managing big league sports

MANAGING BIG LEAGUE SPORTS

3.1

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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.

• Describe unique facets of professional sport• Governance• Labor Management

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GOALS

• Significance of TV to professional sports• Major revenue sources for professional

sports

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A CONTRACT What exactly is a contract?

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WHAT IS A CONTRACT? Any agreement enforceable by law. Or A legally binding agreement

ELEMENTS OF A CONTRACT1. Offer 2. Acceptance3. Genuine Agreement4. Consideration5. Capacity6. Legality

OFFER A proposal made by one party (offerer) to

another (offeree) Indicating a willingness to enter into a contract

ACCEPTANCE Agreement of offeree to be bound by the

terms of the offer

GENUINE AGREEMENT Offer and acceptance go together

Create Genuine agreement A meeting of the minds Agreement can be destroyed by

Fraud Misrepresentation Mistake Duress Undue influence

Almost always requires signatures Can be a handshake

CONSIDERATION The thing of value promised in exchange for

something else Mutual exchange

CAPACITY Presumes people entering a contract can do

so Minors are generally excused Mentally incompetent are excused Drunk and drug inhibited are excused

LEGALITY No contract can contain something that is

illegal Crime Tort

ELEMENTS OF A CONTRACT1. Offer 2. Acceptance3. Genuine Agreement4. Consideration5. Capacity6. Legality

SCHEDULED QUIZ Paper Left side # 1 to 10

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CHARACTERISTICS OF A CONTRACT Valid, void, voidable, unenforceable Bilateral or unilateral Express or implied Oral or written

Yes a verbal agreement can be a contract Reference Flyers and Eric Lindros

Go to: Sport Agent International

sample contract between Agent and Athlete

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NEGOTIATE A CONTRACT

Research What are ten items an agent would

include in a contract with an athlete? Briefly explain EACH or give

contract language as to what it means to the person you represent

Go to: Sport Agent International – sample contract Example: What the sport agent is in

charge of Managing schedule, partners ---

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AGENT FEES It is important to understand the maximum

commission available on player contracts. These cap on Agent fees are only regarding team contracts, and Sports Agents may charge a different fee for marketing endorsements (usually 15%-25% as a rule).

Here are the current fee regulations:

MLB – no capNFL – 3%NHL – no capNBA – 4%

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It is rare to see a Sports Agent get the maximum percentage in an NBA contract.

Recently, there was a push by NFL players to lower the maximum percentage that an Agent may receive in an NFL team contract to 2%. It did not pass, however, the ceiling remains at

3%.

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RUNNERS Help secure clients Most agents have runners or “street

agents” Runners can funnel money to

family, friends, and Coaches roommates

Usually illegal

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RUNNERS They attempt to win over players with

Flattery Cash Gifts

Players are expected to show “gratitude” May face threats if not shown

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AGENT GUIDELINES The NCAA does not prohibit agents to

make contact with players. Some universities do not allow agents on

campus Some states have regulatory laws on when

student athletes can be contacted Often, agents must pay a fee to register

Contact the administration of college

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QUICK REVIEW Which one of the following is Not an

element of a contract? A. Offer and acceptance B. Capacity and consolation C. Genuine Agreement and Legality D. All of these are elements of a contract

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QUICK REVIEW - ANSWER Which one of the following is Not an

element of a contract? B. Capacity and consolation

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QUICK REVIEW A $500,000 player contract who pays his

agent 3% is paying A. $1,500 B $15,000 C $150,000 D None of these

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QUICK REVIEW – CORRECT ANSWER A $500,000 player contract who pays his

agent 3% is paying

B $15,000

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QUICK REVIEW A contract that contains a clause relating

to a player having to pass a physical in order to play and be paid is

A. Voidable B. Valid C. Unenforceable D. Void

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QUICK REVIEW ANSWER A contract that contains a clause relating

to a player having to pass a physical in order to play and be paid is

A. Voidable

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GOOD VERSES EVIL Some agents have given profession a bad

reputation Mismanagement of finances #1 problem Excessive fees Conflicts of interest

Often the hardest working agents represent free agents

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BOTTOM LINE FOR AGENTS It is a highly competitive environment Only a few agents gain major benefits and

major money

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To get a full understanding of what an agency can do, summarize the company known as (International Management Group)

1. Who are they?2. What do they do?3. What services do they offer?4. What one service do you find interesting?5. What is it and why do you find it

interesting?6. Who are some of the biggest names they

have as speakers?

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ANSWER #1 problem with agents and their

reputation A. Excessive fees B. Conflict of Interest C. Have runners do the “dirty work” D. Mismanage players finances

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CORRECT ANSWER #1 problem with agents and their

reputation

D. Mismanage players finances

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Owners and General Manager

Chapter 3.3

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Goals Be able to define the roles of team owners

and general managers in a sports franchise

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RESEARCH What are 3 (for each) key roles and

responsibilities for Owners of a sports franchise?

Of a General manager

Bullets with a brief explanation

Hand in for up to 6 points credit

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Roles of Owners Professional sports franchises commonly

have an owner or ownership group of certain individuals.

Owners play an important part in the community and also have a political influence

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How to become an owner Need to have a large amount of money

MINIMUM entry into this elite club is $250,000,000 Owning a team is an investment for individuals

and owners must show a love for the sport. Most owners have a childhood attachment to

teams

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Responsibilities Owners need to see the big picture Need to make the team as exciting as

possible for the fans. Provide financial management and

organizational management for employees. Provide faculties

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The General Manager The General Manager puts the team together. Many owners are also the general managers General manager primarily functions

Hiring players Negotiation of contracts and trading of players

no longer desired on the team for those they think will help the team out the most

Coaches used to be general mangers

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Evolution of the GM The position of general manager used to be

occupied by the coach of the team, Once the business aspect of professional sports became more important, the general manager position had to be appointed to someone other than the coach, someone more business oriented.

Work in the draft

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Owner vs. GM The gm is an employee of the owner Owner is business side/GM is sports

(business minded) Everything player oriented is the GM GMs interact with other teams

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BEST GM OVER THE PAST DECADE Baseball-Best GM: Theo Epstein, Red Sox NBA-Best GM: Gregg Popovich/R.C.

Buford, Spurs NFL- Best GM: Bill Polian, Colts NHL- Best GM: Ken Holland, Red Wings

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SUMMARY OF 3.3 Agents Contracts Management of a Sports

Organization

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