Sports Business Practices Final -
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Similarities Between Sports+Other Industries (4) - Answer✅✅1.Value Creation and
Growth
(Both interested in increasing franchise values and develop new sources of revenue)
2.Working with Labor Unions
(both negotiate with organized labor in order to succeed)
3.Quality of Product Matters
(Presentation of high quality product to consumers is a determining factor)
4.Branding
(Brand league teams, players etc.)
Differences Between Sports and Other Industries (5) - Answer✅✅1.Simultaneous
Cooperation and Competition
(sports have cooperation through revenue sharing)
,2.Public Funding of Facilities for Pro Sports Teams
(cities+states provide millions to pro teams for new facilities)
3.Management Occurs in a Fishbowl
(receive public scrutiny by media+fans)
4.Limited Disclosure of Financial Records
(privately owned teams rarely share)
(illegal for businesses not to)
5.Systems in Place to Support Weakest Performers and Handicap the Strongest
(struggling teams supported while wealthy clubs penalized through revenue sharing,
luxury tax, player draft) *league intervenes rather than let team disappear*
Major Changes in Business of Sport (4) - Answer✅✅1.Disneyfacation of Sport
(create multiple entertainment options in one facility)
2.Media Changes
(expanded broadcasting of sports and sharp revenue increases)
3.Stadium Changes
(Focus on single purpose stadiums and a rise in luxury seating)
4.Changes in league policies and player rights impacting competition and distribution
of revenue
(salary cap, luxury tax, 50/50 split for revenue between owners and players)
Single-Entity Ownership Model - Answer✅✅The league and all teams in the league
are owned by a single ownership group (Arena Football and MLS)
Distributed Club Ownership Model - Answer✅✅Each team has an individual
ownership that posses independent property rights in their team, but agree to
contractually share some of those rights with others
Advantages of Single-Entity League (7) - Answer✅✅1.Ability to place teams in
preferred cities regardless of the availability of local ownership groups
2.Ability to assign players in a way that promotes fan interest and competitive
balance
3.Large market teams do not have an advantage over teams in small markets
4.Ability to control player salaries by reducing competition between teams and
reduce other expenses with centralized purchasing
5.Improved Value as a league-wide entity for potential sponsorships
(sponsors buy league affiliation not local team)
, 6.If single-entity owner is made of partners, financial risk is spread over partners
7.Antitrust laws do not apply, league can engage in anticompetitive business
behavior
(illegal for business competitors)
New Arena Football League Following Bankruptcy of Original AFL - Answer✅✅-
Operate as single-entity
-Players+coaches paid by league
-Team sells own tickets, local sponsors, local media deals
-League owned equally by 15 team owners
-Single-entity model facilitates group purchasing power for expensive
items(workers+sharing of other costs)
-Old AFL salary cap reached 2.2M/now paid $400 a game plus room and board
-2008 was highest revenue, 12% increase in Revenue, 20% increase in Expenses
Disadvantages of a Single-Entity League Structure (2) - Answer✅✅1. Reduced
economic incentives for individual teams to succeed on the field or generating
revenue if it all goes back to the league
2. Reduced competition between teams because all operators of teams are
ownership partners
Advantage of Distributed Club Ownership (1) - Answer✅✅1.Brings out highest
competition for talent+revenue
Disadvantage of Distributed Club Ownership (1) - Answer✅✅1.Competition
between owners can lead to conflicts between those with diverse interest and tends
to drive up player price
Conflicts in the Distributed Club Ownership Model - Answer✅✅Cowboys GM Jerry
Jones signed deals with Nike+Pepsi behind NFL Properties. NFL Properties were fed
up with "ambush" deals and sued for $300M in damages
Competitive Balance - Answer✅✅What leagues do to create opportunities for
teams to have regularly recurring chances to make the playoffs
Common Measures Leagues Use to Promote Competitive Balance (6) - Answer✅✅1.
Revenue Sharing
2. Luxury Tax
3. Salary Cap
4. Reverse-Order Player Draft
5. Promotion and Regulation
6. Expanded Playoff Pool
UIowa Exam| Brand New Exam
Questions with 100% Correct Clear
Verified Answers| All Graded
A+|Latest Premium Update|100%
Guaranteed Success.
Similarities Between Sports+Other Industries (4) - Answer✅✅1.Value Creation and
Growth
(Both interested in increasing franchise values and develop new sources of revenue)
2.Working with Labor Unions
(both negotiate with organized labor in order to succeed)
3.Quality of Product Matters
(Presentation of high quality product to consumers is a determining factor)
4.Branding
(Brand league teams, players etc.)
Differences Between Sports and Other Industries (5) - Answer✅✅1.Simultaneous
Cooperation and Competition
(sports have cooperation through revenue sharing)
,2.Public Funding of Facilities for Pro Sports Teams
(cities+states provide millions to pro teams for new facilities)
3.Management Occurs in a Fishbowl
(receive public scrutiny by media+fans)
4.Limited Disclosure of Financial Records
(privately owned teams rarely share)
(illegal for businesses not to)
5.Systems in Place to Support Weakest Performers and Handicap the Strongest
(struggling teams supported while wealthy clubs penalized through revenue sharing,
luxury tax, player draft) *league intervenes rather than let team disappear*
Major Changes in Business of Sport (4) - Answer✅✅1.Disneyfacation of Sport
(create multiple entertainment options in one facility)
2.Media Changes
(expanded broadcasting of sports and sharp revenue increases)
3.Stadium Changes
(Focus on single purpose stadiums and a rise in luxury seating)
4.Changes in league policies and player rights impacting competition and distribution
of revenue
(salary cap, luxury tax, 50/50 split for revenue between owners and players)
Single-Entity Ownership Model - Answer✅✅The league and all teams in the league
are owned by a single ownership group (Arena Football and MLS)
Distributed Club Ownership Model - Answer✅✅Each team has an individual
ownership that posses independent property rights in their team, but agree to
contractually share some of those rights with others
Advantages of Single-Entity League (7) - Answer✅✅1.Ability to place teams in
preferred cities regardless of the availability of local ownership groups
2.Ability to assign players in a way that promotes fan interest and competitive
balance
3.Large market teams do not have an advantage over teams in small markets
4.Ability to control player salaries by reducing competition between teams and
reduce other expenses with centralized purchasing
5.Improved Value as a league-wide entity for potential sponsorships
(sponsors buy league affiliation not local team)
, 6.If single-entity owner is made of partners, financial risk is spread over partners
7.Antitrust laws do not apply, league can engage in anticompetitive business
behavior
(illegal for business competitors)
New Arena Football League Following Bankruptcy of Original AFL - Answer✅✅-
Operate as single-entity
-Players+coaches paid by league
-Team sells own tickets, local sponsors, local media deals
-League owned equally by 15 team owners
-Single-entity model facilitates group purchasing power for expensive
items(workers+sharing of other costs)
-Old AFL salary cap reached 2.2M/now paid $400 a game plus room and board
-2008 was highest revenue, 12% increase in Revenue, 20% increase in Expenses
Disadvantages of a Single-Entity League Structure (2) - Answer✅✅1. Reduced
economic incentives for individual teams to succeed on the field or generating
revenue if it all goes back to the league
2. Reduced competition between teams because all operators of teams are
ownership partners
Advantage of Distributed Club Ownership (1) - Answer✅✅1.Brings out highest
competition for talent+revenue
Disadvantage of Distributed Club Ownership (1) - Answer✅✅1.Competition
between owners can lead to conflicts between those with diverse interest and tends
to drive up player price
Conflicts in the Distributed Club Ownership Model - Answer✅✅Cowboys GM Jerry
Jones signed deals with Nike+Pepsi behind NFL Properties. NFL Properties were fed
up with "ambush" deals and sued for $300M in damages
Competitive Balance - Answer✅✅What leagues do to create opportunities for
teams to have regularly recurring chances to make the playoffs
Common Measures Leagues Use to Promote Competitive Balance (6) - Answer✅✅1.
Revenue Sharing
2. Luxury Tax
3. Salary Cap
4. Reverse-Order Player Draft
5. Promotion and Regulation
6. Expanded Playoff Pool
