THE DOVETAILING OF THE SPORT AND ESPORTS INDUSTRIES: THREE ESSAYS ON THE STRATEGIC MANAGEMENT OF SPORT ORGANIZATIONS

Abstract

Esports, or competitive video gaming competitions, have grown in popularity to have millions of global fans, spectators, and participants. Sport organizations, including leagues and teams, are increasingly affiliating, or dovetailing, with esports organizations. Although the meteoric rise of esports presents sport organizations with growth opportunities to connect with these markets, esports remain shrouded in uncertainty, stigma, and stereotypes that impede the convergence of industries. The growing affiliation between these two industries allows researchers to gain insight into the strategic actions of sport organizations despite the institutional constraints that influence their behavior. This dissertation includes three essays that address—with respect to esports—the (1) strategic resources and core competencies of sport organizations; (2) sensemaking of actors within sport organizations; and (3) institutional creation strategies within heavily regulated fields. Essay one consists of an explanatory, qualitative study of professional sport teams diversifying into the esports industry. As sport organizations mature, they will need to seek growth opportunities beyond their core industry and compete with formally tangentially related firms. The nascent esports industry has been embraced by sport organizations (e.g., leagues, teams), many of whom use existing resources and best practices from traditional sport to manage their esports property. This trend provides a salient context to identify how sport organizations are using their resources in a new marketspace and what they can provide to non-sport organizations. Guided by strategic management perspectives of the resource-based view (RBV), knowledge-based view (KBV), and resource orchestration (RO), the purpose of essay one is to examine how sport organizations leverage their core competencies to create a sustainable competitive advantage. The findings support the hypothesis that the existing resources of sport organizations such as physical venues and existing departments (e.g., legal, marketing, sales departments) are used to support sport organizations operations in the esports industry. Moreover, the findings identify that the tacit knowledge embedded in the human capital of sport organizations is a salient resource that helps them generate a competitive advantage against non-sport organizations. While tacit knowledge is a driver of competitive advantage, it is the supporting structures and departments that allows sport organizations to use this knowledge efficiently and effectively. Thus, by operating at the intersection of sport, entertainment, and media, sport organizations are increasingly competing with formally tangentially related firms, and can use their embedded resources and structure when competing with these firms. Essay two focuses on the integration of esports by a first-mover sport organization. Essay two employs an exploratory case study of the Philadelphia 76ers of the National Basketball League (NBA) and their integration of an esports team. The 76ers were the first North American professional sports organization to purchase and integrate an esports team. Novel technologies and practices, such as esports, are surrounded by uncertainty and are generally met with resistance (Huber, 1990) with their integration contingent upon internal and external constituent support. Actors, individuals within the 76ers, had to position and garner support for esports, which are representative of the novel practices and technologies influencing the way sport organizations are managed. In essay two an institutional creation work perspective is linked with sensemaking and related constructs to examine how actors within the 76ers helped create and give meaning—sensemaking—to esports. The findings of essay two support how actors within the 76ers were able to foster a progressive culture to create a shared understanding of esports and use this understanding to influence the sensemaking of others—sensegiving. In particular, the 76ers linked the managerial components of operating a sports team to operating an esports team. Yet the 76ers were deliberate in their approach, limiting cross-promotions between the fanbases of the 76ers and their esports team. By connecting institutional creation work with sensemaking, essay two contributes to how actors can proactively take actions to garner constituent support. Moreover, the findings of essay two support that sensemaking is a critical antecedent of sensegiving, as a shared understanding within an organization is a necessary prerequisite to influence the sensemaking of others (i.e., sensegiving). Essay two provides actors within the field of sport integrating novel practices and activities (e.g., augmented and virtual reality, in-game sports betting, wearable fitness devices, mediated sports consumption) strategies to proactively garner support for their integration. Essay two focuses on the integration of esports by professional sport organizations. Essay three utilizes an exploratory qualitative approach to identify the institutional creation strategies associated with integrating collegiate esports programs within the heavily regulated field of U.S. collegiate athletics. The findings of essay three support how actors need to go beyond creating a shared understanding to integrate novel activities. Actors must also influence the cognitive schema of other actors to facilitate the integration of novel practices and activities. Specifically, they can build on the concept of sportification (Heere, 2018) to both communicate and present esports in a manner consistent with traditional sports, using the concept of sport as a legitimizing agent. Collectively, the three essays support how sport organizations can seize growth opportunities with respect to their institutional environment. Sport organizations must recognize their institutional confines, but also can be strategic in their actions by focusing on their financial performance and sustainability in lieu of their constraints. This research contributes to a deeper understanding regarding how the institutional and strategic concerns of sport organizations influence their efficient and effective management. The research lays a foundation for a stream of future research on the strategic growth and long-term viability of sport organizations both within and beyond the esports industry.