NAICS: 33-9920 Sporting Goods Manufacturing
SIC: 3949 Sporting and Athletic Goods Manufacturing
NAICS-Based Product Codes: 33-9920912F, 33-99209146, and 33-99209151
American football equipment includes helmets, shoulder pads, pants, leg pads, decals, chinstraps, helmet cleaners, helmet polish, cleats, jerseys, and many other products. Although the equipment undergoes constant improvements, the basic items of sporting gear particular to football were established in the late nineteenth century and the first half of the twentieth century.
The predecessors of American football found their way onto college campuses in the 1800s. American colleges each played their own version of football; they were typically violent hybrids of the games of soccer and rugby. Princeton played a violent kicking game known as Ballown, in which players used their fists and feet to drive the ball forward. Harvard played a football game each Monday that was reportedly so violent that the day became known as Bloody Monday. Darmouth played Old Division Football, a soccer game played with hundreds of freshmen and sophomores. The Oneida Football Club played Boston Game, another violent running and kicking game. As these games developed on American soil, England was in the midst of formalizing the rules to its version of football. In 1863 the Football Association of England codified the rules to English football.
The United States began to formalize the rules to its own version of football in the years after the Civil War. Princeton developed the Princeton Rules in 1867. On November 6, 1869, Princeton played a game with nearby Rutgers that is seen as the first intercollegiate football game. That game bore little resemblance to modern football. Each team had 25 players on the field; there were 11 fielders lined up in their own territory as defenders, while 12 so-called bulldogs moved the ball against the opposing team. Each goal was a score. After each score the teams traded sides on the field. A player could advance the ball only by kicking or batting it with the feet, hands, head, or side. Rutgers won the game with a score of six to four.
Yale, Columbia, Princeton, and Rutgers finalized a set of rules for intercollegiate football in October 1873. The first rules were very close to the rules for soccer, although they did dictate at least one aspect that is part of the modern football game: the kickoff. Subsequent rule revisions helped shape the modern game: the touchdown was introduced in 1876 and the forward pass in 1905.
Walter Camp was a major force in moving the game of American football away from its soccer and rugby roots. Walter Camp was general athletic director and head advisory football coach at Yale University from 1888–1914, and chairman of the Yale football committee from 1888–1912. Camp is credited with a number of significant changes to the game: creating the line of scrimmage; shrinking the number of players from 15 to 11; standardizing the scoring; and creating the quarterback, center, and safety positions. Football's popularity began to extend from the Northeastern United States to the rest of the country at the turn of the twentieth century. The game was still notoriously dangerous; many college players suffered serious injuries and 18 players died in 1904 alone. President Theodore Roosevelt called upon college athletic leaders to institute reforms. The Intercollegiate Athletic Association of the United States was formed in December, 1905. The group instituted new rules and banned the sport's most objectionable practices. In 1910 this group changed its name to the National Collegiate Athletic Association (NCAA). By 1912 rules for the modern game of football were in place.
Many historians point to November 12, 1892 as a crucial date in the history of professional football. On this date William Heffelfinger became the first player to be paid to play in a football game. Leagues began to develop in the United States around the turn of the twentieth century as the sport's popularity increased. But the sport had to resolve serious issues: salaries were rising too quickly, players followed offers from team to team, and college players were allowed to play on professional teams. To resolve this, teams formed the American Professional Football League in 1920. The organization would change its name to the National Football League (NFL) in 1922. The number of franchises increased to 18 in 1924 from the original 10 in 1920. Football's popularity grew in the post-World War II period with athletes such as Johnny Unitas and Bobby Layne helping the sport gain even greater prominence.
The increasing popularity of football on television accompanied by increasing ticket sales and ticket prices in the post-war period created steady growth for both professional and collegiate football. As more money filtered into football programs, more money became available for improved equipment for players, training equipment, and playing fields. In 1960 Lamar Hunt challenged the dominance of the NFL when he created the American Football League (AFL). This development helped create the Super Bowl, the championship game played between the winners of each league (now each division). The first Super Bowl game was played in 1967. The two leagues merged in 1970, shortly after Joe Namath led the New York Jets to the AFL's first Super Bowl victory over the NFL. The merged NFL continued to grow in both revenues and number of teams, reaching 32 teams in 2007.
Football thrived in some places outside the United States. Canada, for example, has a rich and longstanding football tradition of its own. The Grey Cup, the championship trophy of the modern professional Canadian Football League (CFL) has been awarded since 1909. The modern Canadian game is played with slightly different rules than the U.S. game. Differences include twelve players, as opposed to the U.S. game's eleven; longer end-zones; three downs instead of four; and the rouge, a single point awarded for kicking a ball out of the opponents end zone. Despite the slightly different rules, Canadian football is played with the same equipment as the American game, and indeed many of the players and coaches in the CFL have come from the United States.
Other professional leagues formed in North America since the NFL-AFL merger include the World Football League (WFL) of the 1970s, two international leagues sponsored by the NFL, the short-lived XFL, and at least two professional Arena Football Leagues in which football is played indoors on a hockey-rink sized field.
The popularity of college football also grew rapidly with the help of television in the post-war period. The collegiate game is played by more than six hundred schools. Lower division programs participate in their own playoff system, while schools in the NCAA's top division participate in post-season bowl games and the Bowl Championship Series that attempts to match the two top-ranked teams from the regular season. Thirty-two bowl games were scheduled for Division I schools in 2007. These televised bowl games generate millions of dollars for the participating schools and football programs and provide a prime marketing opportunity for companies wishing to display the newest and best football equipment for the millions of high-school and youth football players and coaches who watch them. In 1994 the University of Michigan's football team entered new territory for sports equipment marketing when Nike signed the Michigan athletic department to an equipment deal that paid the University of Michigan more than $1 million per year. In 2007 Michigan switched from Nike to adidas for a new equipment contract worth $60 million over eight years, making them, again, the most highly paid college program.
In the early days of football, players wore almost no protective gear. Some players grew their hair long or tied bandanas around their heads to provide extra cushioning. Some early leather helmets and protective headgear appeared at the turn of the twentieth century. College players were required to wear helmets in 1939; the National Football League made the same demand of its players in 1943. The John T. Riddell Company patented the first plastic helmet in 1939. These first helmets tended to break. Riddell would have difficulty obtaining plastic during the war years.
By the late 1940s Riddell was able to refine its manufacturing techniques. The company changed its helmet design, reshaping the flat top to a teardrop shape. This new design helped reduce concussions and other injuries. A player's head could move side to side; in the old design the top of the player's head had to absorb most of the impact. Color had been used on the leather headgear of the 1920s and 1930s and was an important modification—color helped quarterbacks distinguish receivers far down the field. Color was increasingly becoming important to help distinguish franchises from each other. The Los Angeles Rams were the first team to design a graphic for their helmets. In 1949 colors could be baked directly on to the helmet in the manufacturing process.
Manufacturers were producing protective nose gear as early as 1927. These devices were made of leather and looked somewhat like a faceplate. Vern McMillan invented the first facemask. It was a rubber-covered wire mask on a leather helmet and was used in the 1930s. Riddell has noted how the development of the plastic helmet helped in the improvement of the facemask. The hole drilled for the bolt holding the mask onto the helmet would not expand in rigid plastic as it would if it was drilled through leather. The sides of the plastic helmet would not collapse and press the nut into the wearer's face. The facemask was modified several times in the 1930s and 1940s, using various combinations of leather, wire, and plastic.
Football is the most watched sport in the United States. The Super Bowl is the most watched event on television annually; an estimated 90.7 million viewers tuned in to watch in 2006. For its 2005 fiscal year the NFL reported revenues of $5.8 billion, approximately half of which were from broadcast rights. Ticket sales generated $1.4 billion, the balance ($1.1 billion) were proceeds from local broadcasting deals, team sponsorships, and ancillary sources such as the licensing of NFL footage for use in television and film productions. There has always been a good natured tug of war between the American version of football and the version of football played outside the United States, which is what Americans would consider to be either rugby or soccer. The United States tried to export its American version of football with the creation of the WFL in 1990. The goal of the league was to hold football games in Europe and Asia. These were American style football games with slightly altered rules to make the game more enjoyable to soccer and rugby fans. A typical WFL game was attended by 20,000 people, less than one-third of the 68,000 people attending an average NFL game. The WFL was generally ignored in the United States and it took a brief hiatus before returning as the NFL Europe in 1997. The league changed names again to NFL Europa in 2006 before ceasing operations in June 2007.
Sales and Market Share Data
Globally, adidas has approximately 35 percent of the global football market, including boots, balls, shirts, and related equipment. Nike is a close second in the market with a 33 percent market share. Puma is third with a 9 percent market share. These global figures represent football equipment used in American style football, soccer, and rugby.
Tracking a relatively small market such as football equipment in the United States is difficult. Data on football equipment are grouped in with larger data sets by most of the entities collecting such data, including the U.S. Census Bureau. Independent market tracking firms publish in-depth studies on such markets only periodically, which makes tracking of trends difficult. Nonetheless, a sense for the market can be gained by a look at the reports of several organizations, each providing a snapshot of the industry at a particular moment in time.
The Sporting Goods Manufacturers Association estimated that U.S. manufacturers shipped $474 million in football equipment in 2006. The NPD Group noted retail sales of footballs at chain sporting goods stores and mass merchandisers were $5.8 million for the first quarter of 1999. A total of $410,000 in lineman receiver gloves, $171,000 in protective equipment, $26,000 in belt/flag sets, $7,000 in helmets, and $361,000 in other related equipment were sold during this same year. These retail figures refer to consumer retail sales and omit sales made through catalog orders or online. It also omits the large school, institutional, and professional channels.
Some companies have carved out large market shares in various niche categories. Wilson Team Sports reported having 80 percent of the market for footballs as of February 2006. Riddell's contract with the NFL gave it 85 percent of the NFL helmet market according to data published in Market Share Reporter 2007. Riddell also holds a dominant share of the market for college and high school helmets. In 2002, according to one estimate, the market for new helmets and reconditioning services was approximately $89 million annually and was expected to reach $111 million by 2010.
Adolph Dassler began his shoemaking business in the family home in 1920. The company opened its first shop in 1927. Dassler manufactured special shoes for soccer and track and field, introducing studs and spikes for the first time. Adidas' shoes appeared on athletes at the 1928 Olympic Games in Amsterdam. By 1937 the company was manufacturing 30 different types of shoes for 11 different sports. The Nazis seized the company during World War II but in the post-war period Dassler rebuilt the company and named it adidas. The adidas brand was worn by numerous athletes at Soccer World Cup matches and during the Olympic Games of the 1950s and 1960s.
Having built a successful line of soccer and track shoes the company expanded into other sporting gear. Its popular tracksuits were marketed as early as 1964. By the 1970s the company lost ground in the North American apparel market to Nike. Adidas retained its popularity outside the United States, however. It continued to offer innovations such as the Copia Mundial, the world's best selling soccer shoe in 1979 and the Torsion sole system in 1988. It launched an equipment line in 1991. Adidas has become a major sponsor of soccer and football tournaments, such as the 2003 Women's Football World Cup in the United States and the European Football Championships of 2004 in Portugal. Adidas had revenues of $13.6 billion in 2006.
Nike, Inc. is based near Beaverton, Oregon, and is the world's leading designer, marketer, and distributor of athletic footwear, apparel, equipment, and accessories. The company began through the efforts of two men: Bill Bowerman, the track coach for the University of Oregon, and Phil Knight, an accounting major at the university and a runner on Bowerman's team. In 1962 Knight approached the Japanese company Onitsuka Tiger about importing high-end athletic shoes into the United States. Knight and Bowerman formed the Blue Ribbon Sports company in 1964. Blue Ribbon Sports began to distribute the shoes from Onitsuka Tiger. By the mid-1960s the Japanese shoes began to challenge Germany's dominance of the U.S. sports shoe market.
The company opened its first retail outlet and became the first distributor of Onitsuka running shoes in the United States. The shoe had a special cushioned wedge heel designed by Bowerman. According to Nike company historians, the name Nike, used first on one line of the company's shoes, was chosen because of its earlier usage, as the name of a Greek Goddess of victory. Graphic artist Carolyn Davidson designed the company's now famous Swoosh logo for a small, one-time fee. In 1972 tennis star, Ilie Nastase, became the first athlete to professionally endorse the new line of Nike shoes. In 1978 Blue Ribbon Sports changed its name to Nike, Inc.
Nike subsidiaries include sporting goods maker Converse Inc.; Nike Bauer Hockey Inc.; Cole Haan, which designs, markets, and distributes fine dress and casual shoes and accessories; Hurley International LLC, which designs, markets, and distributes action sports and youth lifestyle footwear, apparel, and accessories; and Exeter Brands Group LLC, which designs and markets athletic footwear and apparel for the value retail channel. Nike has 28,000 employees and earned revenues of $14.9 billion for the fiscal year ended March 2006.
Riddell Sports Inc.
John T. Riddell began a career as a teacher, head football coach, and athletic director at Evanston Township High School in Evanston, Illinois. Riddell soon recognized a problem with the cleats on the football shoes. In rain or otherwise inclement weather, the team's football shoes needed to be refitted with longer cleats. The shoes were not always ready in time. Riddell had the idea for removable cleats and got help from the J.P. Smith Shoe Company to produce them. In 1927 Riddell quit his coaching job and opened the Riddell Corporation two years later.
Riddell manufactured the first molded basketball shoe and the first soft-spike basketball shoe. In 1939, Riddell developed the first plastic football helmet. The first helmets tended to break during games. However, in the post war period the company perfected its manufacturing processes, making the helmet more comfortable and durable. The company continued to develop new products for football in the 1930s and 1940s. During this period Riddell produced the first chin straps, the first plastic facemasks, and the first low cut football shoes. Riddell died in June 1945.
The company continued producing innovative gear, manufacturing the first clear and tubular bar guards, the first nose protector, and the first microfit and air cushioned helmets in the 1950s and 1960s. In the 1980s the company began to produce high school and youth shoulder pads. In 1988 it acquired the Power Athletic Company, a manufacturer of professional shoulder pads. In 1989 Riddell became the official supplier of helmets and shoulder pads to the NFL and in 1990 to the WFL. In 2001 Riddell introduced a new football helmet called the RevolutionT, a new technology designed to reduce the risk of concussion. Riddell also launched the Sideline Response System, a new technology that combines a real-time, on-field head impact telemetry system (HIT System), team management software, and cognitive testing to provide a new standard of care for the athlete.
In 2006 parent company Riddell Bell merged with Easton Sports, creating the leading company in head protection equipment and a market leader in baseball, football, softball, hockey, auto racing, and motorcycle sports. In addition to its supply agreements with the NFL and the WFL the company supplies approximately half the helmets used in high school and college football leagues. Reconditioning of football helmets is another of Riddell's businesses. Reconditioning involves cleaning, buffing or repainting helmets, and replacing interior straps or pads. Reconditioned helmets are certified as conforming to the National Operating Committee on Standards for Athletic Equipment (NOCSAE) standards.
In 1996 former Maryland football player Kevin Plank designed T-shirts with special microfibers that would keep an athlete cool and dry during a workout. He drew his inspiration from the tight fitting compression shirts that players wore during practices. He tested his new T-shirts on fellow players and then began to market them. The company's T-shirts, hats, and related apparel became known as performance apparel. The new clothing was soon very popular among athletes. In 1997 twelve college teams and ten National Football League teams were wearing Under Armour clothing. The company began advertising and promoting its products through their use in football-themed films such as Any Given Sunday and The Replacements. In 2000 it began to advertise nationally. By 2007 the company was expected to see sales of $600 million. Under Armour has continued to expand into new markets and at the end of the first decade of the twenty-first century was involved in selling football cleats, headgear, and sporting apparel for women. In 2007 the company had 979 employees and was based in Baltimore, Maryland.
Bill Schutt began manufacturing basketball goals and dry line markers out of his hardware store in Litchfield, Illinois. In 1935 he manufactured the company's first faceguard. In 1973 Schutt introduced football faceguards in eight colors and powder coated basketball rims. In 1987 Schutt began marketing the Air football helmet. It also marketed helmets to the basketball market the same year. In 2001 the company marketed the Air Advantage helmet. Schutt introduced the DNA football helmet, featuring SKYDEX padding in 2001. Three inches of this new type of padding replaces 12 to 18 inches of traditional padding. In 2004 Schutt partnered with Concussion Sentinel to offer $20 million of free cognitive testing equipment to high schools and colleges throughout the United States.
Niche Market Players
Within the small niche segments of this market are companies whose names are less familiar than Nike or adidas. Arthron Inc., for example, produces special hip and shoulder padding for athletes. Rogers Athletic manufactures tackling dummies and other training equipment. SpeedCity is a producer of football and sports training equipment and videos to help train athletes to improve 40-yard dash times, lateral quickness, and flexibility. Porta Phone produces wireless headsets used by coaches and their staffs. Bike Athletic manufactures cups, shoulder pads, rib protectors, and football pant inserts.
MATERIALS & SUPPLY CHAIN LOGISTICS
The earliest footballs and helmets were made from simple materials. In the Middle Ages, pig bladders were used as makeshift balls. The bladders were easily acquired from local livestock and were suitable as balls because they were basically round and could be easily inflated and sealed. They were later covered in animal skins or leather and the term pig skins is used to this day when referring to footballs. Producing balls from pig bladders meant that balls could vary in size and durability based on the animal. Rubber balls would not be available until the nineteenth century. Charles Goodyear patented the process for vulcanizing rubber in 1836. In 1855 Goodyear began to produce the first rubber balls that were durable and of a consistent size for use in soccer and football.
The first helmets were also made of leather. Riddell introduced the first plastic helmets that offered players greater head protection but were somewhat unreliable and prone to breaking. As Riddell refined its production techniques the helmets became more durable. Manufacturers improved their designs as well as their materials. Advances in the materials sciences have had an impact on sporting equipment of all types.
How a Football is Made
A regulation American football is 11 inches long and 22 inches in circumference at the center. The ball is inflated to an air pressure of 12.5 to 13.5 pounds per square inch (psi) and weighs 14 to 15 ounces. The football is made from leather panels that are tanned to a natural brown color. The panels are cut into shapes and then sent through a skiving machine to shape the panels into a predetermined thickness and weight. The panels are manufactured in an inside-out manner. One of these lacing panels receives an additional perforation and reinforcements in its center, to hold the inflation valve. A synthetic lining is sewn to each panel. The lining prevents the panel from stretching or growing out of shape during use. Holes are then punched into the panels for use in sewing them together with a hot-wax lock stitch machine. The footballs are then turned right side out. A rubber or plastic bladder is inserted into the football. Finally, quality checks are done and the balls are ready for a manufacturer's label and number.
How a Football Helmet is Made
The manufacturing of a helmet begins with the construction of the shell, made of polycarbonate. Pellets of polycarbonate are sent through an injection-molding machine that heats and molds the substance into the form of a helmet. A drill creates 14 to 15 holes in the mold. Liners are cut and inserted to provide cushioning and support. The lining is attached with airtight seals. The jaw pads, face guards, and chin straps are then attached and the helmet is painted. The helmet then goes through a rigorous quality control testing phase to ensure that it fully conforms to standards established by the National Operating Committee on Standards for Athletic Equipment.
The facemask, which is usually made of plastic or metal bars, attaches to the front of the helmet. There are two types of facemasks: the open cage and the closed cage. Quarterbacks, running backs, wide receivers, and defensive backfield men usually prefer the open cage because the lack of a vertical bar above the nose enables better visibility. The closed cage is usually the choice of linesmen because the two, three, or four horizontal bars help keep other players fingers and hands out of their eyes. In the 1970s vinyl coating was layered onto the bars to protect against chipping and abrasions. Soon, colors were added to the facemasks as another way to distinguish players and teams.
The market for football equipment can be divided into two categories: the school and institutional channel, by far the larger; and the retail channel. Schools at all levels—grade schools, high schools, and schools of higher education—are potential customers for football equipment.
Most team equipment is purchased through the school and institutional channel. While the institution is the initial purchaser of the equipment it may charge participants in its football program for the equipment used or insist they purchase the equipment outright. While many schools have faced tightening budgets during the first decade of the twenty-first century, they are unlikely to cut deeply into their football programs as a means of savings. These programs tend to be popular and are often large generators of revenue. Equipment manufacturers have sales teams that sell directly to these markets. Riddell, for example, has a sales force of 186 individuals who sell helmets and other football gear to high schools, colleges, and the many youth and professional leagues across the United States. Their staff includes former athletes and coaches who are familiar with Riddell products. Dixie Sporting Goods has 50 sales professionals in the Southeastern United States to market team uniforms and sports equipment.
The retail market for football equipment is best understood by looking at the sporting goods market. Sporting goods are now sold through numerous retail channels. This has made the market fragmented and very competitive. Some sporting goods stores such as Dick's Sporting Goods and Sports Authority began as regional retailers and then began expanding into other markets in the 1970s. Small independent retailers with sports specific merchandise such as Bass Pro Shops also developed during this period. In the 1990s the discount store industry quickly developed. Wal-Mart and Target were the leading retailers of sporting goods equipment in the early 2000s. According to Sporting Goods Business, Wal-Mart sold $8 billion of sporting goods equipment in 2006. Target was second with sales of $4.5 billion. Dick's Sporting Goods, the largest U.S. sporting goods chain, sold $3.1 billion in equipment in 2006. Several trade journals have noted that large discount stores sometimes hesitate to enter into agreements with small manufacturers for various reasons. The company is seen as too new and unproven, or is seen as being unable to manufacture enough goods to fulfill orders.
The Internet has transformed the sporting goods market. The major discount and sporting goods stores have all established an online presence. Some companies such as Moosejaw.com have flourished on the Internet without the benefit of a traditional store. The catalog business for sporting goods also continues to flourish. The Sport Supply Group mails 3 million catalogs and other advertising products to potential clients. It is the largest manufacturer, marketer, and distributor of sporting goods products directly to the institutional and team sports market. Manufacturers have also established retail and online sites to compete in the sporting goods market. Nike has approximately 220 stores and had $1 billion in retail sales. Adidas earned $300 million through its 100 stores. Reebok operated 160 stores and earned $295 million.
Football remains a popular sport for young men. Approximately 1 million high school boys played football during the 2004/2005 school year, according to the National Federation of State High School Associations. The next most popular sport was basketball, although it had half the participants—545,497 players compared to 1,071,167 for football.
According to the National Collegiate Athletic Association, there were approximately 60,000 football players at the college level in the 2004/2005 school year. These figures remain fairly constant from season to season. Approximately one million high school boys played football in the 1999/2000 school year and 56,528 men played college football in the 1998/1999 school year. The slight variation can be attributed to changes in the number of high school or college age men each year as well as the state of the football programs at any particular school.
Approximately 2.1 million boys play football frequently according to the National Sporting Goods Association. Its estimate includes school players and those on a park or district team. Football enjoys consistent levels of participation at the high school and college level. This figure is up 4 percent from 2000. However, the number of men in the United States who have ever played the sport has declined. Indeed, participation in many team sports has been declining since the 1990s. According to the Sporting Goods Manufacturers Association, there were 18.3 million people at least six years of age who played football at least once in 2000. By 2004, 16.4 million people had played football. Participation fell more than 10 percent from 1987 to 2004. Touch football participation fell 36 percent over this same period. Many team sports were seeing similar declines in participation in the United States. The number of baseball players fell from 15.1 million in 1987 to 9.7 million in 2004, a decline of nearly 36 percent. The number of volleyball players fell from 36 million to 22.2 million over the same period, a drop of 38 percent. The number of basketball players fell from 35.7 million to 34.2 million players, a decline of 4 percent.
Football equipment is often tracked in the larger context of team sports equipment manufacturing. The market for team sporting equipment other than football is a primary adjacent market to the market for football equipment. Despite football's popularity, baseball and softball equipment represents a much larger share of the team sports equipment market. According to industry tracker SportscanInfo, baseball and softball equipment combined had 46 percent of team sports sales in 2006. Basketball represented 21 percent of team equipment sales. Football had 13 percent of sales. Baseball and softball's commanding share of the team sports market is understandable when one considers the equipment necessary for the game: bats, gloves, helmets, leg guards, chest protectors, batter's guards, catcher's guards, and related equipment. Also, there are more basketball and baseball teams. There were 14,760 high school football teams in the United States in the 2004/2005 season, according to the National Federation of High School Associations. But there were 17,482 basketball teams and 15,161 baseball teams. Similarly, there were 617 football teams at the collegiate level, but 864 baseball and 994 basketball teams. Soccer had 10 percent of team sales, hockey 4 percent, and lacrosse and volleyball had 3 percent each.
In terms of a spectator sport, football is considered by many to have replaced baseball as the national pastime of the United States. There have been countless theories to explain how this might have happened, however the sport's accessibility to television audiences is most often credited for helping it achieve its widespread success. Football broadcasts feature brief interludes of violent game play separated by brief shots of short-skirted cheerleaders and convenient breaks for advertisers—an ideal combination for television popularity. A baseball season has 162 games, which can drag on even the most devoted fans. The seventeen-week, sixteen-game season of NFL football builds suspense into the outcome of each game. It is unclear when football became America's preferred game, but it happened far earlier than might be imagined. A 1966 Time magazine article titled "The National Pastime," noted that 31,000 fans paid to watch a Baltimore Colts scrimmage while only 23,000 fans showed up to watch a baseball game between the Baltimore Orioles and the Detroit Tigers. Four decades later fans regularly lined up to watch their favorite teams practice in the weeks before the season began.
Average attendance at an NFL game was 67,738 in 2006. Total paid attendance in 2005 was 21.79 million, the fourth year of record setting attendance. Major League Baseball (MLB) was second in average attendance, with 31,404 spectators per game in 2006. The popularity of football may seem surprising based on the cost of the tickets. The average cost for a family of four to attend an NFL game was $321.62 in 2004, an 80 percent increase over the cost a decade earlier. That same family had to spend only $164.43 for an MLB game and $263.44 for an National Basketball Association (NBA) game.
Basketball is often the second most popular sport for young men to play in school. Like football, it is fast-paced and exciting. It also has star athletes that attract young men to the game. The game can also be played more easily that football, can be played indoors and outdoors, and requires fewer people and less equipment.
Football is big business. Plunkett Research estimated that the National Football League generated $5.8 billion in revenues in 2006. Major League Baseball earned $5.2 billion, the National Basketball Association earned $3.1 billion, and the National Hockey League earned $2.2 billion. Much of the NFL's income comes from its licensing and sponsorship deals. Sponsors pay millions for the right to use NFL and Super Bowl logos in their promotions. The NFL has more than 100 licensees, including Electronic Arts, Northwest Airlines, Pottery Barn, Reebok, VF Corp., and Wilson. Billions in fees are earned for the right of the major networks, DirecTV, and ESPN to broadcast the NFL's games.
The National Football League had approximately 39 percent of licensed sports apparel sales in 2006, ahead of Major League Baseball, which took 26 percent of sales and college teams, which collectively took 25 percent of the market. Video games are a new and lucrative market for football teams. Madden NFL 07 was the best-selling video game in 2006, with sales of 5 million copies. Approximately 2.5 million copies of the NCAA Football 07 were sold in 2006. By one estimate, a school gets 10 to 25 percent of its licensing revenue from video games. The University of Oregon saw its video game royalties increase from $15,000 in 2000 to $95,000 in 2006. Ohio State and Florida earned revenues of $103,500 from NCAA Football 2005–06.
RESEARCH & DEVELOPMENT
The development of the compression apparel market has been one of the major developments in the football equipment and apparel industry. The demand for football gear that keeps players cool and dry has moved into helmets, shoulder pads, and other protective equipment. There is a continual effort to make these products more durable and lightweight. In 2005 Schutt introduced the Typhoon shoulder pad, featuring climate control technology which helps the player better manage body temperature in all types of weather conditions. Russell Athletic has expanded its Dri Power technology from its sports apparel into its casual apparel lines. Russell also introduced its Xtreme Compression football jersey in the autumn of 2006. The jersey keeps the body cool and dry and because of its compression technology makes a player difficult to grab.
Manufacturers are producing padding that better absorbs and distributes blows to an athlete's head and body. An estimated 1.6 million to 3.8 million amateur and professional athletes suffer a concussion each year, according to the Center for Disease Control and Prevention. The design of the Schutt DNA helmet helps reduce the force of helmet to helmet contact. It was released in 2003. Riddell's Revolution, released in 2002, has a teardrop shape and padding that can be custom fit to the athlete's head. Riddell marketed the $170 helmet as capable of reducing concussions. A study of high school football players in January 2006 showed 5.4 percent of Revolution wearers suffered concussions, as opposed to 7.6 percent among wearers of a more traditionally designed helmet.
Arena football is growing in popularity. Viewership of the Arena Football League (AFL) is increasing in part because of a league contract with the NBC that broadcasts the games on Sunday afternoon. From 2002 to 2006, the AFL's total viewership increased from 12 million viewers to 65 million, its team values went up from $12 million to $20 million and its average per game attendance increased from 9,957 to 12,378. When combined with arena football2, the AFL's minor league, Arena Football played in 49 markets in 2007. The game is also gaining fans because of its fast pace and high scoring. It seems to attract young male fans, a highly prized demographic for marketers who sponsor games. Sponsors include Nike, Spalding, Schutt, Upper Deck, and EA Sports (which released an AFL video game to join its NFL video games).
Fantasy football leagues have become increasingly popular. In a Fantasy Football game, a participant becomes the owner of a fantasy team arranged into a league. Owners may acquire a player through a draft or a trade. The owner then scores points based on those players' statistical performances on the field. Fantasy football leagues are not a new phenomenon borne out of the Internet. According to sports lore, the first such league was active in 1963.
Wilfred Bill Winkenbach, part owner of the Oakland Raiders and sports writer Scotty Stirling created the first fantasy football league, known as the Greater Oakland Professional Pigskin Prognosticators League. There were thought to be 15.6 million fantasy football players in 2006, compared to 11.9 million fantasy baseball players and 7.1 million fantasy basketball players. Entering into a league might cost from several hundred dollars to more than one thousand dollars. One estimate suggested that $1 billion was spent on fantasy football leagues in 2006. Such leagues are believed to have boosted the number of football viewers. More than a few NFL players have gone on record to state their dislike of such leagues, since they lead viewers to root for a particular player's statistics instead of the overall team. However, the NFL has embraced the phenomenon and uses many of its own top stars in marketing campaigns to promote its own online fantasy football game at NFL.com.
TARGET MARKETS & SEGMENTATION
The football equipment market is segmented by age range. Grade school aged players make up one segment, high school aged players another. Collegiate level athletes are another large segment, and the large, professional player segment influences all of them. The media exposure received by professional football provides a stage upon which the brand names worn by the players are on view by a large audience. That audience has influence on the equipment used by all the other market segments.
The football equipment market was on solid ground in 2006, according to industry analysts. Average selling prices increased more quickly than in any other team sport. Some of the increase has come from premium lines of equipment being released—sales of footballs costing more than $25 increased three times faster than the sales of footballs costing less than $25. Manufacturers continue to bring technological advances to mouth guards, padding, helmets, and apparel. These improvements not only make a player safer out on the field but more comfortable as well.
The overall football industry remains strong, as well. The National Football League generates billions in revenues and schools spend billions in support of their teams as well. According to an Associated Press poll, Ohio spent $29.6 million on its football team during the 2004/2005 season, the most of any team. It is understandable why so many colleges spend millions on their football teams—football is popular and a major revenue generator. But some may question the fairness of the spending. Rutgers doubled spending on its football program during the 2004/2005 season as it eliminated the men's tennis, swimming, diving, crew, and fencing teams.
RELATED ASSOCIATIONS & ORGANIZATIONS
International Federation of American Football, http://www.ifaf.org
National Federation of State High School Associations, http://www.nfhs.org
National Football League, http://www.nfl.org
National Operating Committee on Standards for Athletic Equipment, http://www.nocsae.org
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