Term
| What defines professional sports? |
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Definition
| events and exhibitions where athletes compete individually and or on teams and perform for pay |
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Term
| sources for major international business grossing billions of dollars |
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Definition
| media rights, gate receipts, luxury seating, sponsorship and properties. |
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Term
| *international expansion of sports through the drafting of more international players by north american sports leagues. * |
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Definition
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Term
| five north american major mens leagues |
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Definition
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Term
| there are 149 teams at the major league level ** |
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Definition
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Term
| _____ is the only womens major pro-league |
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Definition
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Term
| more than _____ north american minor league teams in baseball, basketball, hockey, arena football, womens football, tennis, soccer, indoor and outdoor lacrosse |
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Definition
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Term
| Numerous professional leagues also operate throughout |
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Definition
| South America, Europe, the Middle East, Asia, Australia, and Africa. |
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Term
| Athletes in professional leagues are _________ employees whose bargaining power and ability to negotiate salaries vary. |
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Definition
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Term
| Professional sports events are also staged around the world in |
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Definition
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Term
| 1869: First professional team, |
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Definition
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Term
1876: North America’s first professional sport league,______ emerged
it Included.....(3) |
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Definition
the National League
bylaws for limits on franchise movement, club territorial rights, and mechanism for expulsion of a club |
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Term
| corporate governance model |
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Definition
| Owners act as the board of directors, and the commissioner acts as the chief executive officer |
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Term
| Leagues are structured as an __________for franchises to cooperate in business while competing on playing field. they also handle ___________ |
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Definition
| umbrealla organization....... rule making and rule enforcement. it was the trend for emerging leagues to be established as single entities to avoid antitrust liability and to create centralized fiscal control (e.g., MLS, WNBA) |
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Term
| franchise ownersip... initially sport team ownership was a ____________ for the __________ |
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Definition
| hobby for the wealthy. teams were operated by "mom" and "pop" businesses. |
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Term
| focus of franchise owners today |
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Definition
| is on running team like a business rather than a hobby. ownership groups today are diversified because of the costs of purchasing and operating a team. exception today is the nfl... it is family/individual ownership and is still considered the norm bc of enhanced degree of revenue sharing. |
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Term
| Franchise Ownership Issues |
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Definition
Owners trying to recoup initial investment in club and make more money on their franchises
A growing trend is for owners to challange leagues control over shared revenue streams
Some owners clamoring for local control over marketing revenues using logos, trademarks, and sponsorships
Examples: Dallas Cowboys and NY Yankees
Or working to maximize revenues
Examples: Boston Red Sox and Fenway Sports Group |
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Term
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Definition
permission to own sports franchise granted by ownership committee or league;
league imposes restrictions on ownership,including limit on number of franchise rights granted and restrictions on location;
leagues may impose eligibility restrictions for franchise ownership (NFL bans corporate and public ownership);
franchise and territorial rights are granted with ownership;
use of team colors, name, and logo are granted w/ ownership. |
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Term
| 1920 first commissioner of a pro sport league |
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Definition
| mlb's judge kennesaw mountain landis |
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Term
| league constitution and bylaws set forth commissioners powers: |
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Definition
granted authority to investigate and impose penalties when individuals involved with the sport are suspected of acting in the best interests of the game.
-player's associations have used collective bargaining to limit commissioner’s powers |
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Term
| 1885: john montgomery ward... and what happened when it didnt work |
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Definition
| established first players association to fight resene system, salary caps, and practice of selling players without the players receiving a share of profits and also to negotiate with owners. .... when it didn't work, about 200 players orgnied a revolt that led to the organization of the players league. |
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Term
| 1952 the mlbpa formed and was dominated by management. the negotiations were limited to |
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Definition
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Term
| 1966: Marvin Miller organized players as true labor union by... |
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Definition
-convincing all players that each of them was essential to game revenues
-Convinced players to fund players’ association by giving their group licensing rights to the union from which the union would operate and give remaining funds back to players in pro-rata shares |
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Term
| in 1957, nhl players tried to authorize .....nhl owners were |
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Definition
| humiliated, threatened, traded, and/or released players for involvement in players organizing efforts. |
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Term
| Labor relations did not play major role in professional sports until the late 1960s, when.... |
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Definition
| growing fan interest and increased TV and sponsorship revenues transformed leagues. |
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Term
| Once players unionize, collective bargaining must occur before league management can |
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Definition
| change hours, wages, or terms and conditions of employment |
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Term
| With a players union in place, a league can |
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Definition
| negotiate acceptance for restrictive practices with players' association (practices that on their own might violate the antitrust laws) |
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Term
| When the collective bargaining process reaches an.......the players can go on strike or owners can “lock out” players. |
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Definition
| impasse (a breakdown of negotiations) |
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Term
| Strikes and lockouts are far more disruptive in professional sports than in other industries because of |
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Definition
| the lack of replacement players (employees). |
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Term
| Key Concepts: Franchise Values and Revenue Generation |
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Definition
| Owners diversify investments to protect against risk that a franchise will lose a great deal of money. |
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Term
| Currently, franchise values for major league clubs are in the |
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Definition
| hundreds of millions of dollars |
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Term
| Franchise free agency—stadium games: |
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Definition
| Team owners threaten to move teams if their demands for new stadiums, renovations to existing stadiums, or better lease agreements are not met |
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Term
| examples of revenue generation |
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Definition
-boston red sox
LA dodgers following the model
Large vs. small-market dichotomy created by the disparity in local broadcast revenues in MLB
Forcing some teams to focus on efficiency (Oakland A’s) and use a system that uses less common statistics, wise drafting, and drafting of players who are “signable” |
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Term
| Contract Law & talk about disputes... |
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Definition
-All players sign a standard player contract particular to each league.
commisioner of a league can refuse to approve players contract if he/she believes it violates leagues role or policy.
Disputes may occur over which team retains rights to a particular player, and such disputes may lead to legal battles between teams and players of different countries. |
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Term
| In 2003....... had improvements in the race categories |
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Definition
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Term
| nba's first african american majority owner was |
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Definition
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Term
| MLB: First minority owner was |
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Definition
| mexican american arte moreno (anaheim angels) |
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Term
| WNBA: Representation of women has _____ in every category except ________________ and _______ |
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Definition
| declined.....prof. administrator and player |
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Term
| salary caps were intended to create ___________ by capping how much a team can spend on its players’ salaries. |
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Definition
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Term
| Owners must negotiate with the ______to have a salary cap, and the _______will inevitably negotiate for some exceptions to the salary cap. |
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Definition
players...... union
Exceptions have created loopholes for creative general managers and agents representing players (exceptions for signing bonuses, veterans, etc.). |
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Term
Caps force teams to ____ or renegotiate their contracts to make room under the cap to sign another player.
Caps can also require teams to have..... (2) |
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Definition
cut established players
-spending minimums, so low-revenue teams are prevented from cutting their payrolls to stay competitive. |
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Term
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Definition
| Professional sports are becoming globalized through the drafting and signing of players from other nations and the movement of marketing efforts into those countries. |
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Term
| NFL played exhibition game in China and regular season game in England in |
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Definition
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Term
| NBA seeks to move full force into |
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Definition
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Term
| Women’s Professional Sport Leagues |
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Definition
| Only the WNBA and NPF still exist; the ABL declared bankruptcy and the WUSA suspended operations in the fall of 2003. wonmens professional soccer is trying to make a footprint |
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Term
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Definition
No single, universally agreed upon definition...Generally refers to two primary activities of an organization:
1.How an organization generates the funds that flow into that organization
2. How these funds are allocated and spent once they are in the organization |
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Term
| Traditional sources of revenue |
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Definition
Traditional Sources:
Tax support, broadcast revenue, gate receipts
While sources have gone down, what goes up as well?
52% of Division IA schools do not make as much as they spend. |
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Term
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Definition
| Difference between financial inflows (Revenues) and outflows (Expenses) |
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Term
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Definition
| Anything an organization owns that can be used to generate future revenues |
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Term
| Teams can fund or “finance” assets in many ways:(2) |
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Definition
Owners’ Equity: The amount of their own money owners have invested in the firm
Debt: Amount of money an organization borrows |
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Term
| Professional sports revenues and expenses |
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Definition
REVENUES
Gate receipts – 30-60%
Media Rights- 15-55%
Venue - 10-20%.
EXPENSES
Player salaries- 55-75% |
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Term
| College athletic dept revenues and expenses |
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Definition
REVENUES
Ticket sales, post-season, institutional support, donor contributions, student fees, gov’t support, media, sponsorship, concession.
EXPENSES
Salaries, Grants in aid, team travel… |
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Term
Many financial decisions ultimately revolve around management of assets
** |
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Definition
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Term
| Return on Investment (ROI): |
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Definition
| Expected dollar-value return on each alternative investment |
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Term
| risk of financial decisions and roi |
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Definition
Future benefits of investment cannot be known at time of investment
Owners must decide how much they will finance with their own money and how much with borrowed money |
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Term
| Spectator sport industry is organized much differently from nonspectator industry and from rest of American business. |
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Definition
| The existence of one franchise benefits the others. |
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Term
| sports leagues are considered monopolies because |
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Definition
they face no direct competition
they are given greater bargaining power when dealing w/ stakeholders and allows them to potentially raise prices
allows them to earn much higher profits than would be the case, as wel as enact financial policies that wouldn't be possible w/ direct competition
only legal monopoly in US |
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Term
| sport industry is the ____ largest in the US |
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Definition
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Term
| Economic Magnitude of sport |
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Definition
$152B in direct spending on products and services to $380B for sport and entertainment.
$1 out of every $8 spent by Americans is devoted to sports and entertainment |
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Term
| Managers must deal with situations in which traditional sources of revenue have declined or remained stagnant while expenses have increased. example |
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Definition
IE: 18,000 seat arena cost $30M in 1975 to build and today it costs over $185M to $250M!
Cincinnatti Reds |
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Term
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Definition
| when traditional sources are not met, administrator faces a double whammy in which DEFN: stable and declining revenue- growing cost and a need for new sources of revenue. they need to find out where they will find the new sources and consequences if they don't find a new source. |
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Term
| Those interested in a career in sports should have solid grounding in: |
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Definition
corporate finance
managerial and financial accounting
advanced use of spreadsheet software. |
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Term
| There has been an explosion of spending on recreational and fitness activities. |
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Definition
| The U.S. population has aged, overall affluence has increased, and societal concerns about health-related issues have grown. |
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Term
| For individual segments of nonspectator sport industry, predicting trends is a factor. Capital investments are made now, but |
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Definition
| payoff does not occur until later. |
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Term
| Spectator sport industry has had tremendous revenue growth in past 15 years as the result of... |
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Definition
| of increased popularity, premium ticketing, broadcast contracts, sponsorship sales, stadium naming rights, and so on. |
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Term
| Increasingly large capital investments are needed to be able to |
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Definition
| continue to generate revenues. |
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Term
| College athletics, taken as a whole, continues to be unprofitable |
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Definition
| The revenue-generating abilities of football and men’s basketball are insufficient to compensate for deficits of other sports. |
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Term
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Definition
Entertainment value connected to “uncertainty of outcome”
Differences in market sizes cause differences in revenue potential, which cause differences in ability to pay players, which cause differences in on-field performance
Salary cap, revenue sharing, luxury tax
MLB Values |
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Term
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Definition
| an organizations revenues, expenses, and profits over a given time period (for example ayear) are usually summarized on a financial statement called this. |
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Term
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Definition
| an organizations assets, liabilities, and owners equity at any given point are shown on this financial statement sheet. |
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Term
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Definition
| an organizations assets, liabilities, and owners equity at any given point are shown on this financial statement sheet. |
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Term
| College athletic department heavily rely on ticket sales for revenue what percentage |
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Definition
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Term
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Definition
| Shows how the organization’s operations have affected its cash position. |
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Term
| current issues: * ticket sales, the right price, retention, sponsorship, luxury seating (are there enough corporations to fill sale of all suites) |
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Definition
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Term
| New revenue source : Licensing |
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Definition
Retail sales of the 4 pro leagues= $9.6B in 2003. (Table 4-8 in text)
The more fans spend, the greater the return to the teams.
Clothing manufacturer must pay a ROYALTY FEE
Professional leagues have highly centralized licensing programs.
College athletic programs not too far behind.
Ohio State
$2.5 M in 2001; 4 Million in 2002 ($80M in retail sales) |
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Term
| 1852: crew race between harvard and yale was the first... |
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Definition
| commercial intercollegiate athletic event in the U.S. sponsored by Boston, Concord, and Montreal RR Co. |
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Term
| 1864: first "coach" was hired by yale crew team |
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Definition
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Term
| dangerous nature of ______ pushed faculty and administrators to get involved in intercollegiate athletics |
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Definition
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Term
| 1895: this was formed to create student eligibility rules |
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Definition
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Term
| 1905: formed to make football safer to play |
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Definition
| intercollegiate athletic association on u.s. |
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Term
| 1912: iaaus changed name to |
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Definition
| national collegiate athletic association (NCAA) |
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Term
| 1929: this painted bleak pictures of intercollegiate athletics, identifying many academic and recruiting abuses, payments to student-athletes, and commercialization of athletics |
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Definition
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Term
| NCAA were pressures to change to an organization that would |
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Definition
| oversee academic standards for student athletes, monitor recruiting activities of coaches and administrators, and establish principles of governing amateurism |
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Term
| 1989: harris poll found that _____ of americans thought collegiate athletics were out of hand |
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Definition
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Term
| 1989: this formed and what did it do |
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Definition
| knight commission formed. it prompted NCAA membership to pass numerous rules and regulations regarding recruiting activities, academic standards, and financial practices. |
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Term
| WOMEN IN COLLEGE ATHLETICS |
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Definition
| intitial intercollegiate sport competitions were run by men for men. |
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Term
| 1896 (women): first sport contest for women was a bball game between |
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Definition
| UC berkley v. stanford= predominant theme of womens involvement in athletics was participation |
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Term
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Definition
| commission on intercollegiate athletics for women |
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Term
| 1971 (women) the commission on intercollegiate athletics for women became |
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Definition
| association for intercollegiate athletics for women (AIAW) |
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Term
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Definition
| endorsed an alternative athletic model for women, emphasizing educational needs of students and engaged in a power struggle with ncaa over governance of women's athletics |
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Term
| in 1981: ncaa membership voted to add championships for _______ in _______ |
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Definition
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Term
| 1982: AIAW executive board voted to |
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Definition
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Term
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Definition
| voluntary association. more than 1200 institutions, conferences, organizations, and individual members. |
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Term
| 1973: the current three-division system ______________ was created to increase flexibility of ncaa in addressing needs and interests of schools of varying size |
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Definition
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Term
| two of the more prominent ncaa administrative areas are |
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Definition
| legislative services and enforcement |
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Term
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Definition
supports philosophy of competitiveness, generating revenue through athletics, and national success. -326 member institutions
- division 1-A is for institutions that are somewhat larger football playing schools, which must maintain certain attendance requirements. - 118 member institutions in I-A; 116 in I-AA; 72 in I-AAA |
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Term
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Definition
division 2: awards athletic scholarships but on a more modest basis than division 1 - usually financed in the institutions budget like other academic departments - 282 member institution
-division III- doesnt allow athletic scholarships. emphasizes participation, placing primary emphasis on regional in-season and conference competition- 419 member institution |
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Term
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Definition
- member conferences must have minimum of 6 institutions in a single division to be recognized as a voting member conference
- have their own compliance director and run seminars regarding ncaa rules and regulations
- run championships in sports sponsored by member instiutions in the conference
- may also provide a revenue -sharing program to their member institutions
-conference realignment: current ncaa issue |
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Term
| current issues: title IX/gender equity |
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Definition
this is a challange. numerous institutions are choosing to eliminate sport programs and funding for overrepresented sex (usually men's teams)
- increasing participation and funding opportunities for female student athletes is another method. |
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Term
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Definition
| capping roster sizes for men's teams. |
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Term
| Current Issues: hiring practices of minorities/women |
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Definition
2003-04: 7.2% of athletic directors, 8.8% of head coaches of men's teams and 8.2% of coaches of women's teams were black.
women held in 2003-04 7.85 of division 1, 16.7 of 2 and 27 of 3 athletic director positions |
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Term
| Head football coach ________, University of Washington, dismissed in June 2003 for participating in a gambling pool on the NCAA basketball tournament |
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Definition
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Term
| ___% of male student-athletes and ___% of female student-athletes engaged in gambling or sport wagering activities |
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Definition
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Term
| 1990: NCAA adopts _____________plan for championships and postseason events—testing is for street drugs, performance enhancers, urine manipulators, and masking agents |
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Definition
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Term
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Definition
| CFO of athletic department at SU |
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Term
| Rob Speaker (Business of athletics) 2 major entities |
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Definition
| help generate revenue. NCAA - takes all schools, sells event for significant $... Big east conference- more regional level. take group of schools together, rules, schedules, provide us w/ structure and sell product. |
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Term
| NCAA has a revenue sharing plan according to rob the speaker |
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Definition
| it is based on # of sports that sponsors them.3 biggest things they look at to give you money... ncaa tournaments, sponsors, scholarships |
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Term
| 7 basic categories of revenue #1 = biggest and 7=smallest (for SU) |
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Definition
1. ticket sales
2. tv
3. fundraising
4. sponsorships/marketing
5. concessions/merchandise/parking
6. equiptment and apparel contracts
7. institutional support |
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Term
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Definition
#1. salaries and benefits
2. transportation for athletes
3. Marketing
4. Scholarships
5. utilities
6. recruiting
7. equiptment |
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Term
| SU is required to have how many programs |
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Definition
| 16. certain number of mens and womens programs. |
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