Quiz for module 6 Facility and Event management
what is a bond?
"an interest-bearing certificate issued by the government or corporation, promising to pay interest and to repay a sum of money"
How many sports tenants should sport facility owners have?
2 prime tenants
fact
A prime example of a team that successfully built an arena with limited tax support was the Utah Jazz.
facts
Another team in the process of relocating is the Oakland Raiders, which will be known as the Las Vegas Raiders. One stand-out feature of the Raiders to-be stadium is the videoboard on the outside of the stadium, which will give tailgaters a view of the game.
What are primary venues for sports events?
Arenas and stadiums
private-placement bonds and asset-backed bonds
Both types are sold by the team, but private-placement bonds provide a lien on all future revenues generated by the team, whereas asset-backed bonds are secured through specific assets the Pepsi Center, home of the Denver Nuggets, Colorado Mammoth, and Colorado Avalanche, was financed through asset-backed bonds in the 1990s
What two teams called Wrigley Field their home at the same time?
Chicago Cubs and the Chicago Bears
city revenues for facilities
Cities, in particular, face hard choices, because most have stable or declining tax revenues and increasing municipal government costs. Building public assembly facilities means that other services have to be neglected. In many locations, the question of publicly financing a stadium has been put to a vote.
Facts
Civic centers and civic arenas sprang up in a number of major and secondary markets as cities competed for major and minor league sport teams by building suitable facilities. This period also marked the dawn of the touring concert industry, and concerts became an extremely lucrative addition to a facility's schedule.
fact
Companies such as Ticketmaster, New Era, Eventim, and Ticket Pro all return a percentage based on the ticket price back to the facility
fact
Concerts are booked, on average, 6 months before the performance date. Tours and routings are established, and the dates are promoted after an agreement is reached. When booking concerts, it is important to look at the potential ticket sales and the intended market
fact
Convention centers are almost always built and owned by a public entity. Convention centers are built to lure conventions and business meetings to a particular municipality. They are publicly financed because the rents and fees they charge do not always cover their costs.
fact
Convention centers are typically located near the downtown districts of large cities. The convention business is extremely competitive, and municipalities (and states) offer significant financial inducements to convention and meeting planners for the opportunity to host visitors.
fact
Conventioneers also are taxed, so the state and municipality receive indirect revenues from the events. The increased business, employment opportunities, and fiscal revenues justify the public entity's construction and continued subsidy of convention centers.
Alli Sports is a media, event, and branded content company that is a division of the NBC Sports Group.
Dew Tour, the Lucas Oil Pro Motocross, the Red Bull Signature Series, and the World of Adventure Sports
What do managers not want to do?
Double-book events Nontenant sport events must be booked around the primary tenants. Examples of these types of sport events may include AAU basketball tournaments or high school all-star games.
facts
Facility financing starts with the federal government, which allows state and local governments to issue tax-exempt bonds to help finance sport facilities
what do managers and promoters have to take in consideration?
Family events such as traveling circuses may not do as well, because some activist groups believe that the animals involved in such programs are being treated unethically.
Critical Event Management Functions
Finance/budgeting. Risk management. Tournament operations. Registration. Volunteer management. Event marketing.
general obligation bonds
General obligation bonds are repaid with a portion of the general property taxes and require voter approval (Sawyer, 2006). Stadiums funded by these bonds include AT&T Stadium in Dallas, Texas; Time Warner Cable Arena in Charlotte, North Carolina; and the Tampa Bay Times Forum in Tampa, Florida
whats a well known family event?
Harlem Globetrotters show
International Association of Venue Managers
IAVM, the professional trade association for this field. Facility managers provide the public with a safe, enjoyable experience while providing a cost-effective and efficient means for the venue owner.
facts
Incorporated in Levi's Stadium is more than "400 miles of cabling, 70 miles of which are just dedicated to connecting the 1,200 distributed antenna systems that serve the Wi-Fi routers that are placed to serve every 100 seats" of the nearly 69,000 seats in the stadium
3 largest promoters
Live Nation, AEG Live, and Feld Entertainment
who made the move from St. Louis, Missouri, to the now-crowded NFL market of Los Angeles in 2016?
Los Angeles Rams
fact
Mayo clinic is opening up soon.
fact
Metropolitan facilities are venues located in large cities such as Madison Square Garden in New York, the Wells Fargo complex in Philadelphia, and the Staples Center in Los Angeles 400 events a year. Typically the staffs operating these venues are larger based on the event load, whereas a smaller venue will generally run a more streamlined staff.
Minnesota Vikings
Minnesota Vikings football team helped fund its new stadium by imposing an additional tax on tobacco products
private managment
Most private management companies have a network of facilities that create leverage in cultivating key event relationships and, in turn, event bookings. increased operating efficiencies, purchasing leverage for supplies and maintenance items, and labor negotiation resources. Some of the larger private facility management companies include Global Spectrum, which manages facilities ranging from Philadelphia's Wells Fargo Center
What teams have recent trends in facility construction that include adjacent practice facilities for the primary tenants?
NHL's Columbus Blue Jackets and New Jersey Devils. Minnesota Timberwolves of the NBA and the Minnesota Lynx of the Women's National Basketball Association.
Ancillary Revenue
Occurs from the sale of food and beverage, merchandise, parking charges, ticket fees, and sponsorships.
combined funding
Oftentimes, opportunities are available to combine private and public funding to build a new facility. For example, the Minnesota Vikings' U.S. Bank Stadium was constructed using $348 million in Minnesota state funds, $150 million in Minneapolis city funds, and $550 million in funding from the Vikings. Of the $550 million, $220 million will come from the U.S. Bank naming rights over 20 years
The key question that arises is how these facilities are being funded and for how much
Over the past two decades, professional sport venues of the Big Four (MLB, NHL, NBA, and NFL) have cost approximately $37 billion, with 54% or $20 billion of this being funded through tax dollars
Who moved to arenas first?
Professional hockey moved to arenas first, followed by basketball, which hockey owners used to fill dark days when the hockey teams did not play.
revenue streams
Single-purpose facilities designed to the specifications of a particular sport with one team as primary tenant are desirable to team owners because revenue streams do not have to be shared.
facts
Some National Basketball Association (NBA) and National Hockey League (NHL) teams have built their own arenas. In other cases, municipalities, state governments, or public authorities have built them. Sometimes the public owner manages its facility, and sometimes it contracts out for private management. The public or private manager then negotiates a lease with the prime sport tenant. If the arena is privately built, commercial lenders issue loans to the team, which pledges facility revenue streams as collateral.
What is a harder facility to manage and construct?
Stadiums, particularly football. Arenas for hockey and basketball were easy.
Local/civic venues may have a smaller capacity and are located in towns or small cities.
The CURE Insurance Arena in Trenton, New Jersey, and the Santander Arena in Reading, Pennsylvania, are examples of local or civic venues.
Sports Television
The X Games, for example, are a direct result of the growth in sports television. ESPN created the X Games in the summer of 1995 to provide programming, and currently manages all X Games (summer and winter) in-house
Will the facility be financed publicly or privately?
The answer depends on a number of factors, including the type of facility being constructed.
facts
The baseball-only stadiums that had served their owners and fans for more than 40 years became obsolete during the 1960s. Some were too small, and most lacked modern amenities such as wide seats, leg room, easy access to concession stands, and artificial turf. Several new stadiums were built during the 1960s and 1970s, although not by the team owners.
most common ticket profit
The most common ticketing profit center is the ticket rebate. Most ticketing contracts are awarded based on the size of the rebate and the number of points of sale available to the consumer.
fact
Universities tend to provide their venues with tenant teams as well as a certain amount of content through the educational and extracurricular activities of the university. Providing the university with the content that may be routed through the area can sometimes prove to be difficult based on the occupied dates scheduled for university programs.
Arenas
University of Notre Dame's Compton Family Ice Arena. Bob Devaney Center at the University of Nebraska.
fact
Venue managers should know about a wide variety of genres and be able to quickly assess the type of event that would have the biggest impact on the community and the venue.
Cookie Cutter Stadiums
Veterans Stadium in Philadelphia, Three Rivers Stadium in Pittsburgh, and Riverfront Stadium in Cincinnati.
What sports have created a new market for venues because they offer the large, unobstructed space that is vital for successful functions.
Volleyball and MMA
how are convention centers financed?
almost always financed publicly because they are not intended to make money. the public sector pays for them
nongauranteed bonds
are sold on the basis of repayment from designated revenue sources nonguaranteed bonds do not generally require voter approval, the interest rate is higher compared to general obligation bonds
The facilities designed and built to accommodate these large groups of people include
arenas, stadiums, convention centers, theaters, performing arts facilities, racetracks, and amphitheaters.
tax-increment financing (TIF).
available in a specific square mileage of land around the facility (usually an urban area that has been identified for renewal or redevelopment) where the tax base is frozen and any additional taxes added are used to repay the TIF bonds
why are venue managers required to use union labor?
because of contracts negotiated before the venue opened that were based on funding and economic impact studies.
why do teams subsidize sports facilities
building a facility creates construction jobs people who attend games or work for the team generate new spending in the community, expanding local employment a team attracts tourists and companies to the host city, further increasing local spending and jobs new spending has a "multiplier effect" as increased local income stimulates still more new spending and job creation
how are intercollegiate facilities financed?
by private donations, endowments, student fees, fundraising campaigns, and, in the case of public institutions, public grants or capital bonds.
Facility ownership generally falls into three categories
community or state - which may have a "plethora of regulations and procedures in place" colleges - "funding is based on continued student growth, gifts, and institutional subsidies" private facilities - whose motive is solely to make a profit
where are trade shows best located and what is an example of one?
convention centers because hotel and exhibition space are specifically intended for that usage, but they can also play in stadiums and arenas that can be converted to accommodate the event. Phoenix Convention Center in Arizona, which hosts an annual expo for outdoor enthusiasts and fans of recreational vehicles.
grassroots programs
created by organizations attempting to target individuals at the most basic level of involvement, sport participation National Football League (NFL) Punt, Pass, & Kick national skills competition; the NFL Flag Football league (NFL Flag, 2017); and the Urban Youth Academy program of Major League Basebal
From a sport management perspective, today's version of public assembly facilities evolved when?
during the late nineteenth and early twentieth centuries in the United States, coinciding with the development of professional and intercollegiate athletics.
what do religious events do?
encompass mass worship
what can the stadium parking facility be for?
fairs, festivals, circuses, carnivals, outdoor marketplaces, and drive-and-buy car shows. They are also sometimes rented out for staging areas for new cars in transit to dealers or for parking for nearby events such as state fairs or major civic events such as the Kentucky Derby.
In-House Agencies
formation within major corporations of separate departments or divisions dealing with event management MasterCard
Turnkey Sports & Entertainment
full-service market research organization that works with a number of sport properties and organizations, including professional and college athletic teams, sport arenas and facilities, sport media organizations, and corporations engaged in sport sponsorship activities.
Tax-exempt bonds used by government entities are available in two types:
general obligation and nonguaranteed.
FSM Fenway Sports Management
global sports marketing firm that oversees sponsorship sales for Fenway Sports Group's sports portfolio, which includes the Boston Red Sox, Liverpool Football Club, New England Sports Network (NESN), and Roush Fenway Racing. exclusive marketing agency for LeBron James
convocations
graduations, and speaking engagements are great ways to get community involvement and interaction with the venue. Venue managers generally approach these types of events with the understanding that graduations happen in the spring and weather
what does civic venue do?
has a niche that is based in the surrounding community, and the support the venue receives is critical to its success.
why are must play venues popular with promoters?
have a variety of local staff, making tour travel less expensive and more efficient, have larger capacities, allowing for greater ticket sales, skilled labor in metropolitan venues is almost always unionized.
what did owners figure out?
having host cities build the stadiums/arenas saved a lot of money than building it themselves
What are arenas?
indoor facilities that host sporting and entertainment events. They are usually built to accommodate one (or more) prime sport tenant(s) or to lure a prime tenant to the facility.
what is public financing?
involves issuing bonds that can be tied to direct or indirect facility revenue, but more often are a general obligation of the governmental entity.
marketing fund
is a pool of money that is reserved from the profits of other shows.
Specialized Agencies
limit either the scope of services performed or the type of clients serviced. For example, Redmandarin is a London-based sport marketing agency that focuses on advising corporations on how to maximize their involvement with sponsorship opportunities, and offers consultancy services to partners of the Olympic Games
what is difficult for stadium managers?
maximizing bookings
what are the main nonsports events in stadiums?
outdoor concerts given by performers who have the drawing power to fill a stadium.
Full-service agencies
perform the complete set of agency functions discussed in the previous section. the largest are WME/IMG - 800 events include athletes such as Cam Newton (football), Venus Williams (tennis), and Ian Poulter (golf).
Team owners have traditionally sought lucrative stadium leases that provide revenue from four sources
preferred seating, parking, concessions, and stadium sponsorship
why is it hard for stadiums to hold nonsports events?
primarily because stadiums are significantly larger than other venues and most other events cannot attract stadium-sized crowds
in-house
producing a product or service within the organization.
public financing
public financing has accounted for 54% of costs for professional facilities. These monies are obtained through bonds, hard taxes, or soft taxes.
ways to gain private funding
selling naming rights, food and beverage rights, luxury suites and premium seating, advertising rights, and so on. Private donors to university athletic departments also may provide funding and have their names placed on the new facilities. Recent examples include the University of Louisville's $18.5 million
the facility in which a professional sport team plays has the most
significant impact on its profitability and is often the primary consideration in choosing to remain or move to a new location.
facilities built solely for soccer teams
soccer-specific stadiums (SSS). SSS have become the legacy of soccer investor Lamar Hunt, late owner of the Columbus Crew, whose SSS in Columbus, Ohio, was the first venue of its size to be built in the United States and has fueled SSS growth. The Crew Stadium opened in 1999 and has become a model for all Major League Soccer (MLS) franchises.
what are the types of events?
sports events family events concerts trade shows religious events convocations seasonal events
what are university venues?
stadiums, arenas, and theaters that operate under different economic factors. The market for university and college venues is generally dictated by the student population. Universities and colleges have different geographic locations, but the general intent when selling tickets is to market to the student population; in turn, certain types of events will play better than others.
whats an example of seasonal events
summer music tours Buffet's Margaritaville tour is one of the most heavily attended summer touring events.
Chicago united center
the NBA Bulls and the NHL Blackhawks.
how is booking challenging for family events?
the amount of preparation the venue will need and how long of a run the show will have.
the word stadium is derived from
the ancient Greek stade, a site for early Olympic-style athletic competition, such as the early Olympic Games first held in Olympia, Greece.
This technology idea was taken one step further where
the brand-new Mercedes Benz Stadium, home of the Atlanta Falcons of the National Football League (NFL) and the Atlanta United FC of the MLS. This stadium includes the largest videoboard in the world, providing 63,000 square feet of coverage. The 360-degree board has been labeled the "halo board" and truly revolutionizes the ability for second-screen viewing inside the stadium
New York to its professional sport teams
the city helped to subsidize the building of new stadiums for the Yankees and the Mets. Mayor Michael Bloomberg nixed the plan of his predecessor Rudy Giuliani to spend $800 million in city funds due to the recession
Levi's Stadium, home of the San Francisco 49ers, set the standard for
the new era of high-tech stadiums.
in the Dallas Cowboys' AT&T Stadium
there is an emphasis on second-screen viewing. According to Stephen Jones, this is a bigger deal.
What was the reason the LA rams moved?
this decision appears to be the state-of-the-art Los Angeles Stadium at Hollywood Park, which is set to open in 2020. The location offers an entertainment and retail experience unlike any other, and the truly unique design will allow for maximum use for events of all kinds on a year-round basis
what benefits municipality do convention centers serve?
through the economic impact the conventions or business meetings have on the municipality. Organizations such as the International Association of Convention and Visitors Bureaus evaluate the economic impact of various events, considering spending that includes hotel, meal, entertainment, and related expenditures.
what is critical when scheduling a concert?
timing
How do team owners use facility revenue?
to compete for free-agent players and boost their own profits. Some cities have constructed (or have promised to construct) facilities that will provide team owners with the design and revenue streams they need to be successful.
What was the goal of this in Levi's stadium
to provide fans with a platform to consume content even when live action is not occurring. Through the use of an app that was developed specifically for Levi's Stadium, fans are able to view content from any smartphone or tablet, just as if they were watching from home. The app also provides fans with information such as directions to an exact parking spot, directions to the individual's seat, estimated waiting times at the nearest restroom, and so much more.
true or false: Market research is particularly crucial for corporations wanting to know the impact of their sponsorship activities.
true
true or false: new stadiums spur so much economic growth that they are self-financing
true subsidies are offset by revenues from ticket taxes, sales taxes on concessions and other spending outside the stadium, and property tax increases arising from the stadium's economic impact.
