Revenue

Revenue

Fifth-stream income and the business of cricket

Mr Adrian Pritchard

Posted: July 26, 2014

Mason’s (1999) much cited paper identified four streams of income in professional sport: paying spectators; broadcasters; commercial partners/sponsors; and local communities. The latter is more of a North American phenomenon, the result of franchising systems that are prevalent in the region. What his framework does not consider in any detail are those sports where there is insufficient income from these streams to support professional status.

In this context, the author has therefore been examining sources of income of the 18 county cricket clubs in England and Wales. A cursory look at their accounts shows that they generate more money from other activities than those that are cricket-related. Though cricket is their raison d’être, commercial activities that are not related to the sport appear to be financing it. As one CEO told me, ‘if you had not diversified into other areas you would be bust by now’. These clubs have been maligned within cricket for relying on handouts from the governing body, the ECB. They in turn generate most of their income from the sale of broadcasting rights. However, as defenders of the domestic game point out, they do provide the grounds and players for the national team.

Drawing from Levitt’s definition (1960), most sports marketers would define cricket teams as being in the entertainment business. The problem is that, unlike most generic businesses sports, cricket leagues and their teams are restricted in their ability to supply the core entertainment product: the game. Most sports have a season that does not run all year round, capacity constraints at their grounds and limited interest. These restrictions have led to problems in maintaining professional status in the UK for teams in sports such as American Football, basketball, ice hockey and speedway amongst others.

What cricket clubs provide a good example of is the ability to diversify into other areas in order to maintain professional status. 17 of the 18 have been professional since the 1920s and no club has ever ceased operation. Indeed, one could cite Ansoff (1957) in the way county cricket clubs have diversified and offered new products/services to non-core markets. Music concerts, drive-in cinemas, firework displays, gyms, hotels and physiotherapy units are some examples of this. What is not entirely clear is the extent to which these activities lead to interest in the sport. The general view amongst cricket club managers is the crossover is likely to be a single figure percentage, but at the moment it is difficult to track. Is it possible to get Cliff Richard, Madness and Take That fans to come to the cricket after seeing a concert at a ground? Increasingly sophisticated databases meant that this is likely to be easier to track in the future but does it really matter if this fifth stream supports the core product?

IAnsoff, I. (1957) “Strategies for diversification”. Harvard Business Review, September-October, 114.

IILevitt, T. (1960) “Marketing myopia”. Harvard Business Review, July-August.

IIIMason, D.S. (1999). “What is the sports product and who buys it? The marketing of professional sports leagues”. European Journal of Marketing, Vol. 33, No.3/4, pp. 402-418.

About Adrian Pritchard

Adrian Pritchard is a lecturer in marketing at Coventry University. His interests lie in the portfolio of products/services offered by professional sports clubs. He is currently investigating the extent to which clubs and leagues can transfer skills developed in the running of a  sports team.