Professional Sport

1
chapter 5

• Professional Sport

James M. Gladden, William A. Sutton
2
Introduction

• Professional sport is any sport activity or skill
  for which the athlete is compensated
• Compensation can be in the form of a salary,
  bonuses, reimbursement for expenses, or any other
  forms of direct payment
• (continued)

3
Introduction (continued)

• The heart of North American sport
• Super Bowl
• World Series
• Masters
• Indianapolis 500
• Wimbledon
• Kentucky Derby
• X Games

4
Nature of Professional Sport

• David Guterson (1994)
• Professional sport industry principles
• Labor
• Management
• Governance

5
Unique Aspects of Professional Sport

• Interdependence
• Structure and governance
• Labormanagement relationship
• Role of electronic media

6
Interdependence

• Teams simultaneously compete and cooperate
• All teams make sacrifices and concessions for the
  long-term benefits and growth of the league
• Each league pools its revenues to some extent

7
Structure and Governance

• League office includes
• League commissioner
• Board of governors composed of team owners
• Central administrative unit
• Negotiates contracts and agreements
• Responsible for scheduling, licensing, and so on
• Coordinates publicity and advertising

8
LaborManagement Relationship

• Five unique circumstances and conditions
• Baseballs antitrust exemption
• Collective bargaining
• Free agency
• Salary caps
• Player draft

9
Baseballs Antitrust Exemption

• Sherman Antitrust Act
• Created to prohibit companies from dominating
  their respective markets in interstate commercial
  activity, thus creating a monopoly
• Supreme Court ruling
• Federal Base Ball Club of Baltimore, Inc. v.
  National League of Professional Base Ball Clubs
  (1922)
• MLB was granted an exemption to antitrust law

10
Collective Bargaining

• National Labor Relations Act (NLRA)
• Common elements

11
National Labor Relations Act

• Provides three basic rights
• Right to self-organizationto form, join, or
  assist labor organizations
• Right to bargain collectively through agents of
  ones own choosing
• Right to engage in concerted activities for
  employees mutual aid or protection

12
Common Elements

• Contract
• Compensation
• Labor
• Rights
• Agreement
• Clauses
• Protection
• Benefits
• Discipline

13
Free Agency

• Implications
• After fulfilling number of years of service with
  a team, players can sell their services to
  another team
• Restrictions
• A negotiated item in the collective bargaining
  agreement
• Recognizes team investment in the player

14
Salary Caps

• Labor and management share revenues generated by
  the league
• Places limit on total compensation
• All teams must comply
• Put into effect through collective bargaining

15
Player Draft

• Designed to be an equitable system
• Teams with poor records have an advantage over
  teams with winning records in acquiring talented
  new players
• Teams restrict competition for new talent
• Team that drafts a player determines destination
  and salary of new player

16
Role of the Electronic Media

• Importance of television
• Teams and leagues receive revenue
• Enhances the enjoyment for viewers
• Emerging sources of media coverage
• Satellite
• Internet

17
Revenue Sourcesfor Professional Sport

• Media contracts
• Gate receipts
• Licensing and merchandising
• Sponsorship

18
Media Contracts

• Table 5.3
• National media contracts for sport leagues
• Proliferation of sport programming
• Growth and capabilities of both cable and
  satellite
• Increased choices available
• Decline in viewers of professional sports
• Difficult for leagues to negotiate lucrative
  contracts

19
Gate Receipts

• Major source for minor league sports
• Prevalent source for newer leagues
• Majority retained by home team
• Portion given to league
• Portion may be given to opposing team

20
Licensing and Merchandising Revenues

• Leagues and teams grant manufacturers the right
  to use names and logos
• In return they receive a royalty
• Lucrative source of revenue
• Revenues distributed equally among teams

21
Sponsorships

• Signage
• Becomes visible
• Demand for location
• Rotating signage
• Virtual signage
• Naming rights
• Corporation agrees to pay a large sum of money
• Name of corporation included in the name of the
  facility

22
Career Opportunities

• Executives
• Overseers of the entire operation
• Player personnel
• Responsible for putting the best possible team on
  the field or court
• Business positions
• Responsible for generating revenue, marketing,
  developing a fan base, and working with customers

23
Executives

• Chief executive or operating officer
• Responsible for entire organization
• Chief financial officer
• Responsible for accounting and financial planning
• Chief marketing officer
• Responsible for coordinating marketing mix
• (continued)

24
Executives (continued)

• General counsel
• Responsible for overseeing all legal matters
• General manger
• Responsible for acquiring, developing, trading,
  and releasing talent

25
Player Personnel

• Involved in identifying, evaluating, and
  developing potential and current players
• Involved in observing players assigned to the
  minor leagues

26
Medical, Training, and Team Support

• Responsible for physical and mental preparation
  and readiness of players
• Responsibilities include
• Medical and dental care
• Treatment and rehabilitation
• Nutrition
• Strength and conditioning

27
Coaching Staff

• Concentrates on all activities occurring between
  the lines
• Primarily concerned with coaching, managing, and
  training players on the rosters

28
Player Education and Relations

• Serves as a liaison between team and player
• Educates players regarding
• Financial management
• Substance abuse
• Nutrition
• Image management
• Additional higher education

29
Video Staff Support

• Produces and edits videos
• Purchases and maintains hardware and software
• Supervises and coordinates satellite feeds
• Coordinates broadcasts

30
Equipment and Clubhouse Staff

• Maintains, cleans, orders, repairs, distributes,
  inventories, ships, and packs all uniforms and
  equipment
• Negotiates with manufacturers and sales personnel
  for equipment and uniforms
• Provides security for the locker room both at
  home and on the road

31
Stadium and Facility Staff

• Responsible for maintenance, upkeep, and repair
  of the playing surface
• Prepares the team offices, locker rooms, training
  facilities, practice facilities, and playing
  fields

32
Ticket Sales

• Focuses on selling
• Season tickets
• Partial season tickets
• Group tickets

33
Corporate Sales

• Targets corporations exclusively
• May sell corporate sponsorships, luxury suites,
  or club seats

34
Game Experience

• Focuses on enhancing the experience of people who
  attend games
• Oversees music, video boards, and public address
  messages

35
Advertising

• Designs and writes advertising copy
• Identifies, secures, and places advertisements in
  a variety of media

36
Promotions

• Focuses on providing an optimal experience to
  spectators
• Oversees all promotional activity that occurs on
  the field or in the stands

37
Web Site Management

• Uploads and downloads content
• Works with league offices to ensure appearance
  standards
• Works with corporate sponsors
• Creates content that will increase traffic to the
  site

38
Community Relations

• Creates and administers grassroots functions
• Clinics
• Charitable events
• Implements leaguewide programs, such as NBA Reads
  program

39
Media Relations

• Assists and works with the media by providing
  information necessary for game and publicity
• Ensures that the needs of the media are met at
  every sporting event
• Responsible for media guides, yearbooks, and game
  programs

40
Database Marketing Coordinator

• Focuses on building databases of information
  about team customers
• Oversees the marketing research efforts of the
  organization

41
Hospitality Coordinators

• Responsible for game-related needs of
• Corporate clients
• Club seat holders
• Luxury box owners
• Coordinates the provision of
• Food
• Beverages
• Computer and Internet connections

42
Information Technology Staff

• Responsible for information technology hardware
  and software used in all operations of the
  franchise
• Handles purchasing, network maintenance, and
  report generation.

43
Ticketing

• Manage the ticket inventory
• Responsible for
• Ticket distribution
• Printing
• Accounting
• Box office sales
• Complimentary tickets
• Financial settlement for visiting team

44
Securing Employment

• Steps that you can take
• An internship is essential
• Construct an information file on teams and
  organizations
• Seek part-time employment or volunteer experience
  in sales, game management, customer service, and
  hospitality
• Interview people
• Develop good understanding of the industry,
  leaders, and issues