Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

From Flashcardlet > LGST 207 Midterm > Flashcards

LGST 207 Midterm Flashcards

1
Q

Why Sports

A

Person and communal aspect, real life drama, sense of distraction and community/healing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Circle of sports

A

Bargaining power of suppliers (talent, stadium, entertainment), threat of substitute products or services (other forms of entertainment, art, music, movies…), bargaining power of buyers (consume product in various ways–at home or at the game), threat of new entrants (to capture these factors). And there is rivalry among existing competitors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Big picture of Why Sports

A

The sports industry is unique in that is has such a high profile and can connect with people on such a personal level. There is a threat of new entrants and substitute products or services, but ultimately, sports thrive because of the consumer and their high willingness to pay because of all the amazing intangibles that sports bring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Rating

A

The percent of households watching a given program (whether TV is on or not)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Share

A

Percent of households using their TV that are watching a given program

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Sweeps

A

Months in which people write in their Nielson diaries and send them in. Usually the most expensive months for advertisers. February, May, July, and November (2,5,7,11)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How are ratings tracked

A

Nielson uses a sample size to measure how many people are watching a given program

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Why do ratings matter

A

So that advertisers know how much to pay for a commercial which in turn results in how much broadcasting networks pay for league packages which influences league revenue heavily

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Sports TV ratings in relation to TV in general

A

TV in general is way down, so sports being down a little bit is seen ok. Sports are the only appointment TV (besides awards shows) and this allows for good viewership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Why does the NFL dominate?

A

Appointment TV because of Sundays and short season and short playoffs. Also violence and gambling

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Big picture of TV ratings

A

Even with TV ratings going down, sports (and especially the NFL) is still king. One of the few remaining appointment TV things that you must watch live.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What was the first sports event

A

Ancient Greek Olympics, ended because seen as Pagan with Christianity rising

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Cincinatti Red Stockings

A

Harry Wright founded them in 1869. Sells tickets, no other jobs for players during the season, but problems with gambling and drinking

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

National League history

A

William Hulbert forms the National Association of Professional Baseball Players in 1871, becomes the NL in 1876. Major cities only, central league office to keep standings and rule changes. Family friendly with no gambling or drinking. 50 cent ticket price to establish value as the best level of competition. price is a key element in establishing value. If free, can’t sell it later. Reserve clause results in teams owning the rights to a player, can’t play for another team. Underpaid and tempted by gamblers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Henry Chadwick

A

Writes for the NY Times and invented box score

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Pivotal events

A

BlackSox, Federal Baseball Case, Berlin Olympics, Jackie Robinson, Sports Broadcasting Act, Flood v. Kuhn and Messersmith/McNally

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

BlackSox Scandal

A

White Sox players paid to throw off the World Series in 1919. Awful for the integrity of the game, but emergence of Babe Ruth helps solve this

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Federal Baseball Case

A
  1. Team sues because not in the MLB. Baseball ruled not an interstate commerce, which allows for the reserve clause to stay.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Berlin Olympic Games

A
  1. Jesse Owens, US black track star won 4 gold medals, big for black athletes. Also, US track team removes 2 Jews to appease Hitler, right before WWII
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Sports Broadcasting Act

A

Allows for the NFL to create their own TV deal, team can act together with other teams to do so in an Anti-Trust exemption

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Flood v. Kuhn and Messersmith/McNally

A

Curt Flood was traded, challenged the reserve clause, but it stays in place. Marvin Miller forms the MLBPA, and the CBA. Abritration and free agency begin as a result.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

1920 stars

A

Mantal Ware, Babe Ruth, Jake Demsey

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Big Picture of Sports History

A

William Hulbert founded the National League in 1876 and immediately established it as the cream of the crop by having a central league office, selling tickets for a high price to establish value, and addressing previous problems (no gambling, drinking, Sunday games). Also, we saw a bunch of other pivotal moments in the 1900’s that led to sports as they are known today.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Hootie v. Martha

A

Martha Burk, chairwoman of a woman’s organization challenges August (chairman, Hootie Johnson) to admit female members. Bad PR ensues for Augusta, they decide to have no sponsorship in 2003. Factors include protests, Masters being in the spotlight, sponsors and CBS. Condoleezza Rice and Darla Moore admitted as first female Augusta members not until 2012

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Jackie Robinson decision

A

When Branch Rickey signed him, needed to weigh factor that whites may stop going to games. But also taps into a whole new market of black people and new supply of talent to improve the game

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Title IX

A

Requires equal funding as a whole (individual sports can be different as long as total sum the same) for men and women sports by Universities (in order to receive federal funding)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Big Picture of Sports Diversity

A

Sports have grown much more diverse. Title IX requires equal funding for men and women sports in college. Jackie Robinson breaking the color barrier was huge for the MLB and allowed it to tap into a whole new market of fans and players. NFL and NBA are engraining themselves in social issues, which could become a serious problem unless agreements can be reached to not alienate the fans. People see sports as a place to get away from social issues, and Kaepernick intertwined them

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Key sources of revenue

A

Media rights is number 1 (risen to the top recently) with long term deals, then gate receipts, sponsorship (which will continue to grow as more opportunities are created)< and then merchandise/licensing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Sports ecosystem

A

Media, fans, leagues, brands, clubs, and players all interact in a complex way to create sports as we love them.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Big picture of Sizing the Market

A

Media rights have become increasingly important and influential in a league’s revenue. Also, sports are massive globally and nationally and have grown faster than GDP’s. There is a complex ecosystem that explains how the different factors (media, fans, leagues, brands, clubs, and players via agents) interact in sports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

What makes a league major

A

When they are the highest level of play in the sport, highest demand for the product. Integrity, authenticity, legacy all help

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Revenue/profit by league

A

NFL has the most profit by far. MLB is second, much more revenue than NBA but just a little bit more profit, and the NBA has more profitable teams. NHL is a distant fourth.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Big picture of current status

A

There are a lot of different leagues in the US and the world. In the US, the NFL is king in terms of profit, revenue, and viewership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

How do teams generate revenue

A

Gate receipts, luxury seating premiums, media rights (local and national), sponsorships (local and national), advertising, stadium naming rights, other stadium-related opportunities, licensing (local and national), concessions, parking

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Gate receipts

A

People going to the stadium, buying tickets to see the team play.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Ticket price by team and sport

A

NFL most expensive because of lack of supply (16 games) and high demand. MLB has cheapest average because it has so many games. Within each sport, big market/historic teams have the highest average ticket price while newer teams in smaller markets in the south and sunbelt have the lowest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Variable pricing

A

Charging different prices for the same seat depending on who the opponent is. Set these prices before the season begins and remains the same. Allows for teams to take advantage of supply and demand, not just the secondary market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Dynamic pricing

A

Movement of ticket prices once the season is underway, driven by the shifts in supply and demand and/or a desire to change purchase behavior. For example, charge more to see LeBron score his 30,000th point

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Tampa Bay Lightening jersey chip

A

Gives season ticket holders a jersey with a chip in it that gives them discounts at retail and concessions. Allows for the team to gain valuable data about the consumer and resulted in more season ticket sales and money spent.

40
Q

Luxury Seating Premiums

A

Club east and suites have become huge for teams, huge new source of revenue with new stadiums

41
Q

Media rights

A

Biggest source of revenue. NFL the biggest, then the NBA. Long term deals. Local broadcasting deals for MLB, NBA, NHL. Long term ensures certainty

42
Q

Sponsorships

A

Local and national. Teams get local sponsors in the 75 or 150 mile radius, can’t overlap with another team. Big markets benefit from sponsorship revenue

43
Q

Licensing

A

Local and national. Revenue generated by the sale of licensed products in the home stadium, team-owned retail outlets, and on team website is local revenue

Revenue generated by sale of licensed products in all other locations is captured by the league and treated as national revenue

44
Q

Other sources of revenue

A

Advertising, stadium naming deals, other stadium stuff (PSL, restaurants, etc.), concessions, parking

45
Q

Team expenses

A

Player salary, staff salary, team and game related, general and administrative, marketing, player development, facility (stadium and practice facility), debt service

46
Q

Big picture of team revenue

A

Teams and leagues generate revenue in a variety of ways. The four biggest are media rights, sponsorships, licensing (merchandise), and gate receipts.

47
Q

League revenue

A

Leagues make money from media rights, sponsorships, licensing, international efforts, league-controlled events (draft, playoffs)
Leagues make money in the same way teams do, revenue sharing splits it up (see lecture 9)

48
Q

What is national vs. local revenue for NFL?

A

NFL national revenue: national TV, radio, media deals. DirecTV, Sirius XM, NFL Network
NFL local: suites, club seats, local sponsors, Home gate (60%), visitor gate (40%)

49
Q

What do we learn from looking at team financial statements?

A

Not much data is available, but for what is, we see that revenue sharing is big in baseball, especially for the Pirates. Make profit just because of that.
Panthers in 2011 go 1-15 in an un-capped, un-floored season. Make profit and get to draft Cam Newton. If you’re going to be bad, be really bad

50
Q

BAM

A

Baseball Advanced Media. MLB Digital Entity. Pioneers in delivering the product. Sold to Disney recently

51
Q

MLB Local TV Revenue Dist.

A

MLB lets teams keep 2/3 of their local TV revenue and put 1/3 of it in a pool that goes to each team

52
Q

Big picture of team financial data

A

Not much financial data for teams is available. We see the same dominant revenue sources (TV, gate receipts, sponsorship, licensing) as well as revenue sharing are important for teams.

53
Q

Business priorities of sports teams–> why are spots unique?

A

Blend of priorities make sports unique. Winning or profits? Owner’s financial capacity and willingness to commit resources. League infrastructure and rules (salary cap, revenue sharing, etc.)–> context in which you operate and what the league allows you to do is important, club’s endowed assets (stadium, situation, brand value), emotional attachment, brand loyalty, limited financial disclosure, high profile nature and labor costs are so big

54
Q

Winning as a virtuous cycle

A

Teams invest in players, academies, talent acquisition, and stadiums. Results in a better team performance, more stars, and fan loyalty
This generates revenue thru. media revenue, talent sale, commercial revenue, and ticketing revenue

55
Q

Big picture of business priorities of sports teams and nuances of sports leagues

A

Sports are unique int hat owners have many different business priorities. There is sometimes a competing priority between winning or profits that owners must juggle

56
Q

What is important to millennials

A

Pre/post-game events, player meet and greets, and seating based on social interests are more important to millennials and are willing to spend extra for these memorable experiences

57
Q

Big picture of Sports Fan Data

A

While Americans still love sports, millennial viewership and fandom is down. This could potentially be a problem, as millennials are the future and typically the 18-34 demographic is the group that spends the most. Additionally, we see the importance of season ticket holders on spending. Also, youth programs are important in getting the youth involved and developing life long fans.

58
Q

Sports TV ratings

A

Oh no, they are down. But still very dominant in comparison to TV as a whole, which are way down. 23% of national TV advertising spending was on live sports but live sports accounts for only 1.4% of all TV programming
Sports were 88/top 100 most viewed TV programs in 2016, compared to 14/top 100 in 2005. Only of the non sports were presidential debates, award shows, post SB program, and 2 NCIS shows.

59
Q

Threats facing sports

A 
Cost of attending live events
Declining youth sports participation
Cord-cutting TV
Cheating
Hassle of attending live events
Live experience improvement
Rising cost of attendance
Burst of media rights fee bubble
Safety and security concerns
Effects of technological advances
Pro sports image issues (cheating)
Also, social issues (this data is from 2014, old)
60
Q

What are fans worried about?

A

High ticket and food/beverage prices, traffic, drunkenness, parking, lack of wifi
Inflated ticket prices and total cost of attendance + unappealing at game experience with little innovation + enhanced at home experience = problem?

61
Q

Why are we losing millennials

A

Not as interested. They like the at-home experience, so many other things to do with their time.

62
Q

Solutions to re-gain or gain fans

A

Address/remove social issues
Youth sports—> grassroots marketing efforts that educate and inform the under under-25 market as to what’s in it for them
Player-fan interactions
Safety issues in pros and among youth
Rule clarification
VR—> marketing channels that are age and interest specific and relevant
Miking players
Pace of play/game length
Promos
Replay reform
Competitive analysis of your marketplace and begin to understand what is perceived a cool and in the moment and why that is the case
Examine venues and determine what need to do to attract younger fans and hold their interest

63
Q

Big question to ask

A

Trying to replicate the at-home experience at the game or try to differentiate?

64
Q

Big picture of sports industry challenges

A

TV viewership down and interest seems to be fading a fit. Is this a problem? Depends how you look at it. TV viewership as a whole is down and sports had been immune but not immune anymore. Need to do something to keep youth participation and allow for the young generation of fans to stay involved in the sport. Need to make marketing efforts to get kids playing your sport, address pace of play issues, make it interesting for kids to watch.

65
Q

Revenue sharing

A

Amount of revenues earned by members of a professional sports league that are shared by all league teams regardless of the teams’ contributions to the generation of these revenues

66
Q

History of revenue sharing

A

Sports started in US as individual businesses, but Hulbert’s NL made it one league. But in this league, each team essentially operated separately despite the centralized league office. Controversial because seen as socialist, anti-American.
Bill Veeck, Branch Rickey, Lamar Hunt

67
Q

Bill Veeck

A

St. Louis Browns owner proposes to split TV revenue. Dodgers owner responds saying he is a communist, but Veeck wants this so poor clubs can compete

68
Q

Branch Rickey

A

Signed Jackie to the Dodgers
Also started spring training and minor league as farm system
Also proposed Continental League, split TV revenue

69
Q

Lamar Hunt

A

Founded the AFL, pool and split their TV revenue

70
Q

History of Revenue Sharing in the NFL

A

Pete Rozzell is inspired by the AFL, brings up “League Think.” Teams used to have their own TV deals, but forms the Sports Broadcasting Act with Congress in 1961 that allows for the NFL to act together and have their own TV deal–> some teams are harmed by this but helps the league as a whole

71
Q

Central issues in revenue sharing

A

Which streams are national and local? How to distribute shared revenue? What to do with new revenues? (NBA jersey sponsor for ex.)

72
Q

Sheehan’s article–>How to think about revenue sharing

A

Think of revenue sharing as a tax—> tax distorts economic incentives. How can a league enforce revenue sharing while still providing incentives for teams to make money AND compete at their highest level?

73
Q

Three issues with revenue sharing

A
  1. Accounting–> what should be split> Gross revenues or net?
  2. Equity–> What is a fair revenue split?
  3. Economic Efficiency–> How to share revenues and still incentivize owners to pursue profits, winning teams, and long-term league health without destroying economic incentives?
74
Q

Suggestions for revenue sharing from Sheehan

A

Disproportionately taxing the profitable franchises will address the uneven distribution of profits in all leagues.
But, should tax costs instead of revenues as we want to increase profitability. Taxing revenues disincentives owners from growing revenues and ultimately is self-destructive
Taxing costs provides no such disincentive, encouraging owners to control their spending

Could also tax incremental costs (luxury tax), or losing teams

75
Q

Sharking

A

Independent owner action initiated to increase the wealth of the individual club at the expense of the overall league welfare. For example, undermine the league by making their own marketing agreements—> Jerry Jones with the Cowboys made his own deals for sponsorship

76
Q

Shirking

A

Revenue sharing creates incentives for a lack of effort amongst teams, who can free-ride the efforts of other teams. For example fielding uncompetitive teams and undermonetizing those club revenues that are shared with other teams.

77
Q

Which leagues consult players about revenue sharing?

A

NHL and MLB negotiate revenue sharing in the CBA. NFL and NBA owners decide by themselves

78
Q

Big picture of revenue sharing

A

Ultimately, while individual teams compose the league, they all need one another in order to be effective and create demand for the product. As a result, revenue sharing is necessary so that each team can be put on a more equal playing field, allowing for more competitive games and more demand for the product. Sharking is a problem because it undermines the league and shirking is also bad because you profit only because of revenue sharing. I suggest removing shirking by requiring a minimum salary in baseball.

79
Q

Competitive imbalance

A

one team dominating the top position for an extended period of time (dynasties) and/or being at the bottom of the league for a long time

80
Q

Goal for a league

A

For the product to have demand. Do this by having competitive balance. People want uncertainty, they don’t want a pre-determined outcome

81
Q

3 types of uncertainty

A

game (Any given Sunday), seasonal (Is this the year?), multi-seasonal (Worst to first)
Such uncertainty is what fuels demand—> why would I want to watch if I already know the outcome?

82
Q

Factors in imbalance

A

Local market—> different population and preference, willingness to act on differences in fan tastes, player tastes, winning and uncertainty
Biggest factor in imbalance is market size—> revenue sharing will only be effective when trying to maximize wins, not profits.

83
Q

How to promote competitive balance

A

reverse-order draft, salary caps and floors, luxury taxes, relegation and promotion, revenue sharing
Salary cap is important–> league think
Problem with reverse-order draft is tanking and one player can’t necessarily single handily improve a team (Browns)

84
Q

Reserve Clause

A

William Hulbert’s NL has it in 1879 to keep player on the same team
Challenged in 1922 Federal Baseball Case, but MLB ruled non-interstate commerce. Exemption to allow to keep this.
Not challenged until Kurt Flood, challenges 50 years later, didn’t overturn until Peter Seitz. He was an arbitrator in Messersmith & McNally—> allows for free agency and the salary cap

85
Q

Salary caps in each league

A

NFL has hard cap and floor, franchise tags
NBA has soft cap, Larry Bird exemption to re-sign player on own team, Derrick Rose rule allows for you to move up in contract you can get if certain accolades. Kevin Durant inspired a rule to keep him with the Thunder—> get more if stay with original team
NHL has hard cap and floor, guaranteed contracts
MLB has luxury tax, no floor. Huge disparity in payroll

86
Q

Big Picture of Competitive Balance

A

Need competitive balance to create demand for your product. Many ways to do this, including revenue sharing, salary cap, reverse-order draft, relegation and promotion. Each league is different in how they do this, but it is necessary in order to diminish the market effects and allow for the leagues to work as one body together.

87
Q

Why have franchise values gone way up recently?

A

Revenue and revenue multiples have grown dramatically
Partially because of the national TV deals going way up
1998—> FOX enters as a fourth network for 3 packages, results in TV deals going way up
Stadium situation, team affinity, brand value, fan base demographics very important in franchise valuations
Started with Donald Sterling selling the Clippers in 2014. Market way up from then on.
Supply of teams is so small, demand is high, so great value
Recently, value has gone way up across four major leagues, higher growth than the DOW

88
Q

Stadium Status

A

Sine 1988, 138 new stadiums in big 5 leagues (crazy! out of 148 or so)
Referendums for taxpayer money for new stadiums are approved at a crazy high rate, and of those not approved, teams don’t relocate but do something else (privately fund)

89
Q

Big Picture of Franchise Valuation and Venue Development (Mitchell Ziets)

A

Franchise valuations have grown rapidly recently because of new TV deals and a lack of supply of franchises despite high demand. Also, stadiums have become increasingly privately funded and a ton of them have gotten built recently. Almost every referendum gets passed for public funding.

90
Q

Why are unions needed

A

Players want to be together to create power for them as a group. Owners like them because can’t be sued on Anti-Trust Laws

91
Q

Collective Bargaining Agreement

A

Creates a system of laws and guidelines that govern the relationship between management and the union
Tough and bitter negotiations and little sympathy from the public because already making millions
Discuss season duration, talent distribution, compensation mechanisms, conditions of employment, workplace integrity, grievances, employee revenue distribution in the NHL and MLB

92
Q

How is the union in sports different than other industries

A

individual athletes negotiate their salaries rather than having the union do it for them. Loyal fans to the players makes the players irreplaceable during a strike

93
Q

MLB Labor history

A

MLBPA founded in 1954, Marvin Miller made it prominent in 1966
First strike in 1972 and lockout the following year
Most strikes about free agency and arbitration
Cancel 1994 World Series because of a strike—> injunction makes them start next season under previous CBA after getting into the season and no deal being reached

94
Q

NFL Labor History

A

NFL—> NFLPA founded in 1956 and decertify in 1988 so NFL can be sued on anti-trust

95
Q

Do athletes get paid too much?

A

People are willing to pay so there is demand for the sport, and the players deserve to split the revenue the way they do
However, NFL contracts not being guaranteed seems unfair for the players
And the NBA structure seems to be a bit too high. TV deal too big makes cap too big and creates super teams because can afford multiple super stars. Should give X amount of revenue to players association as a whole and have cap only like 80% of what it is

96
Q

What determines player salaries?

A 
CBA
Internal Factors (Skill, position, experience, injury history, drawing power, sport)
External Factors (Competitor league, free agency, MLB salary arbitration, salary caps, luxury taxes, reserve system)
97
Q

Big Picture of Unions and Athlete Compensation

A

Unions are needed to create the CBA that governs the rules of the league and how players are compensated in relation to the league’s revenue. Players are paid a lot, but not too much except in the NBA where the revenue is ridiculously high because of a new TV deal that was over-market price. Should give some of that revenue to the NBAPA as a flat fee and rest as cap. NFL not guaranteed, should be.

From Flashcardlet (60 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions