IEC IN SPORT EXECUTIVE SUMMARY (NON ANALYTICAL PERSPECTIVE)
Introduction
Given the data, IEC’s potential profits from agreeing to broadcast the Liga Zon Sagres soccer
games. They have secured $8 million dollars of business, and have up to seven more clients who
will potentially purchase the rights to broadcast the games. Each client has a probability of
renewal associated with them and some clients have backup clients lined up in case the first does
not renew. These backups also came with a probability of renewal. The profitability of IEC
pursuing this project would depend on if these potential customers are willing to cooperate!
Expected Value Model
Based on our findings, the company can earn a positive profit in the best case of $1,330,250 and
in the worst case a loss of $740,035. In other words, pursuing the broadcast can bring the
company into a loss position!
Simulation Model
With the given probabilities, 1,000 different outcomes were simulated. The simulations
generated randomly based on the given probabilities of the client and at times backup clients.
The main takeaway here is that we have a probability of loss of approximately 25-28%, meaning
that if we are proceeding with the project, there is a 25%-28% of us losing money. The
simulations varied widely and did result in large profits at times, but the amount of times a loss
occurs is too significant to overlook.
Final Recommendation
Based on the findings of these models, it is recommended that IEC do not take on the project of
broadcasting the Portuguese Soccer League. Since, there is such a high likelihood that they will
lose money, it would be better for the business to avoid taking on a project that would likely
create such a loss over one quarter of the time when simulated.