Bell Ringer

1
Bell Ringer

• What is the sale price of an item that is 179.99
  and is 15 off? 
• Sit in your ASSIGNED seats.

2
Bell Ringer Answer

• 179.99 15 (0.15) 26.9985 ? 27.00
• 179.99 - 27.00 152.99

3
Agenda

• Bell Ringer / Attendance / Housekeeping
• Discuss weekly schedule
• Risk Management Lecture and Discussion
• Take Notes (YELLOW STARRED SLIDES ARE IMPORTANT)
• Left-Hand Side Activity

4
Learning Objectives

• Define risk and describe the categories and
  classifications of risk.
• Name and describe four strategies for risk
  management.

5
Risk

• The possibility of financial gain or loss or
  personal injury.
• Financial loss can occur if a business does not
  make a profit and has to close, resulting in the
  loss of all of the money the owners and investors
  have used to start the business.
• Personal injury can occur if a business does not
  take the appropriate safety precautions.

6
Types of Risks

• Natural
• Economic
• Human

7
Natural

• Risks that are a result from natural causes such
  as the weather.
• Hurricane Katrina resulted in New Orleans
  population to decrease by 80

8
Hurricane Sandy
9
Economic Risks

• Risks that occur from changes in overall business
  conditions.
• When many people are without jobs, they spend
  less money on sporting and entertainment goods.
• The sporting and entertainment industry has the
  risk of not selling merchandise or tickets.

10
Human Risks

• Risks caused by human mistakes as well as by the
  unpredictability of customers, employees, or the
  work environment.

11
Sources of Inventory Shortages
12
Other Categories of RisksGain or Loss

• Pure Risk ? risks when there is a possibility of
  a loss, but no chance to gain from the event.
• Flood closes a golf resort
• Speculative Risk ? risks that occur when gains or
  losses are possible.
• NBA team comes to Louisville

13
Other Categories of RiskControllable Risk

• Controllable Risk ? risks that can be prevented
  or reduced in frequency.
• Sprinklers to reduce fire damage
• Uncontrollable Risk ? events that keep a business
  from continuing such as the weather.
• Tornado blows away a dome

14
Other Categories of RisksInsurable Risk

• Insurable Risk ? pure risks that could exist for
  a large number of businesses, includes those for
  which the probability and amount of loss is
  predictable.
• Fire Insurance
• Uninsurable Risk ? risks that occur when the
  chances of risk cannot be predicted or when the
  amount of loss cannot be estimated.
• Louisville Bats have a losing season and fans do
  not come out to watch.

15
Risk Management

• There are no methods to completely safeguard a
  business from risk however, marketers must
  develop risk management strategies to ensure all
  probable risk are addressed.
• Risk Management ? a strategy to offset business
  risks.
• Risk management is a systematic process of
  managing an organizations risk exposure to
  achieve objectives in a manner consistent with
  public interest, human safety, environmental
  factors, and the law.

16
Risk Avoidance

• Avoiding risky situation takes planning on the
  part of sports and entertainment marketers.
• A business could be successfully sued if it has
  not taken steps to ensure compliance with safety
  laws that limit the liability for injury.
• Liable ? the business is legally responsible for
  damages and might have to pay for the medical
  costs and other losses suffered by the injured
  person.

17
Managing Potential Risk

• Businesses can handle risk by different methods
• Purchasing insurance
• Property, Liability, Theft
• Risk Transfer
• Transferring risk to another company or the
  consumer
• Hires a company to host a firework display,
  include a disclaimer at the bottom of tickets
• Implement employee training / background checks
• Product warranties
• Risk retention
• Setting aside funds to use in case of a loss

18
Risky Situations

• Indiana State Fair Payout
• Fan Falls at Turner Field Video
• Man Falls at RiverFront Stadium
• Amusement Park Injuries
• The Station Nightclub

19
Identify the Category of Risk
20
Identify the Category of Risk

• http//www.youtube.com/watch?v6a37f5WROis

21
Identify the Category of Risk
22
Pure or Speculative?
Nike Be True Collection
23
Controllable or Uncontrollable Risk?
24
Insurable or Uninsurable?

• Ticket Prices Rise as Attendance Drops
• Dolphins Attendance

25
Brainstorm

• What risks do NFL teams have to prepare for
  during the season?

26
Risks

• Not drafting good players low ticket sales
• Safety Concerns (Escalators, Steep Seats,
  Appropriate Railing)
• Low ticket sales due to the economy
• Lockout (Ref or Players)
• Weather if you do not have a dome

27
Left-Hand Activity (Part 1)

• Age Distribution Graph

28
Disney

• According to Disney spokesperson Kim Prunty, The
  warning signs indicate that Mission Space is
  not for every guest. Epcot brochures available
  in English, German, and other languages warn
  visitors that riders of Mission Space and
  Test Track should be in good health and free
  from high blood pressure, heart, back or neck
  problems, motion sickness, or other conditions
  that could be aggravated by this adventure.
  There were 13 signs in the Mission Space cue
  that warn guests of certain medical conditions to
  not ride. A four-year-old boy died in June 2005
  and a 49 year-old German tourist suffered a
  stroke and late died in April 2006 after riding
  Mission Space While two have died almost 9
  million people have ridden since its 2003
  opening.
• What risk do people assume when they board a ride
  at a theme park.
• What responsibility does the theme park have to
  the riders?

29
Left-Hand Activity (Part 2)

• List four steps a sports venue could take to
  avoid risk injury to fans attending games?