RSM Quiz 3

Even if stadiums do not make cities money, what are some arguments for why we should use public money to build stadiums (we talked about 4...)?

- Building a facility creates construction jobs - People who attend games or work for the team generate new spending in economy, expanding local employment - Attracts tourists and companies, further increasing local spending and jobs - All of the new spending has a "multiplier effect" as increased local income causes still more new spending and job creation

What are salary caps?

A salary cap is intended to create parity among teams by capping how much a team can spend on its players salaries. Salary caps are adjusted annually for changes in revenue.

Growth of Product Endorsement Opportunities

Agents played an important role trying to negotiate endorsements contracts..

Athletes need for financial planning

As players were making more money, they needed help for tax planning and other business advice, and negotiated more favorable contracts that included having a higher income and receive tax breaks

Theatres

Building or outdoor area that has been designated for plays or other dramatic, comedic, and musical performances

International Olympic committee(IOC)

Governs all things relating to the Olympic games

Evolution of Players Associations

In the second CBA with the MLB, the MLBPA got a written agreement allowing players to have agents in contract negotiations

Is it financially beneficial for cities to host the Olympics? Explain your answer.

No, the host city uses more money to produce the Olympics than they receive for hosting the games. The IOC is taking larger percentages of the profit every year.

International Sports Federation

Non-governmental, international governing bodies recognized by the IOC to administer specific sports at the world level

National Governing Bodies

Organizations governing as a specific sport in each country

The Reserve System

Players were bound to their team until the mid 1970s, allowing owners to retain their rights and depress player salaries. Teams have a "gentleman's agreement" not to offer contracts to players on the reserve system.

Stadiums

Significantly larger than other venues, mainly large sporting events and concerts take place at stadiums

Development of Competing Leagues

Starting in the 1960s through the 1980s there were some competing leagues being created and offered higher salaries to players that would join the league. The agents would gauge interest from teams for their clients and maximize their player's value

What major professional sport league does not have a salary cap? How does this league regulate player salaries?

The MLB is the only major professional sports league that does NOT have a salary cap. Instead of a salary cap, they have a competitive balance tax similar to the NBA's luxury tax. They regulate their players salaries by abiding by this competitive balance tax. If a team spends over a certain limit, they will be responsible to pay a "luxury tax" penalty. The MLB has a very strong players union which allows them to fight and eventually dismiss all attempts to create a league wide salary cap.

What are some arguments for why we should not use public money to build stadiums?

The money could be used to benefit the public as a whole rather than just sports fans.

What are territorial rights? How do they impact smaller franchises (i.e. Oakland As)

They limit a competitor franchise from moving into another team's territory without league permission and providing compensation to the rights holder, as well as revenue sharing, with teams like the San Francisco Giants taking the majority of the area, it prohibits the A's from growing their fanbase.

What is The Sport Agent Responsibility and Trust Act (SPARTA), 2004 and why is it important?

This Act prohibits certain conduct by sports agents relating to the signing of contracts with student athletes. It also prevents them from mistreating or misleading student athletes in order to get them to sign.

What is a CBA contract?

This contract states that once a player has unionized, professional sport league management cannot make unilateral changes to hours, wages, or terms and conditions of employment. This agreement is between owners & players. The owners seek cost containment through free agency, salary caps, and other wage restrictions. The players seek payment and player movement through a free market.

Convention Centers

Usually owned by a public entity, usually host conventions or business meetings.

Thinking about the information from this chapter, does your group support the proposal to build a new Smokies stadium in downtown Knoxville? Why or why not? Support your answer.

We support the city's proposal to build a new stadium in Knoxville, It would provide a more pleasing view and extension of the city in the "old city" area. Could generate more revenue for restaurants in the area, but minor league baseball does not generate a lot of money and could get too pricey, but overall with the cuts that baseball has done to minor league teams and the smokies have survived those, it's not a bad idea to have the team in a bigger market.

Promotion & Relegation

a multitiered system of connected sports leagues in which teams are exchanged from one league to the next based on performance. For example, teams finishing at the bottom of a higher league will be relegated to a league one tier down.

Club system

a system separate & distinct from the education system, primary purpose is to fulfill social and fitness functions. Allows people to stay engaged in sport across their lifespan. Usually operated as independent nonprofit and voluntary organizations that serve their local community.

Outside of financial gain, what are the three primary benefits of stadium/arenas for cities?

a. Civic pride b. "Major league city" c. Possibility for urban renewal

Metropolitan Facilities

are venues located in large cities such as Madison Square Garden in New York

University Venues

consist of stadiums, arenas, and theaters that operate under different economic factors

National Olympic Committee(NOC)

develop and protect the Olympic movement in their respective country

What is revenue sharing?

gives a team a portion of various league-wide revenues such as expansion fees, national television revenues, gate receipts, and licensing revenues

Arenas

indoor facilities that host sporting and entertainment events

Local/civic venues

may have a smaller capacity and are located in towns or small cities

Organizing Committee

responsible for planning, implementing, and staging the games

What are some reasons that it is so difficult to get into the profession of sports agency?

there is a limited amount of clients out there