Special Edition: Refuting IOC’s Plan to End Modern Pentathlon Competition

The recent decision of the International Olympic Committee (IOC) to drop the modern pentathlon from the Olympic Games has prompted Dr. Thomas P. Rosandich, president of the United States Sports Academy, and the editors of The Sport Journal to publish a special edition bringing attention to this grave matter. We join the call that has gone out from various quarters to retain the modern pentathlon. It is a vital component of the Olympic Games and an important historic tradition. The special edition features the opinions of several IOC members, reproduced from four sources.

The first source is an abridged version of a letter from Klaus Schormann, president of the Union Internationale de Pentathlon Moderne (UIPM), to IOC President Jacques Rogge:

Monaco, 5 November 2002

According to our discussion during our last meeting in Lausanne [Switzerland], the UIPM is sending a summary of its arguments and response to the Program Commission report which it feels appropriate to be considered for the sport of modern pentathlon to remain in the Olympic program. These arguments, which cover a larger spectrum than those developed by the Program Commission, should be given to the IOC executive board prior to their last meeting in November, and to the IOC members in case the matter would be voted during the session in Mexico.

I. Answer to the arguments of the Program Commission

Lack of global participation by nations and individual athletes
Ninety-four nations from five continents are now affiliated with the UIPM (more are coming, as they are in establishment procedure), while the Olympic Charter requires 75 nations in four continents. The sport meets the criteria of the Olympic Charter. We want to remind that Pierre de Coubertin founded the sport in 1912 from scratch, on the model of the ancient pentathlon, the symbolic and complete sport of the Ancient Games, which means that this sport has never stopped growing since its creation.

—Significant expense of practicing the sport, with resulting difficulties in major development
Modern pentathlon is not more significantly expensive than most of the other Olympic sports or than those willing to enter the Olympic program. The change of its format to the one-day in 1992 and the new shooting system (air pistols instead of guns) have reduced the costs for organizing and training. Facilities already used by other sports are also for modern pentathlon, inside and outside of Olympic Games, for competing, training, and studying. The new compactness of venues in many cities gives new possibilities for modern pentathlon. The reduction of the costs for sport equipment (including horse riding) brings new possibilities. It is to be noted that pentathletes do not need to have a horse of their own, are not charged for that in competitions, and that the use of local horses does not require any guarantee.

—High operational complexity
Experience with organization of UIPM events on all continents and in the previous Olympic Games shows that all organizers were able easily to offer facilities for the five disciplines of modern pentathlon (shooting, fencing, swimming, riding, running) within walking distance. It is to be noted that no specific venue is required for the modern pentathlon, and that UIPM has developed a policy of polyvalent international technical officials. Modern pentathlon helps to a more efficient use of venues used at Games time. The official report of the XXVII Olympiad made by SOCOG makes a clear statement on this.

Relatively low broadcast and press coverage
The relatively low broadcast stated by the Program Commission does not fit the statistics established by the UIPM, which can easily be checked. . . . All major UIPM events on all five continents were covered by international TV during the last seven years. Due to its TV coverage, the UIPM has developed a successful marketing program . . . which is in very good standing in comparison with other Olympic sports.

II. Arguments which should be taken into consideration by the IOC to keep modern pentathlon in the Olympic program

Modern pentathlon is the only sport that has ever been created in its entirety by Pierre de Coubertin and the IOC, as the Ancient sports were created by the Ancient Greeks, and therefore [has] a symbolic value within the Olympic Games.
It was especially designed on the model of the ancient pentathlon in order to show all possible skills developed, through five sport events, in one single athlete, and not for a massive number of participants. It is important for the sake of the Olympic tradition.

—Modern pentathlon, from the skills it develops, has an educational value.
[It is] a complete sport: On the physical side, swimming, running are the basic disciplines; on the mental side, shooting requires stress control and a precise technique; on the intellectual side, fencing requires adaptability and intelligence; riding an unknown horse requires a mix of adaptability, self-control, and courage.

—Modern pentathlon has an entertainment function at the Olympic Games.
Since the Atlanta Olympic Games and the introduction of the one-day format, the interest of spectators at Games time has grown dramatically, which can be easily shown by statistics on the number of spectators at the Sydney Games (full venue and 15,000 spectators per session) and by an independent survey published in the Olympic Review.

An Olympic sport with reasonable number of athletes and with a high representation of NOCs.
Only 32 women and 32 men, a total of 64 athletes (in fact around 0.5% of the total athletes number), competing for only two days (six medals), which means that modern pentathlon, as one of the 28 sports of the Olympic program, has a very limited impact on the overall number of athletes in the Games. Remarks: The average number of athletes for the other sports is (10500 – 64) /27 = 386/ At the same time, modern pentathlon gives to many NOCs the possibility to take part in the Olympic Games. In Sydney 48 pentathletes competed while 24 NOCs were represented. This means 50% of the quota was dedicated to NOCs’ representation, which is the highest value of all Olympic sports.

A drug-free sport.
Since the one-day format has been created and due to the permanent efforts of the UIPM, modern pentathlon has become a drug-free sport. The one-day format has discouraged prohibited behaviors, as there is no interest in using drugs for shooting when fencing comes right after it. Anabolic substances are not useful in a sport that does not place the success of the winner only on his physical skills, but in his overall physical and intellectual harmony.

—UIPM, a flexible organization.
In addition to the changes in the modern pentathlon’s format, the UIPM has created an ad hoc commission looking at the optimal evolution of the sport for the future. The purpose is to keep to symbolic construction of modern pentathlon in placing its complete skills first, but looking, at the same time, at its events in order to fit with the evolution of sport practice in general. This commission already collaborates with the International Pierre de Coubertin Committee and intends to do the same with the other international federations and the IOC.

—Modern pentathlon is a symbolic sport for the Olympic Movement.
Modern pentathlon is a true representation of the Olympic Movement. The five Olympic rings are reflected in modern pentathlon’s five events and participation from all five continents. It is a true sport of the Olympic Games, created by the founder of the Modern Games, Pierre de Coubertin, and reflecting the ideals embodied by the Olympic Movement. It has to remain an indefatigable part of it.

The concept and the philosophy of the pentathlon are 2,710 years old, as described by Aristotle: “The most perfect sportsmen are the pentathletes, because in their bodies strength and speed are combined in beautiful harmony.” Created by the Greeks and renovated by the founder of the [Modern] Games, it shows the symbolic complete athlete in his body, will, and mind as stated and described in Fundamental Principle 2 of the Olympic Charter. Let’s keep this part of the soul of the Olympics, let’s keep it on the field of play, let’s see it on the stadium, and not only in the Olympic Museum in the future!

Table 1

The 28 Sports of the Olympic Program, Participating NOCs, and Disqualification Quotas

  Total Participating NOCs Total Disqualification Quotas Percentage
AcquaticsDiving 42 158 27%
AcquaticsSwimming 150 983 15%
AcquaticsSynchro Swim 24 104 23%
AcquaticsWater Polo 13 234   6%
Archery 46 128 36%
Athletics 194 2468 8%
Badminton 28 172 16%
Baseball 8 192 4%
Basketball 18 288 6%
Boxing 75 312 24%
CanoeSlalom 21 83 25%
CanoeSprint 43 265 16%
CyclingMountain Bike 33 80 41%
CyclingRoad 44 216 20%
CyclingTrack 38 190 20%
Equestrian 37 204 18%
Fencing 40 200 20%
Football 20 432 5%
GymnasticsArtistic 43 195 22%
GymnasticsRythmic 20 84 24%
Handball 19 329 6%
Hockey 15 352 4%
Judo 90 400 23%
Modern Pentathlon 24 48 50%
Rowing 51 549 9%
Sailing 69 404 17%
Shooting 103 411 25%
Softball 8 120 7%
Taekwondo 51 103 50%
Table Tennis 48 172 28%
Tennis 52 192 27%
Triathlon 34 100 34%
VolleyballBeach 23 96 24%
Volleyball 17 288 6%
Weightlifting 76 264 29%
Wrestling 55 319 17%

The second source reproduced in this special edition is HSH Prince Albert Monaco’s address to the IOC in Switzerland on behalf of the cause of the modern pentathlon:

HSH Prince Albert reaffirms Modern Pentathlon as soul of Olympic Movement, to be maintained for the sake of olympic tradition & values

I’m here not only because I am the honorary president of the UIPM, nor because Monaco is host to the headquarters of the UIPM. I’m here above all as an IOC member who is fearful that some very important part of the values and the philosophy of the Olympic Movement handed down to us by Baron Pierre de Coubertin might be lost forever if modem pentathlon should disappear from the program. The cultural dimension of this sport, its ancient roots and the educational value of its different components, are an important legacy for the IOC, for the Olympic Movement. This dimension is more important than the sport itself; the consequences of its demise larger than any one of us in this room.

Some people will argue that tradition and values are not the only elements that should guide us. If you look around you, watch TV, or read a newspaper article, you will find quite a few people saying the opposite: that a society has lost points of reference, that values have diminished. Why not continue to provide our youth with the kind of values and symbol that this sport possesses, and that they obviously are looking for? Why challenge a sport that celebrates and showcases the versatile, complete athlete? According to the latest figures from the Sydney Olympic Games, more people than ever seem interested in watching athletes test their abilities in combined events.

Is it right to deny the development of a sport that is growing in popularity and has sustained youth programs? There is a quotation from a young Cuban athlete in your brochure, “I want to compete in modem pentathlon at the Beijing Olympic Games.” Is it right to deny Jose Fernandez and his friends the opportunity to realize his dreams in an existing Olympic sport?

Having said all this, we are not stifled in tradition, we are not dinosaurs, we are willing to be open to change, if it is for the better.

The American philosopher and author Tom Wolfe once wrote, in his book The Search for Excellence,  “We must learn to accept change, as much as we hated to in the past.” I’m sure he meant changes in our society, changes in behavior, changes in economics, etc., not changes in our values.

The values of education and culture, and understanding through sport, are everlasting and something we in the Olympic Movement should hold sacred.

The third source reproduced in the special edition is a further communication written by Klaus Schormann, UIPM president:

I am just back in my home after a lot of traveling. . . . In Busan during the Asian Games (modern pentathlon was included, with the whole competition-program: individual women/men and relay women/men and team-medal. I could speak with a lot of IOC members, NOC presidents, and media people. As you can see [Table 2], my schedule for the next weeks is very busy; therefore, I think we should meet in Colorado Springs at the GAISF meeting (20 to 24.11.2002). I send you some documents about the “IOC Program Commission” and our actions now, for your information. UIPM needs from all institutions of international-sport-scene support: Public statements . . . for modern pentathlon are needed.

Table 2

UIPM President Klaus Schormann’s Schedule, September to December 2002

06. 08.09.2002 Biathle World Championships Cagliari ITA
09. 10.09. Executive Board UIPM Cagliari ITA
11.09. working-meeting NOC-Germany
– only Presidents –
Frankfurt/M GER
12.09. meeting DOG-Darmstadt Darmstadt GER
13.09. Freiburger Kreis SEMINAR
– Clubs / Federations –
statement DSB President M.v. RichtMofen
Darmstadt GER
14.09. meeting with business-people Stuttgart GER
18. 21.09. meetings in Beijing-BOCOG
– Olympic Games 2008
meetings with IOC Members
Beijing CHN
23. 30.09. Junior World Championships
and meetings with IOC Members
Sydney AUS
04.10. meeting with IOC President Rogge Lausanne SUI
08. 15.10. Asian Games in Busan
and meetings with IOC Members
Busan KOR
17.10. Council LSB Hessen
– Federations
Frankfurt/M GER
18. 20.10. 40th anniversary MP Bavaria
– Gala and competition –
Munich GER
24. 27.10. Pan American Championships
– Qualification Pan American Games 2003 –
Rio de Janeiro BRA
31.10. meeting in Rome WCH-2003-Pesaro Rome ITA
02. 03.11. General Assembly NOC Germany NUrnberg GER
08. 09.11. General Assembly MP-Germany/DVMF Darmstadt GER
15.11. 100th anniversary German Tennis Fedr Berlin Berlin GER
21. 24.11. GAISF General Assembly
ASOIF Extraordinary GS go 11 USA
Colorado Springs USA
26. 29.11. IOC-EB and Extraordinary Session Mexico-City MEX
04. 07.12. DSB-Congress and General Assembly Bonn GER
07. 15.12. EB-UIPM and General Assembly UIPM Cairo EGY

The fourth source reproduced in the special edition is an abridged version of a UIPM press release dated 8 October 2002:

UIPM Delegation Visits IOC Regarding the Olympic Program; HSH Prince Albert Reaffirms Modern Pentathlon as the Soul of the Olympic Movement, to be Maintained for the Sake of Olympic Tradition and Values; International Pierre De Coubertin Committee and DeCoubertin’s Family Call for Pentathlon’s Respect and Promotion

On 4 October, a UIPM delegation composed of President Klaus Schormann, Honorary President HSH Prince Albert of Monaco, First Vice President Juan Antonio Samaranch, and Secretary General Joel Bouzou was welcomed at the IOC headquarters by IOC President Jacques Rogge, accompanied by Sport Director Gilbert Felli and his new assistant, Olivier Lenglet.

The purpose of the meeting was to answer to the Program Commission’s recommendation to the IOC executive board and to present additional arguments to be considered by the IOC executive board before their final decision during their meeting in Mexico City, 26 and 27 November.

After the opening by IOC President Rogge, UIPM President Klaus Schormann referred to the letter sent to the IOC that answered the points raised by the technical report of the Program Commission. [As Schormann noted,] “We now have more than 95 countries in the five continents. . . . De Coubertin started the sport from scratch in 1912, and the media coverage of our events has dramatically increased since the adoption of the one-day format. Our sport is only using existing venues during the Games and therefore is not expensive, as stated in the report. Equally, compact venues in modern cities allow more and more pentathletes to practice the sport and combine it with studies.

President Schormann also mentioned the surveys made during the last Olympic Games by an independent observer, Prof. Dr. Mfiller from the research group of the Gutenberg University in Mainz, and by SOCOG, which both support the UIPM counter-arguments. Dr Rogge confirmed that he took into account the point made by President Schormann concerning the flexibility of UIPM in terms of the sports evolution.

UIPM Secretary General Bouzou recalled that modem pentathlon does not need any specific venue for the Games; that most modem cities have multisport complexes adapted to the organization of modem pentathlon; that nine modem pentathlon major competitions are seen on international TV in the five continents; that, as stated by SOCOG (in a post-Games report), “[T]he quality of competition and sports presentation, combined with the most comprehensive television coverage ever of modem pentathlon in Olympic Games history, ensured first-class viewing for live spectators and global television audiences.” He also acknowledged the fact that modem pentathlon is not, and will never be, practiced by millions of athletes throughout the world. However, it was never designed for this by the founder of the Games, Pierre de Coubertin, but to be used as a living symbol of all values within a single sport. This was the reason why exceptional personalities like General Patton or Chevalier Raoul Mollet chose this sport in their respective athletic times.

UIPM Vice President Samaranch reminded that 15,000 spectators attended each of the two days of modem pentathlon at the Sydney Olympic Games, in sold-out venues, and that there are only 64 athletes competing in modem pentathlon, which represents only 0.5% of the overall number, and, therefore, that taking the sport out of the program would not affect the reality in terms of cost.

IOC President Rogge, following the presentation of all the arguments, informed the UIPM delegation that he would ensure they would all be duly reported on to the IOC executive board.

Professor Dr. Norbert Muller, president of the International Pierre de Coubertin Committee, wrote a letter to the IOC president saying that he had been “informed with great regrets about the proposal of the program commission,” adding that, “this sport represents the real legacy of Pierre de Coubertin, which he elaborated personally when he wanted to showcase the Perfect Olympic Man or Woman.” [Muller] transmitted an appeal from the committee, saying, “[T]he personal legacy of Pierre de Coubertin should be respected and modem pentathlon permanently included.”

Mr. Geoffroy de Navacelle de Coubertin, the great-nephew of Pierre de Coubertin, also wrote to the IOC president, saying, “Let me tell you my astonishment and my emotion. I have always decided not to interfere with the IOC business. I am simply concerned in making sure that the achievements and the philosophy of Pierre de Coubertin will be respected. This sport is the most symbolic one in showing the perfect athlete. Should you not promote and support it in order to make it grow, instead of only promoting ‘specialists’ which media like so much?” De Coubertin had contacted Schormann . . . in order to create a permanent Pierre de Coubertin Commission within UIPM, that he would lead, the role of which will be to promote the philosophy of the founder “on the ground,” particularly through modem pentathlon events, in close cooperation with the International Pierre de Coubertin Committee, throughout the entire world. The Pierre de Coubertin Commission was established 1 October 2002, comprising the following members: de Coubertin, Schormann, Muller, Bouzou, and modern pentathlon Olympic champions Dr. Stephanie Cook [of Great Britain] and Janus Peciak [of Poland].

Author’s Note:

Correspondence regarding this articLEwhould go to:

Union Internationale de Pentathlon Moderne (UIPM)
Tel. +377,9777 8555 Fax.+377 9777 8550
E-mail: pentathlon@monaco.mc
For more on Pentathlon, visit the website: http://www-pentathlon.org
08.10.2002/ JB

 

 

A Review of Service Quality in Corporate and Recreational Sport/Fitness Programs

Abstract

This article is a review of the literature related to the study of service quality in corporate and recreational sport and fitness programs. It considers earlier discussions of conceptualization and operationalization aspects of consumers’ perceptions of service quality. It reviews several models used by researchers in the past, as well as more recent approaches to understanding the constructs of service and service quality and the various means used to measure them.

Quality of service has been studied within the discipline of business management for years, because the market is increasingly competitive and marketing management has transferred its focus from internal performance (such as production) to external interests like customer satisfaction and customers’ perceptions of service quality (Gronroos, 1992). However, the concept of service quality has only recently—over the last two decades—gained attention from sport and recreation providers and those who study them (Yong, 2000). The service-quality framework known as SERVQUAL comprises a traditional disconfirmatory model and was the first measurement tool to operationalize service quality. Although it made a contribution to the field of service quality and was very popular among service-quality researchers in many areas, SERVQUAL proved insufficient due to conceptual weaknesses in the disconfirmatory paradigm and to its empirical inappropriateness.

Later service-quality frameworks included a greater number of dimensions than SERVQUAL offered. Most recent models, such as Brady’s (1997) hierarchical multidimensional model, have synthesized prior approaches and suggest the complexity of service-quality perception as a construct. Because of this complexity, despite numerous efforts in both business management and the sport/fitness field, the study of service quality is still in a state of confusion. No consensus has been reached on its conceptualization or its operationalization of consumers’ perceptions of service quality.

Service and Service Quality

Service quality has long been studied by researchers in the field of business management. However, they have reached no consensus concerning how the service quality construct is best conceptualized or operationalized. In presenting the literature that reflects this lack of consensus, it is first necessary to focus on the definitions and characteristics of service and service quality. The concept of service comes from business literature. Many scholars have offered various definitions of service. For example, Ramaswamy (1996) described service as “the business transactions that take place between a donor (service provider) and receiver (customer) in order to produce an outcome that satisfies the customer”(p. 3). Zeithaml and Bitner (1996) defined service as “deeds, processes, and performances” (p. 5). According to Gronroos (1990),

A service is an activity or series of activities of more or less
intangible nature that normally, but not necessarily, take place in
interactions between the customer and service employees and /or
systems of the service provider, which are provided as solutions
to customer problems. (p. 27)

Some researchers have viewed service from within a system-thinking paradigm (Lakhe & Mohanty, 1995), defining service as

a production system where various inputs are processed, transformed
and value added to produce some outputs which have utility to the service
seekers, not merely in an economic sense but from supporting the life of the
human system in general, even maybe for the sake of pleasure. (p. 140)

Yong (2000) reviewed definitions of service and noted the following features of service that are important to an understanding of the concept. First, service is a performance. It happens through interaction between consumers and service providers (Deighton, 1992; Gronroos, 1990; Ramaswamy, 1996; Sasser, Olsen, & Wyckoff, 1978; Zeithaml & Bitner, 1996). Second, factors such as physical resources and environments play an important mediating role in the process of service production and consumption (American Marketing Association, 1960; Collier, 1994; Gronnroos, 1990). Third, service is a requirement in terms of providing certain functions to consumers, for example problem solving (Gronroos, 1990; Ramaswamy, 1996). From these points Yong (2000) concluded that “a service, combined with goods products, is experienced and evaluated by customers who have particular goals and motivations for consumers for consuming the service.” (p. 43)

Among researchers generally, there is no consensus about the characteristics of service. According to Yong (2000), their various conceptualizations fall into two groups. First, there are those researchers who view the concept from the perspective of service itself. They pay attention to the discrepancy between marketing strategies for service and goods, in an approach that differentiates service (intangibles) from goods (tangibles). The suggestion is that distinct marketing strategies are appropriate for the two concepts. Parasuraman, Zeithaml, and Berry (1985) as well as Zeithaml and Bitner (1996) identified the following features of service that distinguish it from goods: Service is intangible, heterogeneous, simultaneous, simultaneous in production and consumption, and perishable.

Pointing out the unique features of service advances understanding of the concept, but it has drawn criticism, for example because the identified features are not universal across service sectors. As Wright (1995) noted, first, a service industry depends more on tangible equipment to satisfy customers’ demands, while some customers do not care whether or not goods are tangible. Second, some service businesses are well standardized; an example is franchise industries (Wright, 1995). In addition, some customers value equality and fairness in the service provided. Third, many services are not simultaneously produced and consumed (Wright, 1995). Fourth, highly technological and equipment-based services could be standardized. Critics other than Wright (Wyckham, Fitzroy, & Mandry, 1975) have argued that the four-point approach to service ignores the role of customers.

The second group of researchers conceptualizing service comprises those who view service from the perspective of service customers. These researchers focus on the utility and total value that a service provides for a consumer. This approach points out that service combines tangible and intangible aspects in order to satisfy customers during business transactions (Gronroos. 1990; Ramaswamy, 1996). The approach implies that because consumers evaluate service quality in terms of their own experiences, customers’ subjective perceptions have great impact upon service businesses’ success or failure (Shostack, 1997).

Conceptualization and Operationalization of Service Quality

Although researchers have studied the concept of service for several decades, there is no consensus on how to conceptualize service quality (Cronin & Taylor, 1992; Rust & Oliver, 1994), in part because different researchers have focused on different aspects of service quality. Reeves and Bednar (1994) noted that “there is no universal, parsimonious, or all-encompassing definition or model of quality” (p. 436). The most common definition of service quality, nevertheless, is the traditional notion, in which quality is viewed as the customer’s perception of service excellence. That is to say, quality is defined by the customer’s impression of the service provided (Berry, Parasuraman, & Zeithaml, 1988; Parasuraman, Zeithaml, & Berry, 1985). This definition assumes that customers form a perception of service quality according to the service performance they experience and in light of prior experiences of service performance. It is therefore the customer’s perception that categorizes service quality. Many researchers accept this approach. For example, Bitner and Hubbert (1994) defined quality as “the consumer’s overall impression of the relative inferiority/superiority of the organization and its services” (p. 77). But their definition of service quality differs from that of the traditional approach, which locates service quality perception within the contrast between consumer expectation and actual service performance (Gronroos, 1984; Lewis & Booms, 1983; Parasuraman, Zeithaml, & Berry, 1985; Parasuraman, Zeithaml, & Berry, 1990).

Parasuraman, Zeithaml, and Berry (1985) viewed quality as “the degree and direction of discrepancy between customers’ service perception and expectations.” According to this approach, services are different from goods because they are intangible and heterogeneous and are simultaneously produced and consumed. Additionally, according to the disconfirmation paradigm, service quality is a comparison between consumers’ expectations and their perceptions of service actually received. Based on the traditional definition of service quality, Parasuraman, Zeithaml, and Berry (1985) developed their gap model of perceived service quality. The model incorporates five gaps: (a) the gap between management’s perceptions of consumer expectations and expected service, (b) the gap between management’s perceptions of consumers’ expectations and the translation of those perceptions into service-quality specification, (c) the gap between translation of perceptions of service-quality specification and service delivery, (d) the gap between service delivery and external communications to consumers, and (e) the gap between the level of service consumers expect and actual service performance. This disconfirmation paradigm conceptualizes the perception of service quality as a difference between expected level of service and actual service performance. The developers of the gap model proposed 10 second-order dimensions consumers in a broad variety of service sectors use to assess service quality. The 10 are tangibles, reliability, responsiveness, competence, courtesy, credibility, security, access, communication, and understanding (Parasuraman et al., 1985).

Using these 10 dimensions, Parasuraman et al. (1988) made the first effort to operationalize the concept of service quality. They developed an instrument to assess service quality that empirically relied on the difference in scores between expectations and perceived performance. Their instrument consisted of 22 items, divided along the 10 second-order dimensions, with a seven-point answer scale accompanying each statement to test the strength of relations. The 22 items were used to represent 5 dimensions, ultimately: reliability, responsiveness, tangibles, assurance, and empathy. Yong (2000) described the five as follows:

Reliability refers to the ability to perform the promised service
dependently and accurately. Responsiveness reflects the willingness
to help a customer and provide prompt service. Tangible refers
to the appearance of the physical facilities, equipment, personnel and
communication material. Empathy refers to caring, individualized
attention the firm provides its customer. (p. 66)

In their seminal study, Parasuraman and colleagues used SERVQUAL to measure service quality as the gap between expectation and perception in several venues: an appliance repair and maintenance firm, retail banks, a long-distance telephone provider, a securities broker, and credit card companies (Parasuraman et al., 1985). The study provided a comprehensive conceptualization of service quality, and it marked the first time, in service-quality research, that an instrument for measuring perceived service quality was used. It became very well known among service-quality researchers.

However, numerous researchers challenged the usefulness of the SERVQUAL scale as a measure of service quality (e.g., Babakus & Boller, 1992; Brown, Churchill, & Peter, 1993; Carmen, 1990; Cronin & Taylor, 1992; Dabholkar, Thorpe, & Rentz, 1996). Carmen (1990) selected four service settings that were quite different from those in the original test and found that in some situations, SERVQUAL must be customized (items added or edited), despite its introduction as a generic instrument measuring service quality in any sector. In addition, Carmen suggested that SERVQUAL’s five dimensions are insufficient to meet service-quality measurement needs, and that measurement of expectation using SERVQUAL is problematic.
Finn and Lamb (1991) argued that “the SERVQUAL measurement model is not appropriate in a retail setting” (p. 487). Furthermore, they argued, “retailers and consumer researchers should not treat SERVQUAL as an ‘off the shelf’ measure of perceived quality. Much refinement is needed for specific companies and industries” (p. 489). According to Brown, Churchill, & Peter (1993) SERVQUAL’s use of difference between scores causes a number of problems in such areas as reliability, discriminate validity, spurious correlations, and variance restriction. Finally, Cronin and Taylor (1992) argued that the disconfirmation paradigm applied by SERVQUAL was inappropriate for measuring perceived service quality. The paradigm measures customer satisfaction, not service quality, and Cronin and Taylor’s study employing solely the performance scale SERVPERF showed SERVPERF to outperform SERVQUAL.

SERVQUAL’s shortcomings result from the weakness of the traditional disconfirmatory definition of service quality which it incorporates. Yong (2000) notes several problems in this traditional definition of service quality. First, customers’ needs are not always easy to identify, and incorrectly identified needs result in measuring conformance to a specification that is improper. Schneider and Bowen (1995) pointed out that

[C]ustomers bring a complex and multidimensional set of expectations to the service encounter. Customers come with expectations for more than a smile and handshake. Their expectations include conformance to at least ten service quality attributes (i.e., Parasuraman et al.’s 10 dimensions—reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding, and tangible).” (p. 29)

Second, the traditional definition fails to provide a way to measure customers’ expectations, and expectations determine the level of service quality. Because customer expectations may fluctuate greatly over time (Reeves & Bednar, 1994), a definition of quality based on expectation cannot be parsimonious. It is invalid, empirically speaking, to use the disparity of scores for expectation and scores for perceived service quality to measure service quality.

Oliver (1997) is another researcher who pointed out the traditional model’s difficulty distinguishing service quality from satisfaction. While perception of quality may come from external mediation rather than experience of service, consumers must experience satisfaction in person. In addition, judgments and standards of quality are based on ideals or perceptions of excellence, while judgments concerning satisfaction involve predictive expectations, needs, product category norms, and even expectations of service quality. Moreover, while judgments concerning quality are mainly cognitive, satisfaction is an affective experience (Bitner & Hubbert, 1994; Oliver, 1994). Service quality is influenced by a very few variables (e.g, external cues like price, reputation, and various communication sources); satisfaction, in contrast, is vulnerable to cognitive and affective processes (e.g., equity, attribution, and emotion). Quality is primarily long-term, while satisfaction is primarily short-term.

Discussing various analyses in terms of their definitions of service quality, Yong (2000) pointed out that service quality should not be defined using a disconfirmation paradigm (i.e., by comparing expectation and perceived quality). Indeed, since service quality may not necessarily involve customer experience and consumption, the disconfirmation paradigm does not clarify service quality (Yong, 2000). Furthermore, it is easier to measure service quality if judgment occurs primarily at the attribute-based cognitive level. Yong (2000) stated as well that customer perception of quality to date has been the main focus of service-quality research; consumers’ overall impressions determine service quality. Yong (2000) argues that what constitutes service changes from one service sector to another, so each sector’s consumers may perceive service quality differently, and that service quality is multidimensional or multifaceted. Finally, according to Yong (2000), service quality must be clearly differentiated from customer satisfaction.

Several researchers have approached service quality from perspectives quite different from that of Parasuraman et al. (1988). On the one hand, some scholars argue for multidimensional models of service quality. At first, Gronroos (1984) used a two-dimensional model to study service quality. Its first dimension was technical quality, meaning the outcome of service performance. Its second dimension was functional quality, meaning subjective perceptions of how service is delivered. Functional quality reflects consumers’ perceptions of their interactions with service providers. Gronroos’s model compares the two dimensions of service performance to customer expectation, and eventually each customer has an individual perception of service quality. McDougall and Levesque (1994) later added to Gronroos’s model a third dimension, physical environment, proposing their three-factor model of service quality. This later model consists of service outcome, service process (Gronroos, 1984), and physical environment. McDougall and Levesque (1994) tested the model with confirmatory factor analysis, using the dimensions of the SERVQUAL scale (which provided empirical support for the three-factor model). The three components from the above models, together with Rust and Oliver’s (1994) service product, represent one important aspect of services. All of them contribute to consumers’ perception of service quality (Yong, 2000).

On the other hand, Dabholkar, Thorpe, and Tentz (1996) proposed a hierarchical model of service quality that describes service quality as a level, multidimensional construct. That construct includes (a) overall consumer perception of service quality; (b) a dimension level that consists of physical aspects, reliability, personal interaction, problem solving, and policy; and (c) a subdimension level that recognizes the multifaceted nature of the service-quality dimensions. Dabholkar and colleagues found that quality of service is directly influenced by perceptions of performance levels. In addition, customers’ personal characteristics are important in assessing value, but not in assessing quality.

The two lines of thought on the modeling of service quality were combined by Brady (1997). He developed a hierarchical and multidimensional model of perceived service quality by combining Dabholkar, Thorpe, and Tentz’s (1996) hierarchical model and McDougall and Levesque’s (1994) three-factor model (Brady, 1997). Brady’s model incorporates three dimensions, interaction quality, outcome quality, and physical environment quality. Each dimension consists of three subdimensions. The interaction quality dimension comprises attitude, behavior, and expertise subdimensions. The outcome quality dimension comprises waiting time, tangibles, and valence. Finally, the physical environment quality dimension comprises ambient conditions, design, and social factors. Brady’s hierarchical and multidimensional approach is believed to explain the complexity of human perceptions better than earlier conceptualizations in the literature did (Dabholkar, Thorpe, & Rentz, 1996; Brady, 1997). Furthermore, empirical testing of Brady’s model shows the model to be psychometrically sound.

In a study of service quality in recreational sport, Yong (2000) further developed Brady’s (1997) model, proposing that perception of service quality occurs in four dimensions. The first is program quality: the range of activity programs, operating time, and secondary services. The second is interaction quality, or outcome quality. The third is environment quality. Yong tested his model with a two-step approach of structural equation modeling, and he supported multidimensional conceptualization of service-quality perception.

Conclusion

Perception of service quality is quite a controversial topic; to date no consensus has been reached on how to conceptualize or operationalize this construct. In its summarization of the existing literature about service quality, this article explored the concepts of service, service quality, consumer perception of service quality, and the conceptualization and operationalization of the service-quality concept. It covered several models of service quality, the earliest one of which was SERVQUAL. An application of the traditional disconfirmatory model, SERVQUAL represents the first effort to operationalize service quality. Although it made a great contribution to the field and was very popular among service-quality researchers in many areas, SERVQUAL is now thought to be insufficient because of conceptual weaknesses inherent in the disconfirmatory paradigm and also because of its empirical inappropriateness. Service-quality researchers working after SERVQUAL’s introduction proposed models containing additional dimensions. Brady developed a hierarchical and multidimensional model of perceived service quality by combining the ideas of earlier researchers. The relatively recent approaches like Brady’s (1997) utilize ideas seen in earlier models, yet more fully represent the complexity of the concept of service-quality perception.

References

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Brady, M. K. (1997). Re-Conceptualizing Perceived Service Quality: Hierarchical Model. Unpublished doctoral dissertation, The Florida State University.

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Selected Characteristics of Division-I Boys! Junior High Basketball Coaches in Taiwan

Introduction

According to many studies, basketball is the most popular sport among Taiwanese Youth (Wu, 1998; Liang, 2000, & Yu, 2000). Despite this, there are not many junior high schools that were willing to organize teams. Of the 724 junior high schools in Taiwan, only 16 teams (2.2%) had participated in the Division-I Basketball Tournament. These select few also do not have to compete in the local or regional levels to earn their playoff bids. Like most high school programs in the United States (Unknown, 1984; & Norwood, 1987) without a sufficient budget, finding proper coaching staffs to guide interscholastic sports is a difficult task for most Taiwanese secondary schools. Although 16 schools had hired their coaches and enjoyed Division-I competition, the qualifications of these coaches were often overlooked.

Paulson (1980) stated that in order for children to develop a love for sport, coaches must be held to high standards of proficiency. As a result, some research has been focused on issues of coaches’ background, education, playing experience, training, and certification (Sisley & Capel, 1985; Schweitzer, 1989; Stewart & Sweet, 1992; & Palmer, 1997). Schweitzer (1989) collected survey data of 350,000 high school coaches and found one-third to one-half of coaches did not receive sport-related education. Sisley and Capel (1985) conducted a survey in of high school coaches in the State of Oregon. They found 69.5% of the coaches were teaching and coaching at the same schools, 82.7% of the coaches were male, 54.9% had played at the high school varsity or intercollegiate teams, and that 34.5% of the coaches had majored in Physical Education (PE). Stewart and Sweet (1992) surveyed 400 coaches in Montana, with a responding rate around 72%. Among the 288 respondents, 77% (223) were male, and 94 (270) held at least a baccalaureate degree. 89% of respondents were teaching and coaching at the same school, and about 54% of respondents had PE as their major or minor.

Who are the coaches guiding most elite junior-high basketball programs in Taiwan? How did these coaches get involved with their coaching jobs? What qualifications and education did they receive in order to perform their coaching duties? The purpose of this study was to examine the demographic characteristics and the qualification in coaching education of the Division-I boys’ junior high basketball coaches in Taiwan. Since the information concerning the background, occupational education, and certification of basketball coaches was well documented, this study could provide more depth in identifying the coaching qualities and the needs of coaching courses.

Methods

The purpose of this study was to identify characteristics and qualifications of the current Division-I head coaches of boys junior-high basketball in Taiwan. Among the 16 Division-I junior high schools that had participated in the National Tournament, 11 head coaches had agreed to fill out the survey questionnaire. Of the eleven coaches, only one was female. Their ages ranged from 24 to 57 years old, with the mean age, 32.7 years. The average coaching experience was 7.0 years.

The questionnaire used in this study was developed by Palmer (1997) with slight moderations in order to adapt to cultural specificity. Items were designed to elicit demographic characteristics regarding coaches’ general information and their attitudes toward coaching certification and education.

The colleague of the researcher, Wu Ming, personally attended the National Tournament in Taipei and distributed the questionnaire to the subject coaches to collect the survey data. Data was collected during the preliminary round of the National Tournament in November 2001, with 16 schools playing three games in an attempt to make the second round. Coaches who agreed to participate in the study answered the survey questionnaire between games at the gymnasium or the hotel. The survey did not take more than 10 minutes to answer.

Results

Coaches were asked to indicate their highest level of education attained, playing experience and their enrollment in PE courses. Nine of the eleven subject coaches had a baccalaureate degree, one coach had an associate’s degree, and one had only a high school diploma. Five of the nine graduated from the National Normal University. Overall, two coaches graduated with a degree in PE, with seven taking PE courses during their study or as a minor. Six of the eleven coaches had participated in intercollegiate athletics before having played for their college basketball team.

Six of the eleven coaches coach boys’ teams only, while the other five coached both the boys’ and girls’ teams. A majority of the teams (89%) that they had coached would have an even distribution in numbers according to the different grades. The enrollment of the school they had coached ranged from 130 to 2,100 students. The average enrollment was 1,380.9. Among the 16 schools in the tournament, 77.8% had enrollment of more than 1,200.

Five coaches had indicated that the Bureau of Education of their counties or cities would require coaches to be certified. However, among these five coaches, only one had the required coaching certification. Either the Chinese Taipei Basketball Association or the municipal Bureau of Education certified three of the coaches. Interestingly, five coaches indicated that their jobs would be formally evaluated. The evaluators were the principal/ superintendent or the dean of academics.

Seven of the coaches were teaching at the school where they also had coached with four coaches hired out of the campus. Of these four, only one was paid for his coaching duties. Only one faculty-coach received pay for coaching. As a result, overall only two out of the total eleven coaches were paid for their coaching duties. Despite this fact, coaches were willing to volunteer due to their personal interest in basketball.

Among the eleven coaches, seven had attended a one- or two-day coaching clinic last year. However, in terms of a comprehensive coaching course that includes instruction in sport psychology, injury prevention, and health education, only five of the coaches had taken part in this type of course. Among the six coaches who had not attended a comprehensive coaching course, four of them stated that they did not have any information or access regarding this type of course.

Conclusions and suggestions

There was only one female coach in the Division -I Junior High Basketball. With males dominating the coaching, it is strongly recommended to have more female coaches in basketball.

The studies of Stewart and Sweet (1992) and Siegel and Newhof (1992) yielded similar high percentages in terms of coaches who are college graduates. The percentage of Taiwanese coaches who held a PE degree and the percentage of faculty-coaches were also quite similar to the findings of Sisley and Capel (1985) and Palmer (1997). However, this study found the percentage of the coaches who are volunteers is much higher in Taiwan. There were also a higher percentage of coaches in this study who had attended a coaching clinic in comparison to the results of Palmer’s study (1997).

According to Palmer’s study (1997), only 22.4% complete a coaching course. In the United States, 65% of the state departments of education do not require any certification of their coaches (Conn & Razor, 1989). Despite this, the Bureau of Education of Taiwan is still far behind the US educational departments regarding the issue of certification. Therefore, it is recommended that the Bureau of Education propose an education program to ensure the quality of its sport coaches.

Due to the small number in the sample, this study can only be viewed as a case study on the selected characteristics of the current Division-I junior high school coaches. Any further generalization to all secondary-school basketball coaches of Taiwan must be carefully considered. According to the responses of the subject coaches, there are two suggestions that the researcher would like to address to the schools and the Municipal Bureau of Education of various counties. (1) Since nearly 82% of the subject coaches were working on a volunteer-basis and nearly half of them coaching both boys and girls teams at the same time, there should be a method to reward or reimburse them. Although 82% had shown strong personal interest toward their coaching jobs, the administration should not take this for granted. Simply stated, keeping these coaches to maintain their jobs should be a primary concern in term of students’ interests. (2) More coaching courses should be offered and publicized to current coaches so they can obtain updated information and professional knowledge to perform their coaching duties. If certifying all coaches is a future concern, then course planing and the implementation will be extremely important.

References

Conn, J. & Razor, J. (1989). Certification of coaches-A legal and moral responsibility. The Physical Educator, 46(3), 161-165.

Liang, I.C. (2000). A study of consumer behavior on recreational sports participation of the undergraduates in Taipei City. Unpublished master’s thesis, National Normal University, Taiwan.

Palmer (1997). Selected characteristics of basketball coaches in Lutheran Elementary Schools. Unpublished Doctoral Dissertation. Daphne, Alabama.

Schweitzer, C. (1989). Coaching certification. Washington, D.C.: ERIC Clearinghouse on Teacher Education. (ERIC Document Reproduction Service No. ED 310 112).

Siegel, D. & Newhof, C. (1992). What should it take to be a coach? The Journal of Health, Physical Education, Recreation, and Dance. 63(6), 75-79.

Sisley, B. L. & Capel, S. A. (1985). Oregon coaches background survey-Background of coaches in Oregon high schools, 1984-85. Department of Physical Education and Human Movement Studies: University of Oregon. (ERIC Document Reproduction Service No. ED 280 832).

Stewart, C.F. & Sweet, L. (1992). Professional preparation of high school coaches: The problem continues. The Journal of Health Physical Education, Recreation, and Dance. 63(2), 75-79.

Wu, H.P. (2000). A study of implementry status and impedimentary factors of physical educational amusement camps of Taipei elementary /secondary schools. Unpublished master’s thesis, National Normal University, Taiwan.

Yu, C.F. (1998). The relationship between free time activities and health among students of a selected junior high school in Taipei City. Unpublished master’s thesis, National College of Physical Education, Taiwan.

Economic Values of Professional Sport Franchises in the United States

Abstract

In professional sport, the value of media rights, fees, and luxury suites is enormous. As a result of increasing revenues in professional sport, the economic value of teams has risen, and it will continue to rise to unpredictable levels. The purpose of this study was to examine the economic value of media rights, luxury suites, and club seats in North American professional football, baseball, basketball, and hockey franchises. Secondary data from league offices and networks were used to describe the significance to professional sport franchises of revenues deriving from media rights and luxury seat sales, and their symbiotic relationships.

Value of Professional Sport Franchises in the United States

Unlike industrial or financial business, which is generally valued on cash flow and assets, sport franchises are valued on their revenues. There are two reasons for this. First, in the long term, the operating expenses within each league are about the same for every team. Second, revenues most closely measure the quality of a team’s venue, and they also track athletic performance, ultimately the two most critical elements of team evaluation (Ozanian, 1994). The value of professional sport teams has risen over the past decade and is expected to rise to unpredictable levels during the next few years. The reason for the rise is revenues from the leagues, including gate receipts, broadcast rights fees, luxury boxes, club seats, concessions, advertising, and membership fees.

Professional sport leagues and network television have enjoyed significant growth for more than 30 years. Needless to say, many people participate in and enjoy the games of major professional sport. For example, 62% of Americans call themselves “Major League Baseball fans,” according to a 1997 ESPN/Chilton sports poll (John, 1998). Spectators consume sport indirectly, through television, to a far greater extent than they do directly, through personal attendance at events. More than 2,100 hours of televised sport are programmed per year by the four major networks, and cable televisionprovides an additional 6,000 hours. Professional sport and the media, especially television, are mutually dependent institutions, and extremely popular forms of entertainment. Although each has independent origins, their relationship now makes it hard to imagine one without the other. In total, 98% of all American homes have television sets, which are on for an average 7 hr 51 min a day (Sage, 1998). ESPN, which reaches 70% of American homes with televisions, broadcasts more than 8,000 hours of sport each year. Regional sport cable networks and direct satellite sport broadcasts are growing rapidly, and these generate countless thousands of hours of sport each year (Sage, 1998).

Revenue Streams

Broadcast Rights

To understand professional team sport, it is important to recognize that sport is not just games, it is business. The overall logic of professional sport is grounded in the principles of buying and selling goods, services, and labor. In the major professional sport leagues, revenues are divided among league members in varying percentages. National Football League (NFL) teams split ticket sales, or gate receipts; 60% goes to the home team, 40% to the visiting team. In Major League Baseball (MLB), the split is approximately 80–90% to the home team and 10–20% to the visiting team. The basketball and hockey leagues permit the home team to keep all gate receipts. Depending on the individual contract, a stadium or arena’s owner or an outside contractor may keep the revenues, or there may be a split with the franchise-tenant.

Revenue from national broadcast rights is shared equally among the teams that constitute the football, basketball, baseball, and hockey leagues (Shropshire, 1995). By the end of 1961, the U.S. Congress had passed the Sport Broadcasting Act permitting the professional sport franchises to negotiate the sale of national broadcast rights as a single economic unit. These antitrust exemptions applied to professional baseball, hockey, and basketball as well as to football. In 1962, CBS purchased the exclusive rights to broadcast the NFL, with a package worth $4.6 million a year. Two years later, assisted by 50% growth in ratings and therefore even fiercer bidding by all three networks, CBS agreed to a 300% increase and a package of $14 million for each of the following two years. This contract, incidentally, ensured the survival of the Green Bay Packers, who proceeded to dominate the league for years afterwards (Barnett, 1990). Thirty-six years later, the price tag for television rights for the NFL have increased dramatically. In 1998, the rights to televise NFL games, as well as the Super Bowl, for eight years were sold to several networks for $17.6 billion.

All NFL television money is split evenly among the teams, for an average $73.3 million per team per year. The rate is thus much higher than what MLB teams derive from that league’s network TV deal, which is not quite $11 million for each club. About 65% of all revenues of NFL teams comes from the sale of television rights (Sage, 1998).

Luxury Seating

Luxury suites and clubs seats are becoming one of the most lucrative of revenue sources for professional leagues. The revenue-generating potential of such luxury seats is tremendous, and luxury seating represents the leagues’ fastest growing revenue source (Hoffman & Greenberg, 1989). For most stadium construction projects, luxury seating has become a critical strategy to maximize cash flow per seat (Howard & Crompton, 1995). This potential revenue stream, for instance, has been instrumental in securing financing for Oakland-Alameda’s $121 million arena and Detroit’s $235 million Tiger Stadium. Realizing the tremendous potential revenue, many stadium and team owners are now trying to renovate and repair seats to make luxury boxes.

Pay-Per-View Networks

In addition, professional sport franchises are adding to their revenues through contracts with local pay-per-view television networks. Current trends show increasing revenues for pay-per-view over the next few years. The $435 million pay-per-view revenues of 1991 grew to total revenues of $1.1 billion in 1996 and of nearly $3 billion in 2000. The National Basketball Association’s Dallas Mavericks, Houston Rockets, Portland Trail Blazers, and San Antonio Spurs are involved in pay-per-view (Worsnop, 1991). It is possible that in the near future the World Series and Super Bowl may be televised in a pay-per-view format. Professional sport franchises see pay-per-view as a new source of revenue, beyond what they take in from the broadcast networks. It may help them to keep pace with escalating players’ salaries (see Table 1).

Table 1. Average Salary Climbs of MLB Players

Year
Average Salary
Increased Rate*
Decreased Rate*
1977 $76,066 47.70% N/A
1979 $113,558 13.70% N/A
1982 $241,497 30.08% N/A
1985 $371,571 12.80% N/A
1987 $412,454 N/A -0.02 %
1990 $597,537 20.17% N/A
1992 $1,028,667 20.81% N/A
1995 $1,110,766 N/A -4.92 %
1997 $1,336,609 19.34% N/A
1998 $1,398,831 4.65% N/A
1999 $1,611,166 15.18% N/A
2000 $1,895,630 17.65% N/A
2001 $2,138,896 12.83% N/A
2002 $2,384,779 11.50% N/A
* Means as compared to the previous year (source: USA Today)

Table 2. 1999–2000 Season Values and Revenues of Top Five NBA and NHL Teams (in Millions), with League Averages

Teams Values Revenues* One-Year Change in Value
NY Knicks
$395 $152 18 % ^
LA Lakers
$360 $133.2 28 % ^
Chicago Bulls
$314 $112.2 2 % ^
Portland Blazers
$272 $97.3 6 % ^
Phoenix Suns
$252 $96.8 5 % ^
NBA Average
$207 $79.9 15 % ^
NY Rangers
$263 $97.6 12 % ^
Philadelphia Flyers
$240 $88.9 14 % ^
Detroit Red Wings
$218 $80.7 12 % ^
Boston Bruins
$217 $77.6 10 % ^
Toronto Maple Leafs
$203 $84.4 35 % ^
NHL Average
$148 $60.6 10 % ^
* Revenues include media revenues, gate receipts, and stadium revenues (source: Forbes)

Media Revenues in Professional Sport

Television contributed to the nationalization of sport by making the prosperity of professional sport dependent on the creation of a broad-based national constituency. When NBC provided the first live network coverage of the World Series in 1949, fewer than 12% of U.S. households had television sets. By 1953, 15 of the 16 baseball clubs had local television contracts, and ABC introduced the first network game-of-the-week format. The share of U.S. households with televisions grew rapidly through the 1950s, reaching 67% of households (34.9 million homes) in 1955 and 87% of households (45.8 million homes) in 1960 (Zimbalist, 1992; Gorman, Calhoun, & Rozen, 1994). During the 1950s, none of the networks considered sport programming critical to their overall success. They put far more of their resources and effort into comedies, Westerns, and popular dramas.

But in the early 1960s, ABC broke with this pattern. ABC gambled that increased sport programming would give its network greater visibility, bring in new local television stations as affiliates, and improve the audience ratings for all shows. Sport telecasts contributed substantively to ABC’s rise from third place in prime-time audience ratings in the 1950s to the top in the 1970s (Rader, 1999). Today, up to 40 hours of professional team sport are beamed to home television sets each week by the major networks, and hundreds of additional hours are provided by cable networks spread across the country.

According to Zimbalist (1992), when the Yankees signed their first media contract, in 1946, radio and television together contributed only 3% of MLB’s revenues. That figure rose to 16.8% by 1956 and continued to increase through the years until, in the 1990s, television money represented more than half of baseball’s yearly earnings. In the case of football and basketball, broadcasting monies also amount to about one half of overall revenues; only hockey, whose history with national television can only be described as spotty, has thus far been left out of the formula. For example, MLB was in the middle of four-year pacts with ESPN and CBS that earned $400 million and $1.06 billion, respectively. Four-year NBA contracts with NBC and Turner, expiring in 1994, totaled $875 million. Hockey was not left out completely, however; the NHL’s five-year contract with ABC and ESPN, signed in 1992, was worth nearly $80 million (Gorman et al., 1994).

In addition to revenue from national broadcasting contracts, the leagues negotiated with over-the-air and cable networks to further increase their revenues. Deals cut between individual teams and local stations are crucial in sport and weigh heavily in a team’s financial success or failure. In the case of MLB, local television, radio, and cable generated more than $350 million for the 28 teams in 1993. For the NBA, revenues from local radio, cable, and over-the-air television come to over $100 million each year.

Table 3. Values and Revenues of MLB Teams (in Millions), 1998–2001

Team Values
1998
2001 Increased Rate Revenues*
1998
2001 Increased Rate
NY
Yankees
$491 $730 48.68 % ^ $175.5 $215 22.51 % ^
Cleveland Indians
$359 $360 0.27 % ^ $149.7 $150 0.87 % ^
Atlanta Braves
$357 $424 18.77 % ^ $142.7 $160 12.12 % ^
Baltimore Orioles
$305 $319 4.60 % ^ $130.5 $133 1.91 % ^
Colorado Rockies
$311 $347 11.58 % ^ $124.6 $129 3.53 % ^
Arizona
D’Backs
$256 $280 9.38 % ^ $116.3 $127 9.2 % ^
Texas Rangers
$281 $356 26.69 % ^ $108.1 $134 23.96 % ^
LA
Dodgers
$270 $435 61.11 % ^ $107.9 $143 32.53 % ^
Boston
Red Sox
$256 $426 66.40 % ^ $106.9 $152 42.19 % ^
NY
Mets
$249 $482 93.57 % ^ $99.7 $169 69.51 % ^
* Revenues include media revenues, gate receipts, and stadium revenues (source from the Forbes)

Sport and television coexist in a high-priced equation. The leagues in the major sports sell the rights to broadcast their games, making millions of dollars each season. The networks in turn sell advertising by the half-minute to sponsors on national, regional, and local levels. The sponsors, confident that sport reaches the right customers for their products, pay hundreds of thousands of dollars for their flashes of exposure.

The Baseball Network (TBN) is an example of creativity in advertising. TBN, in partnership with MLB, NBC, and ABC, was scheduled to run for six years beginning in 1994. As a media entity, TBN was charged with generating revenue for MLB by selling advertising time and promotional rights. Rather than take a projected 55% cut in rights fees and receive a typical rights fee from the networks, MLB agreed to accept 88% of the net revenue generated by TBN from sale of advertising and corporate sponsorship. Consequently, MLB shared the financial risk with the networks. It was thought that, if its advertising rates were reasonable, TBN would help the networks, MLB, corporate sponsors, and players market in sport. The networks stood to benefit because they reduced the risk associated with purchasing broadcast rights outright. (For example, in 1993, the year before the TBN deal, CBS had lost approximately $500 million on its four-year, $1.06 billion contract, due to its high bid and a shortfall in advertising revenue.) MLB and its players liked the new arrangement because the recently expanded play-off format would further line their already bulging pockets. Finally, the advertisers were excited about the arrangement with TBN because the new package included several changes intended to boost ratings, especially among younger viewers. Since this type of partnership appeared to please all parties involved, many thought other major sport leagues and their affiliated networks would eventually adopt it, thus furthering the growth of sport sponsorship and advertising (Carter, 1996).

Table 4. TV Sports: Broadcast Rights Fees

Network
Years Covered Avg. Cost Per Year Total Cost
MLB
CBS
1990 – 1993 $265 million $1.06 billion
ESPN
1990 – 1993 $100 million $400 million
ABC/NBC
1994 – 1999 $0-revenue sharing $0-revenue sharing
ESPN
1994 – 1999 $42.5 million $255 million
Voided after 1995 season
FOX
1996 – 2000 $115 million $575 million
NBC
1996 – 2000 $80 million $400 million
ESPN
1996 – 2000 $87 million $435 million
FOX Cable
1997 – 2000 $40.5 million $162 million
FOX
2001 – 2006 $417 million $2.5 billion
ESPN
2000 – 2005 $141.8 million $851 million
NBA
NBC
1990/91 – 1993/94 $150 million $600 million
TBS/TNT
1990/91 – 1993/94 $68.75 million $275 million
NBC
1994/95 – 1997/98 $187.5 million $750 million
TBS/TNT
1994/95 – 1997/98 $87.5 million $350 million
NBC
1998/99 – 2001/02 $437.5 million $1.75 billion
TBS/TNT
1998/99 – 2001/02 $222.5 million $890 million
ABC/ESPN
2002/03 – 2007/08 $400 million $2.4 billion
AOL Time Warner
2002/03 – 2007/08 $366.5 million $2.2 billion
NFL
ABC (Mon. Night)
1990 – 1993 $225 million $900 million
CBS (NFC)
1990 – 1993 $265 million $1.06 billion
NBC (AFC) 1990 – 1993 $188 million $752 million
ESPN (Sun. Night) 1990 – 1993 $111.25 million $445 million
TNT (Sun. Night) 1990 – 1993 $111.25 million $445 million
NBC (Superbowl) 1994 $40 million $40 million
ABC (Mon. Night) 1994 – 1997 $230 million $920 million
FOX (NFC) 1994 – 1997 $395 million $1.58 million
NBC (AFC) 1994 – 1997 $217 million $868 million
ESPN (Sun. Night) 1994 – 1997 $131 million $524 million
TNT (Sun. Night) 1994 – 1997 $124 million $496 million
ABC (Mon. Night) 1998 – 2005 $550 million $4.4 billion
FOX (NFC) 1998 – 2005 $550 million $4.4 billion
CBS (AFC) 1998 – 2005 $500 million $4.0 billion
ESPN (Sun. Night) 1998 – 2005 $600 million $4.8 billion
NHL
SportsChannel 1989 – 1991 $17 million $51 million
ESPN 1992 – 1996 $16 million $80 million
FOX 1994 – 1998 $31 million $155 million
ESPN
(ABC & ESPN2)
1999 – 2003 $120 million $600 million
(source: Forbes)

Sport Venues’ Golden Seats

Revenues from luxury suites—alternatively called sky boxes, luxury boxes, or executive suites—have become important to the professional franchises for maximizing cash flow per seat (Howard & Crompton, 1995; Funk, 1997). Luxury boxes are fancy rooms inside stadiums and arenas, in which corporations and some private individuals entertain clients and friends while also watching sport events. They are always up high, often near press-box level, and they are usually equipped with closed-circuit television for close-ups of the action. Every facility built within the last 20 years has luxury suites, and most of the older ones have been retooled to include them (Gorman & Calhoun, 1994). Wrigley Field in Chicago, for example, added 67 sky boxes for the 1989 season, each accommodating 12–15 people. Most of them rent for $45,000 to $65,000 a year. The revenue-generating potential of these luxury boxes would go untapped through the late 1980s. However, by the early 1990s, luxury suites had emerged as the most coveted and profitable of the venue-based revenue sources, contributing to unprecedented growth in sport venue construction. Club seats, sometimes called premium seats, are another source of increased revenue. Even when club seats lack a private entertainment or reception area adjoining the seats, they are usually more comfortable than seats found elsewhere in the stadium or arena (Rosentraub, 1997).

Luxury suites in stadiums hosting NFL franchises range in number from 47 in Seattle’s Kingdome to 370 in Irving’s Texas Stadium. MLB facilities have suites numbering from 19 in New York’s Yankee Stadium up to 161 in Toronto’s Sky Dome. The number of luxury suites in arenas used by the NBA range from 12 in Charlotte’s Coliseum to 360 in Detroit’s Palace at Auburn Hills. NHL teams play in facilities that have suites numbering from 16 in Florida’s Miami Arena to 135 in Montreal’s Molson Center. Table 5 shows the number of luxury suites and club seats in professional sport venues.

Table 5. Luxury Suites and Club Seats in Professional Sport Venues

Team/League Luxury Suites Club Seats Total Capacity
Florida Marlins 215 6,750 47,662
Cleveland Indians 129 2,058 42,400
Texas Rangers 120 4,099 49,292
MLB Total 1,841 40,500 N/A
Atlanta Falcons 203 6,300 71,280
Carolina Panthers 135 10,800 72,300
St. Louis Rams 120 6,200 65,300
NFL Total 3,091 60,978 N/A
Chicago Bulls 216 3,000 21,500
Detroit Pistons 180 3,000 21,454
Cleveland Cavaliers 92 3,000 20,562
NBA Total 2,057 32,780 N/A
NHL Total 1,860 28,978 N/A
(source: USA Today)

The revenue-generating capability of luxury suites and premium seats is enormous. Luxury suites at Jack Murphy Stadium in San Diego rented for $29,000 to $49,000 a season; at Candlestick Park in San Francisco, for $24,000 to $60,000 for the baseball season and $40,000 to $80,000 for the football season; and at Houston’s Astrodome, for $25,000 per baseball season and $15,000 to $45,000 per football season (Gorman & Calhoun, 1994). Taking the Dallas Cowboys as a specific example, use of luxury suites is the primary reason stadium revenue is such a significant portion of a franchise’s total revenue. The Cowboys have approximately 360 luxury suites that represent more than $23 million annually in potential revenue. Table 6 indicates the economic value of the Cowboys’ luxury suites.

Table 6. Economic Values of the Cowboys’ Luxury Suites

Suites Category # of Suites Average Price Potential Revenue
Circle 180 $31,000 $5,580,000
Crown 172 $57,000 $9,804,000
Platinum 8 $1,000,000 $8,000,000
Total 360 $23,384,000
(22.8% of Total Team Revenue)
The data in this table are from Financing Sport, by D. Howard and J. Crompton, 1995, Morgantown, W.V.: Fitness Information Technology. Reprinted with permission

The economic power of sales of luxury boxes and sales of club seats contributing to gross revenue has the potential to reach over $625.8 million and $329.9 million, respectively. As these dollar figures indicate, luxury seats and premium seats illustrate how a number of factors affect the amount of revenue a team realizes from sales of special seating. Currently, there are 8,090 luxury suites and 151,451 club seats for sale in professional sport venues, at a total amount of $955.7 million (as detailed in Table 5 and Table 7). The potential revenue from the sale of luxury suites and club seats by professional leagues is seen in Table 7.

Table 7. Potential Gross Revenue from Luxury Boxes and Premium Seats

League Luxury Boxes Premium Seats Potential Revenue
NFL $204,119,771 $56,231,120 $260,350,891
MLB $130,270,819 $84,115,293 $214,386,112
NBA $149,975,179 $115,627,254 $265,602,433
NHL $141,446,090 $73,982,339 $215,428,429
Total $625,811,859 $329,956,006 $955,767,865
* Adjusted for facilities housing more than one team (source: Forbes)

Conclusion

The development of the professional sport industry during past decades has been phenomenal. Prior to 1960, there were only a few independent sport leagues whose members could legitimately claim “major” status. Today, however, the situation is dramatically different. As professional sports have grown in recent decades, they have gained recognition as a vital part of the burgeoning mass-entertainment industry (Worsnop, 1995). The teams in the NBA, NHL, MLB, and NFL are worth, combined, more than $12 billion. Furthermore, over the next decade, the value of professional sport teams is going to rise to unpredictable levels.

Traditionally, revenues earned by professional team sport were a combination of media revenues, game receipts, and especially luxury boxes and club seats. In the coming 10 years, media revenues, particularly, will increase, attaining what currently seems an unthinkable position. The main reason will be the consolidation of media and entertainment companies and the voracious appetite these companies will have for sport programming. Also, among the various private sources of revenue for sport franchises (stadiums’ and arenas’ proceeds from parking fees, concessions, advertising, corporate naming rights, and special seating), luxury boxes and club seats have become one of the most valuable. The revenue-generating potential that luxury boxes and club seats offer to professional sport franchises is second only to the potential for media revenue. In conclusion, professional sport franchises now see the importance of attracting fans to their stadiums and arenas in order to increase their private revenues. Sport, especially professional team sport, can earn money in more ways than one.

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