Sport FInance FINAL
The NBA has national TV deals with both ESPN and TNT. How much annual revenue does the NBA generate from these two deals
$2.6 billion
What is the annual amount that Nike is paying LeBron James to serve as an athlete endorser?
$30 million
In 2017, the average annual player salary in Major League Baseball was
$4.47 million
In the 2016-2017 season, NBA had a salary cap of
$94.1 million
When starting a business, it is recommended that the owner first set aside at least 2 years worth of living expenses.
2 years
Only _________ of new businesses survive.
20%
Within major North American professional sports leagues, the percentage amount for team salary cap purposes is approximately what percentage of overall league revenues?
50%
Within most licensed merchandise deals, the royalty payment to the property rights holder is
6%-18%
Income statement
A document describing how much profit or loss was earned by a business over a given length of time.
Balance sheet
A document displaying the financial condition of a business at a single point in time. The basic definition for this document is that assets = liabilities + owner's equity.
A new approach to managerial accounting is ________________, which examines financial metrics, customer perspective, internal perspective (employees and culture), and learning and growth (employee training).
Balanced scorecard approach
What was the most valuable sport franchise in the world in 2017
Dallas Cowboys
money that is owed to others
Debt
costs that are incurred by an organization
Expenses
What is the formula for future value
FV=PV(1+r)^t
A tangible asset cannot be touched or held
False
An NCAA Football Bowl Subdivision football team is limited to 65 scholarships per year.
False
Inventory is always considered a current asset.
False
It is always appropriate to compare two professional teams with each other for financial purposes
False
Most e-sports games started similar to how traditional sports were started.
False
Owners regularly disclose their financial condition to benefit local voters.
False
Uniform expenses are the single largest expense for a travel team
False
_______________ is a key to financial planning that involves looking to the future and making certain assumptions.
Forecasting
The rule permitting NBA teams to re-sign their own players even if it means the team is over the salary cap as long as that player has been with the team for a minimum of 3 years is known as the
Larry Bird exception
______________ is often less clear because the large number of variables reduces the accuracy of projections.
Long-term planning
What is the most profitable league in the United States
NFL
Which North American professional sports league generated the most revenue in 2016 at $13 billion?
NFL
What is the largest sporting goods company in the world, as measured by annual sales?
Nike
Geographically, the largest market for Under Armour is North America
North America
What is the formula for present value?
PV=FV/(1+r)^t
Money coming into a sports business is called _________________. Examples include ticket sales, broadcast contracts, concession sales, or sponsorship agreements.
Revenue
Accountants have developed __________________ to document monetary transactions. According to this entries made on the right side of the T are credits, and entries on the left side of the T are debits.
T-system
Accounts payable represent amounts owed to vendors and suppliers for services or products
True
An angel is a major investor who can give a small amount or several million.
True
An annuity is a constant stream of payments that is received for a fixed number of periods.
True
AnnualCreditReport.com is the only government-authorized (Federal Trade Commission) sourcefor a free annual credit report that is yours by law.
True
Assets help generate revenue or have the potential to generate revenue.
True
Book value examines what a product is worth based on the balance sheet.
True
Capacity refers to anything of value that can be pledged to guarantee final repayment of the loan, while collateral can include a home, property, equipment, collectibles, a legal judgement, or even a lottery payoff
True
Employees are considered an asset because they have value
True
Every debt obligation has an associated cost.
True
Every team in the National Football League splits the revenue from broadcasting and licensing deals equally.
True
Finance sometimes overlaps with economics and accounting.
True
Financial accounting is the process of recording, summarizing, and reporting the financial transactions of an organization. The end result of this process is the creation of three primary financial statements: balance sheets, income statements, and cash flow statements.
True
Financial decisions are not made in a vacuum
True
Five North American major men's leagues: MLB, NFL, NHL, NBA, and MLS.
True
Improving corporate image/image transfer is one of the benefits for sponsors.
True
It is beneficial to compare how much one earns against others the same way that sport facilities compare themselves to other facilities.
True
Magic Johnson is the part owner of the Los Angeles Dodgers
True
Sponsorship and broadcasting are the main revenue resources for sport teams in the US.
True
Sport Finance helps determine the value of financial decisions.
True
The National Football League generates over $4 billion a year in broadcasting rights fees.
True
Youth sports organizations often struggle financially.
True
Sport finance requires
all of the above
What is one question to ask when borrowing from others?
all of the above
Which of the following documents are used to secure funding?
all of the above
Which of the following is a company that sport organizations use to manage their concessions operations at sporting events?
all of the above
Which of the following is a valuation approach?
all of the above
Which of the following is an example of an expense for a high school athletic program?
all of the above
Which of the following is an example of revenue source for a public high school athletic department.
all of the above
Which of the following is considered a source of external data?
all of the above
Which of the following is not a sport finance issue?
all of these are sport finance issues
Which of the following is not a source of revenue for a professional sports team?
alumni and booster donations
What is Under Armor's largest source of revenue?
apparel
The benefit of a limited liability corporation (LLC) includes all of the following except
audited financial statements
Which of the following is not one of the most common revenue sources for amateur sports?
broadcasting rights
Not having enough money in your bank account is an example
budgeting and cash management
more oriented to the long-term and sometimes future expenditures such as spending for a new building or purchasing other major assets
capital budget
The largest source of revenue at the NCAA Division I FBS level
cash contributions from alumni and others
The short-term planning process requires close scrutiny of internal variables such as
cash flow and debt related issues
Of the 5 C's of credit, the applicants credit history and truthfulness falls under
character
Real or personal property pledged as security for repaying a loan is called
collateral
in a business plan, _________________ includes the following business activities. (Review the history and background of the business. It can include the mission statement, objectives, goals (long term and short term), and strategies. List the current principal owner(s) or majority stockholder(s), all members of the board of directors (if applicable), and all key executives)
company section
Which is not one of the 5 C's of credit
compassion
When borrowing from friends or relatives, it is recommended to
develop a repayment schedule and keep accurate records or repayment
What does liquid mean in terms of assets?
easy to convert to cash
The degree to which a change in pricing effects the unit sales of a product is
elasticity of demand
Accounting is the process of calculating revenue and _______________ through receipts and other facts to determine the numbers for a company or entity.
expenses
Costs that are incurred by a business are called ________. Examples include salaries, equipment, travel, rent, and insurance.
expenses
In which of the following business situations would it be a mistake to assume that the rapid expansion will continue forever?
fast growth
Which assets are the most difficult to convert to cash?
fixed assets
Costs that do not change as production changes are known as
fixed costs
Within collegiate athletics, a payment made from one athletic department to another to entice a team to play another team in a sporting event is known as a game guarantee
game guarantee
information is generated by the business itself.
internal data
Bonds and loans are examples of
long term debt obligations
To qualify for a small business loan, one must have all of the following except
no bankruptcies in the past 6 years
Which of the following is not an asset?
none of the above
which of the following is not considered a source of capital
none of the above
To qualify for a small business loan, one must have up to ____________ of the required capital to put into the business
one third
In a business plan, ____________ include the following business activity. (This section describes how the product will be developed and produced or how the service will be delivered. It should discuss critical dates, such as when production will begin, as well as who will produce the products, where the inventory will come from, what shipping schedule will be followed, how the products will be delivered to clients, and so on).
operation section
day-to-day operations of the organization and list sales and expenditures for normal operations. Usually cover a one-year period
operational budget
Which of the following business situations may require reexamination of product lines and markets to help with sales and to start to turn a profit?
ownership change
What is the largest source of expense for major North American professional sports teams?
player salaries and benefits
The process of obtaining funds from private parties such as investors, venture capital investors, or other companies interested in investing in a business is known as
private placement
Information used for forecasting can come from
qualitative and quantitative data
What is the single largest source of expense for NCAA Division I FBS athletic departments?
salaries and benefits
Suppliers allowing 30 days to pay are essentially providing businesses with
short-term loans
A plan that dictates how a business should proceed within the next two years is called
short-term planning
Which of the following business situations makes sales forecasting difficult?
start-up
A document providing information about how the cash position of a business has changed over a given period of time is called
statement of cash flows
The most traditional form of long-term funding is
stocks and bonds
Which of the following is not considered internal data?
the Yahoo business
What is the single largest expense for college athletic departments?
tuition and financial aid
Costs that change as production changes are known as
variable costs
