Sports and Entertainment Management
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Managing Local Events
Economic Environments
Utility
Factors of Production
Economic Systems
Managing College Events
College Bowl Project
Professional Events
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Financial Plan
Marketing Plan
Budget
Economics
Supply
Demand
Utility
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Factors of production
Economic system
Scarcity
Unity of command
Research

Goals
 Describe three types of plans necessary for
organizing entertainment events.
 Explain the importance of budgets as related to
entertainment management.
 Describe the management necessary for major
events.

By failing to plan, you are planning to fail.
▪ Benjamin Franklin


What does this mean in life?
What does this mean in business?
“Americans spend more time planning their
vacations then they do their careers and
retirement”

“Americans spend more time planning their
vacations then they do their careers and
retirement”

What are the consequences of failing to plan
for
 Your career?
 Your retirement?

Career
 One you hate
 Low pay
 Not skilled enough
 Limited advancement opportunities
 Frustration


Retirement
#1 concern of retired people is --- Running out of money

Consequences of little/no retirement
planning?
 Running out of money
 Not having enough to do what you want
 Live with children
 Poor post retirement care

Much the same as life consequences
 Limited money
 Run out of money
 Can not do what is wanted/needed for business
 Unhappy employees (Think Hostess)

The process of
 Setting goals
 Developing strategies
 And outlining tasks and schedules
▪ to accomplish the goals.

Any event needs cash and cash flow during
the event.

Run out of cash and event is in trouble

Cash flow

Must plan and manage cash and cash flow


A measure of a company's financial health
Equals cash receipts minus cash payments
 over a given period of time

Sounds simple, right?
•Over $213 BILLION In Revenue.
•This make the Sports Industry 2X the size of the Automotive
Industry.
•Sources of Revenue:
2. Advertising - $27.43 billion
14. Endorsements - $897 million
1. Sporting goods - $35.62 billion
12. Facility construction - $2.48 billion
15, Internet - $239.1 million
9. Licensed goods - $10.50 billion
10. Media broadcast rights - $6.99 billion
7. Professional services - $15.25 billion
3. Spectator spending - $26.17 billion
11. Sponsorships - $6.4 billion
8. Medical spending - $12.6 billion
6. Travel - $16.06 billion
13. Multimedia - $2.12 billion
5. Gambling - $18.90 billion
4. Operating Expenses:
(Not travel)
$22.98 billion.
2002 –Sale of Athletic and
Sports clothing:
$10 billion

Business Plan
 Document of a set of business goals
 Reasons they are believed To be attainable
 Plan for reaching those goals

Financial Plan
 Projected income, expenses, and profits from
event

Marketing Plan
 Detailed description of all promotional activities

What exactly does a business plan contain?
 Research
▪ Very good site is the SBA
 Briefly (handed in for credit)
1. List the elements or components of a business plan
2. Give a short description of each

Goals of a company and how they will be
achieved
 Attain financing or funding
▪ Includes business loans
 Strategy on paper
▪ Mistakes can be found here in thinking
▪ Less costly here
 Road map for the business

Executive Summary
 Summary of your plan as a whole
 Actually written last
▪ after other components completed

Company Description
 What does the company do?
 What is different from other companies?

Market Analysis
 Research business/industry the company operates
within

Organization and Management
 How is the business structured?

Service or product offered
 What do you sell or have to sell?
 Benefit to customers?

Marketing and Sales
 How do you plan to market your business?
 What is your strategy?

Financing/Funding
 Where will you get funding for your business?

Financial Projections
 Revenue Vs.. Expenses
 What will be your return on investment?

A written plan that
 Describes the event
 Events goals and objectives
 How goals and objectives will be achieved
▪ Includes details for items as
▪ Jobs and job descriptions
▪ Legal issues
▪ Acquiring financing if necessary

Managing Yourself
 Hard to manage a business if you can not manage
yourself.
 What is your business plan for you?
▪ Career?
▪ Retirement?
▪ Think about things you want to do in life and retirement
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


See Rubric
Contains eight elements covered for a
business plan
It is on you as a company and a product
Think about managing your future
 Where do you see yourself?
 What is your product? (you)
 What is or will be your value to someone?
 Financing for college? How? How much?

Setting a budget
 Estimates expenses and sales
 Shows number of people to be hired
 Consider the following
▪ Previous attendance
▪ Competition
▪ Economic trends
▪ Amount of promotion


Remember the Functions of Management
Planning is the process of setting
 Goals (short and long term)
 Developing strategies
 Outlining tasks
 And schedules
▪ to accomplish goals.



Create a PERSONAL BUSINESS PLAN
Plan your next five years using below as your
guide
The process of setting
 Goals (short and long term)
 Developing strategies
 Outlining tasks
 And schedules
▪ to accomplish goals.

Any event needs cash and cash flow during
the event.

Run out of cash and event is in trouble

Cash flow

Must plan and manage cash and cash flow
•Over $213 BILLION In Revenue.
•This make the Sports Industry 2X the size of the Automotive
Industry.
•Sources of Revenue:
2. Advertising - $27.43 billion
14. Endorsements - $897 million
1. Sporting goods - $35.62 billion
12. Facility construction - $2.48 billion
15, Internet - $239.1 million
9. Licensed goods - $10.50 billion
10. Media broadcast rights - $6.99 billion
7. Professional services - $15.25 billion
3. Spectator spending - $26.17 billion
11. Sponsorships - $6.4 billion
8. Medical spending - $12.6 billion
6. Travel - $16.06 billion
13. Multimedia - $2.12 billion
5. Gambling - $18.90 billion
4. Operating Expenses:
(Not travel)
$22.98 billion.
2002 –Sale of Athletic and
Sports clothing:
$10 billion

Money must be managed


No single, universally agreed upon definition
Generally refers to two primary activities of an
organization:
 How an organization generates the funds that
flow into that organization
 How these funds are allocated and spent once
they are in the organization
Profits/Income
 Difference between financial inflows (Revenues)
and outflows (Expenses)
 Assets: Anything an organization owns that can be
used to generate future revenues
 Teams can fund or “finance” assets in many ways:
 Owners’ Equity: The amount of their own money
owners have invested in the firm
 Debt: Amount of money an organization borrows
 College sports are nonprofit. Use budgetary
transfers from the university and other innovative
methods

Many financial decisions ultimately revolve
around management of assets
 Return on Investment (ROI): Expected dollarvalue return on each alternative investment
 Risk
 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
▪ Debt carries more risk than equity does
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

Long-term preparation where strengths and
weaknesses are evaluated.
Strengths
 Experience
 Past success
 New features

Weaknesses
 Budget
 Target market
 Lack of experience

Opportunities
 Size of community
 Expansion

Threats
 Weather conditions
 Economic conditions
 Competitors
Chapter 4.2
Chapter 12 (new book)
Finance, Economics, & Budgeting
In The Sports Industry


One of most diverse in the world
Sub industries
 Professional sports
 Collegiate athletics
 Facility Management
 Health and fitness
 Sporting goods

$435 billion industry (2012 est.)
 Plunkett Research
▪ What are the largest revenue producers?
 11th largest industry in the US

Ranks larger than insurance and legal services


Has seen large growth over the last 20 years
138,000 jobs just in spectator sports
 Not including careers in sport related industries

Some economic problems
 Income disparity between teams
▪ Try to solve with
▪ Revenue sharing
▪ Salary caps
 NFL generates more revenue from media than
gate receipts
▪ This revenue has grown but owners still complain

Some Media outlets and sports teams
 Own Each other


For years trend was for media to buy teams
Trend is now in other direction
 Show
 Media Companies No Longer Want To Own
Sports Teams

ESPN and their new TV deal
 Revenue streams

Spectator sport industry is organized much
differently from non spectator industry and from rest
of American business.
 The existence of one franchise benefits the others.
© David Lee/ShutterStock, Inc.

Sport leagues considered monopolies
 They face no direct competition
 Gives them greater bargaining power when
dealing with stakeholders
▪ (e.g., players, broadcasters, corporate sponsors, and local
governments)
▪ and allows them to potentially charge higher prices

Allows teams to earn much higher
profits
 than would otherwise be the case,
 as well as enact financial policies
▪ (e.g., salary caps, revenue sharing) that would not be possible
with direct competition

Only legal monopolies in United States

Contemporary Sport Management book
 P 271 to 281


Economics deals with unlimited wants Vs..
Unlimited needs AKA Scarcity
Economics of sport is
 The study of how people within a sports industry
deal with scarcity
 Scarcity is there are not enough resources to meet
all peoples needs



Scarcity is important because all managers
encounter it
The most successful managers are those who
make the best use of limited resources
What exactly is a resource?

Basic resources used to create goods and
services
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


Capital or infrastructure
Labor or human resources
Land or natural resources
Entrepreneurship
Biological resources
Computer resources



Typically resources cannot be consumed in
their original form, but rather through
resource development
They must be processed into more usable
commodities.
With increasing population, the demand for
resources is increasing.

There are marked differences in resource
distribution
 and associated economic inequality between
regions or countries,
 With developed countries using more natural
resources than developing countries.

Sustainable development is a pattern of
resource use,
 that aims to meet human needs while preserving
the environment.[1]

Contemporary Sport Management book
 P 271 to 281


Economics deals with unlimited wants Vs..
Unlimited needs AKA Scarcity
Economics of sport is
 The study of how people within a sports industry
deal with scarcity
 Scarcity is there are not enough resources to meet
all peoples needs

Microeconomics

Macroeconomics

Macroeconomics
 The study of problems and workings of the
economy as a whole

Microeconomics
 The study of problems and workings of the
economy in a specific region, or even individuals
or households

Supply
 Relationship between price of a product and
amount producers are willing/able to produce and
sell

Demand
 Relationship between price of a product and
amount consumers are willing to pay


You and ticket prices--How many of you would attend a Phillies
game if prices were
 $100
 $10

The A Rod example (or any good player)
 Normal supply and demand curve

Supply and demand Curve
 And Total Revenue
▪ Ticket prices
▪ Food and beverage prices
▪ Parking prices
▪ Sports Clothing
▪ Memorabilia


If you were trying to fill a stadium, concert
hall or movie theatre --Is it better to have a full “house” at lower
price tickets or a slightly empty house at
higher price tickets.
Ticket Prices
Quantity Sold
Total revenue
$10
35,000
$350,000
$15
31,000
$465,000
$20
26,000
$520,000
$25
20,000
$500,000
$30
15,000
$450,000
$35
12,000
$420,000
Ticket Price
Seats/Tickets Sold
$105
45000
$95
46000
$85
54000
$75
75000
$65
78000
$55
80000
Total Revenue
Ticket Price
Seats Sold
Total Revenue
$105
45000
$4,725000
$95
46000
$4,370,000
$85
54000
$4,590,000
$75
75000
$5,625,000
$65
78000
$5,070,000
$55
80000
$4,400,000

Consumers will demand less of a product as
the price of the product increases

Involves more than just price times quantity
sold
 Total Revenue

Other factors to consider are peripheral sales
 Food and beverage
 Clothes
 Other memorabilia

The average person at an event spends $12,
now what is the best price point?

Still $75 per ticket
$5.6 million in revenue and $900k in extra vs.
and extra $60K for a sell out
$75 per ticket is still better by $1.16 million



Scarcity
 Limited financial resources for unlimited wants

Capital may be scarce in the off season
 Teams often borrow money
 Are charged interest
▪ An interest rate
▪ Inflation

Capital may be scarce in the off season
 Teams often borrow money
 Are charged interest
▪ An interest rate


Capital resources are scarce
Better to know going in the chance for
success
 Vs. spending scarce resources and losing money

Economic Impact Study can help preserve
scarce capital
Economic Impact Study
 10 points (#1 & 3 = 3 pts., #2 = 4)
1. What is an Economic Impact Study?
2. What are four reasons to conduct an
economic impact study?
3. What is a basic multiplier effect and the two
main components (hint we talked about $1 spent

ripples through and economy 11 times)

Example



Typed
MLA Format
NO copy and paste
Chapter 4.3
GOALS


Describe the job positions and responsibilities
involved in sports management.
Explain the importance of community
involvement for professional sports teams.




4.3 in old book
New book:
Careers
 115, 117 to 122,
 244, 255, 256,
 289 to 290
Job opportunities in (these are NOT jobs/careers)
 Financial management
 In professional sports
 Public relations
 Facility and event management
 Tourism
 Marketing
 What jobs can be found in sports and
entertainment management?
 Minimum 5 for an average grade (more for above
average)
Must also include a Brief description what each position
does or is responsible for performing
 May use the book to research

Jobs examples in the field of
 Marketing and Promotions Director
 Corporate Sales Director
 Director of Ticketing and Finance
 Sporting Goods Sales Manager
 Facilities Coordinator
 Athletic Business Manager
 Fitness Manager


What do you need to be A Sports Agent?
See article on:
 The Nature of Being a Sports Agent
 Become a Sports Agent
 Education and Career Roadmap
 Sports Agents: Career Definition



1. What education is recommended?
2. What is a realistic salary expectation?
3. What type of personality is recommended?

Many colleges offer degrees in sports
management.
 (Majors , Minors, and Masters)

Competition comes from everywhere
 Is fierce for the high profile careers like sports
agent

A degree in the field offers
 network opportunities
 solid understanding of the product


Jobs can be a cross of business and exercise
science.
Requirements
 Knowledge of business
 Long workweeks including night and weekend
hours

Employment outlook
 Competitive
 Growing

Jobs in sports have increased significantly
over the past decade due to an increased
interest.

Internships in sports are important to help
with networking. In college some unpaid
internships can cover college credits


Read: P 259 IN PROFILE
Answer:
 1. What advice does Ms. Marquette offer students
that want to break into the sport or entertainment
industry?
 2. If you get an internship, what should you
consider it as far as your career?
 3. Why don’t some students get an internships?
 4. How would you go about getting an internship?


Do you have what employers want?
If not, why would they
 Hire you?
 Give you a raise?

What VALUE do you add to your
company/employer?
No matter what type of sport organization
involved, the finance function is crucial
 Those interested in a career in sports should have
solid grounding in:
 Corporate finance
 Managerial and financial accounting
 Advanced use of spreadsheet software
 For those interested in working in spectator
sports, knowledge with sport economics is
beneficial


Research
 Top 10 skills employers want
 List the top 10
 Give a brief description of each
 Full sheet of paper as there will be a second
activity associated with this activity.
 Copy and paste = a BIG FAT ZERO for this activity

1. Communication skills
 Includes writing, speaking, body language

2. Analytical/Research Skills

3. Computer Technology literacy

4. Flexible/Adaptable/Manage multiple items
 Time and task management

5. Interpersonal skills


6. Leadership/Management skills
7. Multi cultural awareness
 Many cultures in our society
 Global economy



8. Planning and Organizing
9. Problem solving and creativity
10. Teamwork
On the same sheet of paper as the 10 skills
employers want--1. What are three skills you need to improve
personally?
2. Why do you believe you need to improve
these skills?
3. What are you going to do to improve these
skills?

Chapter 19


Chapter 19 in Contemporary Sport
Management book
Pages417 to 439





Importance of research
Techniques of good research
Value of asking questions in sport
management
Analysis, interpret and evaluate questions
Importance of obtaining accurate answers


Usually unpopular
Most students would rather gain satisfaction
from hands on “learning”
 Less interested in theory and research

Usually need to actually be a manager to
 Fully appreciate the necessity of research in a
managers position


On line
List five reasons research is important
 To you in your career
 To a manager

Research is critical to Sport Management
 Management in general



Only research can keep you current
Trial & error Management is Folly (and costly)
Will it play in ----?








Your credibility is on the line
Helps in decision making
Helps us find details about our choices
Lets us explore choices with little risk
Helps us see more in each choice
Helps us create other choices
Helps us handle change better
Can be used in any job

Research is the investigation of a particular
topic
 using a variety of
▪ reliable,
▪ scholarly resources.
 Usually to answer a question or questions

The three major goals of research are
 establishing facts,
 analyzing information,
 and reaching new conclusions.
• The three main acts of doing research are
▪ searching for,
▪ reviewing,
▪ and evaluating information.

Don’t you expect professionals to be up to
date?






Finance and investment
Doctors
Lawyers
Auto mechanics
Airline pilots
Sport management (and management) is no
different from other professions

What areas do Managers need to be current?
 Human resources
 Marketing and organizational development
 Leadership
 Trends in their industry
 Competition
 The economy




Would you drive a car that had not been fully
tested by the manufacturer before buying?
Would you fly in a new aircraft that had never
been test flown?
Would you try a medicine that had not gone
through field testing and study?
Would you want to buy a hand held device
that had not been tested?

Other examples of what you probably want
tested
 Helmets
 Running shoes
 Baseball bats
 Hockey sticks
 Other sports equipment



Often ideas are implemented without testing
However, trial and error can be expensive
We all use trial and error
 But why if an alternative is available?
 Why do “trial and error” on purpose?
 Why not
▪ Gather information about question/topic
▪ Make decision on sound judgment

Read page 420
Trial and Error Management
You need to know if---

in book


2.
Why is Trial and Error Management Folly?
What in management are all derived from
research?
3.
What is the point in asking the question –
1.
1. Will it play in our area?

Where in your life do you conduct research?
Example: Checking out colleges

List three examples of where research is used
in your life and what you do to conduct that
research

First and foremost-- What is the question?
▪ Formulate and pose clear cut questions

To be good in decision making questions
must
 Precisely address topic to be researched
 Answers must relate to needed information

Address questions and gather information
without bias
 Through tenacity
 Through experts
 Through experience/intuition
 Through science
▪ Empirical evidence
▪ Data


Question Construction
Read page 422 to 424
 Planning Useful Results
 What is
Economic Impact Analysis?
Why is question construction so important?




Remember
Capital resources are scarce
Time is scarce and equates to money
Better to know going in the chance for
success
 Vs. spending scarce resources and losing money

Economic Impact Analysis/Study can help
preserve scarce capital




Research is very vital to our everyday decision
making.
It arms you from wrong information
Saves time and money.
It is important to your success
 as you take on life's challenges
 and career decision making.
 Economic Impact Study
 12 points
1. What is an Economic Impact Study?
2. What are four reasons to conduct an
3.
economic impact study?
What is a basic multiplier effect and the two
main components (hint we talked about how $1
spent ripples through an economy)


Example
Find an Economic Impact study





Find three different Economic Impact Studies
relating to sports or entertainment
List all three impact studies and where you found
them
1. Summarize one study
2. What was the key question?
3. What were the conclusions?
Chapter 4.3


All teams have an extensive involvement with
the local community
Teams support and help create/fund local
organizations. Players do the same

All sports teams demonstrate a commitment
to the community. Many organizations have
paid positions for a community relations
coordinator.

Use a kids club for community involvement

Teams organize charity events around larger
events.

What do you think/believe is the impact on
sports teams having community
involvement?
 Economic?
 Social?
Chapter 4.4

What is a brand?

Brand Marketing is the process of creating a
perception that separates an organization
from its competitors. A name and a brand is
an important part of increasing sales

Selling additional products to customers
beyond the initial purchase is known as
upselling.

Up selling is a result of you purchasing
products beyond your original intentions.

The key is the additional revenue stream.

Brand Marketing and upselling stress the
importance of synergy.

Synergy can also be the strength developed
working with partnerships.