1st Edition

Sports Finance and Management Real Estate, Entertainment, and the Remaking of the Business

    500 Pages 60 B/W Illustrations
    by CRC Press

    The sports business landscape has changed dramatically in the past two decades. Teams and facilities have become integral parts of the businesses of real estate and development, entertainment, and the media. While an understanding of core financial management issues specific to the sports industry is still mandatory, a greater appreciation of financial and management issues that link teams to the dynamic forces that make it possible to listen or to watch games at home, on the road, or anywhere a fan happens to be is also needed.

    Sports Finance and Management: Real Estate, Entertainment, and the Remaking of the Business takes an in-depth look at the changes in the sports industry, including the interconnecting financial issues that occur when a sports team becomes a part of bigger companies, the altered nature of fan loyalty influenced by network and Internet footprint, dramatic changes in sports venues driven by the trend for single-purpose stadiums, and league policies such as revenue sharing, luxury taxes, and salary caps. The authors have deliberately not chosen sports examples to teach general finanancial and management concepts. Rather, they use basic financial and management concepts to illsutrate the differences and uniqueness of the sports industry. This gives students tackling finance issues for the first time a firm foundation, while allowing those more expert in financial issus to apply their skills and knowledge to the issues specific to the sports industry.

    Capturing the issues that make the sports industry different from any other, the text examines the effects of public financing, unique pricing structures, and roster depreciation allowances. It includes a detailed treatment of risk measurement based on the monetary value placed on championship wins and the influence fixed rosters have on the investment horizon. These features and more give students the foundation needed to understand finance and management as well as the idiosyncrasies of the sports industry.

    The Redefinition of the Sports Business
    Introduction
    Sports Finance and Management in Real Time
    References

    The Structures of Ownership
    Introduction
    The Emergence of Team Sports and Profitable Markets
    Ownership and Expansion: From Individual Entrepreneurs to Large-Scale Entertainment, Real Estate, and Media Firms
    Ownership Patterns Today
    Ownership Structures
    Horizontal and Vertical Integration
    The Integration of Real Estate Development, the Media, Entertainment, and Team Ownership
    References

    Financial Statements, Revenues, and Costs
    Financial Statements
    Balance Sheets
    Income Statements
    Statement of Retained Earnings
    Statement of Cash Flows
    Analyzing Financial Statements
    Ratio Analysis
    Revenues and Costs
    Stadium Revenue
    NFL In-Stadium Revenue
    NBA In-Facility Revenue
    Naming Rights
    Media Revenue
    Player Costs

    Facilities: “Disneyfication” and Design
    Introduction
    Facilities: The Early History
    The Constrained Supply of Sports Franchises
    Disneyfication and the Location of Facilities
    Where Should a Facility Be Built?
    Design and the Competition for Discretionary Income
    The Exterior Design of Facilities and Intrafacility Competition
    References

    Stadium Financing
    Introduction
    Financing Tools
    Financing Facilities: Who Really Pays?
    Facility Financing: The Team’s Share
    Facility Financing: A Public Sector Investment
    References
    Appendix 1

    Sports Teams and Real Estate Development, or Real Estate Development Companies with Sports Teams?
    Introduction
    Increasing Value of Downtown Locations for Sports Facilities
    Rise of Horizontal Integration, Residential Real Estate, and Entertainment Venues
    Managing the Real Estate Inside a Facility
    Managing the Real Estate Outside the Facility: The Increasing Value of Sports Venues as Anchors for Development
    References

    Media and Sports Management
    Introduction
    Sports and the Media: Brief History
    Phase 1: Media and Team Relationships
    Phase 2: Large Scale Revenue from the Sale of Media Rights
    Impact of Phase 2: The Profitability and Revenue Power of Television, the NFL, and Revenue Sharing
    Phase 3: The Vertical Integration of Teams and the Media
    Phase 3 Continues: College Conference Networks
    Media, Sports, and the Future: Emerging Competition in the Delivery of Games to Fans and Advanced (Internet) Media
    References

    What Are Teams Worth? Team Valuation
    Introduction
    Establishing a Team’s Market Value: Basic Observations
    Valuation Models
    Other Factors Affecting Value
    What Is the Value of NFL, MLB, NBA, and NHL Franchises?
    Multiple Earnings
    Constant Growth Pricing Model
    Other Sports
    College Sports
    Conclusion
    References

    Demand and the Sports Business:What Does the Customer Want and How Does a Team Owner Provide It?
    Introduction
    Defining Demand
    Long Run Demand for Sports
    Short Run Issues in the Demand for Tickets
    Reference

    Pricing Strategies
    Introduction
    Ticket Prices
    Are Ticket Prices Too High, Too Low, or Just Right?
    Why Are Ticket Prices Inelastic?
    Price Discrimination
    Bulk and Group Discounts
    Product Bundling
    Variable Ticket Pricing
    Day of Game Pricing
    Dynamic Pricing
    Personal Seat Licenses
    Condominium Seats
    Futures Options
    Pay What You Want
    Media Prices
    Merchandise Pricing
    References
    Appendix 1
    Appendix 2
    Appendix 3

    Capital Budgeting and Team Investments
    Introduction
    Team Investments
    Facility Investments
    Player Investments
    Cost of Capital
    References

    League Policies, Taxes, and Profits
    Introduction
    League Policies
    Player Drafts
    Revenue Sharing
    Luxury Taxes
    Salary Caps
    Promotion and Relegation
    Collective Bargaining
    League Specifics
    Competitive Balance
    Taxes
    Roster Depreciation Allowance
    Player Taxes
    State Taxes
    Ticket Taxes
    Tax Exempt Status for Universities
    Profits
    Leverage
    References
    Further Reading on League Policies
    Appendix
    References

    Biography

    Jason Winfree, Ph.D., is Associate Professor, Sport Management in the School of Kinesiology's Department of Sports Management at the University of Michigan. Dr. Winfree is a sports economist, whose primary research focuses on professional and collegiate athletics.

    Mark S. Rosentraub, Ph.D. holds the Bickner Chair in the School of Kinesiology's Department of Sports Management at the University of Michigan. Previously, he was dean and professor at the Levin College of Urban Affairs at Cleveland State University and an associate dean and professor in the School of Public and Environmental Affairs, Indiana University.

    … sheds light on issues that are unique to the sports business … takes an in-depth look at the changes in the sports industry, including the interconnecting financial issues that occur when a sports team becomes a part of bigger companies … captures the issues that make the sports industry different from any other.
    — NeoPopRealism - Wonderpedia,
    Jan/Feb. 2012