3290-Article Text-21010-1-4-20220817.docx

Financing the Underdogs: Business Strategies of

Small-Market Sports Teams

Bryan Wang and Jonathan Blackstock

Saratoga High School

Advisor

ABSTRACT

Small-market sports teams do not have the luxury of a massive media outlet, or an absurd salary cap that attracts

superstars. These small market teams are not able to create a superteam that fans from any region of the U.S would be

grateful to watch. To generate revenue and stay afloat financially is a task of itself. These small-market teams must

rely on non-materialistic attributes to survive in the professional sports world. In this essay I will discuss three market

strategies that the Memphis Grizzlies and similar small-market teams have used to not only stay afloat but create a

system that brings in new supporters and revenue.

Introduction

The announcer introduces a star player as he runs onto the court. Many fans in the arena proudly wear jerseys just like

his as they anticipate seeing a star player in his prime. The atmosphere is electric and ironic--ironic because this is not

a home game for the star player. He is playing in Memphis against the small-market Grizzlies. The attention thrown

on the star player creates a "grit and grind" mentality among the Grizzlies' players and among their loyal fans. The

underdog mentality, just like the star-player system, creates both fan appeal and marketing potential. This style of play

unites small-market teams--franchises that may not have a star player--to be just as strong as, or at least competitive

with, teams that feature a superstar. Every player on the Grizzlies is hungry to prove people wrong, contributing to

their success as a small-market team.

Fans attend games hoping to support local sports teams, watch intense competition, and admire the size of

the facility. Many people do not realize the strategies and effort it takes to just keep the team afloat financially. This

is even more true for small-market sports teams due to their reduced media coverage and smaller fanbase. Small

market teams use market strategies that create a winning atmosphere, encourage players to give back to the commu-

nity, and build partnerships with area businesses to stay competitive and generate revenue.

Grit and Grind

Small market teams often use a grit and grind mentality to create a winning atmosphere that motivates players to join

and improve which generates revenue. The term "grit and grind" refers to making the most of whatever financial and

human resources a team has at its disposal to reach a goal. The Memphis Grizzlies, for example, do not have a large

market that can attract expensive star players; however, they have relentless energy and play with a chip on their

shoulders, creating an underdog mentality with a passionate team-first atmosphere. This mindset motivates players to

work harder and improve. In the article Is Memphis the NBA’s Next Small-Market Success Story? Seerat Sohi (2022)

says, "Every front office has a type, and when a front office acquires enough of the same kind of player, a culture can

organically emerge. Memphis, by hitting on draft sleepers, naturally aggregated players who believed in themselves

when others didn’t, who clung tightly to their NBA dreams and worked hard despite not getting recognition." By

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ISSN: 2167-1907

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targeting players that the Grizzlies believe will play selflessly for the success of the team rather than individual acco-

lades, the Grizzlies build a grit and grind culture.

The public image of a high-energy, selfless team that the Grizzlies have created for itself has allowed more

players to consider Memphis as a destination. For example, "[Ja] Morant’s energy and unselfishness could eventually

attract free agents to Memphis. 'If he was out in the media,' says [NBA executive Andy] Shiffman, 'making it all about

him, guys don’t want to play with those guys. But Ja’s not that type of person.'" Shiffman further explains that,

"[s]lowly over time, Memphis is becoming more of a destination” (Sohi, 2022). If Memphis were to attract a player

with a large fanbase, the team would bring in even more revenue and more publicity. Additionally, with another

impactful player alongside Morant, the Grizzlies are more likely to be successful in the season and win more games.

Winning teams bring in more fans and more business opportunities. "As a result, the Grizzlies have a deep well of

players with the skill and versatility necessary for today’s game, but with the mindset of the underdogs who used to

lead this franchise" (Sohi, 2022). The team has a system, and consistency is part of helping the team as a collection of

strong individuals achieve more than people expect. The team, then, gains both local fans and everyone who does not

want to be a part of the big team bandwagon.

The grit and grind mindset shared by t

he players resonates with fans and connects them with other potential

ticket buyers. The underdog mentality shown in the Grizzlies’ style of play is relatable to many aspects of viewers’

lives. The speactators are more inclined to support a team they resonate with. By attracting fans that are able to relate

to the team on a deeper level, the Grizzlies can essentially turn these fans into marketers themselves. Referrals made

by these fans are considered,”…the golden leads to any salesperson in any sales industry. The internet and in particular

the secondary market like StubHub capture customers who have purchased one game from the ticket system. This

referral of name, address, email, and phone number is then forwarded to the NBA sales department” (Dick & Shwarz,

2020, 44). Referrals are important because they help to multiply attendance. Customers can be turned into marketers

and their interactions with their friends/family bring in more customers. However, others argue that their grit and grind

style of play is unappealing to watch. "By dedicating resources to defense first, the Grizzlies are committing them-

selves to have a better chance to accomplish their ultimate goal. They are also, however, committing themselves to

un-watchability” (Brown, 2013). Though this style of play is not captivating offensively, a winning season can make

up for the lack of showy offense.

Player Volunteering

Encouraging players to give back to their communities gives the team a positive public image, which makes local

businesses more inclined to form a mutually beneficial business partnership. One of the ways to create this partnership

is for individual players to volunteer in their communities. For example, Marc Gasol and Mike Conley volunteer at

local hospitals and have earned praise from Rick Shadyac Jr., President and CEO of ALSAC, the fundraising and

awareness organization for St. Jude Children’s Research Hospital.

“We’re especially blessed to have the support of Marc Gasol and Mike Conley, who are two of our

most dedicated ambassadors,” Shadyac said. “These guys spend hours at the hospital interacting

with kids in genuine and authentic ways. These are intimate conversations these two choose to

have with kids who look up to them. It’s not just photo opportunities and appearances. It reminds

these kids they are kids. And for the kids to be able to spend time with people they see on TV is an

incredible experience for them. (The children) talk about it all the time.” (Wiedower, 2016)

Grizzly players are making a difference in the world outside of basketball. By doing this, the Grizzlies get the whole

Memphis community to back them. People want to support a team that makes a difference in the world. Brands want

to support a team that is viewed positively by the public. Local businesses want to be associated with these kinds of

teams as well. All of this generates more revenue.

Patrick Fitzgerald, Vice President of Integrated Marketing and Communications with FedEx agrees that the

Grizzlies have found success in the sports marketing world. Fitzgerald says, “They’ve been an amazing organization

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from commitment to the community, and that’s from ownership to the players. They consistently get players who go

out of their way to give back to the community, and we’re proud to be associated with that” (Sheffield, 2016). A factor

that allows the Grizzlies to be a successful small-market team is their role in their community. Because the players

give back to the community and the grizzlies consistently bring in players that do the same, businesses are keener to

partner with them. Businesses want to be associated with a team that does good for the world.

Small market teams also polish their public image and generate more revenue when they aid communities

that have been struck by disaster. For example, small market sports teams in New Orleans helped out their community

after Hurricane Laura devastated the city. “The New Orleans Saints, Pelicans and the NFL Foundation announced

today a $500,000 donation to provide relief to victims of Hurricane Laura, the most powerful storm to hit Louisiana

in over 100 years. The Saints and Pelicans are working with three non-profits including Feeding Louisiana, Commu-

nity Foundation of Southwest Louisiana and the American Red Cross of Louisiana to actively support southwest

Louisiana’s storm recovery efforts” (NBA New Orleans Pelicans, 2020). The Pelicans and Saints create a symbiotic

relationship with their community by donating money to these nonprofits. Similarly, the Grizzlies raised money when

Memphis police officer Sean Bolton was fatally shot (NBA Memphis Grizzlies, 2015). When these small market

teams aid their community in its recovery from natural disasters and other tragedies, those who understand and are

affected by disasters are more likely to support these teams.

Partnerships with Local Businesses

In much the same way that professional teams connect with their local communities, teams also create a symbiotic

relationship when they connect with businesses. These partnerships with local businesses benefit both the company

and the small-market team. This networking with the team benefits the business by rewarding hard-working employ-

ees and creating a social atmosphere. For example, the Columbus Blue Jackets, a relatively small-market NHL team,

utilizes the tickets to create business partnerships that help companies motivate employees and even customers. Mike

Stasko, a Vice President of Sunny Street Cafe, uses season tickets for in-store promotions such as drawings and raffles.

The personal touch of a question and answer session creates strong networking between the team and the business.

Stasko says, “It’s always nice to do a Q&A with your Jackets rep or some of the higher ups. I learned a couple of

things from that, and also just the general networking. Everybody shares that common interest in the Jackets, so you

can hit it off that way and grow from there, so a couple of things that my business needs or on a personal level that I

need, I was able to make those connections” (Foglia, 2015). This sort of interaction creates strong business partners.

The shared interest in the Blue Jackets is used as common ground to build connections and hire valuable employees.

Happy and valuable employees are more likely to work harder for their company. This creates a cycle that generates

more revenue for the business.

Similar to the way businesses capitalize on their relationship with small-market teams, these teams are able

to generate a consistent revenue from this relationship. The small-market teams benefit from this network because

they are able to gain more season ticket customers with disposable income. These customers are integral to the finan-

cial success of the team, "Season tickets are always where the majority of the revenue is located in ticket sales. Season

ticket holders are the backbone of any sports franchise while ticket sales are the blood that circulates through the

organization. The 80/20 rule is in effect with 80 percent of our ticket sales revenue comes from 20 percent of our

ticket holders who are our season ticket holders" (Dick & Shwarz, 2020, 44). Season tickets holders are important

because this is revenue that owners can count on even if the team has a failing season. Those ticket holders also have

more investment, take more pride in the team, and invite friends and family, which creates more revenue. They also

buy products with their disposable income to show their brand loyalty.

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Conclusion

Before a team can even hope to win a championship or even a game, the team’s management must have a clear market

strategy to be financially stable. While a large-market team can afford to buy a superstar to attract more fans, a small-

market team needs to create a tight-knit team that separates themselves to be successful (Birchmore, 2021). A team

does not need a large media outlet, numerous superstars, or a massive city to generate revenue and be profitable. A

team that creates a winning atmosphere with players that make a difference in the world outside of basketball will

attract business partners, bring in more fans, and even generate more revenue. The revenue can be used to acquire new

players to increase the success of the team and even provide better training resources. This method contributes to a

circle of success where increased revenue can create wins.

References

Birchmore, E. (2021, August 22). Charlotte Hornets: Blueprint for small-market success. Fansided.

https://swarmandsting.com/2021/08/22/charlotte-hornets-blueprint-small-market-success/

Brown, H. (2013, August 08). The tradeoffs of the grit and grind for small market teams. Fansided.

https://bealestreetbears.com/2013/08/08/memphis-grizzlies-the-tradeoffs-of-the-grit-and-grind/

Dick, R., & Shwarz, E. The perceived value of marketing techniques utilized by NBA marketing directors. Journal

of Marketing Development and Competitiveness, 14(1), 38-47. http://t.www.na-

businesspress.com/JMDC/JMDC14-1/3_Dick_14_1_.pdf

Foglia, F. (2015, June 22). Business owners: How are you using your season tickets? NHL Columbus Blue Jackets.

https://www.nhl.com/bluejackets/news/business-owners-how-are-you-using-your-season-tickets/c-771489

NBA Memphis Grizzlies. (2015, August 07). GrizzNation supports Tennessee Heroes.

https://www.nba.com/grizzlies/news/grizznation-supports-tn-heros-150807

NBA New Orleans Pelicans. (2020, September 02). New Orleans Saints, Pelicans and the NFL Foundation donate

$500,000 to Hurricane Laura relief efforts.

https://www.nba.com/pelicans/news/new-orl

eans-saints-

pelicans-and-nfl-foundation-donate-500000-hurricane-laura-relief-efforts

Sheffield, M. (2016, October 27). Memphis Grizzlies are grinding off the court. Memphis Business Journal.

https://www.bizjournals.com/memphis/news/2016/10/27/memphis-grizzlies-are-grinding-off-the-court.html

Sohi, S. (2022, May 13). Is Memphis the NBA’s next small-market success story? The Ringer.

https://www.theringer.com/2022/5/13/23067950/memphis-grizzlies-nba-playoffs-ja-morant

Wiedower, L. (2016, March 2). Memphis wins big: Grizzlies players bring support to community. High Ground.

https://www.highgroundnews.com/features/GrizzPlayers.aspx

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ISSN: 2167-1907