Sport Revenue Test #1
Other than __________, sport leagues in the United States are subject to the Sherman Act. a. The National Football League b. The National Basketball League c. Major League Baseball d. The National Hockey League e. Major League Soccer
c. major league baseball
Which league once operated under a single-entity model? a. MLB b. NBA c. MLS d. NHL e. NFL
c. mls
Which of the following is NOT a requirement for admission to the highest level of NCAA membership, the Football Bowl Subdivision (FBS): A. must meet a minimum football attendance requirement of 15,000 paid home attendance per game. B. allowed to award a maximum of 85 football scholarships C. must offer a minimum of six varsity sports for women student athletes D. must award no fewer than 90% of the allowable number of football scholarships in any given season.
c. must offer a minimum of six varsity sports for women student athletes
Schools are permitted to count "emerging sports" toward meeting the minimum NCAA eligibility requirement for Division I and II status (T/F)
true
T or F An analysis of NCAA revenues and expenses shows that operating expenses are growing on par with or increasing faster than operating revenues depending on division affiliation.
true
T or F Another name for a university's athletic support group is booster club.
true
T or F Distributed club ownership model leagues are sometimes structured as non-profit organizations.
true
T or F Each of the professional sport leagues has established rules regarding who may become an owner and join their "club."
true
T or F In addition to "traditional" luxury suites and club seats, some facilities offer luxury suites that do not have a direct view of the field of play.
true
T or F More than 90% of Division I athletic programs have expenses that exceed revenues on an annual bas
true
T or F NFL teams share the highest percentage of gate receipts with visiting teams.
true
T or F One can create a major gifts table for a capital campaign in three major mathematical ways.
true
T or F The Gross Domestic Sports Product (GDSP) is the market value of a nation's output of sport-related goods and services in a given year.
true
T or F The NBA recently used a pooled-debt instrument to assist financially struggling franchises.
true
T or F The four major North American sport leagues all share revenues from licensed merchandise sales equally among their teams.
true
T or F The largest grouping of sport businesses is within NAICS 71, the Arts, Entertainment, and Recreation segment.
true
Which of the following is generally the most expensive premium seating option: A. Suites B. Loge boxes C. Club seats D. Theater boxes
a. suites
T or F Department-generated revenues are revenues that the school transfers to the athletic department.
false
full season where someone commits to every home game
season ticket
According the Team Marketing Report, the complete cost for a family of four to attend a single major league game on average was around: A. $200 B. $500 C. $300 D. $400
a. $200
Which of the following values would come closest to representing the percentage of a Division I-A level athletic department's total annual revenues generated from ticket sales? A. 22% B. 15% C. 42% D. 5%
a. 22%
Leagues have created rules and policies to improve competitive balance. What do these rules and policies typically relate to? a. Player drafts b. Free agency c. Player salary d. All of the above e. None of the above
d. all of the above
T or F Gift financing is a minor source of operating income for major collegiate sports Programs.
false
T or F In a traditional gifts table, the lead gift (largest single campaign gift) should be set at 5% of the campaign total.
false
T or F Most development departments define a major gift as a donation worth $1,000,000 or more.
false
T or F NCAA revenue distributions to member schools go directly from the NCAA to the School
false
T or F The NHL has the most strict ownership requirements of all the North American professional sport leagues, including a steep cash down-payment requirement.
false
T or F The New York Islanders of the NHL violated league rules regarding league control of official league websites.
false
T or F The revenues that member schools receive from conference distributions are the largest percentage of overall departmental revenues.
false
T or F The single entity structure is used by MLB, the NBA, the NHL, and the NFL.
false
T or F The sport industry is classified as an industry by the U.S. Census Bureau.
false
T or F Though securitization is popular, facilities cannot be financed through Securitization.
false
typically attend for the social aspect (not die-hard fans) and is a good way to fill seats; often at a discount
group
Only non-taxpaying teams may sign free agents starting at $5 million for up to 4 years
mid-level exception
multi-game plan if someone can't attend or afford all of them (sell out the most popular games first)
mini plan
luxury suites and club seats that offer more amenities than regular ticket (it is changing)
premium
the most expensive and most effected by the secondary market
single ticket
what revenue source generally produces the greatest amount of annual income for NHL?
ticket sales
T or F The single entity structure is used by Major League Soccer.
true
T or F The sport industry relies on the discretionary income of spectators and Participants.
true
T or F To reach a capital campaign goal, development departments need to receive major gifts from program supporters.
true
t/f If you fail to renew your season tickets it results in forfeiture of the PSL
true
set in stone price once tickets go on sale. There are no changes made to the price
variable ticket pricing
what is the state of ticket revenue in sport?
16 billion
MLB % of seat capacities sold
70%
NBA % of seat capacities sold
90%
NHL % of seat capacities sold
90%
NFL % of seat capacities sold
95%
Team may re-sign one of its own free agents up to the maximum salary level of 5 years if player on roster previous 3 years
Bird exception
Which of the following statements is TRUE regarding the NFL's revenue sharing policy: A. The owners receive 55% of all national TV rights revenues. B. Under the VTS provision, the league collects 40% of all gate receipts and distributes equal shares to every team. C. Of the $9.5 billion in total revenues generated by the NFL in 2012, 75% was shared equally among the 32 franchises. D. By 2014, analysts predict that the league will distribute as much as $100 million to each team by the start of the season.
D. By 2014, analysts predict that the league will distribute as much as $100 million to each team by the start of the season.
T or F Yankee Stadium was financed by the team using a form of equity financing.
False
what does PSL stand for?
Personal seat license
In the late 1950s, which league failed to recognize that it should expand to emerging markets, which allowed an upstart league to establish a presence in those markets? a. NFL b. NBA c. MLB d. NHL e. WHA
a. NFL
Which factor is driving up the operating costs of a college or university athletic department? a. Arms race b. Moving up a division c. Free market for college coaches d. Increasing tuition on college campuses e. All of the above
a. arms race
When an organization borrows money that must be paid back over time, usually with interest, what kind of financing is being used? a. Debt b. Equity c. Retained earnings d. Government e. Gif
a. debt
Which iconic franchise nearly experienced financial disaster in 2011? ? a. Los Angeles Dodgers b. Chicago Cubs c. Dallas Cowboys d. Washington Redskins e. None of the above
a. los angeles dodgers
Three interrelated sectors exist within finance. Which of the following includes securities markets, investment banking, insurance, and mutual fund management? a. Money and capital markets b. Investments c. Financial management d. Derivative trading e. None of the above
a. money and capital markets
According to which gift table rule does the top 10 gifts to a capital campaign account for 33% of the campaign's total goal and the next 100 gifts account for an additional 33%? a. Rule of thirds b. 80/20 rule c. 90/10 rule d. Traditional rule e. None of the above
a. rule of thirds
One of the most serious concerns about the use of dynamic pricing is: A. Season-ticket holders might revolt if they find they are paying much more for their tickets than those purchasing similar tickets on game day. B. Fans simply won't understand the complexities of this new approach to pricing C. It will drive more fans to buy tickets in the secondary market D. Team revenues will drop.
a. season-ticket holders might revolt if they find they are paying much more for their tickets than those purchasing similar tickets on game day
What are the primary sources of NCAA revenues? a. Television and marketing rights fees b. Championship tournaments c. Investment income d. Sales and services e. Contributions
a. television and marketing rights fees
The "full" financial contribution of major football programs may exceed 70% of the total amount of an athletic department's revenues. Yet, according to the chapter, for every one "big-time" football program turning a major profit, there are _______________________. A. three to four struggling to make ends meet B. fully 50% in desperate financial shape C. surviving only due to massive institutional support D. many considering dropping football
a. three to four struggling to make ends meet
This league began in a single-entity structure and switched to a franchisee/franchisor model? a. WNBA b. MLS c. MLB d. NFL e. Both a and b
a. wnba
what is the most serious challenge to attending a live sporting event?
at home experience
According to data provided by the NCAA, very few intercollegiate athletic departments achieve financial self-sufficiency. In fact, the average FBS division program relies on $_______ in "institutional support" to breakeven. A. $13.1 million B. $ 9.5 million C. $ 3.2 million D. $15.6 million
b. $9.5 million
Three interrelated sectors exist within finance. Which of the following sectors focuses on security choices made by individual and institutional investors as portfolios are being built? a. Money and capital markets b. Investments c. Financial management d. Derivative trading e. None of the above
b. Investments
What is the NCAA's main expense? a. Salaries b. Distribution to Division I members c. Distribution to Division II and III members d. General and administrative e. None of the above
b. distribution to division I members
For schools in Division I-FBS conferences, where does the largest portion of the athletic program's revenues come from? a. NCAA revenue distributions b. Football c. Men's basketball d. Baseball e. None of the above
b. football
Under this sport franchise ownership model, __________ is the most common model of team ownership. a. Single Owner/Private Investor Model b. Multiple Owners/Private Investment Syndicate Model c. Multiple Owners/Publicly Traded Corporation Model d. Single Entity Model e. Distributed Club Ownership Model
b. multiple owners/private investment syndicate model
In which league have franchises typically been owned by corporations? a. Japanese Professional Baseball League b. Nippon Professional Baseball c. Major League Baseball d. Minor League Baseball e. None of the above
b. nippon professional baseball
The so-called "Sanders Provision" provides a loophole in the NFL salary cap by: A. allowing players already on a team's roster to extend their contracts with out regard for the salary cap limit. B. prorating large signing bonuses over the length of the players' contracts rather than accounting for the entire amount in the year paid. C. exempting designated "franchise players" from the salary cap limit. D. allowing performance bonuses (e.g., number of touchdowns scored) to be exempted from cap limits.
b. prorating large signing bonuses over the length of the players' contracts
The most common approach used by analysts for determining the market value of sports franchises is: A. discounted cash flow B. revenue multiple C. comparable market value D. Forbes Appraisal Method
b. revenue multiple
Selling FSE ticket packages are considered to be the most challenging of all the ticket options offered sports fans. Which of the following factors is often the most difficult to overcome in selling FSEs? A. FSEs are the most expensive tickets offered B. The considerable non-monetary "costs" (time and travel obligations) C. They offer fewer preferred seating locations. D. If the team performs poorly, FSE purchasers are stuck
b. the considerable non-monetary "costs" (time and travel obligations)
As a result of an Act passed by Congress in 2004, owners who purchase professional sports teams can now claim the following depreciation allowance: A. 50% of the purchase price over 6 years B. 100% of the player roster value over 5 years C. 100% of the purchase price over 15 years D. 50% of the purchase price over 5 years
c. 100% of the purchase price over 15 years
Which league's salary slotting system encouraged the Houston team to make their on- field product particularly terrible from 2009-2013? a. NFL b. NBA c. MLB d. NHL e. All of the above
c. MLB
Three interrelated sectors exist within finance. The goal or outcome of those working in which of the following sectors is to acquire and secure funds to maximize shareholder wealth? a. Money and capital markets b. Investments c. Financial management d. Derivative trading e. None of the above
c. financial management
NCAA v. Board of Regents affected television revenue generated from which sport? a. Men's basketball b. Women's basketball c. Football d. All of the above e. None of the above
c. football
Under the current NBA collective bargaining agreement (CBA), if players' salaries exceed approximately 50% of BRI, the CBA stipulates that an "Escrow Tax" goes into effect. This tax: A. requires that teams pay $1 for every dollar they are over the salary cap. B. may cost the Los Angeles Lakers an estimated $30 million. C. requires that players "give back" 10% of their salaries D. a and b
c. requires that players "give back" 10% of their salaries
College athletic department-allocated revenues include which of the following? a. Ticket sales b. NCAA and conference distributions c. Student fees d. Alumni donations e. All of the above
c. student fees
Chapter 3 cites a number of reasons for why minor league baseball has continued to thrive over the past two decades. Which of the following is the single most important factor in sustaining the growth of minor league baseball? A. the unique "parent-team" arrangement in which major league teams underwrite the cost of all the operational expenses of their minor league affiliates. B. the development of many new and modern minor league baseball stadiums. C. the emphasis of providing family-affordable entertainment. D. minor league baseball benefits from the its long tradition as "America's pastime.
c. the emphasis of providing family-affordable entertainment
In order for the Portland Trailblazers to avoid paying a Luxury Tax this season, the team's player payroll may not exceed: A. $69.21 million B. $70.34 million C. $58.03 million D. $71.74 million
d. $58.03 million
For Division I-FBS Group of 5 conferences, increased revenue depends on which of the following? a. Performance in the NCAA men's basketball tournament b. A conference football championship c. Having 12 football playing teams in a conference d. All of the above e. None of the above
d. all of the above
Typically, owners in a specific industry compete for wealth maximization. Owners in sport might not be interested in this goal. Rather, they may be interested in __________. a. Winning championships b. Seeking celebrity status c. Protecting a community asset d. All of the above e. None of the above
d. all of the above
As discussed in class, the gap between the "Haves" and "Have Lesses" is a serious concern across all four major leagues. In fact, A. the top 8 NFL teams generate on average more than $100 million more the bottom 8 teams. B. the rapid growth of regional sports networks (RSNs) has allowed NBA teams in smaller markets to close the revenue gap. C. even the generous revenue sharing arrangement in MLB is not sufficient enough to make small market teams profitable. D. All of the above are true
d. all of the above are true
For all sport and entertainment organizations, __________ financing may include land use, tax abatements, direct facility financing, and infrastructure improvements. a. Debt b. Equity c. Retained earnings d. Government e. Gift
d. government
Of the "Big 3" revenue sources, which of the following generally produces the greatest amount of annual income? A. Sponsorship sales B. Naming rights C. Concessions D. Premium seating (suites/clubs) E. Parking
d. premium seating (suites/clubs)
Which of the following is NOT typically a benefit feature of a seat license program: A. "Lifetime" guarantee to the best seats in the house B. The right to transfer /sell the PSL to another party C. The chance to invest in the team's future D. The typically deeply discounted price associated with PSL purchase
d. the typically deeply discounted price associated with PSL purchase
First team to take full advantage of seat license sales in 2008 was..
dallas cowboys
prices are set but not fixed. the prices varies depending on the supply and demand
dynamic ticket pricing
Through 2015, the highest expansion fee paid by a new team entering a North American professional league was in which league? a. MLB b. NBA c. NFL d. NHL e. MLS
e. MLS
Of the following, which is a trait of a major donor? a. They often desire to provide opportunities that they did not have while growing up, to help the less fortunate, to improve quality of life, and to help solve problems in society. b. They tend to be very religious, have a strong belief in free enterprise, and are basically conservative. c. They know someone in the athletic department or know something about the department, and they believe in someone working for the department or believe in something that the academic institution or athletic department represents. d. They have the resources to make a major gift. e. All of the above
e. all of the above
Which of the following is the responsibility of the commissioner's office under the franchisee/franchisor league structure? a. Negotiate national television contracts b. Establish relationships with vendors for league-wide licensed merchandise sales c. Hire and supervise game officials d. Negotiate a collective bargaining agreement with the players' union e. All of the above
e. all of the above
This type of financing includes charitable donations, either cash or in-kind, made to an organization and is the primary source or operating and investing income for major collegiate sports programs. a. Debt b. Equity c. Retained earnings d. Government e. Gift
e. gift
In which league was Pete Rozelle commissioner and developer of the idea of "league think"? a. MLB b. NBA c. MLS d. NHL e. NFL
e. nfl
The NCAA distributes revenue to member institutions based on a specific formula. Of the following, which is a criteria for establishing the amount of revenue a member receives? a. Historical performance in NCAA Division I Men's Basketball Championship b. The number of sports sponsored c. The number of scholarships offered d. All of the above e. None of the above
e. none of the above
Of the following statements regarding the Arts, Entertainment, and Recreation segment (NAICS 71) of our economy, which of the following is true? a. The industry employs a large number of full-time workers and relatively few seasonal and part-time workers. B. Those working in the industry tend to be older than those working in other industries. c. Wages for those working in the industry tend to be higher than wages paid to those working in other industries. d. Almost all leisure time activities, including watching movies, are a part of this sector. e. Rising incomes and increasing leisure time over the next 10 years should lead to an increase in demand in this sector
e. rising incomes and increasing leisure time over the next 10 years should lead to an increase in demand in this sector
team may re-sign own free agent for up to 175% of prior contract if player on roster for previous 2 seasons
early bird exception
.T or F Most of the recent bankruptcies in the "Big 4" professional sport leagues have involved baseball franchises
false
T or F A personal seat license is typically valid for the life of the facility.
false
T or F Antitrust law applies to single-entity sport leagues.
false