1. Chapter 3 BUSINESS, PHYSICAL ACTIVITY, AND SPORT (PG.66-89)

2. “What distinguishes ‘sport for sport’s sake’ from sport as a profit-seeking venture?”

3. 3.1 Professionals VS. Amateurs  Professional Athlete: an athlete who is paid to compete in a sport. For example Kyle Lowry of the Toronto Raptors or Jose Bautista of the Toronto Blue Jays.  Amateur Athlete: is one who is not paid to compete in a sport (although they may receive government support for part of his or her training).

4. The difference...  The essential difference between professional and amateur athletes is compensation. Compensation for a professional athlete’s labour consists of a player’s contract, signing bonuses, sale of merchandise and tickets, investment opportunities, and endorsement deals. An endorsement deal is an agreement whereby an athlete is paid to promote a product or service provided by a commercial interest.

5. Semi-Professional Athletes  An athlete’s career could also be a blend of professionalism and amateurism. Top amateur athletes usually want to move up to the “big leagues” where financial rewards are plentiful. Many sports organizations have relaxed their rules so that professional players can compete.

6. Funding For Amateur Athletes  Sport Canada is Canada’s major granting agency.  It funds amateur athletes through its Athlete Assistance Program.

7. Amateur Athletes’ Financial Challenges  The achievements of many amateur athletes are all the more remarkable given the obstacles they must overcome: -

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9. 3.2 Sport for Profit  For-Profit Sport refers to organized sport where owners hire players to compete and then the owners market their athletes.  The objective is for the owners to make a financial return on their investment.  Sport becomes, in this sense, a business.

10.  Not-for-profit sport refers to recreational, community, and national- level sport where the primary objective is enjoyment and representing one’s country.  The primary objective is not for profit. The players are not paid.  No money is made.

11. Revenue Streams  Where does all the money that fuels the business of sport come from? The sale of tickets to games is only the starting point for sports income. Besides game action, revenue is generated through merchandise.  Increased revenue means a team has more money to hire superstars. Signed a 4 yr, $48 million US

12. Endorsements and Sponsorships  Some athletes endorse the kinds of products they use in training and competition, e.g., basketball shoes, baseball bats, or sports drinks.  Contradicting endorsements?? Can you name some?

13. Sport-Spin Offs Replica products: team jerseys, coffee mugs, supporter banners, scarves, etc.

14. Revenues of Sport Clothing Companies

15. CHAPTER 3.1 & 3.2 SUMMARY Professional athletes are paid to compete; amateur athletes are not. Professional athletes earn money from salaries, endorsement deals, signing bonuses, sales of merchandise and tickets, and investment opportunities. Amateur athletes receive relatively modest government funding. Professional sport is a huge profit-making enterprise that relies on various revenue streams and spin-off ventures.

16. Homework questions  Pg. 65 Q#1 and 3

17. 3.3 Owner, Athlete, Agent and Fans THE OWNERS...  Owners of professional sports teams may have non-economic reasons for doing so, e.g.,contributing to their community or a passion for sports.

18. The Many Business Interests of a Sports Franchise  A sports franchise consists of a team along with associated business interests  A franchise’s business interests include licensing, concessions, broadcasting rights, equipment, stadium, players, and coaches

20. THE ATHLETE...  Athletes are members of a workforce in which performance is the one criterion upon which all members are judged.  High-profile athletes in hockey, baseball, and basketball earn millions of dollars a year.

21. THE SPORTS AGENTS...  or player representatives, make their living by charging a commission: a pre- arranged percentage of the value of a player’s contract.  Agents represent athletes in all levels of business dealings, e.g., choosing a team, negotiating a contract, and selecting endorsement deals.

22. THE SPORTS FAN...  Fan loyalty is the most important asset for a sports franchise. Dedicated fans will support a team through many years of mediocre success and even through suspension of play due to labour disputes.

23. Players Strikes and Lockouts  Sometimes players cause work stoppages because their agents or player unions have disputed clauses in their contracts over salaries or pensions.

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25. Intrinsic Motivations of Top-Level Athletes, Professional and Amateur - Extrinsic Motivations of Top-Level Athletes -

26.  Professional soccer player Benoît Assou-Ekotto (left) caused waves when he admitted he played only “for the money.”

27. Is It Wrong for an Athlete to Play Only for the Money?  Pro Arguments: We are all mercenary to some degree; players sometimes just want to move on to apparently bigger things; renewing a contract with the same club usually means only incremental wage increases  Con Arguments: Athletes play an important role in “advancing the world”; playing in a major sport is not just about “folks going to work”; athletes have a responsibility to live up to certain ideals and to show respect for fans

28. CHAPTER 3.3 SUMMARY The key players in the business of sport are the owners, athletes, agents, and fans. The key players in sport have both economic and non-economic reasons for their involvement but the profit motive is usually very powerful. Athletes are driven by both monetary and non- monetary motivations.

29. CLASSWORK  Complete 3.1 in your workbooks on pg. 36

30. 3.4 The Influence of Media on Sport  Media are the various means of communication through which people are reached widely, including print and digital formats.  The media include: Newspapers Radio Television The Internet Social and news networks

31. The Influence of Television  Early on, newspapers included sports coverage but fans had to wait until after the sporting event to find out who won. In the 1930s and 1940s, radio broadcasts broke that pattern by allowing live sports coverage. The first NHL hockey games came to viewers at home in Canada in 1952. TV has reshaped the rules of sport, caused the redesign of players’ uniforms and equipment, and affected the duration and tempo of sporting events.

32. The Sports as Entertainment History  Many technological advances in television broadcasting have led to the growth of the “sport- as-entertainment industry.” The “extras” include:

33. Digital Advances  Significant technological advances in the delivery of “sport-as- entertainment” are taking place each and every year.  For example: Most professional sports leagues now broadcast games in high- definition. Enormous screens at sporting events offer crystal- clear, digital pictures.

34. Sport and Social Media  Social media play an increasingly important role in how fans follow sport. Fans can follow live action or catch highlights on computers or smartphones. Fans routinely view game highlights and bloopers on YouTube.

35. The Downside of Digital Communications  Widely accessible digital communications technologies have created new possibilities for signal theft (digital piracy). Live sports broadcasts are therefore vulnerable to unauthorized retransmission over the Internet. Signal piracy threatens the advertising and sales revenues of broadcasters who have paid exclusive rights to show live coverage of sports events.

36.  Is there a conflict of interest when a company purchasing a sports team owns media outlets as well? In 2011, Rogers Communications acquired a share of almost 40 percent in Maple Leaf Sports and Entertainment (MLSE). MLSE owns the Toronto Maple Leafs, the Toronto Raptors, the Toronto Marlies, and the Toronto FC soccer team.

38. MLSE Partnerships with Media Giants Advantages  MLSE needs to work with communications companies to televise and broadcast games, publish print information, and post information online.  There is need to pay an outside company for communications/promotion services.  The MLSE franchise can supply its own communications services itself. Disadvantages  The uneasy combined ownership of media and “product” Will fans enjoy unbiased coverage of MLSE teams by people hired to provide coverage who are employed by the same company? All the money an average group of fans pays to consume sports—for tickets, cable fees, and bandwidth fees—now goes to one very powerful company.

39. CHAPTER 3.4 SUMMARY Mass media, including social media, have exerted profound influences on physical activity and sport. Television has reshaped the sport-as- entertainment industry most strongly. There are complex issues related to sport as entertainment, e.g., broadcasting rights and ownership concentration.

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41. 3.5 Consumer Awareness Related to Physical Activity and Sport

42.  A staggering number of companies compete to sell us products and services such as: Sport drinks Exercise equipment Workout apparel Memberships in fitness clubs and sports leagues

43.  Factors behind increasing sales of health and wellness products worldwide include: An aging population High obesity rates Raised public awareness of unhealthy foods

44. Growing Financial Opportunities  The Business Development Bank of Canada issued a report in 2013 revealing that: Health awareness has increased among Canadians. As a result, financial opportunities abound for small and medium- sized enterprises (SMEs). Many SMEs specialize in products related to personal fitness, health, and wellness.

45. Susceptible Target Markets  Several target markets may be susceptible to fraudulent or misleading claims by vendors of products and services related to fitness and health:

46.  The private fitness industry refers to the large number of private clubs offering individuals opportunities to purchase and enjoy fitness training and social activities related to fitness.  Privately owned gyms and health clubs in Canada have grown enormously in the past three decades. There are more than 6,200 fitness clubs in Canada. Fifteen percent of the Canadian population belongs to a fitness club. Total annual revenue of these clubs is $2.2 billion (as of 2014).

47. Before you sign up to a club... Take time to understand what to look for in a gym or fitness club. Find out in advance how the equipment, training, and personnel can help you meet your personal health- related and fitness goals. Know how to read a membership contract before signing and committing to payments. Gyms and fitness clubs always seem on the “top 10” consumer complaints lists. Consumers can take legal action if fitness clubs misrepresent themselves or take advantage of their clients. Consumers must be well-informed before buying a gym membership. They should also ensure that instructors are professionally qualified as trainers.

49. Your Rights as a Consumer  Legislation in Ontario and other Canadian provinces protects you if you sign a “personal development services agreement” that costs more than a modest amount. For example, Ontario’s Consumer Protection Act (2002) covers anyone who signs up with a gym, fitness centre, weight loss club, martial arts classes, or dance lessons. Consult your province’s website to learn more about your rights as a consumer of fitness-related services.

50. CHAPTER 3.5 SUMMARY It is important to be an informed consumer with regard to products or services related to physical activity and health. Unscrupulous companies can market fitness- or health-related products or services that promise results that are too good to be true. Consult reliable sources of information (e.g., Ontario’s Ministry of Consumer Services) to find out your rights as a consumer before signing up for any pre-paid fitness- or health-related services.

51. Homework  Complete questions on page 89 #3,4, 9, 14, 18

52. GROUP ASSIGNMENT  Complete worksheet 3.3 on page 38  You will work in a group of 3 or 4 and come up with a goods or service related to sports and physical activity  This will be added to your portfolio