Revenue Test 1

Which of the following major sports leagues is most dependent on ticket sales? A. NBA B. NFL C. MLB D. NASCAR E. NHL

E. NHL

32. What new league will begin playing next year in Arlington? a. MLL b. MLS c. XFL d. AAF

c. XFL

What does PSL stand for? a. People State License b. Personal Seat License c. Public Seat Lease d. Profit Seating Lean e. None of the above

b. Personal Seat License

8. 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

C. $58.03 million

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 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

7. 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

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 a traditional gifts table, the lead gift (largest single campaign gift) should be set at 5% of the campaign total TRUE or FALSE

FALSE

Most development departments define a major gift as a donation worth $1,000,000 or more. TRUE or FALSE

FALSE

NCAA revenue distributions to member schools go directly from the NCAA to the school. TRUE or FALSE

FALSE

NFL teams share the highest percentage of gate receipts with visiting teams. TRUE or FALSE

FALSE

The NHL has the most strict ownership requirements of all the North American professional sport leagues, including a steep cash down-payment requirement. TRUE or FALSE

FALSE

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

Why does Major League Baseball sell the lowest percentage of its available seating inventory than any other major professional sports league? A. Prices are too high compared to other leagues B. Has 3 to 5 times more seats to sell than any other league C. Long seasons mean more teams are out of contention for an extended period D. Baseball is no longer "America's Pastime"

B. Has 3 to 5 times more seats to sell than any other league

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%

D. 5%

In the 1980's & 90's, what was the primary type of ticket used by fans? a. Email b. Will Call c. Pre-Printed Tickets d. Electronic

c. Pre-Printed Tickets

27. What Dynamic Pricing platform did we discuss in class? a. Fevo b. Zipwhip c. Qque d. None of the Above

c. Qque

One can create a major gifts table for a capital campaign in three major mathematical ways. TRUE or FALSE

TRUE

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 or FALSE

TRUE

Another name for a university's athletic support group is booster club TRUE or FALSE

TRUE

Distributed club ownership model leagues are sometimes structured as non-profit organizations. TRUE or FALSE

TRUE

More than 90% of Division I athletic programs have expenses that exceed revenues on an annual basis. TRUE or FALSE

TRUE

Regardless of whether the "P" in PSL stands for permanent or personal, these seating programs are generally alike in that they are used to collect money upfront from their fans, often to help underwrite the construction costs for a new venue. TRUE or FALSE

TRUE

Schools are permitted to count "emerging sports" toward meeting the minimum NCAA eligibility requirement for Division I and II status TRUE or FALSE

TRUE

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 or FALSE

TRUE

The single entity structure is used by Major League Soccer. TRUE or FALSE

TRUE

To reach a capital campaign goal, development departments need to receive major gifts from program supporters. TRUE or FALSE

TRUE

The sport industry relies on the discretionary income of spectators and participants. TRUE or FALSE

TRUE (discretionary income is extra $$ so that helps sport industry)

2. 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. Gift

a. Debt

19. 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

Identify/list the three (3) tests or prongs used by the Office of Civil Rights to determine whether intercollegiate athletic departments are in compliance with Title IX. (1) ____________________________________________________ (2) ____________________________________________________ (3) ____________________________________________________

-3 Prong Test (institutions only have to meet 1/3): 1) proportionality-proportionate to student body, 2) continued program representation for underrepresented sex-school must be able to show that they've continuously added programs for punitive sex 3) full accommodation of underrepresented sex-if interest is there, school must provide opportunity.

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

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

A. FSEs are the most expensive tickets offered

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.

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

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

6. 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 rather than accounting for the entire amount in the year paid.

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

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

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.

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

A personal seat license is typically valid for the life of the facility. TRUE or FALSE

FALSE

Antitrust law applies to single-entity sport leagues. TRUE or FALSE

FALSE

The revenues that member schools receive from conference distributions are the largest percentage of overall departmental revenues. TRUE or FALSE

FALSE

The single entity structure is used by MLB, the NBA, the NHL, and the NFL. TRUE or FALSE

FALSE

The sport industry is classified as an industry by the U.S. Census Bureau. TRUE or FALSE

FALSE

Yankee Stadium was financed by the team using a form of equity financing. TRUE or FALSE

FALSE

Gift financing is a minor source of operating income for major collegiate sports programs. TRUE or FALSE

FALSE (b/c its a major source, not minor)

5. 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

31. What was the #1 ticket trend to watch in Sports & Entertainment in 2019 highlighted in Forbes article discussed in class? a. Online Tickets will surpass offline b. Everyone has a phone, but no one will answer c. Revenue needs to increase d. Prices will go down

a. Online Tickets will surpass offline

16. 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

11. 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

What is NOT one of the 4 ticket sales departments listed in our book? a.) Digital Sales b.) Season Tickets c.) Groups d.) Inside Sales

a.) Digital Sales

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. e.) Both A & B

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 is the equation used to figure out your FSE number? a.) Total Games in plan/ total # of games in Full Season b.) Total Seats * Cost of parking/total games c.) Total Games in a season/average ticket price d.) None of the above

a.) Total Games in plan/ total # of games in Full Season

What is the class Twitter Hashtag established to share articles with the class? a. #APSMSMUCLASS b. #SMUAPSM4371 c. #SMUSports d. #SMUHashtag e. None of the above

b. #SMUAPSM4371

12. 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

15. 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

1. 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

9. 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

30. What group hospitality area does Professor Troupe credit as being the best and one that others have followed? a. Service King Lounge b. Rockies Rooftop c. Yankees Judge Seats d. None of the above

b. Rockies Rooftop (rooftop bar)

26. What does Professor Troupe believe to be the biggest key to selling tickets? a. Upsell them when ever possible b. Sell them what they want to buy c. Never focus on renewals d. Don't worry about customer service after they buy

b. Sell them what they want to buy

What is professor Troupe's main strategy discussed in class to work with ticket brokers? a. Don't work with b. Treat them like partners c. Sell them every seat you can d. Work with SeatGeek

b. Treat them like partners

Why does Major League Baseball sell the lowest percentage of its available seating inventory than any other major professional sports league? a.) Prices are too high compared to other leagues b.) Has 3 to 5 times more seats to sell than any other league c.) Long seasons mean more teams are out of contention for an extended period d.) Baseball is no longer "America's Pastime"

b.) Has 3 to 5 times more seats to sell than any other league

What was not discussed in class as a significant source of sports revenue? a. Sponsorship sales b. Merchandise sales c. Autograph sales d. Naming right deals e. Licensing

c. Autograph sales

33. What sport did Professor Troupe get his first job in? a. Hockey b. Football c. Baseball d. Basketball

c. Baseball

What is considered the oldest organized "team" sport in America? a. Golf b. Bowling c. Baseball d. Hockey

c. Baseball

3. 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

14. 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

20. Which league once operated under a single-entity model? a. MLB b. NBA c. MLS d. NHL e. NFL

c. MLS

10. 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

What statement best explains the Primary Ticket Market? a.) 2nd buyer of the ticket b.) ticket brokers use this channel the most to sell their inventory c.) 1st seller of ticket or rights holder of ticket d.) Tickets given from employer

c.) 1st seller of ticket or rights holder of ticket

What NBA team two years put in a bar located directly behind the basket? a.) Golden State Worriers b.) LA Lakers c.) Atlanta Hawks d.) NY Knicks

c.) Atlanta Hawks

What is the internet's greatest contribution to the ticket distribution process? a.) Marketing b.) Facebook c.) Its ability to facilitate the resale or exchange of pre-purchased tickets d.) Its ability to hit the right fan at the right time with a ticket offer?

c.) Its ability to facilitate the resale or exchange of pre-purchased tickets

What did the Houston Astros VP of Marketing in 1993 do with Professor Troupe study on marketing to kids? a.) Love in and offered Prof KT a job b.) Adopted it c.) Threw it in the trash d.) Ask for more research

c.) Threw it in the trash

6. 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

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. ALLL of the above

What is ATP? a. Average Total Price b. Attended Tickets Premium c. Average Total Premium d. Average Ticket Price

d. Average Ticket Price

7. 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

29. Where did Professor Troupe receive his Masters? a. Texas A&M b. UCLA c. Ohio State d. Ohio University

d. Ohio University

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

17. 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

18. 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

e. All of the above

Ticket operations is a twofold process, what is the two-fold process? a. Making money b. Being successful c. Servicing fans d. Granting access to event e. Both C&D

e. Both C&D

4. 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

13. 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

8. 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.

Which is not a "physical activity" included in the definition of sport? a. Physical sport b. Mind sport c. Coordinated sport d. E-sport e. Sports reporting

e. Sports reporting

What are the two main functions of a ticket operations department? a.) Budget and sell tickets b.) Granting access to fans and providing tickets c.) Training ushers and food & beverage staffers d.) Staff premium spaces and parking lots e.) Granting access to fans and servicing fans

e.) Granting access to fans and servicing fans

What is not a common objective of a sports executive when making pricing decisions? a.) Maximize the Expected Revenue Yield b.) Attract a Large Spectator Base to a Game/Event c.) Having a Great Game Day Atmosphere d.) Attracting Targeted Groups (e.g., millennials, women 35-39) To the Venue Via Ticket Allocations At Low Ticket Prices (Or Even Complementary Tickets) e.) Making sure players have access to seats

e.) Making sure players have access to seats