1. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 1 Do Now What is risk? What does Harbor Yard or Bluefish Stadium do to reduces the risk of injury to an attendee during a concert or game?

2. Sports and Entertainment Marketing © Thomson/South-Western ChapterChapter Sports and Entertainment Means Business 2.1 Sports and Entertainment Economics 2.2 Risk Management 2

3. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 3 Lesson 2.2 Risk Management Goals Define risk and describe the categories and classifications of risk. Name and describe four strategies for risk management.

4. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 4 RISKING IT ALL risk the possibility of financial gain or loss or personal injury

5. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 5 Three Categories of Risk 1.Natural risk occurs from unavoidable weather conditions 2.Human risk dishonest customers and employees inadequately trained employees 3.Economic risk occurs due to changes in the economy

6. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 6 Three Additional Classification of Risk 1.gain or loss risk speculative risk either a gain or loss could result pure risk a chance of an event occurring that could only result in a loss

7. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 7 2.controllable or uncontrollable risk controllable risk if a loss can be prevented or the likelihood of its occurrence reduced uncontrollable risk nothing can be done to prevent the risk Three Additional Classification of Risk

8. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 8 3.Insurable or Uninsurable risk insurable risk a pure risk for which the chances of loss are predictable and the amount of the loss can be estimated uninsurable risk the chance that a dollar loss could occur the amount of the loss cannot be estimated Three Additional Classification of Risk

9. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 9 What are four steps a sports venue could take to avoid risk of injury to fans attending games?

10. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 10 MANAGING RISK risk management preventing, reducing, or lessening the negative impacts of risk by using the strategies of risk avoidance, risk insurance, risk transfer, and/or risk retention

11. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 11 Strategies to Manage Risk 1.Risk Avoidance – precautions to avoid risky situations 2.Risk Insurance – buy insurance for predictable risk 3.Risk Transfer – put the liability on another company or even the customer 4.Risk Retention – retain money to cover the cost of a given risk

12. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 12 Lesson 2.1 Sports and Entertainment Economics Goals Define profit and explain the profit motive. Describe types of economic utility.

13. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 13 THE PROFIT MAKERS profit the amount of money remaining from revenues after all expenses are paid revenue the money a business receives from the sales of goods and services profit motive making decisions to use resources in ways that result in the greatest profit

14. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 14 Cultural Opportunities for Profits Worldwide distribution revenue is critical for movie profits. China has a tremendous movie market. The government censors movies for content Pirated movies diminish theater sales

15. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 15 ECONOMICS economics the study of how goods and services are produced, distributed, and consumed

16. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 16 the study of the economics of the entire society microeconomics the study of the relationships between individual consumers and producers Sports and entertainment marketers are focused on microeconomics. relationships with consumers macroeconomics

17. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 17 Sports and Entertainment Economics economic utility the amount of satisfaction a person receives from the consumption of a particular product or service

18. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 18 Types of Utility form utility when the physical characteristics of a product or service are improved time utility making the product or service available when the customer wants it place utility the product is available where it is wanted possession utility the product or service is available at an affordable price

19. Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 19 List four types of economic utility.