Chapter 2
Sports and Entertainment
Means Business
Sports and Entertainment Marketing
© Thomson/South-Western
Lesson 2.3
Business Ethics
Learning Targets
 I can define ethics.
 I can discuss the impacts of unethical
behavior.
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Sports and Entertainment Marketing
© Thomson/South-Western
Terms
 Ethics
 Principles
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Sports and Entertainment Marketing
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DO ETHICS COUNT?
 Ethics
 a system of deciding what is right or wrong
in a reasoned and impartial manner.
 All businesses should be conducted
with integrity, trust, and fairness.
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Sports and Entertainment Marketing
© Thomson/South-Western
Ethics and Character Matter
 Principles
 high standards of rules and guidelines.
 Character Development
 a progression in behavior - advance from childish
behavior to mature behavior (it takes time)
 Young people need good role models.
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 Common Principles in our society?
 Don’t Kill
 Don’t Steal
 Common Principles for NCAA?
 Can’t except money from boosters/agents
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Sports and Entertainment Marketing
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BUSINESS BEHAVIOR
 People (businesses) should act
ethically while pursuing a profit.
 Athletes (teams) should act ethically
while pursuing a victory.
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Sports and Entertainment Marketing
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Seeking an Advantage
 Sometimes it is hard to continue to act ethically
when you observe people who receive a
benefit from acting unethically.
 PED’s (Performance Enhancing Drugs)
 Corked Bats
 Paying or giving gifts to recruits
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Sports and Entertainment Marketing
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When Being Bad Profits
 Only fans can really influence the behavior of
ethically challenged athletes and celebrities.
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Sports and Entertainment Marketing
© Thomson/South-Western
Effective and Ethical
 Good decisions are both ethical and
effective.
 Good decisions are the right choices for
the long term.
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Sports and Entertainment Marketing
© Thomson/South-Western
DUE TODAY!
 Assignment Sheet from yesterday.
 FFFL Week 4 Stats
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Sports and Entertainment Marketing
© Thomson/South-Western
Lesson 2.4
Financial Analysis
Learning Targets
 I can discuss sources of funding and revenue
for sports and entertainment businesses.
 I can list and describe four tools for financial
analysis.
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Terms
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Return On Investment
Forecast
Budget
Balance Sheet
Income Statement
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Sports and Entertainment Marketing
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IT TAKES MONEY
 Profit is the primary purpose of sports
and entertainment marketing.
 #1 Goal/Objective of any business is to
make a profit.
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Sports and Entertainment Marketing
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Finding Funding
 Funding for an event is typically provided by
investors.
 Example Costs – Celebrity Golf Pro-Am
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Salaries
Promotions/Advertising
Player Fees
Course Fees
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 Return On Investment
the income from a venture that is distributed to
investors.
 Payment investors receive for providing financial
backing.
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Sports and Entertainment Marketing
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Money Sources
 Funds to repay investors are raised through;
 Ticket Sales
 Pre-Game Sales and Season Tickets
 Broadcast Rights
 TV and Radio
 Licensing
 Merchandise and Apparel
 Facilities
 signage, parking fees, luxury boxes, concessions
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Sports and Entertainment Marketing
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WHERE IS THE MONEY?
 Forecast
 a plan/report that predicts the expenses to be
incurred and the revenues to be received.
Note – must always do your homework if you want a
successful business/team.
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 Budget
a plan for how available funds will be spent.
 Solid budgets list specifics - Income (money coming in)
and Expenses (money going out).
 Sole purpose of a budget is to control costs so
they do not exceed the funds available.
Helps businesses/people to allocate money and
not spend more than they have.
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Financial Statements
 Balance Sheet
shows net worth at a specific point in time.
(Assets – Liabilities = )
 Assets = items of value, cash, property, equipment.
 Liabilities = amounts owed for purchases made on credit and loans.
 Income Statement
shows revenues and expenses for a specific period of time.
 Reveals company’s profit or loss.
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Investor Do Their Homework
NOTE – reviewing the forecasts, budgets and
financial statements is a must prior to investing.
Financial Analysis – Four Tools;
1. Forecasting
2. Budgeting
3. Balance Sheet
4. Income Statement
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Sports and Entertainment Marketing
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