From Sport to Business - the Mutual Impact of Stakeholders and Regulations in Sports

Sports organisations have to deal with an increasing diversity of stakeholders – while the amount and diversity of sports regulations also increase. This paper studies the interrelationship between sports stakeholders and -regulations. It takes a stakeholder approach to explain how stakeholder pressures have transformed sports into businesses. It utilises stakeholder theory to find out if and how a sports organisation affects and/or is affected by its stakeholders – and how this is reflected in its regulations. It also utilises path dependence theory to find out how a sports organisations’ previous regulations affect its current and future regulations. A longitudinal case study of Formula 1 motor racing is selected as the method of study. Findings suggest that although sports stakeholders do not actively participate in the regulation process, sports regulations both affect and are affected by a sports organisation’s stakeholders. More specifically, a mutual relationship is found between altered/new sports regulations and changed/new sports stakeholders. Findings also suggest that the number of changed/new sports stakeholders positively affects both the number of sports regulations and the level of detail in existing sports regulations, leading to path dependence. A state of lock-in, however, is never reached because switching costs are relatively low. Implications include that sports regulations can be proactively set to attract new stakeholders, and reactively to please existing ones (with changed needs). Over time, sports have transformed into businesses because they pleased both newly attracted and existing stakeholders with increasingly commercially viable regulations.

The Business History Seminar is organised by the Business History Centre and has been made possible by financial support from the Erasmus Research Institute of Management (ERIM) and the Erasmus School of History, Culture and Communication