Sports is business: The financial undercurrents that aspiring sports journalists should understand

Sports are not just games played on the court, field or ice: They’re lucrative content machines worth billions. 

The Reynolds Center’s inaugural “The Business of Sports” panel convened award-winning sports journalists and a prominent sports media executive on March 26 to discuss how business journalists can hold the sports industrial complex accountable and which emerging trends they should watch. 

Cronkite School Assistant Dean Brett Kurland moderated. 

Follow the money to get better stories

It’s a refrain business reporters probably have etched in their brains, but the panelists agreed that most reporters don’t fully understand that sports is a sprawling business venture, not just an opportunity for play-by-play coverage. Whether it’s a beloved team relocating, a league expanding or a shift in how games are broadcast, media executive Todd Merkow stressed that reporters covering sports should be tracking where the cash flows. 

“Follow the money, understand the structure of these businesses, understand fundamentally what is going on with whatever the situations are,” Merkow said. 

Todd Merkow discusses his experience. Photo by Mia Osmonbekov.

As name, image and likeness (NIL) reshapes the economics of college sports, traditional broadcasting fragments and big teams act as real estate developers, knowing how to read financial statements and obtain public records to unveil the financial machinations behind the rapidly changing landscape will be crucial. 

“There are so many areas that you have to learn as a journalist that you never imagined when you walked through the sports door,” said Craig Morgan, a clinical professor at the Cronkite News Sports Bureau and veteran sports writer. 

Morgan pointed to the “chaotic” and “never-ending” Arizona Coyotes saga as a prime example of real estate and money driving the team’s decisions rather than just fan culture and outcomes on the ice alone. After decades of trying to find a suitable permanent home in Arizona, the National Hockey League team eventually gave up and moved to Utah.

“Their entire identity in the Valley was tied to the search for a new home,” Morgan said. 

Evaluating economic claims related to sports

While local governments tout the benefits of embedding sports facilities in communities, studies show that the economic benefits of those expensive venues are negligible. More than 80% of economists polled by the University of Chicago in 2017 agreed that the cost of state and local government subsidies for stadiums outweighed the benefits received.  

“Considering it is almost impossible to get a group of economists to agree on anything, that’s a stunning result,” said Jeffrey Timmermans, the director of the Reynolds Center. “Who’s going to keep track of all this money and ensure it’s being used effectively and fairly? This is precisely why we need smart people to cover the business of sports as journalists.”

Brandon Brown, a senior reporter at the Phoenix Business Journal covering sports business, pointed out that “economic impact numbers,” such as approximations of how many millions of dollars a given sporting event generates, are often speculative and can be used to manipulate public opinion.

“I don’t think they’re all B.S., but it’s kind of hard to understand what [the economic impact] means,” he said.   

Sports betting’s “generational” impact

Once a landmark 2018 Supreme Court decision overturned the federal ban on sports gambling, new revenue floodgates swung wide open for the major leagues. In Arizona, betting became legal in 2021. 

“They don’t necessarily get the gambling dollars, but they get the advertising and the partnerships there,” Brown said. 

Brown said “it’s become normal” for him to write about betting activity on leading sportsbooks like DraftKings when he’s not covering games themselves.

Cronkite students asked the panelists questions about their experience. Photo by Mia Osmonbekov.

Sports betting also opened a “can of worms” that new reporters must deal with beyond a traditional sports beat, like state and federal regulations, industry reports and sports gambling terms, according to Morgan. He likened it to learning a “new language.” 

“We have to be covering those sorts of stories,” Morgan said. 

But the effects of legalized sports gambling go beyond the bets themselves. The panelists noted the potential for enterprise reporting delving into the dangers of gambling addiction, athletes being incentivized to rig betting markets, and how the flow of money into leagues is being used. 

“What’s critical here is what the sports fan wants, they usually get,” Merkow said. “Because at the end of the day, it’s where can we get the next dollar from?”

Watch the full discussion on our YouTube channel.

The post Sports is business: The financial undercurrents that aspiring sports journalists should understand appeared first on The Reynolds Center.