Contemporary Sport Management Chapters 1, 2, 4, 5, & 15 Richard Rogers UCSB
501 (c) 6 Business Leagues
501 (c) 7 Social Clubs
Not- For- Profits
Joint Powers Authorities
Simple to form
Fictitious name certificate
Business Liability Insurance
Umbrella Insurance on Homeowners Policy
Persons, partnerships, LLCs, corporations, trusts
Simple to form
Written (and signed)
Cash, assets, skills
Jointly and Severally Liable
Any partner can sign a contract and obligate all partners
“Key man” life insurance
Taxes paid by partners proportionally
Additional topics to be included in a partnership agreement, if applicable
Operate business and personally liable for acts of partnership
No operating control
Share in profits
Filing with secretary of state
Taxes paid by partners proportionally
Limited partners limited on losses
Limited Liability Corporation
Continuity of life
Centralization of management
Free transferability of ownership interests
Types of Stock
Asset distribution preference
Potential for conversion rights
Limited voting rights
– Earnings can be retained- The corporation can retain its earnings for future investment or dividends.
-Limited liability – Corporate shareholders are generally not responsible for the debts and obligations of the corporation.
-Ease of formation- Forming a corporation is generally a mechanical process dictated by state law.
– Formalities required. A corporation must follow certain formalities dictated by law to maintain its corporate status.
– Administration. The administration of a corporation is complicated since certain federal and state tax procedures are necessary and certain accounting methods may not be available.
– Cost. The cost to incorporate an entity can be considerable, and there are annual filing fees that must be paid in most states. Also, the administrative costs of accounting and tax preparation may be expensive due to the complexity of complying with corporate laws.
– Tax issues. In general, corporations are separate taxable entities that are subject to federal and state taxation. Corporate income is taxed at the corporate level. When that income is passed on to the shareholders as a distribution or dividend, it is taxed again on the shareholder’s individual tax return. Double taxation may be partially or completely avoided in a small business by paying a salary to the employee shareholder.
– Tax consequences upon dissolution of a corporation. With all forms of business entity except a C corporation, dissolution and distribution of the business’s assets to the owners is, at worst, a single taxable event. In a C corporation, a double tax may be due; the corporation may owe a capital gains tax on liquidation and the individual shareholders also must recognize a gain upon the transfer of proceeds from the corporate entity to the individual recipient. Consequently, dissolving a C corporation can have serious tax ramifications.
-Tax benefits of partnership
– Liability benefits of corporation
– Articles of organization filed with secretary of state
-Operating agreement (similar to partnership agreement)
* Most professional sports teams are LLC’s
– Limited liability. Members are shielded from being personally liable for acts of the LLC and its members.
– Flexible membership. Members can be individuals, partnerships, trusts, or corporations, and there is no limit on the number of members.
– Management. Members can manage the LLC or elect a management group to do so.
Flow-through treatment. Income, losses, deductions, and tax credits flow through the LLC to the individual members.
– One member LLCs. Many jurisdictions do not allow LLCs to have only one member, although the number of jurisdictions that do allow them is growing. Under federal law, a single-member LLC is treated as a sole proprietorship.
– Free transferability of interest. In older LLCs, transferability of interests was usually restricted to enable the LLC to be treated as a partnership.
– Nontraditional entity. An LLC is a new entity type for which there is little precedent available.
– Cost. An LLC usually costs more to form and maintain than a sole proprietorship or a general partnership. States may also charge an initial formation fee and an annual fee.
– IRS election requirement
– Tax treatment (similar to partnership)
– Can elect “cash method” of accounting if no inventory
– No personal holding company tax
– Limited to less than 100 shareholders
-Other ownership restrictions
– Limited loss deductibility for tax purposes
– Calendar year
– Only one class of stock
– Some tax issues related to fringe benefits
– Cash method of accounting. Corporations must use the accrual method of accounting unless they are considered to be small corporations (a small corporation has gross receipts of $5,000,000 or less). S corporations, however, usually don’t have to use the accrual method unless they have inventory.
– Personal holding company tax. An S corporation does not have earnings and profits, which would allow it to accumulate passive income that is then passed to its shareholders. A corporation that does not elect S corporation status and accumulates passive income is at risk of being classified as a personal holding company. For federal tax purposes, a personal holding company is a corporation that is owned by a small number of individuals and that receives most of its income in the form of dividends, interest, and rents. From 2003 through 2008, undistributed personal holding company income is taxed at an additional 15 percent rate.
– Limit on number of shareholders. An S corporations may only have up to 75 shareholders (100 shareholders for tax years beginning after 2004).
– Limited losses. Although shareholders of S corporations have the ability to deduct pass-through losses, shareholders may not be able to deduct all the losses allocated to them because such losses are only available to the extent of the shareholder’s basis in the S corporation. This is a tax accounting concept that basically limits the amount of losses that an S corporation shareholder can take. (However, C corporation shareholders ordinarily can’t deduct any losses at all, unless their stock becomes worthless or is sold at a loss).
– Calendar year. An S corporation must adopt a calendar year as its tax year unless it can establish a business purpose for having a fiscal year.
– One class of stock. An S corporation can only have one class of stock, which can impair the corporation’s ability to raise capital. Nonvoting stock is not considered a “separate class” for this purpose, however.
– Taxable fringe benefits. Most fringe benefits provided by the corporation are taxable as compensation to employee-shareholders who own more than 2 percent of the corporation.
– Primarily member-owned, controlled
– Usually exempt from ‘Income taxes’
Efficiency: The achievement of goals using minimum resources (focus on activities). Ratio of output to inputs
o Goleta’s Parks and UCSB Rec Department
o ex) US Olympic Committee, Tony Hawk Foundation
ex) Boston Celtics, Manchester United, Under Armour, Dick’s Sporting Goods, ski resorts, CSN
– general environment: includes all elements that may not have a direct effect on the day-to-day operations of the organization. ex) economy, technology, politics, cultural influences
EX: customers, employees, management, owners, stockholders, suppliers, government, community, unions, creditors
– resource based approach: focuses on inputs, need inputs to make outputs
– The internal process approach: focuses on considering the internal well-being, focuses on the transformation of inputs into outputs
– LACK NUANCE AND ACKNOWLEDGEMENT OF THE COMPLEXITY OF THE ENVIRONMENT
– dimension of focus is represented on a continuum from internal to external
– dimension of structure is represented on a continuum from stability to flexibility
– The Stakeholder Approach: based on the premise that several groups, entities and other organizations have an interest in the focal or
o Ex) NBA has WNBA, NBA Development League, NBA Entertainment
o ex) UEFA includes 53 national soccer associations
o Middle management
o Technical core
o Administrative support staff
o Technical Support staff
– low levels of specialization, standardization, high levels of centralization
– professional sport teams in which coaches, sport psychologies etc. are responsible for the products or services
· power resides in the experts
· marketing agencies
· Olympic Games, Google
– temporarily created to this design so that they can address challenging transitions
– when org is bidding for resources
· bidding to host Olympics
· 2. Determining the strategy by using SWOT analysis
· 3. Identifying the resources required to implement the strategy
· 4. Establishing a timeline for implementing the strategy and identifying milestones to assess whether the org is on target to achieve its objectives
– gain competitive advantage when scare resources
– for sports: sponsorship opportunities, media visibility, participants or athletes
– Include stories, myths, symbols, language, ceremonies, physical settings, symbolic artifacts
o Collectivity Stage: leadership crisis has been addressed, now developing clear goals and establishing its direction
– need for delegation with control
o Formalization Stage: rules and procedures are developed, job descriptions are created and communication becomes more formal
– too much red tape
o Elaboration Stage: leaders and managers within the organization undertake collaboration and teamwork need for revitalization
– workers who produced more than others would receive greater rewards
– ex) sales commission on tickets during game days
o 1. planning
o 2. staffing
o 3. organizing
o 4. directing
o 5. controlling and evaluating
o help to identify the root cause of problems rather than simply stating the symptoms of an issue
o creates solutions
Human relations skills
o help in leading, motivating, and developing cohesion among employees
o directly associated with everyday tasks on the job
o budget management, management of intern and external audits, financial planning etc.
o the process of influencing the activities of an individual or group in an effort to achieve a goal in a given situation
– theory suggests the most effective style of leadership is dependent on the situation or context
– leadership is multidimensional in that it includes
a) the leaders’ traits, power or influence and goals. Responsible for managing and introducing change
b) their followers’ expectations and values. There needs to be an alignment with followers’ expectations and values and the leaders’ goals
c) the leadership context defined by organizational complexity and task uncertainty. Organizational complexity: consists of the size of the org or group within which leaders and followers operate and the location of the workspace
– implies an exchange between leaders and followers whereby they agree on three types of performances that will lead to reward punishment for followers
– not actually a leadership style at all because the people who use this approach are extremely passive
– They avoid of leadership because the people who use this are neither monitor nor correct their followers
· Transformational style
– practice the four I’s
– idealized influence, inspirational motivation, intellectual stimulation, individualized consideration
· 2. Identifying criteria for decision: what’s the budget for this stadium? who is going to be involved in the planning?
· 3. Developing and evaluating alternatives: for every problem there are various solutions
· 4. Selecting an alternative: which solution met steps one and two
· 5. Implementing the alternative: implementing the decision in step 4
· 6. Evaluating the effectiveness of the decision: did decision lead to intended outcomes?
· reward power: the person who has the ability to award employees
· coercive power: person who provides punishments
· referant power: power based on personality (charisma)
· access to information
· biases: systematic use of information about others that leads to inaccurate perceptions
· Stereotypes: inaccurate beliefs about characteristics of groups of people
· Overt discrimination: denying diverse individuals’ access to opportunities and outcomes
Steps in the development of plans
Organizational processes involved in developing a strategy to gain competitive advantage
“How to” attract and please customers
“How to” compete successfully
“How to” conduct operations
“How to” achieve target levels of organizational performance
– Competitive Advantage
– Strong Performance
– Push the firm to be more inventive
– Exhibit more urgency to improve its business position
– Be intentional and focused in its actions
– Everyone on the same page
– Operating mangers who
Push needed changes in their organizational units
Consistently deliver good results
– Success measured by:
Meeting or beating performance targets
Showing progress in achieving the strategic vision
Time Management and Organization
Obtaining market equilibrium
– Assets include both long term and current assets
– Liabilities are obligations to pay money or provide goods or services
– Total assets=liabilities+owner’s equity (investment)
– Includes revenues and expenses
– Operating expenses:other normal business expenses such as salaries, rent, and utilities
– Other expenses:outside normal business, – unusual losses such as lost lawsuit
– Income tax expense:amount company pays to IRS
– Not necessarily an accounting concept, but an “economic” cost
If cost exceeds the benefit, we do not do it
– Individuals or organizations always have options to choose from, even if they decide not to make a choice.
– Individuals or organizations strive to minimize opportunity costs.
2nd degree – quantity discounts
3rd degree – based upon attribute (age, gender)
Teams usually do not like it
Reason teams should like it
– Reinforces demand
– Helps with utility issues caused by bundling
– Helps keep ancillary revenue up
Many teams doing themselves
– Can’t beat ’em, join ’em
– Helps to control market
– Best of both worlds
– League owns all teams and controls costs from one source
Individual team owners but centralized labor
– Players hired and paid by league
– Assigned to teams based upon mutually agreed rules
– Players have little control
Individual team owners with decentralized labor
– Players hired and paid by teams
– Players have more control
No teams, just players (i.e. golf, tennis)
– Players self-employed, contract with league
– Players have most control
• Any activity, experience or business enterprise for which the primary focus is fitness recreation, athletics and leisure related
• Multi sports (athletic foundations, disabled sports orgs, high school sports, military sports, Olympic sports)
• College Sports (college associations, college athletics)
• Media (newspapers, magazines , TV, radio)
• Sports sponsors
• Professional services (event planning, sports medicine)
• Facilities (arenas and stadiums, facility management)
• Manufactures and retailers ( software manufactures, retailers)
• Events. Meetings, trade shows
– Sport Performance, Sport Production, and Sport Promotion
• Economic Impact Model
– Sport Entertainment and recreation such as events, teams, associated spending (money spent by sports participants, spectators and sponsors)
– Sports products and services
– Sport supports organizations (leagues, law firms, etc..)
• Sport Activity Model
– Produce sport activities
– Provide products and services to support the production
– Sell and trade products related to sports
1. What are the issues and conclusion?
2. What are the reasons?
3. What words and phrases are ambiguous?
4. What are the value conflicts and assumptions?
5. What are the descriptive assumptions?
6. Does the reasoning contain fallacies?
7. How good is the evidence?
8. What significant information is omitted?
– Managerial Skills
– Critical Thinking skills
– Sports products, protective helmets, etc..
• Ethics and Social Responsibility
– Use the sport for good and illuminate immoral/ illegal incidences
– Principled decision-making – basing decisions on trustworthiness, respect, responsibility, caring
• Environmental Sustainability
• Globalization of Sport
– Exploitation of poor people in other counties
– Major Courses in Sports Management
– Field Experience
– Graduate degree (make sure the program is a good fit for you)
• Implicit norms – Unstated or informal rules understood and practiced by members of an organization
• Learn your job
• Understand Org Culture
• Develop Your Written Communication Skills
• Refine Your Teamwork skills
– Learn to manage conflict
– Embrace Diversity
– Assess Performance
• Continue Professional Development
• Voice-mail Messages
• Meeting Participation
• Dining Etiquette
• International experiences
• Introductions and greetings
• Office etiquette
• Romantic Relationships
– Understand your personal and work values, interests, etc..
• Occupational exploration
– Broad look at career fields
• Career decision- making
– Weighing the information and making a choice
• Career implementation
– Prepare for an effective resume and cover letter that can adjust to the position
• Functional skills – General abilities that transfer to many jobs situations EX: referee uses functional skills to resolve player conflict
• Adaptive skills – Personal attributes and personality traits. EX: Remain calm and posed under stressful conditions