Is Toleration In Moderation The Right Financial Decision For Sports Organizations?

            Just when you thought the Manti Te’o controversy was over, along came the NFL Scouting Combine. Pro Football Talk’s Mike Florio reports that NFL GMs are asking if the hoax that had the Notre Dame standout linebacker Te’o “dating” a woman he had never met in person was created as result of Te’o being gay.

            Sports have always had a complicated relationship with race, gender and sex issues. In particular, sexual orientation has been the leading source of controversy when it comes to equality issues in sports over the past decade. In many instances, players, coaches, and fans have made homophobic comments in a variety of different contexts. This ranges from Kobe Bryant uttering anti-gay slur at a referee during a 2011 game on the same day the NBA was shooting sexual orientation tolerance public service announcement to a USA Today report that states “Fans of two-time defending Russian [soccer] champion Zenit St. Petersburg are calling for non-white and gay players to be excluded from the team.”

When it comes to toleration in sports, there appears to be a gap between what is the right moral / ethical decision and what is the right financial decision. At least some number of fans, media, GMs, and players clearly struggle with these issues – particularly when it comes to gender and sexual orientation. Should sports organizations potentially alienate the athletes, fans, and media members that condone some form of sexual discrimination at a time when teams and leagues are struggling to generate revenue or increase publicity?

            The answer, from an economic standpoint, is yes. Racial, gender, and sexual toleration is the correct economic decision. First, having a gay player would appear to have little to no impact on a team’s ability to win games. Prior to repealing the Don’t Ask, Don’t Tell legislation (which prevented openly gay soldiers from serving in the military) in 2011, the U.S. Department of Defense commissioned numerous studies to see if allowing openly gay and lesbian soldiers to serve in the military would impact “unit cohesion” and prevent soldiers from completing combat missions. A vast majority of these studies found there would be no impact.

A year after Don’t Ask Don’t Tell was repealed, there has still been no negative impact on soldier performance. While there is not a one-to-one correlation between the impact on openly gay military members and the impact openly gay athletes on sports teams, much of the logic behind asking Te’o (or any athlete) if he is gay comes from the same arguments that prevented openly gay soldiers from serving in the military. If there was no impact on performance in the military then it is likely that there would no impact on performance of a sports team.  

            From a marketing standpoint, numerous new opportunities emerge for sports teams that have an openly gay player. In 2009, Welch rugby player Gareth Thomas announced he was gay while still playing for the Cardiff Blues in an interview for The Daily Mail. This led to the Cardiff Blues being profiled in national, European, and international outlets, including Real Sports with Bryant Gumble, and allowed the team to gain exposure it never would have received without Thomas. The profile on Real Sports also documented how Cardiff players quickly came to accept Thomas’ sexuality and preformed in a similar manner after the announcement. Cardiff finished sixth in the Celtic League during the 2008-09 season and fifth during the 2009-10 season (the season when Thomas made his announcement).

            In addition, having an openly player would allow sports organizations to more easily target gay fans. While many major professional teams have policies on tolerance, very few actually proactively target gay fans – particularly male gay fans (the WNBA and LPGA have made great strides in targeting lesbian fans). This is likely a big financial mistake. In 2010, despite comprising just 6.8 percent of the American population, the buying power of lesbian, gay, bisexual, and transgender people was “projected” to be $743 billion, according to Harris Interactive and Witeck-Combs Communication. This lucrative demographic is being aggressively targeted by hotel, travel, and restaurant companies that compete with sports organizations for people’s leisure dollars. More importantly, sites like Outsports.com show there are large numbers of gay sports fans. For sports teams and leagues that are struggling to attract fans and generate revenue, directly targeting gay audiences could prove to a new approach to helping address these issues.

The recent developments in the Te’o story show how far some people in the sports industry need to come in terms of tolerance and acceptance people’s sexual orientation. Similar to the B6A analysis in our post about the Washington Redskins, we find that there is no real financial or economic justification for this type of sexual discrimination. In fact, sports organizations are largely costing themselves money by not targeting gay fans.