense that it binds
together a pool of customers who share the values of the brand, live the brand and take
possession of it. An established brand can move the fans along the emotional continuum
in order to increase their loyalty to the team. It is able to expand its customer base
beyond its market of origin, at a regional, national and even, in some cases, at the
international level (Figure 5). A global brand can be a mass international brand, such as
Coca-Cola, IBM or General Motors; they appeal to the mass market across countries.
But a global brand can also be a niche brand that appeals to a very specific market
segment across different countries, such as IKEA. Among international sports brands,
some could be continental brands, starting to emerge as true international brands
(Newcastle United), whereas others could be seen as true global brands (Real Madrid).

23
 If not every team can become a mass international brand, such as Manchester
United or the New York Yankees, every sports team has the potential for building some
brand equity. Even if the resources are limited, it is possible to conceive that a sports
team could follow a niche strategy to expand its brand across markets, reaching to
foreign customers based on its values (identity) and a shrewd positioning. Examples
exist: soccer teams in Belgium and Switzerland have started to consider this issue,
taking marketing more seriously in order to become commercially viable (The McKinsey
Quarterly, 2000), even tough they may still appear to be exceptions. This may change if
indeed, professional sports teams start working to build their brand equity and become
brands on their own.

24
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28
 Figure 1

What is a brand?

Name, word, sign, symbol, drawing

What is a brand?

Define and differentiate Promise Coherence and continuity

9 Emotional and personal relationship

9 Trust and loyalty

29
 Figure 2

Why my team is a brand?

Strong emotional attachment … … But still underexploited

Positioning ourselves
(vs. other teams & entertainment)

My team is a brand -
Why?

Trust and fan loyalty

Additional Outside the sports arena

revenues (brand extension)

30
 Figure 3

A framework for building sports teams’ brand equity

Brand equity

- Constraints
- “Moderating“ Brand strategy and - Internal catalysts
variables marketing actions - External catalysts

Positioning - Target market

- Why us?

Identity - Attributes
- Value creation

31
 Figure 4

Strategic construction of the brand: The LOSC example

Fighting spirit Solidarity

(Acquired) (Acquired)

Conviviality Modernity
(To be strengthened) (To acquire)

32
 Table 1

Catalyst factors, constraints and “moderating” variables

Catalyst factors Constraints and “moderating” variables

Internal catalyst factors Constraints

“Fans bonding with the team” Fashion

ƒ Entertainment experience for ƒ Trend phenomenon
the fans
ƒ Team’s involvement in its Decrease in loyalty
community ƒ Decrease in customer loyalty
ƒ Physical facilities toward brands
ƒ Less and less loyalty from the
Marketing actions players toward their team
ƒ On-field jerseys
ƒ Sale of team’s merchandise Life cycle of sports leagues
ƒ Players’ management ƒ Maturity or decline phase of
ƒ Promotional campaigns professional sports leagues
ƒ Commercial partnerships
ƒ Customer Relationship General entertainment offering
Marketing programs (CRM) ƒ Competition from other
entertainment alternatives

External catalyst factors “Moderating” variables

Market size Legal framework

ƒ Access to a large fan base and ƒ Centralization in managing the
lucrative TV deals league’s brands
ƒ Legal status of the team
Industry changes
ƒ Merger of sports with the Finances
entertainment and ƒ Resources of the team
communications industries
On-field performance
Technological advances ƒ Winning!
ƒ Development of new means of
communications

33
 Figure 5

Developing brand equity: From a local to an international brand

Level of (Global brand)

brand equity

International brand

National brand
(Continental brand)

Regional brand

Local brand

Time since implementation of a brand strategy

34