1. Professional Sports in America

2. History of Professional Sports in America Most notable early professional athlete was Jim Thorpe – won gold medals in pentathlon and decathlon in 1912 – Stripped of medals due to playing semipro baseball Baseball was the first team sport to employ professionals – The National League was formed by William Hulbert in 1876 The National Hockey League formed in 1917

3. History of Professional Sports in America (cont.) In 1921, the National Football League formed The National Basketball League formed in 1937 and merged with the Basketball Association of America in 1949 to form the National Basketball Association

4. Identification of the Professional Sport Governing Bodies The four major professional sport leagues are MLB, NBA, NFL, and NHL. – Each league operates a number of team franchises in major cities and metropolitan areas around the U.S. and Canada Major League Soccer (MLS) falls outside the “big four” category – MLS is not an association of franchises but a single business entity – Team owners are shareholders in the league Many of the smaller professional leagues include Olympics sports: track and field, lacrosse, golf, and tennis

5. History of Women in Professional Sports The emergence of women as major sports figures began with individual sports during the Olympic Games Women’s professional team sports have faced many difficulties in sustaining themselves – During WWII, the All-American Girl’s Professional Baseball League formed to provide entertainment, but after the war it ceased to exist After the 1999 Women’s World Cup in soccer, a professional league formed, but failed after three seasons

6. History of Women in Professional Sports (cont.) In 1997, the WNBA formed, but the collegiate game is more popular than the professional game for women Female sports professionals within individual sports (golf, bowling, etc.) have a much longer history than those within team sports Even though, thanks to Title IX, more women are playing sports, it is difficult for women’s professional sports teams to survive

7. Management of Pro Sports The sport industry is a unique subset of the business world, demanding a unique set of management qualifications The management philosophy for professional sports has evolved over the years in an attempt to improve its performance

8. Management of Pro Sports Five aspects of professional sport distinguish it from other industries: – organizational structure – governance – the concept of economic interdependence – substance control policies – the role of the electronic media

9. Organizational Structure Every professional sport has its own structure and system of governance. The structure and system of governance for each professional sport, normally denoted to as the league office, typically involves the following: – League commissioner – Board of governors or committee structure composed of the team owners – A central administrative unit that negotiates contracts and agreements on behalf of the league and assumes responsibility for scheduling, licensing, and other functions

10. Organizational Structure (cont.) The big four are all “bottom-up” organizations The General Manager (GM) is similar to the head of any business organization; he/she must make sure that the separate levels function well individually and cooperatively. Like the coach on the field, the GM off the field must institute a game plan and see that each team member follows it.

11. Governance The job of the league office is not to “run” the league but to implement resolutions made by the owners League offices exist as a headquarters for a number of reasons. The working relationships between teams in a league are conducted according to provisions of league constitutions and bylaws. The league offices also have to deal with player– owners disputes. – Prior to the start of the 2011 NFL season, NFL Commissioner Roger Goodell worked with NFL owners and the NFLPA on settling the NFL lockout which ran from March 11 to August 5, 2011 (ESPN.com, 2011)

12. Economic Interdependence Interdependence refers to conditions where one team’s performance is contingent upon how someone else performs. One important feature of professional sports is the interdependence between the players, the team, and the league. This interdependence helps make professional team sports wildly successful. The economic success of each professional sports franchise is dependent on the quality of sports competition throughout the league and the economic strength and stability of other league members

13. Economic Interdependence (cont.) Professional sports teams function together collectively; some teams (small and large market) sacrifice the potential for higher revenue in the interest of league stability. – For example, some small market teams in the NFL may generate a great deal of revenue from merchandising, often out-earning large market teams. The Green Bay Packers and Pittsburgh Steelers were the top two sellers of NFL licensed merchandise in 2011 (Bailey, 2011). This money, however, is pooled and shared equally among all 32 NFL teams.

14. Drug Testing Policies One unique characteristic of the big four (MLB, NHL, NBA, NFL) professional sport organizations in America is the individual drug testing policies of each sport Drug policies, however, are not uniform for all professional sports. – Typically, each CBA explains the policy regarding drug testing and lists banned drugs, potential violations and corresponding penalties, privacy policies, and rights of appeal. Other professional sports (e.g., track and field and soccer) conform to the World Anti-Doping Agency (WADA) code, which is enforced in the U.S. by the United States Anti-Doping Agency (USADA)

17. Role of Electronic Media After Congress passed the Sports Broadcasting Action in 1961, the relationship between the media and professional sports changed dramatically. All four of the major sports have had television contracts with at least one of the “big four" U.S. broadcast television networks (CBS, FOX, NBC, and ABC).

18. Role of Electronic Media (cont.) Professional sport has several unique characteristics. – Sport is an ephemeral (short-lived) product. Viewers are primarily interested in only live broadcasts. – Substitution is difficult. A viewer who wants to see a given sporting event or team is unlikely to be satisfied with coverage of another sporting event. – TV networks are signing longer term exclusive contracts that reduce the accessibility for other entities to benefit from live events.

19. Key Legislation Impacting Labor– Management Relations The court system in the United States has recognized the special characteristics of professional sports leagues and has enacted key legislation protecting these unique organizations

20. Key Legislation Impacting Labor– Management Relations There are a variety of federal statutes that impact professional sport leagues and teams – 1. Antitrust Legislation – 2. Labor Relations Law – 3. Agency Law – 4. Intellectual Property Law – 5. Sports Broadcasting Act – 6. Professional and Amateur Sports Protection Act

21. Major Revenue Sources Unlike commercial business, which is normally valued on cash flow and assets, professional sport franchises are valued on their revenues The primary revenue sources for professional sport teams include – media contracts – gate receipts – concessions and restaurant rights – licensing and merchandising revenues – naming rights – parking fees – public financing for stadiums – sponsorship packages

22. Professional Sport Issues Gambling – Professional sports leagues in America have worked hard to keep their sports free of gambling. Each league has faced challenges in dealing with accusations of players gambling on professional sports. Violence – Professional sports organizations like the NBA have worked diligently to maintain a reputation of clean, violence-free sport. Recent league action demonstrates that certain off- field conduct is indeed a consideration of team and league evaluation as evidenced by discipline of players.

23. Professional Sports Issues (cont.) Employment Diversity – Diversity is critically important to professional sport organizations in America. It is a cultural and organizational imperative around dignity, respect, inclusion, and opportunity. Ownership Restrictions – All four major leagues have strict rules regarding who may own a team, and they also place restrictions on the types of other activities the owners may engage in. To avoid any perception of being in a conflict of interest, the major leagues normally do not allow anyone to own a stake in more than one franchise.

24. Professional Sports Issues (cont.) Broadcasting Issues – Internet rights, siphoning, home taping, domestic and international piracy of satellite transmissions, blackouts, handheld pagers, and satellite distribution Labor Disputes – Labor disputes have impacted every major professional sport in America, often costing players and owners large sums of money. In 2011, the NFL and NBA both experienced work stoppages and lockouts. Globalization