Unit 2 - How (Sports Management)

Single Purpose Facilities

Facilities designed for a single use

Ex: Augusta National (The Masters)

Multi-Purpose Facilities

Facility designed for more than one use

Ex: US Bank Stadium

Examples of Mega Sports Complexes

• ESPN Wide World of Sports

• Grand Park

Management

To maintain a safe and enjoyable environment, proper management of the facility and events is crucial

Privatization of Facility Management

The act of transferring management oversight from the public sector to a private company or organization

Facility Director

Responsible for creation and proper administration of standard operation procedures

Operations Managers

Coordinate, personnel, procedures, policies and activities in facility

Event Coordinator

Manage individual ‘events’ hosted in the facility

Economics of Sports

Study of how people within the sport industry deal with scarcity

Ex: Price paid by consumers for a pair of shorts in a sporting goods store

Scarcity

The basic economic problem facing all societies. A product is considered scarce if people want more of the product than is freely available for consumption.

Goods

Tangible products

Ex: pair of soccer cleats, tennis racket, mountain bike

Services

Intangible products

Ex: Marketing advice, business consulting, financial planning

Economic Interaction

The exchange of one product of value for another product of value

Markets

Arrangements by which economic exchanges among people or businesses occur

Macroeconomics

The study of problems and workings of the economy as a whole

The “big picture” of economics

Ex: economic growth, recession, the unemployment rate, interest rates

Real Gross Domestic Product (GDP)

The value of all the goods and services newly produced in a country during some period of time, adjusted for inflation.

Busniess cycles

Highs and lows in the level of economic activity over several years.

Expansion

A period of at least 3 consecutive quarters in which positive economic growth occurs

Recession

A decline in economic activity, or real GDP, that lasts for at least six months

Interest Rate

The amount that a financial institution charges when it lends money, stated as a percentage of the amount borrowed.

Inflation Rate

The inflation increase in the overall price level of goods and services over a given period, usually a year.

• General tend of prices

• Greatly impacts sport organizations

Microeconomics

The study of the behavior of individual businesses and households

• Price

• Revenue

• Costs

• Profits

What are some Microeconomic Variables?

Demand

Relationship between the price of a product and the amount of the product that consumers are willing to buy

• Downward sloping graph

Law of Demand

Consumers will demand less of a product as its price increases and more of a product as its price falls/decreases

Supply

The relationship between the price of a product and the amount of the product that suppliers are willing to produce and sell

• Upward sloping graph

Law of Supply

Suppliers will increase production as the price of the product increases and decrease production as the price falls

Perfectly Competitive

Market that has a large number of suppliers and consumers; all suppliers produce and identical product, all parties have the same information, and suppliers can easily enter and exit the market

Monopolistically Competitive

A market that has a large number of suppliers and consumers; all parties have the same information, suppliers can easily enter and exit the market, and suppliers can differentiate their products.

Oligopolistic

Market that has a small number of suppliers and a large of consumers

Ex: Sports drink industry

Monopoly

Market in which only one company sells the product

Ex: NCAA Men’s Basketball Tournament

Profit Organization

Produce a profit

Ex: Nike, Wilson, Top Golf, etc.

Nonprofit

To encourage sport participation among those who would not be served adequately by for-profit organizations

• Can be profitable, laws govern use of profit

  • Ex: College, high school, youth, NCAA sports, and YMCA’s

Assets

Financial resources of the company

Liabilites

Money, goods, or services owed to others

Owner’s Equity

Retained earnings and paid in Capital

Liabilities + Owner’s Equity

Assets = ____ + _______ ?

Revenues

In flow of value to the business

Expenses

The cost required for something

Consumer Behavior

The processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas or experiences to satisfy needs and desires

Market Segment

A portion of the population that is distinctive in terms of its needs, characteristics or behavior

Target Market

A market segment or segments identified as the focus of an organization’s marketing efforts

Demographic Segmentation

Dividing the market into groups based on demographic variables such as age, sex, family size, income, occupation, education, religion, and ethnicity

Participant Motivations

Identify the meaning behind each theory of motivation