Sports and Entertainment Management

Managing Local EventsEconomic EnvironmentsUtilityFactors of ProductionEconomic SystemsManaging College EventsCollege Bowl ProjectProfessional Events

Financial Plan Marketing Plan Budget Economics Supply Demand Utility Form Utility Possession Utility Time Utility Place Utility

Factors of production

Economic system Scarcity Unity of command Span of control Proforma Brand Marketing upselling

Goals Describe three types of plans necessary

for organizing entertainment events. Explain the importance of budgets as

related to entertainment management. Describe the management necessary for

major events.

By failing to plan, you are planning to fail.▪ Benjamin Franklin

What does this mean in life? What does this mean in business?

“Americans spend more time planning their vacations then they do their careers and retirement”

“Americans spend more time planning their vacations then they do their careers and retirement”

What are the consequences of failing to plan for Your career? Your retirement?

Career One you hate Low pay Not skilled enough Limited advancement opportunities Frustration

Retirement#1 concern of retired people is ----

Running out of moneyConsequences of little/no retirement

planning? Running out of money Not having enough to do what you want Live with children Poor post retirement care

Much the same as life consequences Limited money Run out of money Can not do what is wanted/needed for

business Unhappy employees (Think Hostess)

The process of Setting goals Developing strategies And outlining tasks and schedules ▪ to accomplish the goals.

Any event needs cash and cash flow during the event.

Run out of cash and event is in trouble

Cash flow

Must plan and manage cash and cash flow

A measure of a company's financial health

Equals cash receipts minus cash payments over a given period of time

Sounds simple, right?

•Over $213 BILLION In Revenue.•This make the Sports Industry 2X the size of the Automotive Industry.•Sources of Revenue: 2. Advertising - $27.43 billion 4. Operating Expenses: 14. Endorsements - $897 million (Not travel) 1. Sporting goods - $35.62 billion $22.98 billion. 12. Facility construction - $2.48 billion 15, Internet - $239.1 million 2002 –Sale of Athletic and 9. Licensed goods - $10.50 billion Sports clothing: 10. Media broadcast rights - $6.99 billion $10 billion 7. Professional services - $15.25 billion 3. Spectator spending - $26.17 billion 11. Sponsorships - $6.4 billion 8. Medical spending - $12.6 billion 6. Travel - $16.06 billion 13. Multimedia - $2.12 billion 5. Gambling - $18.90 billion

Business Plan Document of a set of business goals Reasons they are believed To be attainable Plan for reaching those goals

Financial Plan Projected income, expenses, and profits

from event Marketing Plan

Detailed description of all promotional activities

What exactly does a business plan contain? Research▪ Very good site is the SBA

Briefly (handed in for credit) 1.List the elements or components of a

business plan2.Give a short description of each

Goals of a company and how they will be achieved Attain financing or funding▪ Includes business loans

Strategy on paper▪ Mistakes can be found here in thinking▪ Less costly here

Road map for the business

Executive Summary Summary of your plan as a whole Actually written last ▪ after other components completed

Company Description What does the company do? What is different from other companies?

Market Analysis Research business/industry the company

operates within

Organization and Management How is the business structured?

Service or product offered What do you sell or have to sell? Benefit to customers?

Marketing and Sales How do you plan to market your

business? What is your strategy?

Financing/Funding Where will you get funding for your

business?

Financial Projections Revenue Vs. Expenses What will be your return on investment?

A written plan that Describes the event Events goals and objectives How goals and objectives will be

achieved▪ Includes details for items as▪ Jobs and job descriptions▪ Legal issues▪ Acquiring financing if necessary

Managing Yourself Hard to manage a business if you can

not manage yourself.

What is your business plan for you?▪ Career?▪ Retirement?▪ Think about things you want to do in life and

retirement

See Rubric Contains eight elements covered for a

business plan It is on you as a company and a product Think about managing your future

Where do you see yourself? What is your product? (you) What is or will be your value to someone? Financing for college? How? How much?

Setting a budget Estimates expenses and sales Shows number of people to be hired Consider the following▪ Previous attendance▪ Competition▪ Economic trends▪ Amount of promotion

Remember the Functions of Management

Planning is the process of setting Goals (short and long term) Developing strategies Outlining tasks And schedules ▪ to accomplish goals.

Create a PERSONAL BUSINESS PLANPlan your next five years using below

as your guideThe process of setting

Goals (short and long term) Developing strategies Outlining tasks And schedules ▪ to accomplish goals.

Any event needs cash and cash flow during the event.

Run out of cash and event is in trouble

Cash flow

Must plan and manage cash and cash flow

•Over $213 BILLION In Revenue.•This make the Sports Industry 2X the size of the Automotive Industry.•Sources of Revenue: 2. Advertising - $27.43 billion 4. Operating Expenses: 14. Endorsements - $897 million (Not travel) 1. Sporting goods - $35.62 billion $22.98 billion. 12. Facility construction - $2.48 billion 15, Internet - $239.1 million 2002 –Sale of Athletic and 9. Licensed goods - $10.50 billion Sports clothing: 10. Media broadcast rights - $6.99 billion $10 billion 7. Professional services - $15.25 billion 3. Spectator spending - $26.17 billion 11. Sponsorships - $6.4 billion 8. Medical spending - $12.6 billion 6. Travel - $16.06 billion 13. Multimedia - $2.12 billion 5. Gambling - $18.90 billion

Money must be managed

No single, universally agreed upon definition

Generally refers to two primary activities of an organization: How an organization generates the

funds that flow into that organization How these funds are allocated and

spent once they are in the organization

Profits/Income Difference between financial inflows

(Revenues) and outflows (Expenses) Assets: Anything an organization owns that

can be used to generate future revenues Teams can fund or “finance” assets in many

ways: Owners’ Equity: The amount of their own

money owners have invested in the firm Debt: Amount of money an organization

borrows College sports are nonprofit. Use budgetary

transfers from the university and other innovative methods

Many financial decisions ultimately revolve around management of assets

Return on Investment (ROI): Expected dollar-value return on each alternative investment

Risk Future benefits of investment cannot be

known at time of investment Owners must decide how much they will

finance with their own money and how much with borrowed money▪ Debt carries more risk than equity

does

Long-term preparation where strengths and weaknesses are evaluated.

Strengths Experience Past success New features

Weaknesses Budget Target market Lack of experience

Opportunities Size of community Expansion

Threats Weather conditions Economic conditions Competitors

Chapter 4.2

Spectator sport industry is organized much differently from nonspectator industry and from rest of American business. The existence of one franchise benefits the

others.

© David Lee/ShutterStock, Inc.

Sport leagues considered monopolies▪ They face no direct competition▪ Gives them greater bargaining power when

dealing with stakeholders (e.g., players, broadcasters, corporate sponsors, and local governments) and allows them to potentially charge higher prices▪ Allows them to earn much higher profits than

would otherwise be the case, as well as enact financial policies (e.g., salary caps, revenue sharing) that would not be possible with direct competition▪ Only legal monopolies in United States

Scarcity

Chapter 4.3

GOALSGOALSDescribe the job positions and

responsibilities involved in sports management.

Explain the importance of community involvement for professional sports teams.

What jobs can be found in sports and entertainment management?

Jobs in the field Marketing and Promotions Director Corporate Sales Director Director of Ticketing and Finance Sporting Goods Sales Manager Facilities Coordinator Athletic Business Manager Fitness Manager

Many colleges offer degrees in sports management. (Majors , Minors, and Masters)

Competition comes from everywhereA degree in the field offers network

opportunities and a solid understanding of the product

Jobs can be a cross of business and exercise science.

Requirements Knowledge of business Long workweeks including night and

weekend hoursEmployment outlook Competitive Growing

Jobs in sports have increased significantly over the past decade due to an increased interest.

Internships in sports are important to help with networking. In college some unpaid internships can cover college credits

No matter what type of sport organization involved, the finance function is crucial

Those interested in a career in sports should have solid grounding in: Corporate finance Managerial and financial accounting Advanced use of spreadsheet software

For those interested in working in spectator sports, familiarity with sport economics is beneficial

Chapter 4.3

All teams have an extensive involvement with the local community

Teams support and help create/fund local organizations. Players do the same

All sports teams demonstrate a commitment to the community. Many organizations have paid positions for a community relations coordinator.

Use a kids club for community involvement

Teams organize charity events around larger events.

Chapter 4.4

GOALSGOALSExplain the various types of

organizational structures.Show the importance of branding

Why is the structure of the business or organization a vital part to success?

The organizational structure highlights different business departments and the personnel in which they exist.

This relationship influences the lines of communication

Trace all authorities and responsibility in a direct line from top executives down to the lowest employee level.

A president or CEO has direct authority over all work in a line organization

In a line organization, top management has complete control, and the chain of command is clear and simple. Examples of line organizations are small businesses in which the top manager, often the owner, is positioned at the top of the organizational structure and has clear "lines" of distinction between him and his subordinates.

Unity of command- employees report to only one supervisor at a time.

Span of Control- is the number of employees that a manager supervises directly.

The line-and-staff organization combines the line organization with staff departments that support and advise line departments

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This form is ideally suited for companies, such as construction, that are “project-driven”.

Team Organizations- permanentSelf-directed work teams not

permanent

As competition increases customers expect increased quality and service. The organization becomes even more important

Centralized Versus Decentralized:The terms "centralized" and

"decentralized" are important management concepts. Often, they are used to refer to the distribution of authority and decision making with in an organization.

Have a few top managers who plan and make decisions. Sometimes larger organizations have communication problems. There can be an overabundance of rules.

Divides businesses into smaller units.

Divided by business functions.

Few levels and has improved communication

Chapter 4.4

What is a brand?

Brand Marketing is the process of creating a perception that separates an organization from its competitors. A name and a brand is an important part of increasing sales

Selling additional products to customers beyond the initial purchase is known as upselling.

Up selling is a result of you purchasing products beyond your original intentions.

The key is the additional revenue stream.

Brand Marketing and upselling stress the importance of synergy.

Synergy can also be the strength developed working with partnerships.