Sport Event Management Final

2023 spring

What is a budget?

An itemized estimate of expected income and expenses

What is the purpose of a budget?

* Provide a financial roadmap to help an organization reach its monetary goals
* Communicate financial limitations of an organization
* Constructing a budget of anticipated expenditures is the only way to determine if your event will make money, break even, or lose money

Budgets help event managers do what?

* maximize revenue streams
* Reduce waste by over spending
* Make good decisions

What are the 3 primary elements in a budget?

* Revenue
* Expenses
* net income or loss

What is revenue?

The money coming into an event or organization in exchange for goods or services

Definition of expenses

The money flowing out of an organization and are the costs associated with generating the revenue or hosting the event

What is net income or loss?

* The difference between revenue and expenses

Types of revenues

* Tickets, registrations, memberships
* Sponsorships
* Merchandising and licensing
* Food and beverage sales
* Souvenir program sales
* Corporate hospitality
* Media rights

Types of expenses

* Entertainment
* Human Resources
* Concessions
* Administrative expenses
* Equipment and supplies
* Licenses, permits, and tax
* Marketing promotions
* Event signage
* Sponsor expenses
* General liability, weather, and alcohol liability insurance

What are fixed expenses?

Expenses that are paid regardless of attendance and often do not change even if revenues fall short of projections

Examples of fixed expenses

* Promotional materials
* Guaranteed entertainment fees
* Facility rental

What are variable expenses?

Expenses that increase or decrease depending on attendance or other factors

Examples of variable expenses

Food and beverage costs

The budgeting process:

1. Gather information
2. Forecast sales
3. Project profit and losses
4. Compare industry norms
5. Determine capital needs

Why is it important to start the budgeting process by gathering information?

It helps to make more informed estimates and projections during the budget construction

Internal information that needs to be gathered for the budgeting process:

* Organizational financial statements
* Marketing information
* Research and development

External information that needs to be gathered for the budgeting process:

* Trade publications
* Industry benchmarks
* Economic indicators

Ways to forecast sales in the budget process

* Use past performances and historical sales information
* Investigate current sales trends and seasonal patterns
* Look at new opportunities (customers, products, and distribution channels)
* Look at potential threats (price wars, government regulations, challenging economic conditions)
* Scenario analysis (worst case, best case, and most likely case)

When projecting profits and losses for a budget, what is the main goal of event organizers?

To produce the “biggest bang for their buck”

Ways to compare industry norms for the budget process:

* Examine industry data
* Comparing your projections with those in the market will help you to determine your position in the market
* Differences from industry norms are not always negative

What actions should be taken when determining capital needs for the budget process?

* Assess whether event managers can meet their projections with their existing assets
* Do you need more inventory or additional investment in your event?

Capital financing options when determining capital needs for the budget process:

* Bonds
* Private funding/donations
* Sponsorships (financial or in-kind)
* Sport commissions and foundations

What are bonds?

financial instruments that require repayment of the principle + interest

What are the 2 types of bonds and how are they paid?

1. General obligation bond (paid via new and existing tax revenues)
2. Revenue bond (paid via revenue sources generated by the event)

What is a preliminary budget?

A budget that is constructed during the early phases of event conceptualization (work in progress)

What is a working budget?

* Once the numbers are the most informed and accurate as possible, the preliminary budget transforms into the working budget
* Actual revenues and expenses are included once they are known

The budget can be broken down into what 3 subdivisions?

1. Operating budget
2. Capital budget
3. Cash flow budget

What is an operating budget?

The financial plan for one fiscal year (or the duration of the event)

What is a capital budget?

Equipment with a unit cost of $1000 or more and has a useful life of at least 2 years

What is a cash flow budget?

Anticipates costs that will be paid prior to the implementation of events

Examples of costs on a cash flow budget:

* Deposits on rentals
* Printing and promotional material
* Start-up change for concessions

What is a contingency?

* Funds reserved for emergencies or costs overruns on your budget
* 5-10% of your overall budget

The Bruntland Commission report for the World Commission on Environment and Development defined sustainability broadly as:

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs

Principles of sustainability refer to what?

The environmental, economic, and sociocultural aspects of event development, and a suitable balance must be established between these 3 dimensions to guarantee an event’s long-term sustainability and legacy

What are the 3 foundational principles of sustainability in relation to the sport and event management context?

1. Social
2. Environmental
3. Economic

Why is sustainability important?

* Everything that we need for our survival and well-being depends either directly or indirectly on our natural environment
* Sustainability creates and maintains the conditions under which humans and nature can exist in productive harmony, that permit fulfilling the social, economic, and other requirements of present and future generations

Benefits of sustainability

* Conserving natural resources which helps preserve biodiversity
* Protecting and improving air and water quality
* Reducing waste streams
* Social and environmental responsibility
* Reducing operating costs
* Decreasing waste and disposal costs
* Creating and expanding markets for green products and services
* Improving employee safety using greener products

What has created a sustainability strategy that focuses on what?

3 spheres of responsibility

* IOC as an organization
* IOC as an owner of the Olympic Games
* IOC as an owner of the Olympic Movement

The IOC has made sustainability what alongside credibility and youth?

One of the 3 pillars of Agenda 2020

What were the focuses of the IOC sustainability strategy they developed for the 2020 Olympics?

* Infrastructure and natural sites
* Sourcing and resource management
* Mobility
* Workforce
* Climate

What is the Paris Agreement?

* Partnership between UN and IOC
* Brings all nations into a common cause to undertake ambitious efforts to combat climate change and adapt to its effects, with enhanced support to assist developing countries to do so

What are the 2 main goals of the Paris Agreement?

1. Achieving a clear trajectory for the global sports community to combat climate change, through commitments and partnerships according to verified standards, including measuring, reducing, and reporting greenhouse gas emissions etc.
2. Using sports as a unifying tool to federate and create solidarity among global citizens for climate action

5 main principles behind Paris Agreement:

1. Promote greater environmental responsibility
2. Reduce overall climate impact
3. Educate for climate action
4. Promote sustainable and responsible consumption
5. Advocate for climate change through communication

What is the International Standards Organization (ISO)?

* An international, independent, and non-governmental organization that develops voluntary, consensus-based, market relevant international standards that support innovation and provide solutions to global challenges
* Offer guidance and best practice to help you manage your event and control its social, economic, and environmental impact

What was the first event to receive ISO standards?

London 2012

What is ISO 20121:2012?

Specifies requirements for an event sustainability management system for any type of event or event-related activity, and provides guidance on conforming to those requirements

ISO 20121:2012 is applicable to any organization that wishes to:

* Establish, implement, maintain, and improve an event sustainability management system
* Insure that it is in conformity with its stated sustainable development policy
* Demonstrate voluntary conformity with ISO 20121:2012 by first, second, and third parties

What is Green Sports Alliance (GSA)?

* Founded in 2011
* An environmentally focused trade organization that convenes stakeholders from around the sporting world (teams, leagues, conferences, venues, corporate partners, governmental agencies, athletes and fans) to promote healthy, sustainable communities where we live and play

What is Green Sports Alliance (GSA) committed to?

Creating awareness and dedicated to creating meaningful change towards a more sustainable future

What does Green Sports Alliance (GSA) do?

* Share resources and experience
* Mobilize sport organizations, communities, athletes, and fans to create sustainable progress and behavior change

What are some of Green Sports Alliance’s (GSA) program focuses?

* Energy
* Food
* Procurement
* Transportation
* Venue
* Waste
* Water

What was one of the first league to adopt green initiatives back in the 1990’s?

NFL

Who did the NFL join with in 2018 in an effort to focus on becoming more sustainable?

Green Sports Alliance (GSA)

What was one action the NFL and GSA have made in their partnership with the goal of becoming more sustainable?

Rush2Recycle at Super Bowl LII where the goal was to recover 90% of the waste created from the event

What league has the most LEED certified sport venues in the US?

NBA

Under the broader CSR programming umbrella of NBA Cares the organization also runs what?

NBA Green

T/F: the NBA is partnered with Green Sports Alliance?

True

When did the NHL hold their first green initiative and what was it?

Green Month (March 2018)

What is the main purpose of NHL Green?

To ensure the sport of hockey thrives for future generations

What are some of NHL Green’s 5 year goals?

* Continue to measure, reduce, and offset greenhouse gas emissions
* Implement LED sports game lighting at NHL arenas
* Increase waste diversion efforts across the NHL to 50% landfill avoidance
* Champion viable water innovations that reduce water usage at NHL arenas

What is the most progressive, responsible, and sustainable arena in the world and where is it located?

Climate Pledge Arena in Seattle, Washington

Who owns the naming rights to Climate Pledge Arena?

Amazon

What teams play in Climate Pledge Arena?

* Kraken (NHL)
* Storm (WNBA)
* Redhawks (NCAA)

What is the certification trend?

Many facility owners hope to receive some type of certification as a way to proclaim to the world that their facility is better than the rest

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What is the certification trend classified based on?

* Complexity
* Thoroughness
* Green standard
* Cost to build the facility

Why is the certification trend a thing?

* Certification provides a seal of approval from an independent organization
* More cost effective
* Better for the environment

What are some reasons risk management is becoming increasingly important?

* Increased national media attention
* Insurance costs
* Threats such as terrorist attacks
* Prior events (9/11, COVID, Ebola)
* Growth of new and renovated sport facilities
* Creation of new and more diverse events

Historically risk and risk assessment have been linked to what?

* Gambling (17th century)
* Maritime insurance business (18th century)
* Economics (19th and 20th century)

It was not until the 20th century that risk was linked to:

The notion of avoiding genuine or perceived hazards

What is risk?

Element of danger, the probability a hazard will lead to loss

* Sudden, unusual, or unforeseen
* Subjective

What is the goal of risk management?

Identify risks and develop strategies to reduce or mitigate them

What are the sport event risk classifications?

* Low Risk- indoors, previous experience (ex: weekly indoor intramural soccer game)
* Medium Risk- indoors/outdoors, less frequent (ex: annual or semi-annual), more participants and staff
* High Risk- even more staff or participants, one-off, less experience

What are the 4 parts in the risk management process?

1. Identification
2. Assessment
3. Response
4. Documentation of Risk

What is identification in the risk management process?

Evaluation of the environment, structures, and marketplace to determine the sources of risk associated with the sport facility or event

What is assessment in the risk management process?

Categorizing the levels of risk

* How likely is it to occur?
* What are the consequences associated with the risk?

What is response in the risk management process?

Deciding how to handle the potential risk

* minimizing the impact/occurrence of the risk

What is documentation of risk in the risk management process?

Continuous assessment of the risk associated with the event or facilities

* Documenting occurrences and updating risk management plan as necessary
* Gather information from associated stakeholders
* Development of SOPs

What are Standard Operating Procedures (SOPs)?

* Guiding principles for sport events that outline the processes to be followed for each potential risk
* Consistency and uniformity to the job

What are some benefits of good risk management at events?

* Less likelihood of undesirable and costly impacts
* More safety of patrons
* Less financial issues generally (lawsuits and less insurance premiums)
* Better overall quality of the sporting experience
* Better image of the event/organization
* Greater levels of confidence in employees/volunteers abilities

Who is Billy Payne and what did he do?

* CEO of the ACOG
* Played football at UGA
* Quit his job as a prominent lawyer in Atlanta to help bid for the 1996 Olympic Games
* Put together a team of local businessmen and women with mission of successfully bidding to host the games

Who were the final bidders for the 1996 Olympics?

* Atlanta
* Athens (Greece)
* Toronto
* Melbourne
* Manchester

Where and when was Atlanta announced as the winner of the 1996 Olympics

Tokyo on September 18, 1990

What was the cost of Atlanta’s bid to host the 1996 Olympics?

Roughly $7m

Who was the favorite to win the 1996 Olympics?

Athens (Greece) because of historical ties

How did ACOG and Atlanta win the bid for the 1996 Olympics?

* Excellent facilities
* Secure environment
* Large TV revenues

Some facts about the Opening ceremony for 1996 Olympics:

* July 19, 1996
* 5 hours long
* Hosted in newly constructed stadium (Turner Field)
* Attendance: 85,000
* Olympic cauldron was lit by Muhammad Ali

What was one thing that happened for the first time in history at the 1996 Olympics?

All 197 recognized National Olympic Committees were represented

What were some details of the 1996 Olympic Games emblem?

* Base of the logo represented the 5 Olympic rings and the number 100. Also resembles a classical Greek column and recognizes the centennial of the Olympics
* Flames gradually evolve into a perfect star symbolizing each athlete’s pursuit of excellence
* Gold in the logo represent gold medals, green represents laurel branches worn by winners in ancient times and Atlanta’s reputation as the City of Trees

What were some details of the 1996 Olympic Games mascot?

* Was originally called Whatizit but the name Izzy was chosen voted on by American children

What was on the front of the 1996 Olympic medals?

* Traditional goddess of victory
* Holding palm in left hand and victory crown in right
* Design used in 1928 Amsterdam Olympics

What was on the back of 1996 Olympic medals?

Official emblem for the games and “Quilt of Leaves” design

First time sports at the 1996 Olympics:

* Beach volleyball
* Mountain biking
* Lightweight rowing
* Softball
* Women’s soccer

Top 3 medal count at 1996 Olympics:

* USA- 101 (44 gold)
* Russia- 63
* Germany- 65

What venues were used in Atlanta and what sports were held in them for 1996 Olympics?

* Olympic Stadium- ceremonies and athletics (built for games)
* Georgia Tech Aquatic Center- swimming, diving, synchronized swimming, water polo
* Georgia Dome- basketball, gymnastics, handball
* Georgia World Congress Center- Fencing, handball, Judo, Table Tennis, Weightlifting, wrestling
* Atlanta Beach- Beach Volleyball
* Stone Mountain- archery, cycling, tennis
* Lake Lanier- canoeing and rowing

What venues were used outside of Atlanta for 1996 Olympics?

* Athens- Sanford Stadium and Stegeman Coliseum
* Columbus
* Conyers
* Savannah
* Ducktown, TN

Who became the official Olympic sponsor and how much did they pay?

Coca-Cola paid $40m

What is ambush marketing?

A strategy where non-official brands infiltrate and attempt to market themselves

Who was initially a primary suspect for the Centennial Olympic Park Bombing?

Richard Jewel

* Security guard who discovered the bomb while clearing spectators out of the park

Who was identified as the prime suspect by the FBI for the Centennial Olympic Park Bombing?

Eric Rudolph

Positive legacies of the 1996 Olympics:

Venues

* Olympic Stadium
* Olympic Village
* Centennial Olympic Park