COMPETENCY:
2.00
OBJECTIVE:
UNIT 2.00 STUDENT NOTES
Discuss ethical and legal implications of sports and
entertainment marketing.
2.01
Apply ethical principles to the industry.
A. Define ethics.
1. Ethics is recognizing the difference between right and wrong, then choosing what
is right.
2. Ethical decisions can be complex. Ethics guide how an organization behaves in
relationships with others.
a. Personal views of ethics are subjective, unique to an individual.
b. Example: One company may think it is ethical to actively lure a person
employed by a competitor to its company while others may view this as
unethical.
3. Social responsibility dictates that corporations must be responsible members of
society.
a. Companies need to be active, positive members of the community.
b. Example: A professional sports team aiding a player in covering an illegal
activity is both unethical and socially irresponsible.
B. Analyze ethical practices and codes of conduct.
1. When dealing with the public, organizations must be above reproach and hold
themselves to high standards.
2. Corporations adopt codes of conduct.
a. Example: Most companies have regulations regarding co-worker interactions.
b. Example: The National Football League requires a player found in violation of
the league’s substance policy to be fined and suspended.
c. Example: Abbot Laboratories may fire a worker who discloses confidential
information.
3. Codes of conduct are designed to improve:
a. Public perception.
b. Business operations.
4. Codes of conduct are not the perfect guard against ill doing within a company.
C. Research ethical issues in business and implications of those situations. Examples:
Martha Stewart, Pete Rose, Sammy Sosa, Darryl Strawberry, Michael Jackson.
COMPETENCY:
2.00
UNIT 2.00 STUDENT NOTES
Discuss ethical and legal implications of sports and
entertainment marketing.
OBJECTIVE: 2.02 Interpret legal issues pertaining to sports and entertainment
management.
A. Discuss legal issues associated with marketing products.
1. Certain products are protected from reproduction or use unless permission is
granted by the owner.
2. Intellectual property is a person’s thoughts or creations. Protecting intellectual
property is important because:
a. Substantial profit is a reflection of a good idea.
b. Businesses who originate an idea and protect it usually maximize profits.
3. Patents are granted for an invention or an improvement on a product. Patents
are granted for a limited period of time.
4. Trademarks and service marks.
a. A word, phrase, symbol, or design that identifies and distinguishes the
company from others.
b. Granted legal protection through the United States Patent and Trademark
Office.
c. Example: The Chicago Bulls have their own apparel.
5. Copyrights are granted to creators of:
a. Literary works (novels, poems, newspapers).
b. Artistic works (photography, paintings).
c. Broadcasts (television, radio, Internet).
d. Films.
e. Original musical composition.
f. Example: Faith Hill’s song Breathe is copyrighted so ownership is retained.
6. Industrial designs apply to structural designs, aesthetics, or the look of a product.
7. Certification marks are used to protect and certify the way products are made.
Example: The Hans Device used in NASCAR protects the head and neck from
injuries.
8. Collective marks are symbols used for a group or organization. Example: The
National Football League’s NFL shield logo.
9. Most sports and entertainment companies need to retain legal counsel to
navigate and protect their company.
10. The Lanham Trademark Act is designed to protect trademarks, certification
marks, and collective marks.
11. Teams or leagues such as the NFL, NBA, and Duke University own their logos.
12. The owners of logos can license others to use their logo to sell merchandise.
13. Billions of dollars of merchandise are sold without licensing.
a. Trademark infringement is using a trademark without authorization.
b. Team owners see this as potential loss of revenue.
c. May result in higher prices for legally registered merchandise.
B. Discuss legal issues associated with personnel and fans.
COMPETENCY:
2.00
UNIT 2.00 STUDENT NOTES
Discuss ethical and legal implications of sports and
entertainment marketing.
1. Title IX is federal legislation that dictates universities are required to provide
equal opportunities for both men and women’s sports.
a. Title IX states no one will be denied the opportunity to participate in sports
based on gender.
b. Any institution that receives federal dollars must comply.
c. Example: A school having a baseball team must provide an opportunity for
females to compete in softball.
2. The Americans with Disabilities Act states all public facilities must be
handicapped accessible.
a. The entire facility does not have to be accessible, but there must be a
reasonable amount of seating, restroom and parking available.
b. Participation, under the ADA, does not have to be granted if it would cause
harm to others or would change the whole concept of a product or service.
c. Example: The PGA dealt with an ADA issue when golfer Casey Martin asked
to be allowed to ride a golf cart instead of walking the course.
3. The Sherman Antitrust Act is federal legislation to protect industries from one
competitor that discourages competition within the industry.
a. Major League Baseball is the only branch of sports identified as exempt from
the Sherman Antitrust Act.
b. Example: MLB became exempt after a court ruling in the early 90’s stating it
could operate its business so that no other competing leagues would enjoy
success.
4. The Occupational Safety and Health Administration sets standards to protect
employees from being injured on the job. Example: Safe lifting techniques for
heavy objects such as sporting equipment.
COMPETENCY:
2.00
UNIT 2.00 STUDENT NOTES
Discuss ethical and legal implications of sports and
entertainment marketing.
OBJECTIVE:
2.03
Discuss personnel issues.
A. Recognize employee issues.
1. Organizational charts are designed to illustrate the chain of command and
hierarchy within an organization.
2. All employees should be up-to-date on current issues.
a. Decisions and actions should reflect the company’s stand on issues.
b. Employees are the “face” of the organization.
3. In order to be successful, an organization must have:
a. Benefits and compensation.
b. Collaboration.
c. Communication.
d. Internal rewards.
e. Training and professional development opportunities for staff.
B. Discuss and recognize athlete and entertainer issues.
1. Athletes and entertainers seek to make themselves a brand.
a. Michael Jordan created a brand image for himself.
b. Example: Air Jordan shoes, clothing, and accessories are sold in local retail
stores.
2. Consumer buying may be influenced by the endorsers of a product.
a. Athletes and entertainers control what products they endorse.
b. Athletes and entertainers have the ability to influence the market.
3. Agents represent athletes and entertainers in negotiations.
a. Agents understand the legal concepts behind contracts.
b. Agents are paid a percentage of client’s earnings.
c. Handlers deal with difficult athletes or entertainers.
4. Contract disputes with management often result in negative connotations from
the media.
a. Disputes affect the value and image of the athlete or entertainer.
b. Example: Major League Baseball contract disputes in the mid-90’s resulted in
a player strike. It was not until the homerun race between Mark McGwire and
Sammy Sosa that baseball reclaimed a substantial fan base.
5. Collective bargaining can be used in most sports with the exception of Major
League Baseball.
a. Excludes MLB because of the Sherman Antitrust Act ruling.
b. Gives players the right to organize, use the agent of choice and protect
themselves.
c. Collective bargaining agreements are agreements between players’
associations (or unions) and team ownership/management.
d. A collective bargaining agreement includes:
i. A minimum salary.
ii. Player’s rights.
iii. Medical disability insurance.
iv. Labor rules.
COMPETENCY:
2.00
UNIT 2.00 STUDENT NOTES
Discuss ethical and legal implications of sports and
entertainment marketing.
v. Length of contract.
vi. Restrictions of certain activities or behaviors.
vii. Rules for agents.
viii. Player and team travel.
6. Free agency allows players to explore options of moving to another team with
little or no financial penalty. Higher player/personnel costs can result from
bidding wars for certain players.
7. Salary caps limit the amount a team may spend on contracts.
a. Less profitable teams are protected from continual losses.
b. In the NBA, a luxury tax is paid by teams that exceed the salary cap. This tax
is split between less profitable teams.