SPORTS BUSINESS EXAM QUESTIONS
AND ANSWERS 100% CORRECT
Sports Industry Size: - ANSWER-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 - ANSWER-The Olympic
Games:
Viewers: 2-3 Billion
Revenues: 3.9 Billion
Sponsorship Revenues: 957 Million
League Revenues - ANSWER-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 - ANSWER-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) - ANSWER-Product
- Intangible and perishable
- Inconsistent and unpredictable - Fluctuating demand
- Psychological attachment
What makes the Sports Industry Unique? (Financial Structure) - ANSWER--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? - ANSWER-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? - ANSWER-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 - ANSWER-Athletes attract fans, fans attract media, media
attracts marketers, marketers attract athletes
The Flow of Money in Sports - ANSWER-All arrows point in the direction $ is moving
Do sports organizations need to win on the field in order to to be successful? -
ANSWER-NO
The Winning Fallacy - ANSWER-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 - ANSWER-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? - ANSWER-The best-run organizations are:
• problem-oriented
• committed to differentiation
• attentive to technology
• and always revenue focused
, International Timeline of Sports - ANSWER-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 - ANSWER-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)
Historical Aspects of Sports Marketing - ANSWER-• Watershed event in 1890s
• Endorsement Advertising
• Increased Competition
• Increased Participation and Spectatorship
Watershed event in 1890s - ANSWER-Watershed events: events or developments in an
industry that cause significant changes throughout the industry
Bicycle Craze 1890s
- 1890: 27 companies
- 1898: 312 companies
- 1909: 94 companies
- Influenced thinking about business and strategy
• How to deal with intense competition:
- Increased importance on incorporating successful marketing techniques to develop a
recognizable brand.
Endorsement Advertising - ANSWER--Using an athlete's name to sell a product
• Endorsements link athlete performance to product quality
• Spalding used this approach back in 1880s
AND ANSWERS 100% CORRECT
Sports Industry Size: - ANSWER-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 - ANSWER-The Olympic
Games:
Viewers: 2-3 Billion
Revenues: 3.9 Billion
Sponsorship Revenues: 957 Million
League Revenues - ANSWER-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 - ANSWER-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) - ANSWER-Product
- Intangible and perishable
- Inconsistent and unpredictable - Fluctuating demand
- Psychological attachment
What makes the Sports Industry Unique? (Financial Structure) - ANSWER--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? - ANSWER-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? - ANSWER-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 - ANSWER-Athletes attract fans, fans attract media, media
attracts marketers, marketers attract athletes
The Flow of Money in Sports - ANSWER-All arrows point in the direction $ is moving
Do sports organizations need to win on the field in order to to be successful? -
ANSWER-NO
The Winning Fallacy - ANSWER-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 - ANSWER-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? - ANSWER-The best-run organizations are:
• problem-oriented
• committed to differentiation
• attentive to technology
• and always revenue focused
, International Timeline of Sports - ANSWER-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 - ANSWER-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)
Historical Aspects of Sports Marketing - ANSWER-• Watershed event in 1890s
• Endorsement Advertising
• Increased Competition
• Increased Participation and Spectatorship
Watershed event in 1890s - ANSWER-Watershed events: events or developments in an
industry that cause significant changes throughout the industry
Bicycle Craze 1890s
- 1890: 27 companies
- 1898: 312 companies
- 1909: 94 companies
- Influenced thinking about business and strategy
• How to deal with intense competition:
- Increased importance on incorporating successful marketing techniques to develop a
recognizable brand.
Endorsement Advertising - ANSWER--Using an athlete's name to sell a product
• Endorsements link athlete performance to product quality
• Spalding used this approach back in 1880s
