Sports & Entertainment Management Chpt. 3 - Managing Big League Sports

Managing Big Money Professional athlete: an athlete who has the will and ability to earn an income from a particular sport. Big League Sports: the “big” refers to revenue potential and the skill level of the actual physical competition It takes large sums of money to successfully operate professional sports teams. Sound financial management is necessary to build the latest state of the art stadiums and arenas and to pay player salaries that are well into the millions

Multi-million dollar contracts equal huge ticket sales, merchandise sales. Winning teams equal strong ticket sales with high ticket prices and sold out games   The Big 4 sports are: Major League Baseball (MLB) National Basketball Association (NBA) National Football League (NFL) National Hockey League (NHL)

Player Average Salaries Top Athlete Salaries Sports League Athlete Salary Agent Salary MLB $20,000,000 $600,000 NBA $25,000,000 $750,000 NFL $18,000,000 $540,000 NHL $10,000,000 $300,000 Player Average Salaries Sports League Athlete Salary Agent Salary MLB $2,800,000 $84,000 NBA $4,200,000 $126,000 NFL $1,700,000 $51,000 NHL $1,800,000 $54,000

The Organizing Function Organizing determines how plans can be accomplished most effectively. Organizing is all about arranging resources and developing relationships. Organizational Charts Organizational Charts: illustrations that show the structure of an organization, the major job classifications, and the chain of command. Organizational charts clearly show each employee’s department and supervisor and identify lines of authority and formal communication.

Job descriptions: define requirements for each position in an organization. Job descriptions include skills required for the position and the basic function. Detailed job descriptions can list as many as 20 duties and responsibilities.

Duties can include: Travel requirements Physical demands Audiovisual demands Specific actions Work environment Job requirements   Good job descriptions include measurements of success that describe how the employee will be evaluated.

Managers of Professional Sports Coach: responsible for planning and implementing training & recruiting. League Commissioner: oversee all operations of the league. Owners: oversee all operations of the team. Attract and keep a sports franchise in a city. General Manager: attract best professional players to a team, organize and motivate coaching staff, manage large budgets. Agent: legal representatives who negotiate new contracts, endorsement deals, and public relations matters. Some may handle finances from filing taxes and making investments.

Characteristics of a Successful Agent   Agents are objectives leaders who understand legal terms, honest, ethical negotiators, good communicators, patience, enthusiasm, understanding of sports. Fees and Competition Commission: percent the agent receives for negotiating the contract. Agents receives 4% -10% (varies) of negotiated contracts

Unethical Behaviors Ethics: deciding what is right and wrong in a reasoned and impartial manner. Unethical Behaviors could include funneling money and gifts to prospects, representing too many athletes at one time, putting pressure on student athletes, using poor ethical judgment to make large sums of money.

Functions of Management Examples for Professional Sports Planning what needs to be done to host a Super Bowl game or determine best TV schedule   Organizing Hiring the best coaching staff Implementing Building a new arena Evaluating/Controlling Selling all tickets 2 weeks before the event

Benefits: Prestige, Power and Profitability There are many benefits of owning/managing a professional sports team. A. Perks: a payoff or a profit received in addition to salary B. Political Clout Franchise owners who bring millions of dollars in business activities often find themselves with political clout. New local jobs and businesses New image for the city Motivation for people to stay in city Build a new stadium

C. Professional Teams and the Community Brings enthusiasm, heightened emotion, and morale to a city Brings jobs People identify with teams Offers entertainment for the family  D. Distributing the Game   1. Cartel: a group of independent businesses (sport teams) governed by the league to control the production, pricing, and marketing of a team. 2. The League a. Decides location of the team b. Decides number of teams that can operate in the league

Financing Professional Sports   Selling the naming rights to their stadiums Build multi-functional stadiums that offer luxury suites and restaurants. Use of TV ads to pay the cost of broadcasting the game.