sport management exam 2

21. Which league has the highest credit rating in sports?

C. NBA

The NFL's current TV contract calls for the league to be paid more than ______ per year.

A. $4.95 billion

2. Plunkett Research estimates that total spending across the entire sports industry amounted to approximately ______ in 2012.

A. $435 billion

1. Before a sport manager is liable for negligence, the plaintiff must show that the sport manager owed the plaintiff a duty of care. A legal duty of care arises from which of the following origins?

A. A relationship inherent in a particular situation B. A voluntary assumption of the duty of care C. A duty mandated by a law

20. What statement most accurately describes the current status of Major League Baseball's antitrust exemption?

A. After the enactment of the Curt Flood Act of 1998, MLB's pooled television rights are now exempt from antitrust scrutiny.

6. ______ is/are anything that an organization owns that can be used to generate future revenues.

A. Assets

11. In which American major league sport has a rival league NOT emerged since World War II?

A. Baseball

5. ______ is similar to the regular decision-making process in business situations in that there is a given structure to follow.

A. Ethical decision making

4. Which of the following most accurately defines the managerial discipline of finance?

A. How an organization generates the funds that flow into the organization B. How an organization allocates its funds once they are in the organization C. Any decision relating to money All of these are correct.

14. Which of the following statements are true?

A. Major League Baseball is the only professional sport league exempt from antitrust laws. B. All professional sports leagues' national broadcasting agreements are exempt from antitrust laws. C. Professional sport leagues' collective bargaining agreements are exempt from antitrust law under the labor exemption. D. All of these are correct.

1. ______, like ethics, is concerned with values guiding behavior.

A. Morality

16. Which of the following leagues uses a "soft" salary cap?

A. NBA

6. A valid contract contains which of the following elements?

A. Offer and acceptance B. Capacity C. Consideration D. Legality

12. Why have no rival leagues to the major American sport leagues emerged in more than 20 years?

A. Players today have much less incentive to jump to a rival league, as the emergence of stronger players associations and free agency means that players are much less often "underpaid." B. There is a lack of viable cities and markets in which to play as the major professional leagues have gone through successive rounds of expansion to the point where all four currently have 30 or more franchises.

14. ______ argues that what is moral depends on the situation.

A. Relativism

18. Which of the following is not an example of judicial review of an athletic association decision?

A. The decision involves an on-field decision by an umpire or referee.

8. Codes of conduct may be considered counterproductive if:

A. They are too long or complex to understand easily. B. They try to intimidate employees into acting morally. C. The organization does not demonstrate a commitment to them. D. All of these are correct.

4. Under the law of agency, the principal owes the agent certain duties. Which of the following is not a duty owed to the agent by the principal?

A. To negotiate a written contract with the agent

15. A moral rule of commercial work is to

A. compete. B. be open to inventiveness and novelty. C. be efficient. D. All of these are correct.

13. The increase in ticket prices in all leagues in recent years reflects

A. consumers' increased affluence. C. the growing popularity of sport.

10. In sport, an example of a(n) ______ is that all athletes give an honest effort whenever they compete.

A. ethical principle B. moral principle C. code of conduct D. None of these are correct.

25. Increased revenue in spectator sports has come from

A. gate receipts. B. broadcast contracts. C. sponsorship sales. D. stadium naming rights.

14. Increased revenue in spectator sports has come from

A. gate receipts. B. broadcast contracts. C. stadium naming rights.

13. A collective bargaining agreement is a contract that sets forth

A. hours provisions. B. wage provisions. C. terms and conditions of employment. D. All of these are correct.

8. Equal protection applies to discrimination on the basis of

A. race, religion, and national origin. B. gender. C. such areas as physical or mental disability, sexual orientation, socio-economic background, or athletic team membership.

9. An athlete challenging a drug test on the grounds that it is an unreasonable search and seizure would attempt to prove to a court that

A. taking the athlete's urine or blood may constitute a seizure and the testing may constitute a search.

2. To successfully show a defendant was negligent, a plaintiff must prove

A. that a duty of care is owed to the plaintiff by the defendant B. that the defendant breached the duty of care C. that the defendant's actions were the actual and proximate cause of the plaintiff's injury

17. The law used to protect against ambush marketing is

A. the Lanham Act.

15. The goal of risk management is

A. to develop a management strategy to maintain greater control over legal uncertainty. B. to intervene when problems do occur to minimize their disruption to a business. C. to prevent problems from occurring. D. All of these are correct.

13. ______ argues that moral precepts are universal; that is, applicable to all circumstances.

B. Absolutism

7. ______ are probably the most visible statements of ethical philosophy and beliefs for a company, business, or organization.

B. Codes of conduct

10. Which financial statement measures the financial performance of an organization over a specified time period, usually a year?

B. Income statement

21. What is not a form of discrimination prohibited under Title VII of the Civil Rights Act of 1964?

B. Sexual harassment

18. Why do economists suggest that revenue sharing, in and of itself, will do little to improve competitive balance?

B. Teams receiving revenue-sharing transfers may have little incentive to use the money to increase payroll, simply choosing to retain the transfer as added profit.

5. Vicarious liability is

B. a tort that allows a plaintiff to sue a superior for the negligent acts of a subordinate

17. The philosophy behind a "hard" salary cap is to

B. constrain all franchises to spend the same amount on payroll.

18. To be effective, discipline must meet which of the following criteria?

B. meaningful and enforceable

2. The fundamental baseline values dictating appropriate behavior within a society are known as ______.

B. morals

19. One of the biggest distinctions between moral decision making and other ethical decisions is

B. the extensive ramification of immoral choices.

7. A waiver violates public policy if

B. the parties are not of equal bargaining power.

22. The average player salary in the NBA is now approximately ______.

C. $5.15 million

19. The U.S. Supreme Court case, PGA Tour Inc. v. Martin (2001) involved a challenge to PGA Tour rules under what statute?

C. Americans with Disabilities Act

11. ______ are generally accepted so broadly within a community that they are considered self-evident and largely go unquestioned.

C. Moral values

16. Which is not a defense available to an employer in a vicarious liability claim?

C. The employee was properly trained by the supervisor/employer and thus, the employer is not negligent.

24. In spectator sports, stadium construction projects are often financed with ______.

C. bonds

3. Few areas of sport management present managers with more difficulty than ______.

C. ethical dilemmas

12. Sport law was first documented as a formally recognized specialty

C. in 1972 when Boston College Law School's Professor Robert Berry offered a course on legal issues and the professional sport industry.

5. In a basic sense, the financial success of an organization is ultimately dependent on

C. profits

4. To solve an ethical dilemma, decision makers try to make a(n) ______ argument.

C. rational

15. All of the following are examples of "financial" mechanisms for altering competitive balance except

D. "reverse-order" draft.

11. What area of law has left an indelible mark on the structure and nature of labor relations in professional sport leagues?

D. Antitrust law

7. All of the following are examples of publicly traded sport companies except

D. Callaway Golf

23. What is the term given to the amount of their own money owners have invested in the firm?

D. Equity

16. _____ is the systematic study of values guiding our decision making.

D. Ethics

22. Which of the following is not a way in which labor relations in professional sports are different from those in other industries?

D. Management in professional sports opposes unions much more strongly than employers in other industries.

3. Under the law of agency, the agent owes the principal fiduciary duties. Which of the following is not a fiduciary duty owed to the principal by the agent?

D. The duty to exercise reasonable care

12. Academic discussions of morality often start with a discussion of ______ versus ______.

D. absolutism; relativism

17. A moral rule of noncommercial work includes

D. be obedient and disciplined.

6. A recommendation from the ethical decision-making model is to consult an organization's ______.

D. codes of conduct

19. Where revenue sharing may be effective as a tool to improve competitive balance is when it is used in conjunction with a ______.

D. hard salary cap

8. As chronicled in the book Moneyball, the strategy employed by the small-market Oakland A's general manager Billy Beane to better compete with large-market teams by identifying and acquiring undervalued players is an example of an organization maximizing its ______.

D. return on investment

3. The concept of ______ is probably the best single measure of an industry's impact.

D. value added

9. ______ are the fundamental baseline values dictating appropriate behavior within a society.

Morals

3. Discuss the origins of the competitive balance issue in professional sports and at least three solutions that leagues have developed to deal with it.

Origins: The greater the uncertainty of outcome, the greater the entertainment value for fans, and thus the greater the revenues for leagues. Large market teams have an advantage over small market teams. b. Solutions: "reverse-order" draft, scheduling system, salary cap, revenue sharing, luxury tax.

2. The _______ issue is rooted in the notion that consumers of a spectator sport seek to be entertained by the game itself and that this entertainment value is connected to a concept of "uncertainty of outcome"—the greater the uncertainty of outcome, the greater the entertainment value for fans.

a. Competitive balance

3. If a borrower is unable to repay the borrowed money, with interest, at a prespecified date—perhaps because revenues are lower than expected—then the borrower is said to be in _______ on the debt.

a. Default

1. Discuss the financial challenges faced by college athletics in terms of (1) revenue growth versus profitability and (2) how revenues are distributed across programs.

a. Enormous growth in revenues over the last 15 years, yet college athletics, taken as a whole, continues to be unprofitable. The revenue-generating abilities of the major sports are insufficient to compensate for the deficits that occur in other sports. There is an unequal distribution of revenues across programs. Conferences that are traditional powers tend to get the highest payouts, which can help perpetuate their success while inhibiting the ability of other conferences to increase their success.

1. A _______ has been used as a mechanism to influence competitive balance. With this, a payroll threshold is set prior to a season and teams that exceed this threshold pay based on the excess amount.

a. Luxury tax

2. For the nonspectator sport industry, discuss two issues that have to be considered in determining whether the industry can continue to grow at the rate it has in recent years, and what risks are involved with the assumptions one makes about the future growth of the industry.

a. One must consider the extent to which the recreation and leisure market will continue to grow bearing in mind how it is affected by changing demographics, consumer affluence, and social values. One must also consider consumer trends (e.g., will golf remain "hot" or will a new recreational activity emerge with enormous financial potential?). Because decisions on capital investments are based on the assumptions and predictions made with respect to these issues, these become crucial financial questions to consider.