Sports and Entertainment Marketing © Thomson/South-Western Textbook Assignment: Encore pg B – Thunderstorm 2. A – 1.Gain or Loss Risks 2.Insurable Risks 3.Controllable Risks 3.Make the facility is well-lit, has adequate fire exits, staffed with security personnel, employees have been trained for emergency situations. Chapter 2 Slide 1

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 2 Lesson 2.3 Business Ethics Learning Targets I can define ethics. I can discuss the impacts of unethical behavior.

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

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

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

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

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

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

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 9 Controlling Bad Behavior Professional Sports - Athletes Fines Reduced Playing Time Suspensions Game(s) Season Lifetime College Sports - Athletes Reduced Playing Time Suspensions Game(s) Season Loss of scholarship Professional Sports - Franchise Fines Salary Cap Hits Firings Removal of Owner(s) College Sports - School Fines Reduction of Scholarships Suspensions Televised Games Postseason Play Season

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 10 Being Bad Can Affect Profits Only fans can really influence the behavior of ethically challenged athletes/celebrities/leagues by taking a stand; Stop buying Tickets Products (Jersey, Apparel, and items from major Sponsors) Voice displeasure Letters s Blogs Protest NOTE – if fans do not take a stand the bad behavior wont change because profit has not been affected.

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 11 Effective and Ethical Good decisions are both ethical and effective. Good decisions are the right choices for the long term. Athlete who takes steroids - Short Term – helps them perform at high level and perhaps helps team win Long Term – player will eventually encounter serious health problems Teams that establish core values and demand that players act accordingly will be the big winners in the long run.

Sports and Entertainment Marketing © Thomson/South-Western Textbook Assignment: Encore pg. 46 Answer Questions: #1, #2, and #4 your responses to the questions. Chapter 2 Slide 12

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 13 Lesson 2.4 Financial Analysis Learning Targets I can discuss sources of funding and revenue streams for sports and entertainment businesses.

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 14 Terms Return On Investment Forecast Budget Balance Sheet Income Statement

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 15 IT TAKES MONEY Profit is the primary purpose of sports and entertainment marketing. #1 Goal of any business is to MAKE A PROFIT. #1 Goal of any team is to WIN.

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 16 Finding Funding Funding for an event is typically provided by investors. Example Costs – Celebrity Golf Pro-Am Salaries Promotions/Advertising Player Fees Course Fees Event Workers

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 17 income from a venture that is distributed to investors. Payment investors receive for providing financial backing (typically more $ than what they invested). Initial Investment + Interest Initial Investment + Agreed Upon $ Amount Initial Investment + Interest + Agreed Upon $ Amount Return On Investment

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 18 Money Sources Funds to repay investors are raised through Revenue Streams; Examples Ticket Sales Pre-Game Sales and Season Tickets Broadcast Rights TV and Radio Licensing Merchandise and Apparel Facilities signage, parking fees, luxury boxes, concessions

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 19 WHERE IS THE MONEY? Forecast 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.

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 20 Budget a plan for how available funds will be spent. Solid budgets list specifics – Income (money coming in or revenue streams) Expenses (money going out). 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.

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 Slide 21 Financial Statements Balance Sheet shows net worth at a specific point in time. (Assets – Liabilities = ) Assets = items of value, cash, property, equipment. Liabilities = amounts owed for purchases made on credit and loans. Income Statement shows revenues and expenses for a specific period of time. Reveals company’s profit or loss. Both are used to show investors and creditors that the business/team is being managed properly and worthy of funding.

Sports and Entertainment Marketing © Thomson/South-Western Chapter 2 - Textbook Assessment Pg. 52 Questions: #1 – #10 Pg. 53 Questions: #15, #17 and #18 Due 10/22 – Start of Class Chapter 2 Slide 22