SMPT 217

The Club System
-Birthplace of modern sport and sport management
-18th century
Development of sport clubs with limited membership
-19th century
Continued club evolution with standardizing of rules, settling disputes, and organizing schedules
Thoroughbred Racing
-Races drew broad and diverse audience
No admission charged
-Local club system initially
Racing existed for entertainment only, not financial gain; prestige more important
Rail system allowed horses to compete nationally
-Desire of owners to breed and train fast horses and the increasing complexity of gambling lead to more complex club system
The Jockey Club
-Established around 1750
-Settled disputes, established rules, determined eligibility, designated officials, regulated breeding, and punished unscrupulous participants
-Organized, sponsored, and promoted local events
-Met need for a strong national governing body to establish rules, standards, and a mechanism for resolving disputes
-Served as model for wider sport management practices in England
The Modern Olympic Games
-International club event, with little resemblance to ancient Olympic Games
-First Modern Olympics in 1896, but the revival can be traced back to at least 1850 with club-based Olympic festivals in England
-Founder Pierre de Coubertin, inspired by English revivals and Victorian notions of character building and peace movements through sport, introduced concept of amateur Olympic Games every 4 years
Present-Day Club Structure
-Commitment to serve broad membership and manage elite sport enterprise
No longer local, but international
-Clubs organize youth teams and academies, adult recreational leagues, and social events for members
-Large built-in memberships and loyal fan bases
-Characterized by nonprofit status and exclusive membership
Augusta and male-only membership
-Change from European club system to U.S. league system
American Structures
-European club system did not suit the United States
Lack of aristocratic tradition and prohibition against gambling
-League structure arose out of harness racing, sport of the common person
-Better spectator sport than thoroughbred racing
Sprint vs. 4-mile race; horses could compete daily, large field of competitors
-Managed by track owners and race promoters
Willing to create spectator interest for sport
-Issues of race fixing, management lacking credibility led to loss of popularity
-Baseball was first to adopt league system
-Cincinnati Red Stockings: First pro team
-Some teams in the league paid and some did not—created controversy
-1871: Creation of National Association of Professional Baseball Players
-Importance of “breakeven” financial interests of individual clubs
William Hulbert
-Czar of baseball
-1876: Took over management of National League of Professional Baseball Players
-Believed stability achieved only if teams were run like businesses
-Teams should compete against each other and not collude
Understood that without strict rules forcing honest competition, collusion would occur
-Owners must take some financial risk:
Abandoning seasons early to prevent losses in short term eroded long-term faith of public
-Owners must field competitive teams to be profitable.
-Integrity of baseball was suspect as long as the players’ honesty was questionable:
Gambling prohibited and ticket prices raised
Early Success of National League
-Excitement of pennant race
-Honoring of contracts (reserve system)
-Favorable media attention
-Appealed to fans’ loyalty and pride in their cities
-Early form of revenue sharing
-Rules that distributed talent
Leagues Today
-Successful contemporary commercial sport leagues depend on consolidated league play with strong centralized control and regulation
-Audience has changed
Public’s perception of locus of honest effort resides more with the players than with ownership structure
-Single-entity structures: MLS, MLL, AFL
Professional Sport Tournaments-Golf
-Early golf professionals were instructors and caddies.
-Professional leagues failed to capture public interest or attract golf professionals.
-Attempts to generate gate revenues at tournaments failed.
-Stability of tournaments was achieved when prize money was put up by companies and corporate sponsors.
Corcoran’s Tournaments
-Fred Corcoran: Architect of golf tournament
-Golf tournament was medium through which celebrity, politician, manufacturer, charity, town, or product gained exposure
-Used athletes and golf tournaments to sell advertising space to the public
-Bing Crosby and Bob Hope created charity golf tournaments in pro-am format for WWII fund-raising
Corcoran’s Tournaments Continue After War Ends
-Good business = Tax deductions
-Charities encourage volunteers and good publicity for tournaments
-Golf equipment manufacturers paid Corcoran to create golfer association and arrange tournaments using prize money as player payments to reduce cost of hiring player representatives
-1950s press changes policy and begins naming tournament sponsor not location = free publicity
Golf Tournaments Today
-Golf tournaments have evolved into corporate celebrations of golf and products
-PGA Tour viewed as private group
Set rules of eligibility
-Associations not as exclusive as private clubs (Casey Martin)
-Trend moving away from nonprofit private associations and toward marketing agencies and/or broadcast media
Importance of Women
-Heraea Games (run by Sixteen Women):
Ancient Greek Games for women
-Intercollegiate Sport:
Christine Grant and Judy Sweet
-National Intramural-Recreation Sports Association (NIRSA):
Annette Akins, Mary Daniels, Juliette Moore
-Sport management industry:
Effa Manley of Newark Eagles (Negro League)
Billie Jean King (WTT, WSF)
Lesa France Kennedy (NASCAR)
Stephanie Tolleson (IMG)
Buffy Filipell (TeamWork Online)
Academic Field
-Continuing growth of sport industry and its importance to numerous sponsors and institutions created demand for the systematic study of sport management practices.
1957: Walter O’Malley
1966: James Mason; first master’s program at Ohio
1971: University of Massachusetts
-Current status
More than 200 programs nationwide
North American Society for Sport Management (NASSM)
Program evaluation
Sport management degree programs throughout Europe
Definition and History
-Goal of sport managers
To get workers to do what the manager wants in an efficient and cost-effective manner
-Management theory evolved through two phases
Scientific management
Human relations movement
-Today: Use of organizational behavior
Study and application of the human side of management and organizations
Definition and History: Scientific Management
-Workers should not be doing the same job different ways, but instead in the “one best way” (most efficient way)
-Manager can get workers to perform job the “best way” by enticing them with economic rewards
Definition and History: Human Relations
Hawthorne studies: Social factors in the workplace were important, and job satisfaction and output depended more on cooperation and a feeling of worth.
Definition and History: Organizational Behavior
-Study and application of human side of management
-Includes dealing with modern changes:
Information Technology
-The lasting competitive advantage within organizations comes through human resources and how they are managed.
Functional Areas
-Sport managers must perform in a number of functional areas and execute various activities in fulfilling the demands of their jobs.
-Areas include planning, organizing, leading, and evaluating.
-This list is not comprehensive because organizations are constantly evolving.
Functional Areas: Planning
-Defining organizational goals and determining the appropriate means by which to achieve these desired goals
-Setting course of action for the sport organization
-Organizational plans should change and evolve
Should not be viewed as set in stone
-Managers must participate in both short-term and long-term planning
Functional Areas: Organizing
-Putting plans into action
Manager determines what types of jobs need to be performed and who will be responsible for doing these jobs
-Develop an organizational chart
-Develop position descriptions
-Develop position qualifications
Selection, orientation, training, and development of staff members
Functional Areas: Leading
-“Action” part of the management process
Involves assigning responsibility and accountability for results to employees
-Managers must manage any differences or changes that may take place in the organization
-Managers handle conflicts, work problems, or communication difficulties; stimulate creativity; and motivate employees
Functional Areas: Evaluating
-Measuring and ensuring progress toward organizational objectives
-Progress is accomplished by the employees effectively carrying out their duties
-Establish reporting systems, develop performance standards, compare employee performance to set standards, and design reward systems
Key Skills: People Skills
-Sport management industry is a “people-intensive” industry
-Interaction with unique clientele
-Must be able to treat all people fairly, ethically, and with respect
Key Skills: Communication
-Knowing how to say something to another person is equally as important as knowing what to say to another person.
-Answering each question professionally and courteously wins a lifelong fan.
-Sport managers must be able to treat all people fairly, ethically, and with respect.
-Sport managers are often asked to give speeches.
-Sport managers must be able to write in many different styles (press release, brochures, etc.
Key Skills: Managing Diversity
Differences between individuals, including age, race, gender, sexual orientation, disability, education, and social background
-Women and minorities still underrepresented in managerial positions in the sport industry
More women, people of color, and people with disabilities are needed at managerial level in the sport industry
-Employment process:
Recruitment, screening, selection, retention, promotion, and ending employment
Key Skills: Managing Technology
-Usage of technology in the sport industry
For example: customer data collection and advanced ticket systems
-Usage of technology in the workplace
For example: videoconferencing and multimedia presentations
-Computerized ticketing systems such as M-ticketing, PACIOLAN, and PROLOGUE
-Online surveys used for data collection
-MLB Media Tracker and Fan Tracker
Key Skills: Decision Making
-Gathering and analyzing information
-Need to define problem, generate alternatives, evaluate alternatives and select best alternative
-Participative decision making
Employees or members of the organization participate in the actual decision-making process
-Group decision making should be used when:
more ideas need to be generated, there is a great deal of information to share, alternative perspectives are needed, and the fairness of the decision is highly valued
Key Skills: Organizational Politics
-Use of power or some other resource outside of the formal definition of a person’s job to get a preferred outcome
-Four types of political tactics used
Outside experts
Controlling information
-Sport organizations have formal (e.g., athletic director) and informal (e.g., coach) leaders.
-Learning who the informal leaders are in an organization can help new sport managers understand politics of a sport organization.
Key Skills: Managing Change
-Managers should appreciate employees’ resistance to change.
Plan for resistance, involve employees, and provide additional training and communications
-Managers should select priorities for change.
-Managers should deliver early tangible results.
-Managers should publicize successes to build momentum and support.
-Managers must make sure top management sponsors are fully committed to implementation.
Key Skills: Taking Initiative
-Initiative enables you to learn about a different aspect of sport organization you are working with
-Allows you to meet and interact with people outside of office you work in, thus increasing your network
-Shows your employer your commitment to working in sport industry
Key Skills: Motivation
-Critical for everyone to be on same page when it comes to working to accomplish organizational goals and objectives
-Many theories:
Maslow’s hierarchy of needs, Herzberg’s two factor ideas, Vroom’s expectancy theory, and Adam’s equity theory
-Katzell and Thompson:
Appropriate motives and values; attractive and consistent jobs; defined work goals; appropriate resources and supportive environments; performance reinforced; harmony
Current Issues
Perform self-study to evaluate effectiveness of recruitment and employment of diverse individuals
-Managing technology
Understand how expanding technology will improve customer relations and service
-International sport management
Be aware that domestic models of sport governance cannot be unilaterally imposed on other cultures
-New management theories
Empowerment and emotional intelligence
Czar of baseball; developed national league of baseball players
william hulbert
a profit oriented legal business entity organized so that teams can compete against each other, but also operate together in areas such as rule marketing, broadcasting, licensing, and marketing
national association of professional ball players napbp
a group of professional baseball teams formed in 1871 any ball club that was willing to pay its elite players could join
the jockey club
est in Newmarket, England around 1850 to settle disputes, establish rules, determine eligibility, regulate breeding, and punish in the sport of thoroughbred racing
james g mason
co inventor with o’malley of the idea of sport management curriculum
the modern Olympic games
international athletic event, 1896, based on ancient greek games
professional tournaments
sporting events that are sponsored by community groups, charities, and players win their income through prize money
sport management structures composed of a limited number of members who organize events, standardize rules, and settle disputes
national league of professional baseball players
the successor to the national association of professional baseball players, formed in 1876, it was a stronger body in which authority for the management of baseball rested
fred corcoran
the architect of the professional golf tournaments
north american society for sport management (nassm)
an organization that promotes, stimulates, and encourages study, research, scholarly writing, and professional development in the area of sport management, in both its theoretical and applied aspects
walter o’malley
co-inventor with james mason of the idea of a sport management curriculum. also owner of the brooklyn and los angeles dodgers from 1943 until his death in 1979
sport management structure
plans that help managers organize and run sports; they are conceived and evolve in response to broad social changes or to address specific issues within a segment of the sport industry
pierre de coubertin
founder of the modern olympics
ohio university
first school to establish a masters program for sports management, founded in 1966
a functional area of management that measures and ensures progress toward organizational objectives by establishing reporting systems, developing performance standards, observing employee performance, and designing reward systems to acknowledge successful
precipitative decision making
involving staff or other members of the organization in the making of choices
the encouragement of employees to use their initiative and make decisions within their areas of operations, an the provision of resources to enable them to do so
decision making
a process of gathering and analyzing information so as to make a choice on how to pursue an opportunity or solve a problem
emotional intelligence
the ability of workers to identify and acknowledge people’s emotions and instead of having an immediate emotional response, to take a step back and allow rational thought to influence their actions
assigning responsibility and accountability for results to employees
communication skills
oral and written abilities for presenting facts and information in an organized, courteous fashion
organizational behavior (OB)
a field-involved with the study and application of the human side of management and organizations
the reasons why individuals strive to achieve organizational and personal goals and objectives
going beyond one’s formal job description to help the organization
organizational politics
the use of power or other resources outside of the formal definition of a person’s job to achieve a preferred outcome in the workplace
any differences between individuals including age, race, gender, sexual orientation, disability, education, and social and economic background, that affect how people perform and interact with each other
scientific management
the idea that there is one best way to perform a job most efficiently that an be discovered through studies of the tasks that make up a job, and the belief that managers can get workers to perform the job in this best way by enticing them with economic r
a functional area of management that focuses on putting plans into action by determining which types of jobs need to be performed and who will be responsible for doing these jobs
a functional area of management that includes defining organizational goals and determining the appropriate means by which to achieve those desired goals
people skills
knowing how to treat people fairly, ethically, and with respect
human relations movement
management theory focusing on the behavior and motivations of people in the workplace
a functional area of management that is the action part of the management process; it involves a variety of activities, including delegating, managing differences, managing change, and motivating employees
managing change
effectively implementing differences in the workplace and being aware of employees’ natural resistance to them
managing technology
being familiar with technology and using it to one’s advantage
fan identification
the personal commitment and emotional involvement that customers have with a sport organizatin
customer relationship management
the implementation of relationship marketing practices
related to the statistical characteristics of a group of people
ambush marketing
a strategy that involves placement of material and promotions at an event that attracts consumer and media attention without becoming an official sponsor of that event
pass-by interviews
on-site interviews in heavy-traffic areas (such as malls) that utilize visual aids and assess the interviewee’s reaction to the visual aids
marketing mix
the conrollable variables a company puts together to satisfy a target market group, including product, price, place, and promotion
related to the preferences, beliefs, values, attitudes, personalities, and behavior of an individual or group
relationship marketing
marketing that aims to build mutually satisfying long-term relations with key parties in an attempt to earn and retain their business
identifying subgroups of the overall marketplace based on variety of factors, such as age, income level, ethnicity, geography, and lifestyle
the acquisition of rights to affiliate or directly associate with a product or event for the purpose of deriving benefits related to that affiliation
target market
a group of consumers to whom a product is directed
What is a marketer’s main job?
create demand
The term for a group of consumers to whom a product is marketed to is:
target market
was the first company to capitalize on the term official in marketing its products.
Mark McCormack’s sports marketing agency, IMG, began through a relationship with what athlete:
Arnold Palmer
Nike’s exploits during the 1996 Atlanta Olympics are an example of what type of marketing?
ambush marketing
involves identifying subgroups of the overall marketplace based on factors such as age or income level.
Behaviors and preferences like an individual’s beliefs, opinions, lifestyles, and habits are considered by marketers to be:
psychographic characteristics
Relationship marketing occurs when sports organizations view their customers as statistics in a database.
Fan identification is defined as the sense of oneness with or belongingness to an organization.
All of the following are examples of a demographic trait or characteristic except:
Who founded the National League?
William Hulbert
Who is recognized as the architect of the professional golf tournament?
Fred Corcoran
The name of the part of a contract that binded a professional baseball player to his ballclub was called
reserve clause
The first professional baseball team was the Cincinnati Reds.
Tournaments today are often created by player associations rather than marketing agencies or broadcast media.
The modern Olympic Games in 1896 were held in which city?
What two themes run through this chapter’s examination of sport organizations? chapter 1
honesty and inclusion
There are more than 100 sport management programs in the United States.
Two of the earlier phases used in the development of management theory are:
scientific management and human relations movement
The underrepresentation of women, minorities, and people with disabilities in the sport industry is an important issue for sport managers who value _____ in the workplace.
The most important asset in an organization is its
Sport managers must master their _____ skills in order to be successful
involves measuring and ensuring progress toward organizational objectives.
Which of the following is NOT a step in the classic model of decision making?
managing technology
Sport management should have an international scope.
Participant decision making involves the manager making all of the decisions.
is a continuous process that involves establishing organizational mission statements, goals, objectives, tactics, roles, and evaluation
The sport industry in the United States is in decline.
The concept of _______ is probably the best single measure of an industry’s impact.
Which of the following most accurately defines the managerial discipline of finance?
how an organization generates the funds that flow into the organization and how an organization allocates its funds once they are in the organization
In a basic sense, financial success relies on higher:
is/are anything that an organization owns that can be used to generate future revenues.
Which statement concerning the tradeoff between financing through debt or equity is true?
Generally, financing with equity is more expensive than debt. and Generally, financing with debt carries more risk than equity.
Which financial statement measures the financial performance of an organization over a specified time period, usually a year?
income statement
All of the following are examples of “financial” mechanisms for altering competitive balance EXCEPT:
soft salary cap
luxury tax
hard salary cap
Teams prefer their stadiums to have more luxury and club seating than ordinary regular seating.
The payroll threshold set for a luxury tax acts the same as a hard salary cap.
What financial mechanism helps improve the effectiveness of revenue sharing to improve competitive balance?
hard salary cap
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:
From a relationship inherent in a particular situation
From a voluntary assumption of the duty of care
From a duty mandated by a law
From all of the above
To successfully show a defendant was negligent, a plaintiff must prove:
A duty of care is owed to the plaintiff by the defendant
The defendant breached the duty of care
The defendant’s actions were the actual and proximate cause of the plaintiff’s injury
There is evidence of monetary damages
Which of the following elements is not necessary for a valid contract?
Offer and Acceptance
NOT-Liquidated damages**
A collective bargaining agreement is:
the contract between the players and the owners in professional sport
Which of the following statements are true?
A.All professional sports leagues’ national broadcasting agreements are exempt from antitrust laws.
B.Professional sport leagues’ collective bargaining agreements are exempt from antitrust law under the labor exemption.
C.National Football League is the only professional sport league exempt from antitrust laws.
A&B only.
The U.S. Supreme Court case, PGA Tour Inc. v. Martin (2001) involved a challenge to PGA Tour rules under what statute?
a bonafide occupational qualification
Management in professional sports supports unions much more strongly than employers in other industries.
Waivers and releases of liability are contracts where parties agree to give up their right to sue for all types of torts.
An example of an Equal Pay Act violation may be paying the female coach of a female athletic team less in salary than the male coach of a female team.
The process of making a correct and fair decision is called
ethical reasoning
like ethics, is concerned with values guiding behavior.
To help with ethical decision-making, an organization should write and consult a(n)
code of conduct
Which of the following are examples of sport organizations with codes of conduct?
The National Intramural and Recreational Sports Association
The American Camping Association
The U.S. Olympic Committee
Morality can be seen through either a(n) ________ view or a(n) ________ view.
absolute, relative
To be effective, discipline must meet which of the following criteria?
meaningful and enforceable
When sport managers are faced with ethical dilemmas, their decisions are difficult to make.
Ethical decision making is done best with it is a “gut” feeling with no process.
Codes of conduct are only valuable within the sport industry in the United States.
Codes of ethics should be long and detailed.
What popular current sport originated from a game by the Native Americans?
The Progressive Movement promoted athletics as a tool to:
Prepare for the rigors of modern life and democracy and to assimilate immigrants into American culture
Historically, the most prominent private (or nonschool) agency to promote youth athletics was:
Young Men’s Christian Association (YMCA)
Trainers and physical therapists are recommended to have which of the following skills?
Bus driving skills
Knowledge of injury and physical training
Equipment knowledge
Human resource management does not involve:
creating a financial statement
analysis of compensation, and consideration of employee wellness and employee relations AND performing a job analysis and writing position descriptions
Most sex discrimination challenges in high school athletics have been based on:
Title IX of the Education Amendments of 1972
state or U.S. Constitution equal protection clauses
state equal rights amendments
a combination of all of the above
Which of the following youth programs would not have to be Title IX compliant?
private basketball league
High school sports were initially organized by the federal government.
he administration of school and youth sports is primarily a local affair, with most policy and procedural decisions made at the district, school, or youth league level.
When Little League Baseball was first founded, both only boys were allowed to compete.
amount of money an organization borrows
differences between revenues and expenses, also called profit
the uncertainty of the future benefits of an investment made today
the costs incurred by an organization in an effort to generate revenues
the process of developing a written plan of revenues and expenses for a particular accounting cycle; the budget specifies available funds among the many purposes of an organization to control spending and achieve organizational goals
occurs when a borrower is unable to repay a debt
things that an organization owns that can be used to generate future revenues, such as equipment, stadiums, and league memberships
competitive balance
the notion that the outcome of a competition is uncertain, and thus provides greater entertainment value for spectators
a business or organization that faces no direct competition for its products or services and as a result possesses high bargaining power
luxury tax
a fee that a team incurs when it exceeds a set payroll threshold
sum of debts an organization owes
revenue sharing
a system in which each team receives a percentage of various league-wide revenues
balance sheet
a financial statement that shows the assets, liabilities and owners equity of an organization
income statement
a summary of the revenues, expenses, and profits of an organization over a given period of time
money that is paid for the use of money lent, or principal, according to a set percentage
rival leagues
leagues that compete directly with established leagues
the original amount that an organization borrows. one who authorizes another to act on his or her behalf as an agent
return on investment (ROI)
1) the expected dollar-value return on the financial cost of an investment, usually stated as a percentage 2) the achievement of specific marketing and sales objectives from a sport sponsership
owners equity
the amount of their own money the owner has invested in the firm
financial instruments typically issued by large corporate entities or governments that allow the borrower to borrow large dollar amounts usually for a relatively long period of time
the funds that flow into an organization and constitute its income
salary cap
a financial mechanism that limits team payroll to a percentage of league revenues, thereby preventing large market teams from exploiting their financial advantage to buy the best teams
moral principles
codes on conduct
statements of a company, business, organization, or profession that explicitly outline and explain the principles under which it operates and provide guidelines for employee behavior
systematic study of values guiding decision making
the belief that what is moral depends on the specific situation
ethical dilemma
a practical conflict involving more or less equally compelling values or social obligations
the belief that moral precepts are universal, that is applicable to all circumstances
concerned with the values guiding behavior a specific type of ethical issue
ethical reasoning
the process of making a fair and correct decision, it depends on one’s values or the values of the organization for which one works
the fundamental baseline values dictating appropriate behavior within a society
state associations
nonprofit groups that have a direct role in organizing state championships and competitions in athletics and activities and are the final authority in determining athlete eligibility
national federation of state high school associations (NFHS)
a nonprofit organization that serves as the coordinator for high school sports as well as activities such a music debate theater and student council
school athletic director
an administrator of a school athletic program whose responsibilities include risk management, researching and purchasing insurance, handling employment issues, ensuring gender equity, and fund-raising
people who instruct or train players in the fundamentals or a sport and directs team strategy
youth league director
a supervisor whose responsibilities may include hiring, supervising and evaluating coaches, coordinating nearly all facets of contest management
national youth league organizations
groups that promote participation in a particular sport among children and are not affiliated with schools
progressive movement
an early twentieth century social and political movement that believed in social improvement by government action and advocated economic political and social reforms
non-school agencies
organizations that are not affiliated with the school system
public school
a free tax-supported school controlled by a local governmental authority
private schools
institutions that do not receive government assistance in the united states they were the first schools to provide athletic participation oppurtunities
trainers/physical therapy
individuals who treat the ailments and injuries of the members of an athletic team
individuals contractors employed by schools or leagues to supervise athletic competitions
governing bodies
groups that create and maintain rules and guidelines and handle overall administrative tasks
What Is Sport Marketing?
Create demand
Create, Promote, Deliver goods to consumers
Obtain the best possible understanding of what consumers want
Includes the marketing of
products, such as equipment, apparel, and footwear
services, such as skill lessons or club memberships
entities, such as leagues, teams, or individuals
History of Sport Marketing
Mark McCormack
Founder of IMG; first sport marketing firm in 1960s
Now international and broad categories
Roone Arledge: ABC Monday Night Football; combined entertainment and sports
Led to proliferation of sport channels
ESPN (ESPN2, etc.)
Big Ten Network
Sport Sponsorship
The acquisition of rights to affiliate or directly associate with a product or event for purpose of deriving benefits related to that affiliation
Albert G. Spalding
Use of the word official
Mark McCormack
Built IMG through golfer Arnold Palmer
Nike and Air Jordan
Packaging of the Nike brand, product, advertising, and athlete into one personality
Ambush marketing
Product Extension and Promotion
Bill Veeck
Team must provide reasons other than the game itself for people to attend and support franchise.
Create the greatest joy for the greatest number of people
Ensure a pleasurable attending experience
Create conversation
Research in Sport Marketing
Matt Levine
Credited with formalizing customer research in sport industry; audience audit, intercepts (one-on-one interrviews), focus groups
Pass-by interviews:
On-site interviews in heavy traffic areas such as malls
San Jose Sharks logo and colors changed as a result of pass-by interviews
The Marketing Mix
Controllable variables that company puts together to satisfy a target group
4 Ps:
Product (actual event vs. experience)
Price (depends on value or perceived value)
Place (preselling and exceptional locations)
Promotion (advertising, personal selling, publicity, and sales promotion, public relations)
Identifying subgroups of overall marketplace based on demographic, geographic, psychographic & product usage
Ethnic marketing
Growth of Hispanic population, ESPN Deportes
Generational marketing
Generation Y and action sports
Fan Identification
The personal commitment and emotional involvement customers have with sport organization
Enhanced long-term loyalty in sport fans
Sponsorship opportunities resulting from ability to tap into strong emotional connection between a fan and his or her sport team
Relationship Marketing
Builds mutually satisfying long term relations with key parties (consumers, suppliers, distributors)
Begins with customer and encourages integration of the customer into the company
Builds relationships through communication, satisfaction, and service
Loyal fan gift rewards, special access to players, and special access to information
Current Issues: Cost of Attendance
Drastic increase in cost of attending MLB, NBA, NHL, and NFL games
Increasing evidence that sport fans are not willing or able to pay such prices
Do not see the value of attending a game
Significant challenge for sport marketers is to develop relationship marketing strategies
Key challenge for anyone in team sport marketing is increasing revenues for sport teams
Current Issues: Database Marketing
Creating a database that includes consumer names, addresses, and other demographic information
Managing database by developing and delivering integrated marketing programs
Including promotions and sales offers to targeted consumer segments
Database marketing is often an integral factor in a company’s decision to sponsor an event
Current Issues: Cluttered Marketplace
Numerous and varied entertainment options are available to a consumer with leisure time
Added technological options for the next generation of sport fans
Marketplace cluttered for sponsors
Rise in number of athletes and events, increase in number of advertising opportunities available
Heightened focus on marketing mainstream sports to youth; increased challenge for sport entity to demonstrate how sponsor will benefit from a sponsorship
Current Issues: Image
Development and cultivation of a positive image is becoming increasingly important in sport marketing.
Cluttered marketplace: Imperative that corporations identify sports, events, or athletes that have unique images
Corporate and athlete ethical scandals
Corporations are more discerning in ways that they spend their sponsorship and endorsement dollars; they may now spend more on nonprofit organizations and causes.
What Is Finance?
No single, universally agreed upon definition
Generally refers to two primary activities of an organization:
How an organization generates the funds that flow into that organization
How these funds are allocated and spent once they are in the organization
Financial Flows in Sport Organizations
Difference between financial inflows (Revenues) and outflows (Expenses)
Assets: Anything an organization owns that can be used to generate future revenues
Teams can fund or “finance” assets in many ways:
Owners’ Equity: The amount of their own money owners have invested in the firm; stocks
Debt: Amount of money an organization borrows; bonds
College sports are nonprofit. Use budgetary transfers from the university and other innovative methods
Some Typical Financial Decisions
Many financial decisions ultimately revolve around management of assets
Return on Investment (ROI): Expected dollar-value return on each alternative investment
Future benefits of investment cannot be known at time of investment
Owners must decide how much they will finance with their own money and how much with borrowed money
Debt carries more risk than equity does
The Economics of Sports
Spectator sport industry is organized much differently from nonspectator industry and from rest of American business.
The existence of one franchise benefits the others.
Sport leagues are considered monopolies
They face no direct competition from rival leagues
Gives them greater bargaining power when dealing with stakeholders (e.g., players, broadcasters, corporate sponsors, and local governments) and allows them to potentially charge higher prices
Allows them to earn much higher profits than would otherwise be the case, as well as enact financial policies (e.g., salary caps, revenue sharing) that would not be possible with direct competition
Only legal monopolies in United States
The NFL has had the most competitors over the years including the American Football League during the 1960’and the United States Football League
Increasingly large capital investments are needed to be able to continue to generate revenues.
College athletics, taken as a whole, continues to be unprofitable.
The revenue-generating abilities of football and men’s basketball are insufficient to compensate for deficits of other sports.
Competitive balance
Entertainment value connected to “uncertainty of outcome”
Differences in market sizes cause differences in revenue potential, which cause differences in ability to pay players, which cause differences in on-field performance
Salary cap, revenue sharing, luxury tax
sport law
Sport law
Application of existing laws to the sport setting
A few laws specific to sport industry (regulation of boxing and sport agent industries, Title IX, etc.)
When a dispute arises over the interpretation of a rule or regulation, sport lawyers often represent both the governing body/association and the participant(s)
Involvement of sport lawyers occurs because sport organizations hire lawyers to draft their rules and regulations; thus, need lawyers to interpret them
Tort law cases involving participation in sports and games date from early evolution of tort law.
Many of earliest U.S. lawsuits in sport industry involve professional baseball.
Players challenged owners on reserve system that prevented players from free agency.
Owners challenged each other on business of sports.
First sport law course was offered in 1972 at Boston College Law School.
Considerable growth over last 40 years caused by:
Legal profession more specialized
Amount of litigation and diversity of cases in sport industry have increased as more people rely on the courts to resolve disputes
Many athletic associations have adopted own governance systems with rules, regulations, and procedures that are based on the U.S. legal system
Skills in legal education are beneficial to many positions in sport industry
Risk Management
Developing management strategy to maintain greater control over legal uncertainty
Keeping problems from arising
Having action plan to follow when problems do occur
DIM process:
Develop, Implement, and Manage risk
Include all employees in the three-stage process
Judicial Review
Occurs when plaintiff challenges a rule in sport organization and court determines whether it should review the sport organization’s decision
Historically, courts decline to overturn the rules of voluntary athletic organizations unless certain conditions exist
Plaintiff’s interest is to keep rule from applying or to force athletic association to apply it differently
Plaintiffs seek injunction:
An order from the court to do or not do particular action (i.e. 1. monetary damages 2. injunctive relief -force the court to apply the rule differently)
Court will intervene if athletic organization:
Violates/misapplies its own rule
Violates a statute (typically statutes command or prohibit something)
Violates public policy
Violates constitutional law and it’s a state actor
Acts as arbitrator or in a capricious manner
Exceeds the scope of its authority
Tort Liability
An injury or wrong suffered as the result of another’s improper conduct
Tort law provides monetary damages to compensate an injured person (plaintiff).
Intentional torts occur when a person purposely causes harm to another or engages in activity that is substantially certain to cause harm.
Gross negligence occurs when defendant acts recklessly, and fails to realize harm caused
Negligence is an unintentional tort and is the most common tort that sport managers encounter
Tort Liability Negligence
Sport managers are negligent when:
They commit an act/omission causing injury to a person to whom they owe a duty of care
Negligence imposes a duty to refrain from careless acts
Plaintiff must show that sport manager (defendant) owed plaintiff a duty of care and breached it
A duty of care arises from relationship between plaintiff and defendant (e.g., arena operator and fan).
When a duty is breached and that breach is the cause of an injury for which there are monetary damages
Agency Law
Agency describes a relationship in which one party, the agent, agrees to act for and under the direction of another, the principal.
Purpose of agency law is to establish duties that principals and agents owe each other.
Agency law is an important component of the player representation industry.
Fiduciary duties inherent in principal-agent relationship
Fiduciary – to act with trust and loyalty
Principal’s fiduciary duties:
1. To comply with a contract if one exists
2. To compensate the agent for his or her service
3. To reimburse the agent for any expenses incurred while acting on the principal’s behalf
Agent’s fiduciary duties:
1. To obey
2. To remain loyal (disclose conflicts of interest)
3. To exercise reasonable care
4. To notify
5. To account (for information and finances on a reasonable basis)
Vicarious Liability
Allows plaintiff to sue superior for the negligent acts of a subordinate
Employer need not be negligent to be liable
Three defenses available:
Employee was not negligent
Employee was not acting within scope of employment
Employee was an independent contractor
Contract Law
Contract: Written or oral agreement between two or more parties; creates legal obligation to fulfill the promises
Sport managers negotiate and enter into contracts regularly with or without legal advice.
A valid contract must have the following elements:
Offer and acceptance (mutual assent)
Consideration (value)
Legality (subject matter legal and not against public policy)
Breach: Once a contract is made, if a promise is broken it is considered a breach
Full (entire contract) or partial (some provisions)
Remedy usually money, can be injunction
Waiver and releases: contract in which participant gives up right to sue
Waiver signed before participation in activity
Release signed after participation in activity
Legality and enforcement varies in different jurisdictions
Constitutional Law
Developed from precedents established by courts applying language of U.S. Constitution and state constitutions to actions and policies of governmental entities
Four constitutional challenges arise in sports:
Due process
Equal protection
The right to be free from unreasonable searches and seizures
Invasion of privacy
state law
U.S. Constitution and state constitutions do not apply to private entities.
In some cases a private entity is so enmeshed with the public that courts apply constitution to private entity.
When a private entity meets this standard, it is called a state actor.
Due Process: 5th and 14th Amendments
The right to notice and a hearing before life, liberty, or property may be taken away
Athletic associations may have an impact on liberty and property interests protected by due process clauses in Fifth and Fourteenth Amendments
Right to play, right to be free from stigma, right to work and earn salary, and so forth
Equal Protection: 14th Amendment
No person shall be discriminated against unless a constitutionally permissible reason for discrimination exists
Standards of review for discrimination
Strict scrutiny: On the basis of race, religion, or national origin
Legitimate interest: On the basis of gender; discrimination can occur only if legitimate interest for doing so exists
Rational basis: Discrimination on any other status or classification
Search and Seizure: 4th Amendment
People have the right “to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures.”
Sport example: The act of taking the athlete’s urine or blood for drug testing
Several courts determined that private athletic associations (such as NCAA) or public high school drug testing programs do not violate state constitutional rights
Constitutional Law Invasion of Privacy
There is no specific amendment for invasion of privacy; The court has implied one from the constitutional amendments.
Plaintiff must establish that invasion is substantial and in area for which there is an expectation of privacy.
Sport cases most often arise as challenges to drug testing programs.
U.S. Supreme Court has held drug testing of high school athletes is not invasion of privacy (1995).
Drug Testing usually addressed in collective bargaining
Title IX
Comprehensive statute aimed at eliminating sex discrimination in educational institutions that receive federal funding
In athletics, cases focus on three areas:
Proportionate scholarship distribution
Equal treatment, benefits, and opportunities given in specific program areas
Degree to which educational institution has equally and effectively accommodated the interests and abilities of male and female students
Sherman Antitrust Act (1890) goal:
Promote competition in the free market; break up business trusts and monopolies and prohibit anticompetitive activity by businesses
Application of antitrust laws to leagues left indelible mark on structure and nature of labor-management relations
Just one major professional league for each sport; thus, their domination of the market gets challenged as monopolies violating the Sherman Act
Antitrust Antitrust Exemptions
All professional sport leagues and tours (except MLB) are subject to antitrust rules
1922 Supreme Court Federal Baseball decision granted MLB antitrust exemption
Curt Flood Act (1998): Legislative response to Federal Baseball
allows MLB players to sue their employers under the Sherman Act
Labor exemption
Restrictive practices are exempt from antitrust law when those practices have been negotiated in a collective bargaining agreement (i.e. hours, wages and other terms of employment).

Sport Broadcasting Act of 1961 exempts leagues from antitrust laws when pooling rights to enter into national broadcasting rights
In past, NCAA free from antitrust
As college and high schools sports grow and bring in more money, face cases

Ethical Considerations
Decisions that affect diverse groups of people with conflicting interests (e.g., athletes, fans, media, community, businesses)
Sport managers’ decisions about ethical dilemmas tend to fall under greater public scrutiny
Ethical analysis involves a systematic process of reasoning:
Weighing pros/cons of two or more seemingly valid choices that reflect equally cherished values
Ethical Considerations: Codes of Conduct
Need exists for establishing solid ethical climates in corporations.
Code of conduct outlines and explains the principles under which an organization or profession operates.
Codes of conduct should be clear and straightforward and encourage employees to understand the goals they are trying to accomplish
Ethical Considerations: Morality
Some ethical dilemmas are about choosing between right and wrong or two opposing choices.
Social practices depend on people upholding certain baseline values.
Morals seen as coming from higher order or common sense
Many moral values in society are codified in laws, but moral behavior cannot always be legislated and people cannot be forced to act morally.
Ethical Considerations: Morality in the Work World
Moral precepts are universal—applicable to all circumstances.
What is moral depends on the situation.
Commercial moral rules
Rules of the marketplace guide activities such as sales and marketing.
Noncommercial moral rules
Occupations demand loyalty to an oath of office or professional standards to guard against selling out.
Ethical Considerations: Morality and Multiple Roles
Specific jobs in sports do not reside completely in either the commercial or the noncommercial sphere.
Process of making a moral choice, of deciding what is right and wrong, involves understanding the parameters of acceptable behavior in the context of one’s multiple roles in society.
Ethical Considerations: Morality and Corruption
Immoral behavior violates our basic assumptions and corrupts our social institutions.
An immoral decision can lead to systemic corruption that can destroy a sport enterprise.
Corruption usually occurs when people hop from one set of moral precepts to another.
One feature of corruption is that it is systemic.
Ethical Considerations: Moral Reasoning and Work
Contemporary society is characterized by innovation, which continually presents new ethical dilemmas
Periodically need to assess whether our current practices are in keeping with values that underlie a just society
Moral and ethical principles evolve over time
Key Skills: Ensuring Morality in the Workplace
Rules designed to protect integrity of sports operate uncomfortably alongside business structure underwriting sports.
Organizations can help individuals make moral choices by establishing standards, encouraging self-examinations, providing support structures, and enforcing codes.
Key Skills: Self-Examination
An effective tool to remind people of ethical actions and express institutional concern for ethical issues
Ask employees to think about hypothetical ethical dilemmas
Accreditation programs (NCAA)
Key Skills: Forum for Moral Discourse
Communication is critical to decreasing corruption and resolving ethical dilemmas.
Employees should be encouraged to get together to discuss where and how they face specific problems.
The process takes pressure off individuals and clarifies issues at stake.
Key Skills: Consequences
Employees need to know there are consequences for immoral behavior.
If people understand that corruption comes with certain risks, they are less likely to engage in immoral acts.
Discipline must meet two criteria:
It must be (1) meaningful and (2) enforceable.
History: School Sports
Youth athletic participation predates formation of United States and signing of U.S. Constitution. Native American’s played what game?
Formally organized youth educational athletic participation did not emerge until mid-19th century.
Schools and other agencies promoted sport participation to aid in solving broad social problems such as ill health and juvenile delinquency.
Public schools were slow to embrace value of exercise and play, but private schools recognized value much earlier.
Students organized games at college level.
Athletics were incorporated into school curricula (New York, Illinois, Wisconsin).
Boston-area schools formed Interscholastic Football Association in 1888.
Twentieth Century
Progressive Movement
Educators touted athletics as tool to prepare for rigors of modern life and democracy and to assimilate immigrants into American culture
Promoted child welfare by advocating for increased playground space
Promoted formalized public school athletics as an antidote to regimented physical education curricula
Period during and just after World War I
School sports for males were promoted as a source of physical training for armed forces
Sports resulted in a boost in school retention and graduation rates
Athletics became entrenched in schools and educators took control of athletics from students
Dr. Dudley Sargent, James Naismith, and Amos Alonzo Stagg
Significant contributions toward meeting instructional and curricular development needs
YMCA: Most prominent private agency to promote youth athletics (Young Men’s Christian Association)
1930-1950s: YMCA branches were opened in suburban areas that allowed female members
Financial calamities of Great Depression of 1930s launched unprecedented governmental involvement in recreation
Governance: National Federation of State High School Associations
National coordinator for high school sports, plus activities such as music, debate, theater, and student council
Encompasses 50 state high school athletics and activity associations, as well as District of Columbia, Bermuda, Guam, St. Croix, St. Thomas, St. John, and 10 Canadian provinces
Coordinates official certification
Issues playing rules; holds national conferences and competitions; acts as advocate/lobbying agent
National Council
Legislative body
One representative from each association
Board of Directors
12 member panel elected from National Council
Oversees budgets, committees, exec. Director
Administrative Staff
50 people; day to day operations
Governance: State Associations
Replicate NFHSA model
Organize state championships and competitions in athletics and activities
Final authority in determining athlete eligibility
The scope of activities, the size of full-time administrative and support staff, and the number of schools represented vary from state to state
Governance: National Youth League Organizations
Focus administrative efforts on promoting participation in a particular sports among children (e.g., Little League Baseball)
Require strict adherence to administrative guidelines: Standardized field size; use of uniforms and a draft system; promote adult supervision and safe play
Career Opportunities: School Athletic/Youth League Director
Hiring, supervising, and evaluating coaches
Coordinating facets of contest management, including hiring and paying of officials and event staff
Departmental/league training and disciplinary policies
Determining departmental/league budgets
Overseeing all associated fund-raising
Determining and verifying game scheduling and athlete eligibility
Transmitting relevant publicity and handling public relations
Career Opportunities: Coach/Trainer
Face complex human resource issues
Deal with pressure
Long hours with little or no pay
Most must pass certification
Important to avoid litigation
Career Opportunities: Officials/Judges
Employed by schools and leagues but are considered independent contractors because school or league exhibits no supervisory capacity over the official
May require certification from national, state, and local sanctioning organizations
Use of unprofessional personnel (volunteers) can leave a league liable for litigation for the actions of these individuals
Increased pressure to win
Leading to obesity (Brockton football) and more injuries (women’s soccer)
Players want to play and see opportunities to play in college
Up to coaches to provide safe environment
Equipment (using right ones, maintaining)
Actual play (not playing in bad weather, minimizing physical mismatches, etc.)
Evaluating coaches important
Consistent performance reviews
Although school and youth sport organizations are not-for-profit enterprises, this does not mean that associated programs are not concerned with controlling costs and maintaining balanced budgets
Corporations use youth sports to profit
Disney’s Wide World of Sports Complex
Expanding of opportunities draws more students
Bass Fishing
Drug use more prevalent in youth sports
Testing has high costs
Students feel impervious to risk, enjoy challenging authority
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