2310 Final
Chapter 2: Management Principles
Goal of Sport Managers: "To get workers to do what the manager wants in an efficient and cost-effective manner." FUNCTIONAL AREAS OF MANAGEMENT 1. PLANNING 2. ORGANIZING 3. LEADING 4. EVALUATING KEY SKILL SET 1. People Skills 5. 2. Communication 3. Managing Diversity 4. Managing Technology Decision Making 6. Organizational Politics 7. Managing Change 8. Taking Initiative
Chapter 17: Sport Broadcasting
EVOLUTION Sport Broadcasting Follows Evolution of Technology: Telegraph Radio 1915 - Baseball (1915 World Series) 1921 - Boxing & Baseball 1926 - 1st National Broadcast (Heavyweight Boxing) 1st "Sponsor" of a Broadcast Radio "Networks" = National Distribution 1937/38 - Courts Rule Sport Organizations "legally" own "Broadcast Rights." Become "Sellers" TELEVISION EVOLUTION: Post World War II Television Late 1950's - Early 1960's - Evolves, Bigger than Radio Networks - ABC, CBS, NBC Highlights: In Color, Video Replay, National Events, Highlight Shows, Local Sports, etc. Game-Changers: Wide World of Sports (1961) Olympic Games (1968) Monday Night Football (1973) CABLE TELEVISION 1979 - ESPN Founded (1st 24/7 Cable Sports) 1984 - ABC Network buys ESPN 1980's-1990's - Rapid Growth in Cable Sports Channels - Sport-Specific Channels (examples) Golf Tennis Outdoors Fitness Olympics DIGITAL EVOLUTION: Digital 1999 - First Digital Video Recorder (DVR) Mid 2000's - High Definition Television (HDTV) - High-Speed Broadband & Internet - iPhone, Netflix, Amazon 2010 - "Cord Cutting" Begins Today - Mobile Devices, On-Demand, Streaming, BAMtech, Social Media, Fragmentation, ESPN+, Economic Changes, Diversification SPORT BROADCASTING What is Electronic Media? 1. Radio 2. Television 3. Digital Technology Content 1. Sports Organizations (Sellers) 2. Media Companies (Buyers) Coverage: 24/7, Extensive, Live, Global, Multi-Platform, Replays, Highlights, Pre/Post, Talk, etc. Structure 1. Rights Fees 2. Advertising Revenue 3. Distribution Fees Adv. Revenues + Distribution Fees ≥ Rights Fee SYMBIOTIC RELATIONS PARTNERSHIPS IMPORTANT BETWEEN: 1. Sports Organizations 2. Media Companies HOW IT WORKS: 1. Sports Organization Sells "Rights" 2. Media Company Buys "Rights" 3. Media Company Produces & Promotes RIGHTS / PRODUCTION BROADCAST RIGHTS: 1. A network must first obtain "Rights" to produce 2. Bidding War between networks drives up rights fee 3. No or Few bidders drives down Rights Fee or No Fee TYPICAL RIGHTS ARRANGEMENTS: a. Rights & Production (strongest sports) b. Rights-Only agreement (production from league or 3rd party) c. Time-Buy (usually one-time or annual event) WHAT IS A "RIGHTS FEE" A "Fee" (payment) Made By A Broadcaster To A Rights Holder For The "Rights" To Broadcast an Event or Series of Events for a Specified Period of Time ("Term") "RIGHTS HOLDER" ❖ Rights Holder is "Owner" of Rights, and ❖ Rights Holder is "Seller" of Rights STANDARD BUSINESS MODEL 1. Organizer/Owner of event, conference, league, tour sells "Rights" 2. Broadcasters bid on rights agreeing to paying "Rights Fee" 3. Winning broadcaster then: a. Produces and Promotes the broadcast b. Arranges distribution for public to watch c. Recoups rights fees and production expenses by: i. Selling advertising and sponsorship in the Game telecast(s) ii. Selling distribution rights to cable and/or DBS operators ("Direct Broadcasting Satellites") "RIGHTS HOLDER" EXAMPLES College, Pro Team, Olympic Sports: 1. Conference 2. League 3. National Governing Body Events, Circuits, Tours: 1. Event Owner 2. Circuit Owner 3. Governing Body 4. Membership Association REVENUE SHARING Equal Shares: 1. Rights fees paid to leagues or conferences Broadcaster(s) 2. Fees then shared equally among all member teams Revenue Disparities: 1. National fees shared but Local Broadcast fees are not 2. Favors Large-Market Teams. 3. Hurts League's Competitive Balance "RIGHTS BUYER" EXAMPLES National/Local Television Network National Television Cable National/Local Radio Local Radio Station Syndication Digital/Internet Streaming - "TV Everywhere" International Domestic Foreign Language Pay-Per-View / Over-The-Top Non-TV Websites RIGHTS FEE NEGOTIATION Key Terms and Deal Points: 1. Amount of the rights fees 2. Length of the deal ("Term") 3. Territory where telecast will be distributed 4. Process for selecting particular games, events 5. Copyright ownership 6. In-Broadcast Sponsorship rights 7. First right to negotiate renewal or extension RIGHTS FEE NEGOTIATION Key Terms (continued): 8. Number of commercial units in each broadcast 9. Number of sellable "in-broadcast" elements 10. Dollar amount Rights Seller will deliver ("underpinning") 11. Procedures for extending coverage 12. Procedures for substitute coverage 13. Procedures for pre-empting coverage Business of Broadcasting: VALUE Broadcasters: 1. How much they are willing to pay in rights fees 2. How much money can they make by selling advertising 3. Will programming make network more attractive to cable, DBS 4. Will programming make more people watch their programming NFL: Largest rights fees because of highest-rated programming ADVERTISING TRADITIONAL ADVERTISING • 30-second (:30) commercial message length • Variations include :10 or :15 commercial or promotion • Called an "Ad Unit" or "Spot" or "Ads" COMMERCIAL BREAKS • Normally two (2) minutes • Called a "Pod" • Four (4) ad units per Pod • Pods are Scheduled in Competition ADVERTISING (cont'd) NATIONAL & LOCAL AD PODS • Majority of Ad Pods for National Ads • One Pod per Half-Hour for Local Ads SPOT AD BUYS • Ads That Air in Select Markets • Smart for Regional and Small National Companies ADVERTISING (cont'd) TARGET AUDIENCE • Ad Buyers Look for "Target Audience" • Do Expensive Research • Key Demographics Used: ✓ Gender, Age, Education, HH Income, Geography, etc. • Ad Buyers Buy "Ratings" or "Impressions" at "Cost Per Thousand" (CPM) EXAMPLE: Male, 25-44, College Educated, HHI $75K+, Married w/ Children SPONSORSHIP Not Advertising Cash and/or Trade In-Broadcast Exposure In-Camera Logo Announcer Mentions Graphics Vignettes (feature) Promotional Consideration NETWORK RATINGS TOTAL U.S. HOUSEHOLDS WITH TV's = ∼120,000,000 RATING = NETWORK RATING: = CABLE RATING = Percentage of television sets actually in use at a particular time that are tuned to a show 1.0 rating means 1% of 120M, or 1.2M viewers 3.5 rating means 3.5% of 120M, or 4.2M viewers Depends on Household "Penetration of Channel Cable Ratings Example: Golf Channel 1.0 rating= 1% of 70 million Digital Impressions: digital media sold differently than tv digital: impressions locations period of time television: ratings ad pods number of ad units BIGGEST CURRENT ISSUES 1. Market Bubble = 2. Bundling = 3. Cord-cutting = 4. Audience Fragmentation = Price Corrections vs. a' la carte selection Decreasing HH Penetration More Selection More Alternatives (video games)
Chapter 11: Sport Agency
Focus of "Sport Agencies" Athlete Management & Marketing "Vertical Integration" Mark McCormick - IMG Donald Dell - ProServ Octagon...CAA Sports...Wasserman Focus by Sport(s) and/or Discipline Many Others Mark McCormick ➢ Credited with Inventing Sports Marketing ➢ Athletes as "Entertainers," "Celebrities" ✓ Athlete Representation ✓ Event Management ✓ Sponsorship ✓ TV Broadcasting Rights = Platform Integration aka "Vertical Integration" CAUSES FOR GROWTH 1. Evolution of Players Associations 2. Reserve System 3. Athlete's Need for Financial Planning 4. Development of Competing Leagues 5. Growth of Product Endorsement Opportunities PLAYERS ASSOCIATIONS ➢ NFLPA, MLBPA, NBAPA, etc. = "Union" ➢ Union ▪ Collective Bargaining Agreement ("CBA") ▪ Collective Interest of ALL Players ▪ Contract Minimums ➢ Agent ▪ Collective Interest of Individual Player(s) ▪ Contract Maximums ▪ Opportunities Beyond CBA, Team, Sport NEED FOR FINANCIAL PLANNING ➢ Agent - Contract, Marketing, Personal Matters ➢ Accountant ➢ Business Attorney ➢ Banker ➢ Investment Advisor ➢ Insurance Professional ➢ Estate Attorney PRODUCT ENDORSEMENT ➢ Sports Nationally Televised ➢ Marketing Sophistication ➢ Growth of Social Media ➢ Athletes as Entertainers, Celebrities = Increased Endorsement Opportunities "PERSON-CENTERED BRANDING Page 296 ➢ "Authentic Brand" Creation ➢ Focus on Athlete's Identity ➢ Character, Values, Personality ➢ NOT Solely Performance-Based ➢ Has Risk (i.e. Tiger Woods) TYPES OF SPORTS AGENCIES 1. Free-Standing Sport Management Firm a. Full Service b. Wide Range of Services 2. Law Practice Only a. Only "legal" Matters b. Oversee Others on Financial Team 3. Sport Management w/ Law Firm (vice versa) a. Complimentary Services b. Combined or Collaborative FEES CHARGED BY SPORTS AGENTS Pages 289-291 Market Driven; Four Methods 1. Flat Fee 2. Percentage of Compensation 3. Hourly Rate 4. Hourly Rate w/ % of Compensation CURRENT ISSUES Pages 301-304 1. Income Mismanagement 2. Incompetence 3. Conflicts of Interest 4. Charging Excessive Fees 5. Overly Aggressive Client Recruitment
Chapter 19: Recreation & Golf Club Management
GOLF IN THE U.S.A. 16,693 Courses (14,613 facilities) ↓8% since 2006 "Value" courses (≤$40) majority of closures 33.5M Golfers (24.2M on course; 9.3M off course) Age 18-34 = 6.1M on course; 4.1M off course 2.5M Juniors 4.2M Age 65+ 7.6M Female 434M Rounds Played (↓4.8% Y0Y GOLF COURSE MANAGEMET FOUR (4) BUSINESS MODELS: 1. Public • Municipal or Private Ownership 2. Private • Member, Individual or Corporate Ownership 3. Semi-Private • Individual or Corporate Ownership 4. Resort • Individual or Corporate Ownership PUBLIC GOLF COURSE ➢ Open to Everyone ➢ Backbone of Sport ➢ Majority of courses in U.S. ➢ Majority of rounds played in U.S. ➢ Lower budgets vs. Private or Resort ➢ Green Fees, F&B, Merchandise, Outings ➢ Tax-payer support if Municipal PRIVATE GOLF COURSE ➢ Requires "Membership" ➢ Membership Criteria Varies ➢ Initiation Fee → Debt, Club Improvements ➢ Monthly Dues → Operations ➢ Special Events → Charity Golf Outings, Weddings, Civic Clubs, Business Groups, Tournaments, Charity Events, etc. RESORT GOLF COURSE ➢Connected to a Hotel ➢Access, Tee Times thru Hotel ➢Some 3rd Party Golf Management ➢May have "Membership" ➢Several Revenue Sources ➢Other High-End Guest Amenties (spa, dining) SEGMENTS OF RECREATION INDUSTRY ➢ Community-Based ➢ Public ➢ Military ➢ Outdoor ➢ Campus ➢ Therapeutic COMMUNITY-BASED RECREATION ➢YMCA, YWCA, Boys & Girls Clubs, Jewish Community Alliance, Scouts, Running Clubs, Cycling Clubs, Tennis Teams, Golf Leagues, etc. ➢Membership Supported (modest fees) ➢Grants, Donations, Endowments, ➢Limited Naming Rights & Sponsorship PUBLIC RECREATION ➢City/County Parks & Recreation Departments ➢State/National Parks ➢Tax-Payer Supported ➢Limited Financial Resources ➢Grants, Donations, Endowments, etc. ➢Limited Naming Rights & Sponsorship ➢Funding Cuts an Issue MILITARY RECREATION ➢Part of U.S. Department of Defense ➢Every Base has Recreation ➢Important for Fitness, Readiness, Morale ➢Programs for Service Families too ➢Programs for Disabled Vets ➢Funding Cuts an Issue OUTDOOR RECREATION ➢HUGE Industry Segment ($650B, 150M users) ➢Natural Environments in Different Seasons ➢Mix of For-Profit & Non-Profit ➢Main Segments = Retail & Travel ➢Fishing, Hunting, Camping, Boating, Hiking, Running, Cycling, Golf, Ski/Snowboard, Scuba/Snorkling, Summer Camps, etc. CAMPUS RECREATION ➢Provided by Colleges & Universities ➢Exercise Facilities ➢Fitness Programs ➢Club Sports ➢ Intramurals ➢75% Student participation THERAPEUTIC RECREATION ➢"Health & Wellness" ➢Physical, Emotional & Mental Health ➢Broad Range of Providers ▪ Schools, Community Centers, Churches, Parks & Rec, Senior Living, etc. ➢Broad Range of Offerings ▪ Yoga, Walking, Stretch+Tone, Meditation, Martial Arts, Aquasize, Massage, Strength Training, etc CURRENT ISSUES 1. Aging US Population 2. Money/Time/Access 3. Environment 4. Technology/eSports
Chapter 16: Sports Analytics
INTRODUCTION TWO MAIN IDEA CAMPS: 1. Business Analytics Ticket Pricing, Stadium Financing, Sales & Marketing, F&B 2. Player-Performance Analytics Scouting, Player Development, In-Game Statistics SPORTS ANALYTICS THREE MAIN AREAS OF FOCUS: 1. Data Management 2. Predictive Models 3. Information Systems GOALS: 1. Work as One 2. Integrated System 3. Organize & Process Relevant Data ANALYTICS MIRRORS TECHNOLOGY Grows with Computer Science, Machine-Based Technology Roots in Major League Baseball ✓Pitcher-vs-Hitter Dynamics ✓Moneyball - 2003 (Oakland A's) Other Sports Take Notice Shift to "Data-Based" vs. "Opinion, Intuition, Gut-Feeling" KEY TERMS Metric: A Standard of Measurement Analytics: Systematic Computational Analysis of Data or Statistics Process-Driven Discipline Fluid, Constantly Evolving Accuracy of Input Vital Not 100% Predictive ANALYSIS = ? "Analysis does NOT start with Data. Analysis starts with a Question." APPLIED ANALYTICS IN SPORT: 1. Marketing 2. Management 3. Finance 4. Economics 5. Law MARKETING Sport Seller's Keys: 1. Understanding its Target Consumer(s) 2. Position Products for Functional and Emotional Needs of Consumer HOW TO UNDERSTAND: 1. Target Consumers along Path of Purchase a. Proximity Marketing - Location-Based Ads, Data-Based, Timely b. Beacons - via Team Apps, Consumer Relevance MANAGEMENT FRONT END PLATFORM: 1. Team App 2. Team or League Website BACK END PARTNER: 1. Hardware and/or Software 2. Info Technology Services MANAGEMENT SURVEYING + DATA COLLECTION + ANALYSIS = DECISIONS ABOUT: 1. Merchandising 2. Food & Beverage Offering 3. Pricing Strategies 4. Supply & Demand Quantities 5. Game, Special Event Scheduling 6. Other Analytics-Based Decisions FINANCE Used on a Daily Basis. Examples: 1. Budgeting 2. Player Contracts 3. Staffing & Operations 4. Stadium Enhancements 5. Investments DATA MANAGEMENT: 1. Date Standardization 2. Data Centralization 3. Data Integration PREDICTIVE MODEL: 1. Predictive Analytics 2. Descriptive Analytics II. = Common format, Standard Definitions = Stored in Central Location = How Information is Merged for Analysis = What Could Happen = What Has Happened III. INFORMATION SYSTEM: 1. Data-Driven Storytelling = Graphs, Charts, Video, Colors, etc. Economics: I. Supply and Demand 1. Ticket Pricing: a. Variable Ticket Pricing: - Tiered Pricing; Not Every Game Equal b. Dynamic Ticket Pricing: - Factors in Secondary Market (i.e., StubHub, Seat Geek) - Price Shifts Constantly - Digital Platforms LAW CONTRACT NEGOTIATIONS 1. Data & Analytics for Player Value 2. Fact-Based Justifications 3. Useful in Arbitration SPONSORSHIP 1. Data & Analytics for Market Value 2. Predictive Models for ROI
Chapter 14: Sport Sales
LEARNING OBJECTIVES 1. Large # of Entry-Level Jobs in Sales 2. Everyone's in Sales (selling yourself) 3. Quality, Quantity, Time, Cost 4. Traditional & Modern Sales Methods 5. Sales Techniques 6. Good Salesperson Qualities 7. Sales Inventory TWO MAIN TYPES OF SPORT SALES 1. TRANSACTIONAL (e.g., Tickets, Merchandise) ➢ Usually a low dollar amount ➢ Multiple "units" for sale ➢ Shorter period of time thru "Purchase Funnel" 2. COMPLEX (e.g., Title Sponsorship, Naming Rights) ➢ Usually a high dollar amount ➢ Few "units" for sale (maybe only one!) ➢ Longer period of time thru "Purchase Funnel" FOUR MAIN CAUSES FOR PURCHASE 1. Quality - 2. Quantity - 3. Time - 4. Cost - Team's or individual's performance Number of "units" a factor Amount of time available to consume Budgets, priorities. Companies & Fans FAN COST INDEX ('FCI") = Measures cost to take family of four to a game across different sports. Includes tickets, parking, concessions, merchandise. SALES STRATEGIES, METHODS Starts with "CRM" 1. Direct (e)mail (targeted, cost-efficient) 2. Telemarketing (Inside Sales) 3. Personal Selling (face-to-face) MEMBERSHIP PROGRAM: (1) Alter fans' perspective on purchase commitment, (2) Provide year-round benefits. Analogy = "Fitness Club Membership - Year-round usage PRO-ACTIVE SALES APPROACHES Based on "Relationship Marketing" 1. Benefit Selling 2. Up-Selling 3. Eduselling 4. Aftermarketing KEY SKILLS FOR GOOD SALESPERSON Page 382 Mark McCormick believed: 1. Timing, Patience, Persistence 2. Sensitivity to Situation 3. Person You're Dealing With 4. Not imposing (most important) 5. Believing in Your Product/Service 6. With Good Product + Fit, Doing Prospect a Favor SALES INVENTORY 1. Tickets & Premium Seating 2. Hospitality Suites 3. Advertising (media, in-venue) 4. Venue Signage 5. Naming Rights 6. Digital & Social Media 7. Promotions (in-venue, in-game) 8. Sponsorship SUGGESTED SALES PROCESS Pages 388-389 1. Get meeting with decision-maker. Don't take "no" from underling 2. 1st meeting, listen 80% of time. Sell only if have to 3. Arrange follow-up meeting to present your proposal 4. Create Proprietary "Strategic Partnership" proposal 5. Present as "draft" for customer input. "Co-Author" 6. Negotiate final deal terms. ASK FOR THE SALE! CURRENT ISSUES Pages 301-304 1. Increasing Competition for Customers 2. Increasing Costs 3. Price/Value Ratios 4. Increased Use of Technology 5. Value of a Ticket (secondary markets)
Chapter 1: History of Sport Management
Management Structures: ✓ Key Building Blocks • Clubs • Leagues • Professional Tournaments Secondary Themes: • Honest play - Integrity of Competition • Who gets to play? - Inclusion Debate Sports Clubs: THE CLUB SYSTEM: 1. 18TH Century (1700's) 2. English Aristocracy 3. Membership Limited 4. Social Events 5. Standardized Rules 6. Seasons of Competition Thoroughbred Racing: MOTIVATIONS: 1. Breed & Train Fastest Horses 2. Manage Gambling on Races JOCKEY CLUB: 1. Birth of Governance a. Rules, Eligibility, Competition, Officiating, Disputes, Honesty & Fairness Olympic Games: CREATES NATIONAL & GLOBAL ORGANIZATION: 1. International Olympic Committee (IOC) 2. Country Olympic Committees (i.e., USOC) 3. National Governing Bodies (NGB) for Sports 4. City Organizing Committees to Host Games Early US Leagues: Harness Racing Sport of Common Person Baseball - National League Strict Rules for Honest Competition Authority with League, Not Teams Teams & Schedules Regular Season & Playoffs Ownership Territory Pro Tournaments, Tours: Golf & Tennis Lead Way in 1940's - 1960's NASCAR formed in 1948 Pro Bowlers Tour formed in 1958 Modern Day: AVP World Tour (volleyball) X-Games (extreme sports) Dew Tour (skate & snow) Bass Pro Tour (Fishing Professional Bull Riders (rodeo) World Surf League (surfing) Sports Reflect Society: 1950's & 1960's- Civil Rights: Pro Sports Integrate 1970's- Women's Lib(women's leagues, Billie Jean King)- Reserve Clause(Free Agency, Marvin Miller, baseball) 2010-Equal Pay -Equal Prize Money (Tennis Grand Slams)
Chapter 8: Collegiate Sport
NCAA 1852 -Harvard v Yale in Crew 1905 - Intercollegiate Athletic Association of the United States 1912 - National Collegiate Athletic Association KNIGHT COMMISSION PAGE 193 1989 - Reform Agenda for College Sports 1. University Presidents 2. Corporate Executives 3. Members of Congress "Keeping Faith with the Student Athlete" 1. Recruiting Activities 2. Academic Standards 3. Financial Practices TITLE IX ➢1972 = Federal Civil Rights Law ➢Equal Opportunity in Education Act ➢Sport is part of Education ➢Equity in Athletics ➢Sexual Harassment & Sexual Violence ➢"Genders Don't Play Sports, Athletes Do" NCAA PAGE 195 DIVISION I 1. FBS = Football Bowl Subdivision 2. FCS = Football Championship Subdivision 3. D-1 Institutions (no football) DIVISION II 10 sports; 2 team sports each gender DIVISION III Non-Scholarship; 6 to 10 sports each gender CONFERENCES POWER FIVE: ➢Atlantic Coast (ACC) ➢Big 12 (Big XII) ➢Big Ten (BIG) ➢Pac 12 ➢Southeastern Conference CURRENT ISSUES ➢ Finances ➢Pay for Play ➢Coach/Player Conduct ➢Minority Hiring ➢Student Apathy
Chapter 4: Financial & Economic Principles
Sports is Multi-Billion Dollar Industry Major Force in American Business Global Importance Need for Financial, Economic and Accounting Skills Need for Sports Organizations to run like Businesses...because they are! IMPORTANT TERMS TO KNOW Finance Defined Revenues vs. Expenses Profit Assets Debt Credit Balance Sheet R.O.I. Risk
Chapter 12: Facility Management
TYPES OF FACILITIES ➢ Stadiums ➢ Arenas ➢ Convention Centers ➢ Theaters ➢ Amphitheaters ➢ Performing Arts Centers ➢ Racetracks ➢ Fairgrounds HISTORIC USAGE STADIUM for Baseball + Football ARENA for Basketball + Hockey MODERN USAGE SINGLE-PURPOSE Facilities MODERN USAGE SINGLE-PURPOSE Facilities TECHNOLOGY IN STADIUMS ➢Fan Enhancements ➢Reasons to Attend ➢Smart Phones New Normal ➢Fast Wi-Fi Expected ➢Second-Screen Viewing ➢Importance of the "App" FACILITY OWNERSHIP ➢Municipalities ➢Universities ➢Private TYPES OF EVENTS ➢ Sports ➢ Family ➢ Concerts ➢Trade ➢ Religious ➢ Convocations ➢ Seasonal FACILITY FINANCING ➢Bonds ➢Private Funding ➢Private & Public BONDS Interest-Bearing Certificate, Issued by Government, Corporation, Promise to Repay Investment + % Interest TYPES OF BONDS 1. Tax-Exempt Bonds 2. Taxable Bonds by Private Entity 3. Tax Increment Financing (TIF) (KFC Yum! Center in Louisville, KY) TAX EXEMPT BONDS 1. General Obligation * Repaid with % of general property taxes * Require voter approval 2. Non-Guaranteed * Rapaid from designated revenue sources * e.g., concessions, parking, naming rights * Pays higher interest rate vs. General Obligation bonds TAXABLE BONDS BY PRIVATE ENTITY 1. Private Placement Bonds * Provide a "lien" on all future revenues by team 2. Asset-Backed Bonds * Secured through special assets ("collateral") The Pepsi Center in Denver was financed through "asset-backed" bonds TAX INCREMENTAL FINANCING - "TIF" 1. Available in specific square mileage of land 2. Stadium, Arena as "hub" 3. Renewal or Redevelopment Incentives Louisville Cardinals basketball team plays in a TIF funded arena PUBLIC FINANCING 1. Hard Taxes * Local income, real estate, personal property, sales * Require voter approval 2. Soft Taxes * Added taxes to existing taxes * Car rentals, taxis, hotels, restaurants, "sin" * Can tax "visiting team" players % of income WHY CITIES FUND SPORTS FACILITIES 1. Creates Construction Jobs 2. Local Employment; New Spending 3. Tourism & Business Development 4. Economic Impact; "Multiplier Effect" FACILITY MANAGEMENT 1. Internal * Team Ownership * Local "Authority" 2. External * 3rd Party Management * Hired by Facility Owner * One or Multiple Facilities CURRENT ISSUES 1. Security 2. Sustainability 3. Entertainment District 4. ADA 5. Universal Design Pages 340-344
Chapter 15: Sport Sponsorship
WHAT IS "SPONSORSHIP" "Cash and/or In-Kind Fee paid to a property ("Rights Holder") in return for access to exploitable commercial potential association with that property." SPONSORSHIP ➢Prolific Form of Sports Marketing ➢ Negotiation with "Rights Holder" ➢Rights to Association with: ✓Team ✓ Athlete ✓ Event ✓ Facility ✓ Broadcast SPONSORSHIP ➢Uses Variety of "Marketing Mix" ✓ Incentives ✓ Advertising ✓ Endorsement ✓ Sales Promotion ✓ Client Hospitality ✓ Public Relations ✓ Grassroots Programs ✓ Cause and/or Charity STRATEGIC PARTNERSHIP 1. Money and/or Products & Services to Rights Holder 2. Mix of Benefits from Rights Holder to Sponsor 3. Integration between Sponsor & Rights Holder ✓ Activation by Sponsor ✓ Advice + Service from Rights Holder ✓ Business from Rights Holder to Sponsor ("spend back") Four Legs of Success: 1. business 2. brand 3. community 4. charity 1984 Summer Olympic Games Los Angeles, California Commercial Mind-Set Category Exclusivity High Return-on-Investments First Profitible Olympic Games Start of Sponsorship "new era" "Return on Investment" (ROI) "Return on Objectives" (ROO) Meeting a Sponsor's Marketing & Sales Objectives in a Measurable Way SPONSORSHIP "ACTIVATION" ➢Marketing Term ➢ Above & Beyond Fee to Rights Holder ➢Best if Coordinated with Rights Holder ➢Additional Marketing by Sponsor ➢At Sponsor's Expense Sales Promotion: 1. In-Venue a. In-Stadium Giveaways b. In-Game Promos/Events 2. In-Store a. Premiums b. Contests & Sweepstakes c. Sampling d. Couponing e. Point-of-Sale/Point-of-Purchase (POS/POP) CROSS PROMOTION ➢Expands Scope & Impact of Sponsorship ➢With Other Divisions, Other Companies ➢Main Benefits: a. Cost-Sharing b. Multi-Products/Services c. Pass-Through Rights d. Synergy w/ Other Companies MAIN SPONSORSHIP BENEFITS ➢ Naming Rights ➢ Exclusivity ➢ "Official" ➢ Media ➢ Hospitality ➢ Tickets ➢ Positive Brand Association SPONSORSHIP PLATFORMS Sponsorships are usually with, but not limited to, the following Rights Holders: ➢Teams ➢ Facilities ➢ Athletes ➢ Events ➢ Leagues ➢ Conferences ➢ Broadcasters MEASURING SPORT SPONSORSHIP "Can't Manage What You Can't Measure" 1. Planning - 2. Organizing - 3. Leading - 4. Evaluating - Set Clear & Measurable Objectives Who's Doing What. Agency Help? Doing it and Doing it Well What Metrics, Data & Analytics Tell CURRENT ISSUES 1. Cost/Value Ratio 2. Decreasing Media Value 3. Audience Fragmentation 4. Overall Clutter in Sport 5. Multicultural Marketing
Chapter 3: Sports Marketing
What is "MARKETING" "The Task of Creating, Promoting, and Delivering Goods and Services to Consumers and Businesses" or... CREATING DEMAND! Five Steps in Purchase Funnel: 1) awareness 2) familiarity 3) consideration 4) purchase 5) loyalty MARKETING's #1 GOAL Reach Consumers at the Moments that Most Influence Their Decisions A Brand Is: The Consumer's Gut Feeling About You, Your Product or Service Sport Attracts: 1. Wide Range of Audiences 2. Live Viewership 3. Media & On-Site Coverage 4. Emotionally Connected Fans 5. Follow and Talk About Bill Veeck ➢ Baseball Executive & Sports Marketing Pioneer ➢ Team must provide reasons other than the game itself for people to attend and support the Team ➢ Fans come to the ballpark to be entertained ➢ Create greatest enjoyment for greatest number of people by adding a few moments of fairly simple pleasure ➢ Important for best possible atmosphere ➢ Experience must create conversation Mark McCormick ➢ Founded International Management Group (IMG) ➢ Credited with Inventing Sports Marketing ➢ Arnold Palmer First Client with "Handshake Deal" ➢ Athlete Representation ➢ Event Management ➢ Sponsorship ➢ TV Broadcasting Rights ➢ Platform Integration Roone Arledge ➢ TV Producer (Monday Night Football) ➢ Primetime Event not just Sport; Had to be Entertainment ➢ Take Fan to Game, not Game to Fan ➢ Get Audience Involved Emotionally ➢ Tactics: Instant Replay, Multiple Cameras, Fan Shots, Sideline Interviews, Crowd Noise Sponsorship ➢ "The Practice of Partnering with a Rightsholder for the Purpose of Gaining Some Benefit from the Partnership." ➢ "Official" Status a Key "Packaging" of the Nike Brand, Product, Advertising and Athlete into ONE PERSONALITY "Ambush Marketing" Capitalize on the Goodwill Associated with an Event Without Becoming an Official Sponsor "Segmentation" Identifying subgroups of the overall marketplace based on a variety of factors, such as: ➢ Age ➢ Income Level ➢ Ethnicity ➢ Geography ➢ Lifestyle "Target Market" A segment of the overall market that has certain desirable traits of characteristics and is coveted by a marketer: 1. Demographic - age, income, gender, education 2. Geographic - region, state, area code, zip code 3. Psychographic - lifestyles, activities, habits 4. Product Use - auto, credit card, beverages "Fan Identification" ➢ The sense of oneness with, or belongingness to an organization ➢ Fan identification with team = broad, long-term relationship, more loyalty ➢ "We" vs. "They" ➢ Sponsors align with Teams to TARGET fan-base loyalty "Relationship Marketing" Building mutually satisfying long-term relations with key parties. Begins with the "Customer" ➢ Sponsors ➢ Fans ➢ Media ➢ Suppliers/Vendors ➢ Employees "Customer Relationship Management" "CRM" = Key Term: Implementation of relationship marketing practices "Social Media" - Advantages 1. Immediacy 2. Effeciency 3. Brand Personality 4. Target Marketing CURRENT ISSUES 1. eSports 2. Cord-Cutters 3. Fantasy 4. Student Attendance Jeff Orth's Tips From An Old Guy: 1. Take ANY Job in Sports 2. Chase Experience, Not Money 3. Be the Anti-Millennial 4. Don't be Afraid to Speak Up 5. Learn to Present Ideas in Front of an Audience
Chapter 13: Event Management
catalyst for event management: - increase profits BOXING ➢ Early Significant Sporting Events ➢ Dominated Sports News Cycles ➢ "Must Follow" Events in 1900's ➢ Generated Large Revenues ➢ Drove Profit Motives ➢ Spawned Event Management Needs WHAT IS A "SPORT PROPERTY" ➢A Person ➢ Company ➢ Facility ➢ Event ➢Team ➢ League ➢ Organization - Same or Similar to a "Rights Holder SPORT MARKETING & EVENT MANAGEMENT ➢Different Disciplines: ➢Sport Marketing focus is Sales, Revenue Generation ➢Sport Marketing does NOT include Event Management ➢Event Management focus is Overall Event ➢Event Management can include Sport Marketing SPORT MARKETING & EVENT MANAGEMENT Structure Can Be: ➢In-House Staff ➢Outside Agency ➢3rd Party Vendors ➢Singular Focus ➢Combined Focus TYPES OF AGENCIES 1. In-House • Part of Company • Usually Large Company 2. Specialized • Limited Scope & Service 3. Full-Service • Broad Range of Services FIRST KEY QUESTION FOR ANY EVENT What Are We "Selling?" EVENT MANAGEMENT All functions related to: 1. PLANNING 2. ORGANIZING 3. IMPLEMENTING 4. EVALUATING KEY EVENT MANAGEMENT FUNCTIONS ➢ Planning ➢ Market Research ➢ Budgeting ➢ Staffing ➢ Operations ➢ Competition ➢ Sales Inventory ➢ Marketing ➢ Media Coverage FINANCE / BUDGETING Attempts to Predict Revenues and Expenses Two Methods: 1. Zero-Base Budgeting a. Created as if "First Time" Expense. Start at $0 2. Cash-Flow Budgeting a. Accounting AND Timing of Revenues & Expenses SALES INVENTORY 1. Tickets & Premium Seating 2. Hospitality Suites 3. Advertising (media, in-venue) 4. Venue Signage 5. Naming Rights 6. Digital & Social Media 7. Promotions (in-venue, in-game) 8. Sponsorship OPERATIONS Three Phases: 1. Pre-Event 2. Actual Event 3. Post-Event TECHNOLOGY ➢ Website ➢ Sales ➢ Ticketing ➢ Registration ➢ Information ➢Social Media CURRENT ISSUES 1. Security 2. Social Issues 3. Political Issues 4. Niche Sports
