Chapter 2 Sports and Entertainment Means Business Sports

Chapter 2 Sports and Entertainment Means Business Sports and Entertainment Marketing © Thomson/South-Western

Lesson 2. 3 Business Ethics Learning Targets n I can define ethics. n I can discuss the impacts of unethical behavior. Chapter 2 Slide 2 Sports and Entertainment Marketing © Thomson/South-Western

Terms n Ethics n Principles Chapter 2 Slide 3 Sports and Entertainment Marketing © Thomson/South-Western

DO ETHICS COUNT? n Ethics n a system of deciding what is right or wrong in a reasoned and impartial manner. n All businesses should be conducted with integrity, trust, and fairness. Chapter 2 Slide 4 Sports and Entertainment Marketing © Thomson/South-Western

Ethics and Character Matter n Principles n high standards of rules and guidelines. n Character Development n a progression in behavior - advance from childish behavior to mature behavior (it takes time) n Young people need good role models. Chapter 2 Slide 5 Sports and Entertainment Marketing © Thomson/South-Western

n Common Principles in our society? n Don’t Kill n Don’t Steal n Common Principles for NCAA? n Can’t except money from boosters/agents Chapter 2 Slide 6 Sports and Entertainment Marketing © Thomson/South-Western

BUSINESS BEHAVIOR n People (businesses) should act ethically while pursuing a profit. n Athletes (teams) should act ethically while pursuing a victory. Chapter 2 Slide 7 Sports and Entertainment Marketing © Thomson/South-Western

Seeking an Advantage n Sometimes it is hard to continue to act ethically when you observe people who receive a benefit from acting unethically. n PED’s (Performance Enhancing Drugs) n Corked Bats n Paying or giving gifts to recruits Chapter 2 Slide 8 Sports and Entertainment Marketing © Thomson/South-Western

When Being Bad Profits n Only fans can really influence the behavior of ethically challenged athletes and celebrities. Chapter 2 Slide 9 Sports and Entertainment Marketing © Thomson/South-Western

Effective and Ethical n Good decisions are both ethical and effective. n Good decisions are the right choices for the long term. Chapter 2 Slide 10 Sports and Entertainment Marketing © Thomson/South-Western

DUE TODAY! n Assignment Sheet from yesterday. n FFFL Week 4 Stats Chapter 2 Slide 11 Sports and Entertainment Marketing © Thomson/South-Western

Lesson 2. 4 Financial Analysis Learning Targets n I can discuss sources of funding and revenue for sports and entertainment businesses. n I can list and describe four tools for financial analysis. Chapter 2 Slide 12 Sports and Entertainment Marketing © Thomson/South-Western

Terms n n n Return On Investment Forecast Budget Balance Sheet Income Statement Chapter 2 Slide 13 Sports and Entertainment Marketing © Thomson/South-Western

IT TAKES MONEY n Profit is the primary purpose of sports and entertainment marketing. n #1 Goal/Objective of any business is to make a profit. Chapter 2 Slide 14 Sports and Entertainment Marketing © Thomson/South-Western

Finding Funding n Funding for an event is typically provided by investors. n Example Costs – Celebrity Golf Pro-Am n n Salaries Promotions/Advertising Player Fees Course Fees Chapter 2 Slide 15 Sports and Entertainment Marketing © Thomson/South-Western

n Return On Investment the income from a venture that is distributed to investors. n Payment investors receive for providing financial backing. Chapter 2 Slide 16 Sports and Entertainment Marketing © Thomson/South-Western

Money Sources n Funds to repay investors are raised through; n Ticket Sales n Pre-Game Sales and Season Tickets n Broadcast Rights n TV and Radio n Licensing n Merchandise and Apparel n Facilities n signage, parking fees, luxury boxes, concessions Chapter 2 Slide 17 Sports and Entertainment Marketing © Thomson/South-Western

WHERE IS THE MONEY? n Forecast n a plan/report that predicts the expenses to be incurred and the revenues to be received. Note – must always do your homework if you want a successful business/team. Chapter 2 Slide 18 Sports and Entertainment Marketing © Thomson/South-Western

n Budget a plan for how available funds will be spent. n Solid budgets list specifics - Income (money coming in) and Expenses (money going out). n Sole purpose of a budget is to control costs so they do not exceed the funds available. Helps businesses/people to allocate money and not spend more than they have. Chapter 2 Slide 19 Sports and Entertainment Marketing © Thomson/South-Western

Financial Statements n Balance Sheet shows net worth at a specific point in time. (Assets – Liabilities = ) n Assets = items of value, cash, property, equipment. n Liabilities = amounts owed for purchases made on credit and loans. n Income Statement shows revenues and expenses for a specific period of time. n Reveals company’s profit or loss. Chapter 2 Slide 20 Sports and Entertainment Marketing © Thomson/South-Western

Investor Do Their Homework NOTE – reviewing the forecasts, budgets and financial statements is a must prior to investing. Financial Analysis – Four Tools; 1. Forecasting 2. Budgeting 3. Balance Sheet 4. Income Statement Chapter 2 Slide 21 Sports and Entertainment Marketing © Thomson/South-Western