Corporate Social Responsibility in Sports

The assignment focuses on the application of Corporate Social Responsibility (CSR) principles in sports management. It draws from various sources, including case studies, research papers, and industry reports, to examine the potential of CSR to enhance the reputation and sustainability of sports events and organizations. The document aims to provide insights into the strategic use of CSR in the sports industry, with a focus on the America's Cup as a prime example.

DEAKIN UNIVERSITY
FACULTY OF BUSINESS AND LAW
MMS712 – SPORT MARKETING
Case Study: 34th AMERICA’S CUP - San Francisco 2013
More than a Sport?
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Table of Contents
EXECUTIVE SUMMARY...........................................................................................................................3
CASE: 34th America’s Cup – More than a Sport?....................................................................................4
AMERICA’S CUP – THE SPORT & HISTORY..........................................................................................4
CAUSE MARKETING & CSR IN SPORT.................................................................................................4
OCEAN SUSTAINABILITY AS A CAUSE FOR CSR...................................................................................5
THE CASE OF THE 34th AMERICA’S CUP..............................................................................................7
TRANSFORMATION OF THE 34th AMERICA’S CUP – A MARKETING ANALYSIS.......................................9
IN CONCLUSION…................................................................................................................................11
CASE STUDY: QUESTIONS & ANSWERS................................................................................................12
REFERENCES........................................................................................................................................15
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EXECUTIVE SUMMARY
This case study was commissioned to examine the role of CSR and Sustainability as a
marketing tool used by sport/ sport organization in its business. This case study is of the 34th
America’s Cup 2013, held in San Francisco. how the sport leveraged itself as a CSR and
sustainability platform doing so by incorporating and embracing sustainability as a core
component in the business model of the sport organization.
The case study begins with the history of the America’s Cup, its struggles along the way in
terms of debt, loss of reputation and legal entangles. Also, this case study looks into Ocean
health as a global issue that needs to be addressed with urgency. The scope then widens to
exploring cause related marketing and CSR in sport.
Finally, this case study goes into the details of how the 34th America’s Cup successfully
managed an image makeover by rebranding and positioning itself as a socially responsible
citizen.
The key finding of the Case study is the use of cause related marketing and embracing CSR
as a core component of a business model coupled with the use of technology and broadcast
in promoting and positioning a sport event can result the event in positively impacting the
community on 3 counts; Social, economic and environmental sustainability.
The Case study is concluded by asking and answering three key questions viewing the case
from the marketing “lens” and applying and drawing from the marketing priciples.
Overall it is concluded that:
The net result for the 34th America’s Cup is that its strategy to adopt a cause related
marketing approach coupled with a complete brand makeover has enabled the organization
to boost its image rating, attract a wider variety of audience and reframe their relationship
with their stakeholders – sponsors, fans, and the local community of San Francisco whilst
still being commercially viable and delivering a significant social, economic and
environmental impact.
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CASE: 34th America’s Cup – More than a Sport?
AMERICA’S CUP – THE SPORT & HISTORY
In 1851, the Commodore of the New York Yacht Club built a boat christened “America” and
sent it across to participate in the invitational Royal Squadron Cup at the World’s Fair in
England. The race event victory brought the cup to the U.S and it came to be known as the
America’s cup, since (Pitts 2003). The America’s cup is Yachting’s most coveted prize and is
the oldest trophy in international sport. Its origin precedes the birth of modern Olympic
Games by 45 years (AmericasCup 2013). Despite being the most prestigious and famous
regatta and match race in sailing, the Americas cup hasn’t really drawn attention like other
major international sport properties like Formula One and the UEFA champions league. The
event has constantly been marred by controversies and legal battles surrounding the boats’
design, size and so forth. The America’s Cup Organizing committee (ACOC), in the wake of
the 1992 America’s Cup event, faced debt to the tune of $3 million and heavy discontent
from sponsors due to reasons like overestimation of broadcast revenue, the number of
attendees at the events and poor judgement of the sponsorship market (Pitts 2003).
Ultimately ACOC were accused of not knowing how to ‘package’ and ‘sell’ the event to
corporates of America for the 1992 event in San Diego. Brands like American Airlines pulled
out of sponsorship and did not renew having lost confidence in ACOC to run the event well
(Pitts 2003). The 1992 event delivered one-third to one-half of the estimated economic
impact of $911 million projected by a study conducted by University of San Diego in 1990.
The marketing hype did not effect in attracting people (Pitts 2003). Fast forward 18 years,
the 33rd America’s Cup was held in Valencia, Spain. The event was telecasted live in TV in
Europe, Australia and New Zealand but there was no live TV coverage for U.S viewers.
ESPN3 brought live internet coverage of the event to the United States. BMW Oracle racing
of the Golden Gate Yacht Club (GGYC) won the finals and brought the cup to U.S to host the
34th America’s Cup at San Francisco in 2013 (Miller & Washington 2011). The America’s Cup
desperately required a rebranding of sorts to resurrect its image and position itself as a
crowd attracting world class sport event. The event needed to come up with an extensive
marketing plan to attract fans, media, sponsors and other stakeholders of the greatest
sailing championship. The marketing strategy of the 34th America’s Cup forms the core
component of this case study.
CAUSE MARKETING & CSR IN SPORT
“Cause marketing is the action through which a company, a non-profit organization, or a
similar entity markets an image, a product, a service, or a message for mutual benefit”
(Marconi 2002). Business for Social Responsibility (BSR), a membership organisation
founded in 1992, studied a five-year analysis of cause marketing trends and noted that
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organizations engaging in cause-related marketing were able to quantify and connect the
benefits achieved through the activity to their, image, brand, reputation and bottom line
(Marconi 2002). Social investment, sponsorship, strategic philanthropy and value
partnerships are typical examples of strategies employed in executing a cause marketing
program. Basically, the objective of cause marketing is to integrate a company’s business
with a cause or issue that holds importance to people, community and the environment.
Social responsibility in sport too has come a long way. FIFA for example, directs over 40% of
their income to support grassroots, development work and to partnerships with relief
organizations. Philadelphia’s citizens are benefited by the Philadelphia Eagles’ “Go Green”
environmental campaign for a cleaner community (Walker & Kent 2009). NBA Cares, since
its launch in October 2005, the players, teams and the league itself have raised over $145
million towards charity, built over 525 places where families and children can live, play and
learn. NBA Cares have also provided more than 1.4 million hours of hands-on volunteer
service to communities around the world (Filizoz & Fisne 2011). Two main factors leading to
the growing emphasis of CSR for sports organizations observed by Walker and Kent (2009),
from different studies conducted on CSR in sport industry, are (a) the omnipresence of sport
resulting in seeing sporting organizations as influential members of the global community.
(b) the increasing awareness of the average sports consumer on social aspects of corporate
policy and their affective interests in sport.
OCEAN SUSTAINABILITY AS A CAUSE FOR CSR
Oceans are the most integral part of Earth. Oceans are critical for human sustenance and
provide for environmental balance. The use of Ocean resources and space play a significant
role in the global economic growth and prosperity. “Green economy” and “sustainable
development” don’t make sense without the incorporation of Ocean health. An inter-agency
(IOC/UNESCO, IMO, FAO, UNDP) paper presented at a UN conference on Sustainable
Development (Rio+20) listed the top threats that our world’s oceans face to include
(IOC/UNESCO et. al 2011):
 Unsustainable Fishing
 Ocean Acidification and Climate Change
 Pollution and Waste
 Loss of Habitats & Biodiversity
According to WWF, the single largest threat to ocean is unsustainable fishing. 90% of the
fisheries of the world have been overfished or exploited (WWF n.d).
In the last 200 years, due to intensified industrialisation and agriculture causing further
burning of fossil fuels, there has been a significant rise in carbon dioxide (CO2) emissions in
the world. This directly results in ocean acidification, which causes huge threats to ocean
species and their ecosystems in turn affecting human food resources (UNEP 2010).
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Since the 1970s, the ocean has absorbed over 93% of enhanced heating caused by
greenhouse effect and other human activities. Further analysis of data goes to show rapid
and sustained upward trend in ocean warming (Laffoley & Baxter 2016).
Marine pollution is an emerging issue affecting ocean health. More than 80% of marine
pollution is caused by land-based activities (WWF n.d). Particularly the ingestion of plastic
fragments into the sea has caused suffocation in several marine species (Thevenon et. al
2014).
Source: oceanconservancy.org
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The most compelling motives pointed out by Marconi (2002, p.21) for a business to engage
in cause marketing program in relation to environmental issues are:
(a) By doing so reflects a very strong sense of corporate social responsibility.
(b) The issue has a universal constituency that looks favourably on ‘pro-environment’
businesses and clearly unfavourably on those otherwise.
In a research conducted by Babiack & Trendafilova (2011), survey results with a collective
total of 137 sports organizations’ community relations and foundations directors (from
across various teams in the NFL, NBA, NHL, MLB and MLS) show that 43% of the executives
found that being perceived as a ‘good citizen’ was prime motivation to address
environmental issues. 39% of the managers felt that being environmentally responsible is
now a societal norm.
THE CASE OF THE 34th AMERICA’S CUP
The organisers of the 34th America’s cup, San Francisco 2013, have embraced ‘sustainability’
to significantly deliver greater impact for a better tomorrow whilst improving their
performance as a major sport event and building their relationship with the local
community. The 162-year old trophy which was facing a stagnant audience and a hurt
reputation had embarked on a cause marketing strategy taking the opportunity to tell the
“Sustainability story” by leveraging sport as a CSR and sustainability platform.
Sport is a huge engagement platform. It touches and reaches billions of people across the
world every day. Few facts shown below throw light on the scale of the power and reach of
sport in the US market and worldwide in 2011/12 (Duffy 2012).
 In 2011, there was a collective total of more than 42,500 hours of live sports
coverage on broadcast and cable TV in the U.S.A.
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 Advertisers spent close to $40 billion during those sports coverage on the national
broadcast and cable network with the top spender spending more than $ 420
million.
 35 million individual consumers streamed 460 million video from various online
sport sources in October of 2011.
Sport is also inclined to make a difference and to act as a socially responsible citizen. The
Olympics has for many years, embraced initiatives like sport for peace, sport and the
environment, Education and Development through sport and so forth.
The general public too have shown considerable responsibility towards social issues like
sustainable development. A global online survey conducted by Nielsen of over 28000 people
from as much as 56 countries suggests (Nielsen 2012):
 Over 66% of consumers around the world preferred to purchase/use products and
services from companies demonstrating social responsibility by engaging in activities
that give back to the community/society.
 62% would like to work for such companies and 59% would think to invest in these
companies. Also, close to 50% respondents would consider and pay a higher
premium for services and products sold by the companies.
According to the survey, the consumer segment that most resonated with the need for
organisations being socially responsible are the “socially conscious consumers”. 63% of this
consumer segment were young and below 40 years of age. Another fact that emerged from
the survey is that a whopping 66% of the ‘socially conscious consumers’ felt organizations
should support ‘environmental sustainability’ as a cause from a list of 18 potential causes
for social responsibility (Nielsen 2012).
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In effect, it has been established thus far that:
 Sport is a huge engagement platform with a massive market.
 Sport is inclined, if not committed, to give back to the community/society.
 The general public are significantly becoming more socially responsible.
 Environmental Sustainability is a pressing issue that needs to be addressed on an
urgent and continuous basis and the decline of ocean health is a global problem that
needs attention.
The organisers of the 34th Americas cup took these facts into consideration and came up
with a business model that incorporates sustainability into the DNA of the business (Duffy
2012).
TRANSFORMATION OF THE 34th AMERICA’S CUP – A MARKETING ANALYSIS
A comprehensive marketing plan was put to work (after significant research) in terms of
laying down strategic objectives, performing situational analysis and placing an emphasis on
positioning of the event as “beyond a sport”.
To view the existing situation through a ‘marketing lens’ and propose a definitive direction
towards rebranding the 34th America’s Cup, the organizers of the sport event had roped in
‘Designwerk, a UK based marketing agency, with objectives for the event to be more
appealing and engaging to a wider range of audience, especially to a younger market, whilst
still protecting the core market comprising the ocean racing fans (Hahn 2013).
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Tackling the difficulties of going about repairing the damaged reputation of the America’s
Cup, the organisers and Designwerk worked on 3 aspects that would make the event
relevant and engaging to a wider consumer base and make it commercially viable (Duffy
2012).
 Showcase the race to be fast and exciting to watch.
 Provide ample access to live coverage of the event making it easy to follow the sport
across different platforms such as TV, online and even physically at the event.
 Engage in delivering environmental sustainability as a core exercise during the event.
Cristian Cook, founder and creative director of Designwerk, in an interview said that his
team started with a changes to the logo, strategy and complete brand structure. The team
first defined all the various media channels in which the brand will make its presence. New
strategies around attracting a broader audience from different walks of life were devised,
Also, San Francisco, the host city of the 2013 event was showcased as a terrific location for
hosting the event. Finally, portraying the glory of the America’s cup history and its sailors,
thereby creating awareness around the world The new tagline of the America’s Cup read
“The best sailors, the fastest boats” (Hahn 2013).
Meanwhile the organisers procured lighter, faster, efficient and eco-friendly boats for the
2013 race event. Though costlier as compared to the regattas used in the earlier editions of
the sport event, it was in line with the strategic objectives of the cause marketing plan.
These boats were quoted to consume 50% less fuel and subsequently have drastically
reduced CO2 emissions footprint. The net effect also includes returns via fuel cost savings
(Duffy 2012).
At the cornerstone of the sport event’s commitment to social, economic and environmental
sustainability is “The Healthy Ocean Project”, a partnership between The 34th Americas Cup
and leading ocean conservation groups including Mission Blue, Sailors of the Sea, IUCN, One
World One Ocean among others (Americas Cup 2013). The project focused on three crucial
themes:
 Establishing more marine protected areas.
 Encouraging sustainable sea life choices.
 Reducing amount of single use plastics that end up in the ocean.
The goals were to get people care about the ocean and inspire them to act by engaging with
fans through educational videos and activities.
In a letter summarising the achievements of “The Heathy Ocean Project” to the stakeholders
of the 34th America’s Cup, the heads of three different ocean conservation groups reported
the following (Americas Cup 2013):
 Communications Strategy: The project had developed and executed a
comprehensive communications strategy for the three project themes.
 Educational Exhibits: The America’s Cup Village was host to $150,000 worth
education exhibits developed and built for by the Healthy Ocean project.
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 Shoreline clean-ups: Working over 3800 hours with more than 1100 volunteers, the
project had successfully organised 24 Bay Area shore-line clean-ups (and 3 others at
different places) recovering more than 20,000 pounds of garbage.
 International Ocean Protection Support: The project received an overwhelming
response from America’s Cup fans and spectators generating close to 10,000
pledges across 41 countries seeking action to be taken towards ocean sustainability
(beach clean ups, use of reusable water bottle etc.)
 Film & Lecture Series: A series of 13 educational Film and Lecture events were held
in association with world renowned ocean experts with excellent fan attendance.
 International Marine Protected Area (MPA) Pledge: An MPA-specific pledge was
circulated worldwide, in a bid to support marine protected areas and expanding the
National Marine Sanctuary waters off of the Golden Gate Bridge. This was well
received generating 1518 signatures supporting the movement from 27 different
countries.
 National Geographic Photo Camp: students of Astrisk Bay area High School were
taken on an educational fieldtrip, in association with the National Geographic photo
comp, explaining the fragility of the planet’s ecosystem.
 Sustainable Seafood Promotion: Addressing the major threat of sustainable fishing,
the project partnered with 28 restaurants to encourage the bay area eateries to
make sustainable food choices on their menu thereby promoting responsible food
choices by the public. This program got extensive coverage via the 34th America’s
Cup media channels.
 Habitat Restoration: Several shoreline/ coastline habitats were restored working
with organizations like WWF and National Parks Service in different regions across
the globe (Venice, Naples, San Francisco, Plymouth etc.). In addition, the project
donated funds to NFWF project to get rid of creosote pilings from San Francisco Bay.
 Marine Debris Mapping: 20 students benefited from this initiative by the project to
educate about marine pollution be collecting, analysing and mapping marine debris
pieces found in the Bay area
 Conservative event activities Promoting Marine environment: public engaging and
educating fieldtrips were hosed by the Heathy Ocean project to raise awareness
about marine environment and ocean health.
Having achieved its CSR goals in promoting environmental sustainability by engaging the
spectators through educational exhibits and conservation activities about the importance of
protecting the marine environment at the event through the Healthy Ocean Project, the
task was to attract and engage those followers for the event who are experiencing the sport
through various broadcast and media channels. This was done by a complete brand
makeover in terms of revamping the Cup’s website, logo, flags, sails, merchandise and
mobile apps (Hahn 2013). The 34th America's Cup races were formatted to enhance
spectator viewing with state of the art graphics, cutting edge coverage, and value to
sponsors (Miller & Washington 2013). Designwerk won various awards for Best overall
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visual identity, Best Company Branding, Best corporate rebrand to reflect changed values
(Designwerk 2013).
IN CONCLUSION…
The results of the 34th America’s Cup’s marketing efforts, in terms of regaining lost
reputation can be seen with major international brands like Emirates, Louis Vuitton, Red Bull
and Oracle sponsoring the new-look and feel of the 34th America’s Cup. Also, in terms of
broadcast data, the 34th America’s cup was televised in 190 countries. Over 1 billion people
got to witness the event (live/ delayed) through various TV and internet broadcast
worldwide. Unlike the 33rd America’s cup held in Valencia, the 34th America’s Cup was
telecasted live on TV in the U.S.A brought by the NBC network. According to Sports Business
Journal, sponsorship rights for the Cup were in between $3 million and $4 million (Miller &
Washington 2013).
The sustainability report of the 34th America’s Cup goes on to show that (AmericasCup
2013):
 The event diverted 85% waste from landfill.
 The prohibition of single use plastic bottle resulted in significantly reduce plastic
footprint at the event.
 The use of fuel efficient, faster regattas helped to drastically reduce carbon footprint
to keep the San Francisco’s seas clean and green.
 The event raised sustainability awareness and foster sustainable lifestyles through
inclusively engaging with the local community.
The net result for the 34th America’s Cup is that its strategy to adopt a cause related
marketing approach coupled with a complete brand makeover has enabled the organization
to boost its image rating, attract a wider variety of audience and reframe their relationship
with their stakeholders – sponsors, fans, and the local community of San Francisco whilst
still being commercially viable and delivering a significant social, economic and
environmental impact.
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CASE STUDY: QUESTIONS & ANSWERS
Q: Why did the 34th America’s Cup choose environmental sustainability (Ocean Health) as
a social issue to be addressed? Has this cause related marketing approach of help them
achieve their business objectives?
A: The growing importance of the natural environment as a focus point for CSR is apparent
from a recent study finding that organizations are increasingly paying attention to their
business’s impact on the environment and are consciously adopting ‘green’ management
practices to significantly reduce any negative impact on the environment (Babiack &
Trendafilova 2011). Being an ocean sport, The America’s Cup Organisers found its perfect fit
in addressing the global issue of deteriorating ocean health by partnering with leading
Ocean Conservation groups and leveraging their sport as a platform to voice the need to
protect the marine environment. This is in line with what Marconi (2002) suggested while
choosing a cause marketing partner. A business should keep in mind the compatibility of
their needs with the partner organisation’s objectives.
By proactively addressing issues like negatively impacting environmental sustainability, a
business is able to build stronger relationships with key stakeholders such as customers,
fans, local communities, corporate partners and local government and avoid legal recourse.
(Babiack & Trendafilova 2011). These were exactly the business objectives laid out by the
organisers of the America’s cup at the start – to build and regain the damaged brand image,
to strengthen their relationship with key stakeholders and attract fans while avoiding legal
recourse. The event was found to have positively impacted on all counts; social, economic
and environmental sustainability. Yes, by engaging in cause related marketing activities, the
34th America’s Cup organisation has achieved its objectives.
Q: Explain how the organisers went about ‘re-branding’ the America’s cup by drawing on
marketing strategies employed in terms of market segmentation and brand positioning.
A: The organisers of the 34th America’s Cup 2013, which was being held in San Francisco,
wanted to attract a broader audience. Having decided on a cause related marketing
approach by leveraging their sport as a CSR and Sustainability platform, the organisers
researched and identified the most socially responsive market segment to be the young
“socially conscious consumer”. Key activities of marketing strategy, and in order, are: (a)
Market Segmentation; (b) Market Targeting; (c) Market Positioning (Capon 2008).
With this segmented target market in mind, the organisers sought the help of a professional
marketing agency to go about positioning the product via a complete brand makeover. To
attract and engage with a young audience, they had to showcase the race to be fast and
exciting to watch. This was done by procuring faster boats, providing an inclusive, accessible
and engaging experience at the event venue. Also, by incorporating state of the art graphics
and cutting edge coverage to engage the fans who are consuming the sport via broadcast
and online media platforms.
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In the Psychological Continuum Model (PCM) Funk & James (2001) propose a conceptual
framework in trying to gauge a person’s psychological connection to sport (Fig 4). According
to the PCM, the first step in an individual’s/ fan’s connection with a sport or a sporting team
is awareness. This is done by engaging a fan in activities related to or through sport. When
the engagement happens he becomes aware of the sport and this engagement usually
depends on external factors like socializing (Funk & James 2001). In this case, the organisers
are attracting the new fans though engaging them socially at the event. The tagline of the
34th America’s Cup: “The best sailors, the fastest boats” reveals that the product is
positioned keeping in mind the young market that is attracted by speed. Also, the
marketing efforts projected the city of San Francisco to be a great location for the event
attracting more fans to the bay area. Place has an important role to play in marketing and is
a part of the 4 P’s of the Marketing mix. Finally, the product itself (America’s cup), its history
and its sailors have been glorified and projected through all media and online channels in
promoting the brand.
Fig 4: The Psychological Continuum Model (PCM); Source (Funk & James 2001)
Q: How has the 34th America’s Cup managed to attract sponsors given their hurt
reputation? Can other sports incorporate the 34th America’s Cup way of leveraging sport
as a CSR and Sustainability platform and succeed?
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A: Demonstrating Corporate Social Responsibility has become quite a norm these days. In a
research conducted by (Filo et. al 2007), the PCM approach (Funk & James 2001) is used as a
theoretical framework to examine the role of CSR in mediating the relationship between
motives behind sport participation, event attachment and purchase intent of event’s
sponsor’s products. The findings from the study indicated that while the motives drive event
participation, they will translate to purchasing intent of sponsor’s product only when the
consumers perceive and believe that the sponsor demonstrate social responsibility (Filo et.
al 2007). Therefore, in this scenario, having embraced sustainability as a core part of the
DNA of the business model, the 34th America’s Cup have demonstrated CSR. Also, the have
rebranded the cup and given the event a new and fresh look and feel. These two reasons
attract sponsors to come on board expecting the consumers to engage in their brand
activations during the event.
Finally, the 34th America’s Cup San Francisco, 2013 was successful because they
incorporated Sustainability as a core component in their business model and used the sport
to tell the “sustainability story”. Similarly, if other major sport events and organization can
be successful provided they embrace CSR as a core element of the business model rather
than a mere aftermath philanthropic effort. An immediate effect of this effort by America’s
cup can be felt by another ocean sport, Surfing, which requires the ocean to be fit to body
surf.
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