Industry Overview: Entertainment and Sports

Posted by The Editors on December 3, 2012
With the rise of the Internet and other new communications technologies, the field of entertainment is increasingly difficult to define. In this profile, we're talking about film, television, and music, as well as sports-each a form of entertainment raking in millions of dollars. The first three of these businesses are dominated by enormous, vertically integrated companies such as Sony, Time Warner, and Walt Disney, which have interests in multiple segments of the industry. But there are also thousands of jobs in the entertainment industry at smaller, less corporate companies-film and television production or distribution companies, for instance, and small independent record companies, talent agencies, and management companies. Similarly, pro sports is dominated by the four biggest spectator sports-baseball, football, basketball, and hockey-but there are many other sports out there with varying degrees of business sophistication, and even at the Big Four there are numerous, albeit unglamorous and low-paying, jobs in minor-league outfits.

In entertainment and sports, profit comes from discretionary spending, so these industries enjoy the most success in economically stable countries where leisure dollars flow freely. Industry companies supply their audiences with large-scale sporting events, music concerts, TV situation comedies, and silver-screen masterpieces. Simply put, they're in the business of fun-at least most of the time.

Even during economically depressed periods, this industry flourishes as an escape for all walks of life. And standing at the pinnacle of entertainment culture are the celebrities: the movie stars and quarterbacks and rock stars and talk-show hostesses who either realize our dreams and give us hope, or make us fearful of the kind of values and environment of which current future generations will become a part. This is the only industry whose product is an illusion-neither a good nor a service, and yet both at the same time.

The culture in this industry is one of anti-corporate, studied casualness. There are still uniforms: an ever-changing array of baseball caps and jackets in the music business, for example. But they're invariably less starchy, more expressive of individualism, than anything worn to work in the fields of finance or law. The people? Well, there's no people like show people, and the same can be said for those in the sports world. This is a high-energy crowd. It's also a crowd jammed with inflated egos, which can make its members both stimulating and frustrating.

In 2007, the Writers Guild of America and Alliance of Motion Picture and Television Producers couldn't reach an agreement on issues such as low pay, revenue-splitting from new media, and the non-unionization of reality shows. And so American was left watching re-runs, catching up on old seasons available on DVD, sampling a seemingly endless array of new reality and game shows. Strikes in Hollywood don't only have an effect on the big studio execs and union workers at the center of negotiations. Reuters reported in January that Warner Bros. could cut up to 1,000 employees at its Burbank, Ca., location due to lack of work, stating that recipients could be subject to layoff after 60 days. The notices represent the first sign of the strike's potential implications for Hollywood employees, and could launch a major spree of lay-offs similar to the result of the WGA strike of 1988. Many TV production companies had already laid off workers not necessary without new scripts when Warner Bros. revealed it had gone through the necessary steps to legally pass out pink slips. Some big names came back with new episodes in order to save their own employees from being let go. Late night show hosts including Jay Leno, David Letterman, Conan O'Brien returned to work in the new year with fresh scripts.

Some argue a long-lasting strike would only push the younger generation further toward Internet media as the primary source of entertainment-which would have a direct effect, of course, on job opportunities in the more traditional entertainment sectors. Another concern raised is that the striking could become even more complicated when the 120,000-member Screen Actors Guild heads to the negotiation room in June 2008.

The heads of the major networks are looking for new ways to generate revenue, such as demanding greater ownership of the programs they run, programs that are often made by independent production companies. With a bigger share of the shows, networks can make more money on selling them to affiliate stations. Executives are also increasing the longevity of programs by selling reruns to ancillary markets. In addition, the networks have bought their way into a number of cable operations, so the opportunities for employees to move from cable to broadcast-or vice versa-are even greater than before.

In terms of programming, broadcast networks are hiring people who have proven themselves at fledgling networks and channels. Although the networks desperately want to cut costs, one hit show can be the difference between the most and least successful networks.

The box-office success of independent films over the past several years has sparked significant changes in the film industry. Hollywood has bought into the appeal-and lower production costs-of character-driven films, and studios have established subsidiaries that solely produce such films. Consumers and critics alike have rewarded them for this endeavor. Moreover, many studio distribution departments are looking more seriously at foreign markets and other outside producers as sources of film "product"-partly because these ancillary sources are making movies that filmgoers are responding to, and partly because when they buy a finished film, they have complete control over costs.

While these trends translate into less work for film crews, they heighten the demand for office personnel, who must find new writers, directors, and actors to put together these back-to-basics productions. "It takes talent to find talent," as the industry maxim goes. And studios' efforts to mimic the style of independent films and curtail production costs have meant less reliance on special effects and consequently a greater need for a steady stream of new writers, directors, and actors.

When Seagram followed its $10.4 billion purchase of PolyGram with the announcement that it would fire thousands of employees in a major restructuring, it initiated a trend among the Big Five (BMG, EMI, Sony Music Entertainment, Universal Music Group, and Warner Music Group) toward making record label companies smaller and "smarter"-that is, focusing on a smaller number of "surefire" acts. And the merging continued. In 2004, Sony Music and BMG merged to become Sony BMG Music Entertainment, and EMI merged with Vivendi, which then purchased BMG Music Publishing for $2.2 million to form Universal Music Group. A year later, the European Union's approval of the Sony-BMG merger was annulled in European court, making an investigation of potential antitrust problems necessary. In 2007, the deal was cleared. Still, Universal Music Group continues to hold its top position as the world's largest record company, a title it's held since acquiring PolyGram in '98. In any case, the industry doldrums, which began in 2001, continue to put a damper on hiring.

Perhaps the most contested and conversed about issue within the music industry today, even more than Britney Spears' latest breakdown, would have to be digital music downloads. No industry is more paranoid about a technological advance eating into its profits than the music industry. Though other factors (e.g., a perceived lack of compelling artists, artificially high CD prices, competition from "higher-value" DVDs, and the sluggish economy) are involved, file sharing has clearly had a negative impact on album sales.

To counteract the consumer-spending slump, labels first began trying to find new ways to bring in revenue. These include new contracts that entitle them to a cut of an artist's tour and merchandising revenues and an increased emphasis on placing songs in films, television shows, and-the most lucrative of all-commercials.

Then they adapted the "if you can't beat them, join them" mentality, and major labels partnered with Apple's iTunes, Napster, RealNetworks, and Wal-Mart, increasing the legal digital distribution of music. In a move BusinessWeek reported as ending a digital music era, Sony BMG revealed in January 2008 it would make at least part of its collection digital rights management-free. Sony BMG would therefore become the last of the top four labels to allow its songs to be sold from various outlets, such as UMG and WMG both announced plans to do the same in 2007.

Over the past 20 or 30 years, the major trend in sports has been the tremendous growth in revenues, primed by televised broadcasting of games. This innovation led first to increased advertising sales, then to sponsorships, and then to stadium naming rights. Player endorsements provide a human (or superhuman) face to these sports-marketing efforts. Over time, teams and leagues have become much more business-minded, and revenues have increased many times over. This transformation has fueled the need for business people to wheel and deal, and squeeze as much money out of every sporting event or deal as possible.

However, sports consumers (whoops, make that "fans") are becoming increasingly disillusioned with the transformation of sports into a money-making machine, one that has encouraged player hubris, corporate intrusion, and a general disregard for the fans. Older fans have voted with their, um, backsides, by keeping them at home rather than seating them in stadiums. And younger people have moved toward "action" sports more to their liking, such as snowboarding and BMX, as these are exactly the kinds of things they like to do themselves.

As consumers retreat, corporate sponsors are forced to be more selective in their campaigns, usually by targeting as closely as possible the demographic they are after. They are also demanding more from sponsorship deals. Valuation services is a growing segment of sponsorship, since it attempts to quantify and evaluate the return on investment of any such deal.

As we move into the digital age, it's getting more difficult to cleanly break down the industry into traditional categories. One reason for this is the proliferation of new forms of entertainment-DVDs, the Internet, and the like. Another reason is that many film, television, and music companies have united to form entertainment conglomerates.

While the landscape of the industry is changing, for the purposes of this profile we break entertainment into three traditional categories: television, film, and music, and then follow these up with a look at sports entertainment as its own standalone category.

Television is arguably the 20th century's most significant-and most popular-technological development. In 1945, there were fewer than 7,000 television sets in use in the United States. Today, almost every American household has a television, and two out of three households have more than one. The number of channels and networks-and number of jobs in television-has grown along with television's popularity. But competition for jobs in this segment of the entertainment industry remains particularly stiff. At the entry level, this translates into poor compensation. And although executives are paid generously, job security is always an issue in television. Most opportunities are in Los Angeles and New York, where the networks and major production companies are headquartered.

Before there was a television in every home, film was the medium that created a common national language. Taking weekend trips to the movie house to view double and triple features, and the newsreels that ran between each film was a way of life for people in the '30s, '40s, and '50s. But television soon replaced the movies as the most popular entertainment medium. The movie industry for the most part remained stagnant until the release of Jaws in 1975. That film's gross revenue-more than $260 million domestically-and sensational special effects reinvigorated and redefined the film industry. Film studios rushed to make blockbusters, which cost millions of dollars to produce but when successful could return more than $100 million in box-office grosses.

Technically, the recording industry got its start when Emile Berliner invented a prototype phonograph that recorded music. But the business of music really took off with the large-scale launch of a new technology-when radio stations started broadcasting in the '20s.

Today the industry is dominated by large corporate music groups such as Warner Music Group, Universal, and Sony BMG. These companies produce most of the music in your local CD store's racks and tend to take advantage of-either through acquisition or pressing and distribution deals-any upstart labels that do particularly well in the marketplace. The most recent round of consolidation in the music industry brought independent labels in "outsider" genres such as rap and alternative rock into the major-label fold.

The Big Four
At the professional level, the Big Four spectator sports (baseball, basketball, football, and hockey) are the giants in terms of fan interest, media attention, and revenue. Over the years, these sports have evolved so that each now has one dominant governing body (Major League Baseball, The National Basketball Association, The National Football League, and The National Hockey League) reigning supreme. Originally, the main functions of the governing bodies were to create and enforce rules and policies governing owners, players, and referees; to impartially organize games between teams; and to maintain statistics and issue awards to winning teams and outstanding players. While those functions remain, the incredible growth of sports as a revenue engine has propelled the governing bodies to become full-fledged businesses that encompass marketing and PR, logo licensing, television rights licensing, and revenue distribution among teams.

Team owners tend to be either wealthy individuals or entertainment companies. Owners hire and fire players in accordance to rules hammered out by the governing bodies and the players' associations and are responsible for all marketing related to their teams, as well as income streams such as ticket and concession sales, advertising, and merchandising.

The Big Four also own and operate minor league teams, which have their own governing bodies. Just like the collegiate teams do, minor league teams provide many professionals with their entrée into the industry.

Sports Management
The realization that companies would pay to be associated with the personality and achievements of pro golfer Arnold Palmer-and thereby increase their brand value-led his friend and financial manager Mark H. McCormack to almost single-handedly create the field of sports management, and the sports powerhouse IMG with it, in 1960. A talent agent in the entertainment industry usually focuses on finding lucrative projects for his or her clients and then negotiating the best possible deal, but the sports agent (or sports manager) will often take the process one step further. Naturally, he or she will solicit or review offers from teams and negotiate contracts, but the real money is made off of the court (or field, or ice), in the form of endorsements.

At the top of the heap are integrated sports marketing and management companies like IMG. Big advertising companies have sought to diversify by either creating sports management companies, as Interpublic did with Octagon, or purchasing them outright, as Clear Channel did with SFX Sports Group. Traditional talent agencies such as The William Morris Agency also have sports practices. These agencies represent the biggest, most recognizable athletes in a wide range of sports.

It should be no surprise that most people who enter this field are tax or contract lawyers, certified public accountants, or personal finance managers; basically, people who are comfortable with contracts, numbers, large sums of money, and the law. Some states require registration to help protect college athletes from getting taken advantage of; most professional players' associations offer agent certification to do the same for their members.

Sports Marketing
Sports marketing is a rather nebulous term for a number of activities in the sports world; pretty much every element of the sports industry is involved in marketing in one way or another. The powerhouses are the integrated sports management and marketing companies discussed above.

At the league level, sports marketers help companies market various consumer goods and services by allowing their logos, events, and players to be tied to marketing and advertising campaigns. In addition to direct revenue, there is also an extended benefit when the goods and services being marketed fit in well with a league's image. At the team level, sports marketers help the sales staff sell tickets and corporate sponsorships by building interest in the team through promotions, advertising, and game-day events that complement the game itself. They also help place the team name and logo on a variety of products-everything from caps to Coke cans-to maximize merchandising and sponsorship revenues and maintain a connection with fans. Public relations departments work with the media to get valuable coverage for games, players, promotional efforts, and human-interest stories, all of which enhance the team's appeal to fans and, by extension, to corporate sponsors.

On the other side of the fence sit companies that want to reach sports fans. Nike and Gatorade are far and away the sports-product companies that most actively market to sports fans, but the appeal of sports is so broad that beer companies such as Anheuser-Busch, automakers such as Ford, credit card companies such as VISA, and telecommunications companies such as AT&T are among the largest advertisers of televised sports events. The biggest advertisers have dedicated sports marketing departments that find suitable advertising, promotional, and sponsorship efforts that will reach targeted consumers and, short term, turn them into customers, while over the long term enhance the company's or product's brand.

Keep in mind that this could be the most competitive industry out there. Getting a job in sports or entertainment is a difficult undertaking that requires persistence, intense networking, and good luck. Every year, hundreds upon thousands of job seekers flood New York and Los Angeles hoping to become celebrities, and the majority of them wind up waiting tables to make ends meet. And, if they decide to stay in show biz, they eventually end up taking jobs in production or administration. Take heart in the fact, though, that companies can't ignore talent. If you prove that you've got the skills to thrive in a challenging and nontraditional work environment, then you're in for a thrilling ride.

Careers in this industry usually start at the entry level; agents, personal managers, and studio executives usually get their start as lowly assistants. Once launched on their careers, people in the entertainment industry tend to change jobs frequently, and contacts in the industry are crucial.

For those of you with a business or technical background, work is more readily available. The big corporations that dominate the industry always need people in the standard management functions such as finance, HR, IT, marketing, and communications. Technicians are needed in traditional fields such as sound engineering and photography, and in the rapidly expanding fields of digital special effects: Dozens or perhaps hundreds of companies in Southern California and the San Francisco Bay Area employ software engineers and other specialists to create digital special effects, which are at the center of films like The Matrix series, The Incredibles, Lord of the Rings series, and Spider-Man, and contribute unobtrusively to scores of other films, removing unwanted telephone cables from outdoor scenes and wrinkles from stars' faces. Leading companies in this field include Pixar, Sony Pictures Imageworks, and Industrial Light + Magic.

Everybody wants to be entertained, and four of the most popular forms of entertainment are television, film, music, and sports. It can be a real rush to walk into a theater or turn on the television or radio and say, "I helped make that."

Relaxed Atmosphere
The entertainment industry is an energetic, creative field. Office decor and workplace dress are often more like what you'd see at a nightclub than at a typical office. And if you move up the chain of command, don't be surprised if your office is an exclusive bar or restaurant-that's where many deals are made. Things rarely get so elegant in the sports world, but the atmosphere is usually relaxed-familial, even.

"Entertainment executives are looking for two different things in a prospective project," one insider says. "The first is something that has proven commercial in the past. The second is just the opposite, something that surprises you, something that might just stand out in the marketplace." If you want to redefine the way people think about society and culture, this might be the field for you.

While some executives are fast-talking, morally compromised deal-makers, others are soul-searching creators. No matter which type you work for, keep in mind that they often have little or no regard for the new kid on the block. Prepare yourself for a tongue lashing if you deliver the great one's coffee with two sugars instead of three. "There are some real jerks in this business," says an insider. Sports is less rough and tumble, but there is a clear hierarchy in any organization, and you would do well to respect it.

The Money-Go-Round
Entertainment and sports companies are filled with fans who love the media or sport they work in. Money has always been a part of the equation, but the influx of corporate America onto the playing field, the screen, and the stage can be disheartening. Especially when the big guys are making the bread, and all you're getting are the crumbs.

Marketing and Promotion
These are perhaps the most transferable of all skill sets in this business. Vast and constant infusions of market analysis, research, writing, graphics, and well-organized planning and distribution support every important sports event, hit song, new television show, and box-office gamble. Being an account executive or marketing manager is also great training for whatever senior executive role you may ultimately want to play in one of these entertainment engines. The gas they all run on is marketing and promotion. Learn how to do it effectively and well and you'll always have work. Salary range: $30,000 to $110,000.

Assistant to a Producer
No, the salary listed below is not a typo. And, yes, people really do kill for these jobs. They're the tried and true way in, and most of the titans in music, television, and film began this way, too. This is diverse work-from answering phones, handling correspondence, and setting up and canceling appointments to picking up dry cleaning, fetching take-out food, and taking the kids to their therapy sessions. For the biggest and best, you're on call 24/7; mid-range producers only need you 60 hours, five or six days a week. Salary: $300 per week.

PA (Production Assistant)
First to arrive on the film or television set, last to leave, rotten pay, no respect. Often you wear a walkie-talkie. Always you're running, not walking, to resolve the latest crisis. You stop traffic for shoots, find lost props, make sure the OJ and Calistoga water are chilled, and do a lot of driving. This is viewed as invaluable experience. Some survive to become producers; many go into another line of work. Salary range: Nothing (well, lots of free food and drink) to $500 per week.

This is another time-honored route for all you would-be sports-show hosts, screenwriters, and television scriptwriters. Your job is to coax stars into interviews and multi-city junkets they want no part of and to prepare elaborate press kits with info tidbits available nowhere else. If you're ingratiating, highly efficient, and a very good writer, this is an easier, better-paid job than any of the assistant slots above. Salary range: $20,000 to $30,000 for entry level; $40,000 to $100,000 or more for senior level.

Script Reader
Sounds like there are a lot of people out there writing screenplays, treatments, and television pilots? One insider likens it to "a slush pile the size of Greenland-most of it unimaginably awful." For around $50 first readers write up a lengthy synopsis and either pass it on to the second reader or send out a polite "no hope" letter. These used to be ill-paying but comfy studio jobs for the unusually patient and forgiving. No more. Now it's freelance work, and lots of would-be writers line up to do it (because they can get close to both the second readers and the development office to learn over time what they're most likely to buy). Salary range: Wretched to marginally adequate. (There are $45,000 per year readers' jobs out there at some talent agencies, but you usually get to them by working freelance first.)

Whether you land a coveted screen or script or television talk show gig, this is not writing in the publishing sense. This is not your creative vision; it's the actor's whim, the director's divine right, and the producer's executive fiat. You'll spend a lot of all-nighters hammering out rewrites, only to find them changed again or forgotten in a day or two. Cynics succeed; the sensitive don't. Salary range: $40,000 to $55,000; often much less for an independent or documentary, and occasionally much more.

Artist/Illustrator/Computer Artist
Lines are becoming increasingly fuzzy in this category, but whether you're working on a storyboard or an animation or publicity materials, with a chewed-on pencil or a laser pen, there's ample opportunity for earn-and-learn jobs here. The ultimate goal is to become the art director or production designer and dream up magnificent sets and choreograph the special effects. Expect long hours and low pay, but also in many cases more autonomy and creativity than other entry-level jobs in entertainment or sports. Salary range: $40,000 to $60,000.

Special Effects
This is the industrial magic that's responsible for the dinosaurs in Jurassic Park, the fires, the fog, the terrifying explosions, the cute animatronics-basically anything that isn't human or stationary. Like computer programming, many of these skills can be learned on the job. Taking a few classes in 2D or 3D visual effects programs can be all it takes to get your foot in the door. People come from a variety of backgrounds, not just film school. Artists, designers, engineers, and sculptors are all needed to create the incredible special effects appearing in film today. Salary range: $25,000 to $30,000 for an apprentice or intern to the mid-six figures for an experienced professional.

Getting hired in the entertainment and sports industries usually depends on who you know and being in the right place at the right time. That said, here are several tips from insiders:

  • Don't be too proud to start at the bottom (you might think about looking for an internship). Whether it's sports marketing, record-label production, or a television shoot, you're ready and able to do whatever it takes to learn the business. If this involves fulfilling lunch orders and playing messenger, then that's your job for a while. The talent takes up all the available prima donna space in these industries.
  • Even the business types need to be flexible and willing to assume responsibility in areas usually outside their domain. Emphasize your organizational skills. In the final analysis, all of these productions-ball games, music events, television shows, movies-require a fanatical attention to detail. If you can remember everything on the to-do list with phones ringing, priorities changing, and a forecast for heavy rain, you're the one they'll all want to hire.
  • De-emphasize your need to be in control. Unfortunately, most detail-oriented people are not particularly great at letting chips fall where they may. Quite often in this business they fall helter-skelter, and the show, whatever form it may take, must go on. Making the best of a bad situation is key to your long-term success.