KIN 3804 Midterm Exam (Svensson) With
Complete Solutions
Why is financial management important in the sport industry? - ANSWER
Financial management is important because we need to be able to manage
budgets within every area/department of sport
4 different historical time periods - ANSWER -1990s and early 2000s: Era of
Growth
-2007-2009: The Great Recession
-2010: The New Contemporary Environment
-2020: The Pandemic
1990s and early 2000s: Era of Growth - ANSWER -New sport facilities
-New professional leagues and teams
-Increased and significant growth in corporate investment
2007-2009: The Great Recession - ANSWER -Severe and lingering impact of
recession
· Increase in cost of attendance
· Emergence of high definition broadcast and technology
· Reliance of corporate funds caused decline
2010: The New Contemporary Environment - ANSWER -More challenging
economic environment
· More competition from other entertainment
-Shift to different markets
· Games in other countries
2020: The Pandemic - ANSWER -Furloughed staff and reduced staff size due to
financial implications of COVID-19
How and why did these events shape the financial reality of the sport industry? -
ANSWER Corporate investments, emphasis on broadcasting and technology,
and globalization
Current financial issues in non-profit sports - ANSWER Starvation cycle,
Fundraising challenges, Program competition
Starvation Cycle - ANSWER -Underinvestment in the organizational
infrastructure needed to sustain nonprofits
-Three main factors
, 1. Donors having unrealistic expectations
2. Nonprofits feeling pressured to comply with donor expectations
3. Nonprofits neglecting to develop the necessary infrastructure while also
misinterpreting data
Current Financial issues in college sports - ANSWER -Grim financial realities for
athletic departments
-Increase financial discrepancies
-Struggle to control cost and spending
-Constrained revenue sources to fill revenue shortfall
Current financial issues in profession sports - ANSWER -The "Big Four" leagues
reached saturation
-Most growth has occurred at the minor league level (big five)
-Rise of major league soccer
-Emphasis on strategic branding
What's the purpose of the Federal Reserve System? - ANSWER 1. Provides
central banking for the entire U.S.
2. Controls interests' rates, money supply, and banking oversight
What's the purpose of pivot tables? - ANSWER Table used to summarize, sort,
reorganize, group, count, total, or average data stored in a database
How do you set up a pivot table to match a desired output? - ANSWER -Know
how to set up a table
-Highlight data
-Organize by what you are looking for
What are the main sources of financing for sport organizations? - ANSWER debt,
equity, retained earnings, government, gifts
debt - ANSWER borrowing money, which must be repaid over time with interest
equity - ANSWER Exchanging a portion of ownership for money
retained earnings - ANSWER reinvestment of prior earnings
government - ANSWER funding by federal, state, or municipal sources
gifts - ANSWER cash or in-kind charitable donations
What funding opportunities are available for small businesses? - ANSWER -7(a)
Loan
-504 loan
-Microloans
Complete Solutions
Why is financial management important in the sport industry? - ANSWER
Financial management is important because we need to be able to manage
budgets within every area/department of sport
4 different historical time periods - ANSWER -1990s and early 2000s: Era of
Growth
-2007-2009: The Great Recession
-2010: The New Contemporary Environment
-2020: The Pandemic
1990s and early 2000s: Era of Growth - ANSWER -New sport facilities
-New professional leagues and teams
-Increased and significant growth in corporate investment
2007-2009: The Great Recession - ANSWER -Severe and lingering impact of
recession
· Increase in cost of attendance
· Emergence of high definition broadcast and technology
· Reliance of corporate funds caused decline
2010: The New Contemporary Environment - ANSWER -More challenging
economic environment
· More competition from other entertainment
-Shift to different markets
· Games in other countries
2020: The Pandemic - ANSWER -Furloughed staff and reduced staff size due to
financial implications of COVID-19
How and why did these events shape the financial reality of the sport industry? -
ANSWER Corporate investments, emphasis on broadcasting and technology,
and globalization
Current financial issues in non-profit sports - ANSWER Starvation cycle,
Fundraising challenges, Program competition
Starvation Cycle - ANSWER -Underinvestment in the organizational
infrastructure needed to sustain nonprofits
-Three main factors
, 1. Donors having unrealistic expectations
2. Nonprofits feeling pressured to comply with donor expectations
3. Nonprofits neglecting to develop the necessary infrastructure while also
misinterpreting data
Current Financial issues in college sports - ANSWER -Grim financial realities for
athletic departments
-Increase financial discrepancies
-Struggle to control cost and spending
-Constrained revenue sources to fill revenue shortfall
Current financial issues in profession sports - ANSWER -The "Big Four" leagues
reached saturation
-Most growth has occurred at the minor league level (big five)
-Rise of major league soccer
-Emphasis on strategic branding
What's the purpose of the Federal Reserve System? - ANSWER 1. Provides
central banking for the entire U.S.
2. Controls interests' rates, money supply, and banking oversight
What's the purpose of pivot tables? - ANSWER Table used to summarize, sort,
reorganize, group, count, total, or average data stored in a database
How do you set up a pivot table to match a desired output? - ANSWER -Know
how to set up a table
-Highlight data
-Organize by what you are looking for
What are the main sources of financing for sport organizations? - ANSWER debt,
equity, retained earnings, government, gifts
debt - ANSWER borrowing money, which must be repaid over time with interest
equity - ANSWER Exchanging a portion of ownership for money
retained earnings - ANSWER reinvestment of prior earnings
government - ANSWER funding by federal, state, or municipal sources
gifts - ANSWER cash or in-kind charitable donations
What funding opportunities are available for small businesses? - ANSWER -7(a)
Loan
-504 loan
-Microloans
