Sports and Entertainment Marketing Class – Mr. Sherpinsky
Council Rock School District
the amount of money remaining from revenues after all expenses are paid
the money a business receives from the sales of goods and services
making decisions to use resources in ways that result in the greatest profit
The greatest reason for being in business!
Worldwide distribution revenue is critical for movie profits.
Movie ticket sales in the United States have increased each year for more than a decade.
Typically a studio’s average cost of marketing a film is roughly fifty (50% ) of the costs to producing a film
Results: Movie tickets sales increased every year for last decade
the study of how goods and services are produced, distributed, and consumed
Why is it important?
Because people have limited time and money to spend on entertainment, they must make specific decisions about how to spend their limited resources.
the study of the economics of the entire society (big picture or global)
the study of the relationships between individual consumers and producers
Sports and entertainment marketers are focused on microeconomics.
relationships with consumers
the amount of satisfaction a person receives from the consumption of a particular product or service
when the physical characteristics of a product or service are improved
making the product or service available when the customer wants it
the product is available where it is wanted
the product or service is available at an affordable price
risk risk management liable
the possibility of financial gain or loss or personal injury
Risk can be controlled!
Risk can be classified as:
Involving gain or loss
occurs from unavoidable weather conditions (tornados, blizzards, etc)
dishonest customers and employees
inadequately trained employees
occurs due to changes in the economy
Gain or Loss Risk
▪ either a gain or loss could result
purchase of a new sports franchise would be considered speculative pure risk
▪ a chance of an event occurring that could only result in a loss
if a loss can be prevented or the likelihood of its occurrence reduced
nothing can be done to prevent the risk
a pure risk for which the chances of loss are predictable and the amount of the loss can be estimated
the chance that a dollar loss could occur
the amount of the loss cannot be estimated
preventing, reducing, or lessening the negative impacts of risk by using the strategies of risk avoidance, risk insurance, risk transfer, and/or risk retention
pays for predictable losses
cost of insurance
assuming the cost of an uninsurable risk
Risk Retention Groups
similar businesses facing similar risks pool resources resources are distributed to members that have a loss
a system of deciding what is right or wrong in a reasoned and impartial manner
high standards of rules and guidelines
“Don’t Kill” or “Don’t Steal” or “Don’t Cheat”
a progression in behavior where people
advance from childish behavior to mature behavior based on principles
return on investment forecast budget balance sheet income statement
Profit is the primary purpose of sports and entertainment marketing.
return on investment
the income from a venture that is distributed to investors
a plan that predicts the expenses to be incurred and the revenues to be received
a plan for how available funds will be spent purpose of a budget is to control costs so they do not exceed the funds available.
net worth = assets – liabilities
shows net worth at a specific point in time
shows revenues and expenses for a specific period of time reveals company’s profit or loss