SPORTS AND ENTERTAINMENT MANAGEMENT © SOUTH-WESTERN/THOMSON CHAPTER 3SLIDE 1 CHAPTER 3 CHAPTER 3 Professional Sports Managing Big League Sports Organizing a Professional Team Agents, Managers, and Ethics

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 2 LESSON 3.1 LESSON 3.1 MANAGING BIG LEAGUE SPORTS GOALS Explain the importance of management for success in big league sports. Describe ways professional sports teams generate money. Discuss how opportunities have expanded for women in professional sports.

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 3 MANAGING BIG MONEY Strategic planning looks at the long-term big picture for the entire business First step is external analysis Occurs when managers study factors outside the organization that can affect operations such as customers, competitors, the economy, and government. Second step is internal analysis Managers look at internal factors such as operations, finances, personnel, and other resources Mission – the most important purposes or directions, for the organization Operational planning includes short-term activities for each part of the business. (Ex: find a new sponsor)

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 4 MANAGING BIG MONEY Organizing resources Implementing the game plan Short-term goals are usually accomplished in less than a year. (Ex: more police to direct traffic) Long-term goals take more than one year to complete. (Ex: build a new arena)

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 5 MANAGING BIG MONEY Controlling professional sports The first step of the controlling function involves establishing standards for each of the organization’s goals. (Ex: attendance, safety) Quantity standards measure the amount of sales and sponsorship goals Quantity standards also involve ticket sales Quality standards measure how well a task has been completed

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 6 MANAGING BIG MONEY Time standards are directly related to quantity and quality standards. Every organization wants to be as efficient as possible Cost standards are an important measure of financial success

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 7 STAYING IN THE GAME FINANCIALLY Sports equipment Liability insurance Manufacturers of sporting goods such as bats and football helmets must have liability insurance to cover possible damages from a lawsuit due to player injuries. Major League Baseball’s new regulations require a manufacturers to purchase $10 million of liability insurance coverage.

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 8 MULTISPORT MECCAS Taxes fund new sports facilities “Build it or they will leave” Yankee Stadium, Cowboys StadiumYankee Stadium Cowboys Stadium Corporate sponsors Naming rights Entertainment centers Fans can enjoy a nice meal, shop for souvenirs in upscale stores, entertain children with merry-go- round or swimming pool, and watch the event.

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 9 WOMEN’S PROFESSIONAL SPORTS Title IX Women’s sports expanded rapidly after 1972 law was passed. Role models Many professional women’s football players come from strong soccer or rugby backgrounds. WNBA, WPFL, LPGA

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 10 LESSON3.2 LESSON 3.2 ORGANIZING A PROFESSIONAL TEAM GOALS Describe the purpose and structure of an organizational chart. Explain how organizations measure the success of the business plan.

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 11 THE ORGANIZING FUNCTION Arranging resources Developing relationships

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 12 ORGANIZATIONAL CHARTS Charts illustrate: Structure Job classifications Chain of command

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 13 Sample of organizational chart

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 14 JOB DESCRIPTIONS Skills required Basic function Duties and responsibilities (ex: travel, work environment, repetitive motions) Measurements of success that describe how the employee will be evaluated.

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 15 MEASURING THE SUCCESS OF THE BUSINESS PLAN Mission – the general statement of the organization’s purpose Objectives – specific company priorities Goals – tangible, measurable outcomes Strategies – specific initiatives to deliver goals and objectives Measures – standards to evaluate the success of each strategy

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 16 BUSINESS PLAN—4 S’s Selective – important choices define the type of business and customer Sufficient – the organization will achieve its goals by executing its strategies. It must determine if goals that are reached will result in achieving objectives. Synchronized – all pieces work together collectively in a smooth, effective, and efficient manner Total productivity should be greater than the sum of individual efforts = synergy (collective results of employees) Sustainable – looks at “competitive advantage” that can be used as leverage. Leverage is the advantage over customers.

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 17 LESSON3.3 LESSON 3.3 AGENTS, MANAGERS, AND ETHICS GOALS Identify the characteristics of successful sports agents. Explain the standard fee structures of sports agents and describe how agents recruit clients. Discuss the roles of team owners and general managers.

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 18 TALK TO MY AGENT Agents Athletes hire agents as legal representatives who negotiate new contracts and endorsement agreements. A large percentage of agents are attorneys who are well-versed in contract law.

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 19 TALK TO MY AGENT Agents and leadership Leadership is the ability to influence individuals and organizations to cooperatively achieve goals that benefit both parties. Agents must have strong human relations skills to work well with people. Leadership characteristics Position power comes from the position the agent holds in the organization. Agents who have earned respect will be more likely to gain the attention of athletes, sport franchises, and corporations. Reward power is based on the ability to control rewards and punishments.

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 20 TALK TO MY AGENT Characteristics of successful agents Agents who are leaders in the field show initiative. They have ambition and persistence in reaching goals. Agents understand the importance of negotiation and cooperation. This quality requires good communication and listening skills. Leaders are honest and have high standards of personal integrity. Ethics involves doing the right thing even when it is more tempting or profitable to do otherwise.

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 21 FEES AND COMPETITION What do agents charge? The standard fee for agents representing NBA players is two to four percent of the negotiated contracts. The competition heats up Competition among agents is fierce. Until you negotiate a contract for your first client, you are frozen out while other agents with clients continue to score.

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 22 FEES AND COMPETITION Taking it to the streets One popular recruitment technique used by sports agents is to hire street agents or runners to secure clients. The street agent pays a fee to the athlete’s coach or someone with influence over the athlete. (see Myron Piggie story) The runner funnels money and gifts from the agent to the athlete to establish an indirect relationship between the athlete and agent. The NCAA does not prohibit an agent from having contact with an athlete. Most colleges require agents to register, pay a fee, and contact school administration. Good versus evil (agent reputation)

© SOUTH-WESTERN/THOMSON SPORTS AND ENTERTAINMENT MANAGEMENT CHAPTER 3SLIDE 23 OWNERS AND GENERAL MANAGERS Owner Money Visibility Political influence General manager Attract player Put together coaching staff Manage budget Negotiate