Wharton School puts sports industry under microscope

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PHILADELPHIA -- In a basement classroom, a professor at the Wharton School of the University of Pennsylvania took his undergraduates on a tour of an industry.

For 90 minutes, Scott Rosner talked of "a possible line in the sand" drawn by television distributors that could eventually cut this industry's revenues. Consolidation and realignment, he said, were "not unlike when banks get rolled up."

He pointed out how expenses in the industry have been outgrowing revenues by a 2-1 ratio -- "Let's think about the sustainability of this."

He was talking about college sports.

"As a leading business school, we look at sports the same way Wharton looks at health care and finance and other leading businesses," Mr. Rosner said in his office before class. "By all metrics, it's one of the largest industries in the United States."

In recent years, Philadelphia has become a leading center for the academic study of sports. Research is focused across the spectrum, from the economic benefit of naming rights of local arenas, to diversity in sports.

Sports isn't a new field of research. Temple has one of the first and leading sports-management programs. History professors at schools such as St. Joseph's and Swarthmore have long considered sports history a legitimate field of research. David Karen and Robert Washington at Bryn Mawr have studied integration patterns in that sport. Swarthmore's 37-year tennis coach, Mike Mullan, also is a sociology professor at the college who has studied how Gaelic sports played into the assimilation of the Irish in Philadelphia.

Maybe what's changed lately is an acknowledgment by academia that sports is worth studying in real time.

In 2003, Rick Eckstein, a sociology professor at Villanova, and Kevin Delaney at Temple wrote a book, "Public Dollars, Private Stadiums."

"We would go on book tours and people always wanted to ask about sports," Mr. Eckstein said, remembering how they'd respond: "'The book isn't about sports. It's about stadiums, about politics, about power, about corporations. It just happens to be about sports stadiums.' And we would dismiss it."

The questions never stopped, Mr. Eckstein said, depressing them to no end. Until they realized, he said, "it really was about sports."

Ken Shropshire of Wharton figures that Philadelphia is right at the top as a place to study sports at all levels.

"There are very few cities with all four major sports franchises playing in the city limits and none with the league and union offices a train ride away," Mr. Shropshire said. "If Penn was a sports powerhouse, then there would be no better place to sit."

For the last decade, Mr. Shropshire has headed a think tank, the Wharton Sports Business Initiative.

Sports franchises looking at pricing models, for instance, can contact the Wharton Sports Business Initiative to collaborate on research. It doesn't have to be the major-league teams, either. One piece of funded research several years ago was titled "Sports Branding, Community Enhancement and Social Impact: A Longitudinal Study of the Camden Riversharks."

Mr. Shropshire, a special counsel at the Duane Morris law firm, always has side projects. He worked with the Big East on realignment issues for Duane Morris; led a mayor's task force on where to put the Philadelphia stadiums; and has done a lot of work on diversity issues, including leading a research effort for Major League Baseball's on-field diversity task force and heading an NFL diversity workshop at Wharton.

He has written a textbook with Mr. Rosner, "The Business of Sports." They've begun co-hosting a sports-business show on Sirius XM, part of a Wharton Business channel.

Temple economics professor Michael Leeds and his wife, Eva Marikova Leeds, a Moravian College professor, listened on the radio as someone from Wells Fargo's marketing department talked about the benefits of having the firm's name on the South Philadelphia arena.

"My wife and I both looked at each other and asked, 'What about profits?' " Mr. Leeds said.

That led to their research project on naming rights, done with a Temple honors student, Irina Pistolet.

Their findings? "No net impact on the companies that bought them," Mr. Leeds said. "They would have done just as well putting their money into more traditional advertising -- or into the bank."


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