SPORTS BUSINESS EXAM
QUESTIONS AND ANSWERS
Sports Industry Size: - Correct Answers -U.S.: $485 Billion
Global: $1.5 Trillion
Annual Company Spending on Sports Advertising (U.S.): $33.1 Billion
-Sports industry is twice the size of the auto industry
-Sports industry is seven times the size of the movie industry
Most popular sports and sporting events by viewership - Correct Answers -The Olympic
Games:
Viewers: 2-3 Billion
Revenues: 3.9 Billion
Sponsorship Revenues: 957 Million
League Revenues - Correct Answers -NFL: 9.2 Billion
MLB: 7.1 Billion
NBA: 4.6 Billion
NHL: 2.6 Billion
NCAA: 0.9 Billion
MLS: 0.49 Billion
Most Valuable Teams and Clubs - Correct Answers -1. Manchester United- 1.86 billion
2. Dallas Cowboys- 1.81 billion
3. New York Yankees- 1.7 billion
4. Washington Redskins- 1.55 billion
5. Real Madrid- 1.45 billion
What makes the Sports Industry Unique? (Product) - Correct Answers -Product
- Intangible and perishable
- Inconsistent and unpredictable - Fluctuating demand
- Psychological attachment
What makes the Sports Industry Unique? (Financial Structure) - Correct Answers --
Sport enterprises earn significant portion of their revenues not from the sale of core
product (e.g. a game), but from television rights, sponsorships, concessions, parking,
merchandise, licensing fees, etc.
,What makes the Sports Industry Unique? - Correct Answers -Results and changes are
more immediate
- Poor performance -> people get benched, traded, fired
• Sports owners tend to be more vocal
- Ownership more consolidated and ego-driven
• Every decision is under the public microscope - Media, fans, pundits
• Higher-risk assets
- Injury, inappropriate behavior
• Revenue sharing
- A competitive-cooperative business model (Eagles vs. Packers) as opposed to the
competitive model of most other industries (Toyota vs. Ford).
How the Sports Industry Creates Value? - Correct Answers -Events
- Gate revenues, concessions, parking
• Content
- Packaged content for digital, broadcast, print distribution
• Properties
- Leagues/tours/federations, teams, players
• Rights Management
- Licensing, merchandising, sponsorship rights
• Sporting Goods
- Footwear, apparel, hard goods, accessories
Cycle of Value in Sports - Correct Answers -Athletes attract fans, fans attract media,
media attracts marketers, marketers attract athletes
The Flow of Money in Sports - Correct Answers -All arrows point in the direction $ is
moving
Do sports organizations need to win on the field in order to to be successful? - Correct
Answers -NO
The Winning Fallacy - Correct Answers -Winning Fallacy: The widely held idea that
sports organizations must win in order to be successful
-sports organizations cannot rely on winning to be successful in the sports industry
-Teams that win consistently can fail as businesses
- Teams that lose consistently can achieve success as businesses
Conclusion: Winning - Correct Answers -Winning: Is only one of factors that drives
industry success
• In order to prosper financially, organizations must stand out in a hyper-competitive
industry
, Conclusion: How to win, off the field? - Correct Answers -The best-run organizations
are:
• problem-oriented
• committed to differentiation
• attentive to technology
• and always revenue focused
International Timeline of Sports - Correct Answers -1. 776 BC: Ancient Olympic Games
2. 1800s: UK Rugby
3. 1888: The Football League (Barclays Premier League)
4. 1903: Tour De France
5. 1963: Futbol-Bundesliga
-Chariot racing preceded the creation of the Olympic Games
• Free entry for the poor; wealthy paid for seating with shade
• Betting took place
• Drivers wore colors of their faction
• Fans adopted colors, hairstyles, etc. of their favorite charioteer
United States Timeline of Sports - Correct Answers -1860s: National Association of
Professional Baseball Players
1876: National League
1900: American League
1903: Agreement between NL and AL forms modern MLB, first world series
1917: NHL
1920: NFL
1937: National Basketball League (NBL)
1946: BAA
1949: NBA (merger of NBL and BAA)
Developments Impacting the Sports Industry - Correct Answers -1870s: Several
developments underway that made emergence of the modern sports industry possible
- Technological advances: railroads; telegraph; printing press
• Growth of urban populations
- Growth of local fan bases ready to follow sports - Practice of paying for sport
entertainment
• Standardization of sport product (rules, etc.)
• Specialization of athletic skill
- "Kinesiology" did not exist until 1967
• Knowledgeable entrepreneurs
-Demand for sports uppppp
A.G. Spalding & Brothers - Correct Answers -Example of growth and success of the
sporting goods industry in 1880s
QUESTIONS AND ANSWERS
Sports Industry Size: - Correct Answers -U.S.: $485 Billion
Global: $1.5 Trillion
Annual Company Spending on Sports Advertising (U.S.): $33.1 Billion
-Sports industry is twice the size of the auto industry
-Sports industry is seven times the size of the movie industry
Most popular sports and sporting events by viewership - Correct Answers -The Olympic
Games:
Viewers: 2-3 Billion
Revenues: 3.9 Billion
Sponsorship Revenues: 957 Million
League Revenues - Correct Answers -NFL: 9.2 Billion
MLB: 7.1 Billion
NBA: 4.6 Billion
NHL: 2.6 Billion
NCAA: 0.9 Billion
MLS: 0.49 Billion
Most Valuable Teams and Clubs - Correct Answers -1. Manchester United- 1.86 billion
2. Dallas Cowboys- 1.81 billion
3. New York Yankees- 1.7 billion
4. Washington Redskins- 1.55 billion
5. Real Madrid- 1.45 billion
What makes the Sports Industry Unique? (Product) - Correct Answers -Product
- Intangible and perishable
- Inconsistent and unpredictable - Fluctuating demand
- Psychological attachment
What makes the Sports Industry Unique? (Financial Structure) - Correct Answers --
Sport enterprises earn significant portion of their revenues not from the sale of core
product (e.g. a game), but from television rights, sponsorships, concessions, parking,
merchandise, licensing fees, etc.
,What makes the Sports Industry Unique? - Correct Answers -Results and changes are
more immediate
- Poor performance -> people get benched, traded, fired
• Sports owners tend to be more vocal
- Ownership more consolidated and ego-driven
• Every decision is under the public microscope - Media, fans, pundits
• Higher-risk assets
- Injury, inappropriate behavior
• Revenue sharing
- A competitive-cooperative business model (Eagles vs. Packers) as opposed to the
competitive model of most other industries (Toyota vs. Ford).
How the Sports Industry Creates Value? - Correct Answers -Events
- Gate revenues, concessions, parking
• Content
- Packaged content for digital, broadcast, print distribution
• Properties
- Leagues/tours/federations, teams, players
• Rights Management
- Licensing, merchandising, sponsorship rights
• Sporting Goods
- Footwear, apparel, hard goods, accessories
Cycle of Value in Sports - Correct Answers -Athletes attract fans, fans attract media,
media attracts marketers, marketers attract athletes
The Flow of Money in Sports - Correct Answers -All arrows point in the direction $ is
moving
Do sports organizations need to win on the field in order to to be successful? - Correct
Answers -NO
The Winning Fallacy - Correct Answers -Winning Fallacy: The widely held idea that
sports organizations must win in order to be successful
-sports organizations cannot rely on winning to be successful in the sports industry
-Teams that win consistently can fail as businesses
- Teams that lose consistently can achieve success as businesses
Conclusion: Winning - Correct Answers -Winning: Is only one of factors that drives
industry success
• In order to prosper financially, organizations must stand out in a hyper-competitive
industry
, Conclusion: How to win, off the field? - Correct Answers -The best-run organizations
are:
• problem-oriented
• committed to differentiation
• attentive to technology
• and always revenue focused
International Timeline of Sports - Correct Answers -1. 776 BC: Ancient Olympic Games
2. 1800s: UK Rugby
3. 1888: The Football League (Barclays Premier League)
4. 1903: Tour De France
5. 1963: Futbol-Bundesliga
-Chariot racing preceded the creation of the Olympic Games
• Free entry for the poor; wealthy paid for seating with shade
• Betting took place
• Drivers wore colors of their faction
• Fans adopted colors, hairstyles, etc. of their favorite charioteer
United States Timeline of Sports - Correct Answers -1860s: National Association of
Professional Baseball Players
1876: National League
1900: American League
1903: Agreement between NL and AL forms modern MLB, first world series
1917: NHL
1920: NFL
1937: National Basketball League (NBL)
1946: BAA
1949: NBA (merger of NBL and BAA)
Developments Impacting the Sports Industry - Correct Answers -1870s: Several
developments underway that made emergence of the modern sports industry possible
- Technological advances: railroads; telegraph; printing press
• Growth of urban populations
- Growth of local fan bases ready to follow sports - Practice of paying for sport
entertainment
• Standardization of sport product (rules, etc.)
• Specialization of athletic skill
- "Kinesiology" did not exist until 1967
• Knowledgeable entrepreneurs
-Demand for sports uppppp
A.G. Spalding & Brothers - Correct Answers -Example of growth and success of the
sporting goods industry in 1880s
