When sports fans arrive in San Diego for Super Bowl XXXVII events this month, they will see for themselves why Sports Illustrated selected the city as America’s sports and fitness capital. San Diego’s perfect climate has attracted sports business like a magnet, catapulting the category into fourth place among the county’s leading industries. As the segment continues to flex its strength in a sluggish economy, good sports are helping San Diego business achieve peak performance.

Major League

San Diego has earned a top spot in sports business with an unmatched array of programs, activities and talent. Two major and five minor professional sports teams have anchored the area, the ARCO Olympic Training Center has made it a mecca for amateur athletes, and a league of fitness-minded entrepreneurs from Hobie Cat’s Hobie Alter to golf’s Ely Callaway have made the region synonymous with sports business.

Sports businesses have an excellent reason to start in San Diego.

“Sports manufacturers can test their products here 360 days a year,” says John Hawkins of the Super Bowl XXXVII host committee.

Good weather is just a start, says Professor Dan Rascher of the University of San Francisco Sports and Fitness Management graduate studies program in Orange County. San Diego offers aggregation economies for sports, just like having all “big three automakers in Detroit,” notes Rascher in explaining the decision to base USF’s program close to San Diego North County’s sports manufacturing hub where many students work.

Sports business is good business.

Carlsbad-based TaylorMade-Adidas Golf recently reported an annual sales growth of 18 percent, with profits reaching nearly 10 percent of sales — at a time when many blue chip firms are struggling. Oceanside’s Hobie Cat expects sales to surpass the $100 million mark this year, as the company expands its product line with water skis, fishing equipment, kayaks and new models for its classic outrigger-style sailboats. Both companies have edged ahead of competitors with custom manufacturing programs that produce made-to-order quality right here in San Diego. Employees reap the benefits of high-paying jobs. Designers and engineers at sports equipment companies often earn more than $60,000 a year, while sports marketing executives command annual salaries starting at $120,000.

Surviving Slowdowns

Successful sports businesses can sail through economic slowdowns with a winning combination of advantages. First, fans are three times as likely to buy a brand they associate with a team or event they support, says Jeffrey Pollack, marketing chief of NASCAR in Los Angeles. Second, sports seasons and events are fast-paced, spurring sales at the speed of athletic competition. Third, growth potential is good, since only one out of 10 Americans exercises or plays sports on a regular basis. And finally, sports enthusiasts spend enthusiastically. “Customers won’t pay three times as much for a better car, but they will pay three times as much for a better golf club,” says Andy Sherman, CEO of Powdermet, a Sun Valley-based manufacturer of metal and ceramic nanoengineered fine powders.

The success of the San Diego Sports Council, one of the oldest and largest regional sports associations in America, has strengthened San Diego’s lead. The council, with 70 volunteer board members and a staff of 40, coordinates the region’s competition with other areas to host world-class events like the Super Bowl and U.S. Open Golf Championship as well as amateur events including NCAA basketball and synchronized swimming championships. Tory Nixon, Sports Council director, says San Diego sells itself, observing, “Once these sports leagues come here they keep on coming back.”

The economic impact of this success is significant. The next Super Bowl is expected to generate up to $300 million in revenue for local business, while ESPN’s X Games and the planned 2008 U.S. Open Golf Championship at Torrey Pines are each expected to add more than $100 million to the San Diego economy. Often that is just the beginning. The Super Bowl host committee reports many business owners who attended the 1998 Super Bowl relocated operations to San Diego after experiencing the area’s many benefits.

San Diego especially is attractive to sports and fitness entrepreneurs, reports David Gilroy of IdeaFit, a global trade association of fitness professionals based in San Diego. Jazzercise of Carlsbad was one of the first, founded 30 years ago. A recent example is Sonartech Golf, whose founders relocated to San Diego from Los Angeles to take advantage of the area’s excellent infrastructure.

Another success story is family owned manufacturer Schneider Surfboard, which has seen its sales grow globally as it reaches out to customers from its Web site. Entrepreneurial success in sports has motivated SDSU to launch a new graduate program in athletics and fitness management, geared to prepare talented athletes to launch new sports businesses.

Power Users

San Diego’s strength in sports and fitness business boosts many of the area’s other industries. Tourism benefits substantially, with events like the Super Bowl and Holiday Bowl powering hotel stays and business entertainment. The ARCO Olympic Training Center in Chula Vista, Balboa Park’s Hall of Champions sports museum, the America’s Cup Museum on Harbor Island and TaylorMade’s factory tours in Carlsbad offer year round attractions for visiting enthusiasts.

Sports events also provide exceptional opportunities for business sponsors. Dennis Conner Sports, for example, will offer private charters on an America’s Cup Yacht during the Super Bowl. Supporters also may join the crew in live competition as part of its program to reward sponsors. Corporate sponsorship managers applaud these kinds of opportunities, as Steve Anderson of Hewlett-Packard notes. “Our sponsorship of the America’s Cup Challenge three years ago did a great job at building our brand with the people we wanted to reach.” Qualcomm, Kyocera and Cox Communications have leveraged the visibility of sports events by putting their names on local stadiums.

Local sports business has become a good customer for local technology businesses. HST, a manufacturer of graphite materials, has built a new market by fabricating lightweight shafts for golf clubs. Oasis Sports Medicine, the official health care provider of the San Diego Chargers, is attracting a national clientele.

San Diego’s combined strengths in sports and technology made Carlsbad an ideal location for the 400-employee corporate administration center of 24 Hour Fitness, America’s largest chain of fitness centers. The company is expanding from its base in exercise facilities to offer personal training, nutrition programs and day spas.

City Of Champions

From working out to working together, the region offers sports enthusiasts many paths to a personal best. When the Super Bowl XXXVII Host Committee sought local volunteers, each of the 7,000 available positions was spoken for by the end of October, far exceeding the organizers’ expectations. In addition, the San Diego Regional Chamber of Commerce has organized seminars for small businesses to qualify as vendors to the NFL for the event.

Local managers who would like to learn more about what sports business can do for their business are in the right place. USF’s Orange County sports management program and SDSU’s sports business course are among the very few degree programs nationwide. In addition, Los Angeles-based iHollywood Forum sponsored a brand marketing seminar for sports businesses and is introducing a sports and entertainment summit next spring. And as more San Diegans build sports businesses, they can earn the rewards of being on a winning team.