Podcast
Questions and Answers
Why is it important for sport finance managers to propose solutions for financial losses?
Why is it important for sport finance managers to propose solutions for financial losses?
- To create future financial projections regardless of current losses.
- To avoid paying business taxes.
- To ensure spending is continually optimized. (correct)
- To keep precise and detailed records for historical purposes.
Which business entities are considered when determining the type of business for strategy, planning, and budgeting in sport financial management?
Which business entities are considered when determining the type of business for strategy, planning, and budgeting in sport financial management?
- Joint venture, strategic alliance, consortium, or syndicate
- Sole trader, partnership, corporation, co-operative, nonprofit, or government entity (correct)
- Venture capital, private equity, hedge fund, or angel investor group
- Franchise, limited liability company, S corporation, or holding company
How do smaller professional sport clubs commonly raise funds, according to the presented information?
How do smaller professional sport clubs commonly raise funds, according to the presented information?
- Through financial agreements with manufacturers and retailers.
- By selling merchandise outside a sporting venue.
- Through broadcasting rights on television and radio.
- By organizing gambling events like raffles. (correct)
What does equity financing entail for a sport organization?
What does equity financing entail for a sport organization?
Why is examining previous financial records essential in sport financial management?
Why is examining previous financial records essential in sport financial management?
Which factors are involved in creating a comprehensive financial strategy for a sports organization?
Which factors are involved in creating a comprehensive financial strategy for a sports organization?
What is the PRIMARY obligation of a sports organization when using debt financing?
What is the PRIMARY obligation of a sports organization when using debt financing?
What should every budget decision be viewed through, according to the information about strategy, planning, and budgeting?
What should every budget decision be viewed through, according to the information about strategy, planning, and budgeting?
How do media broadcasts of sports events influence sport finance?
How do media broadcasts of sports events influence sport finance?
What is the purpose of organizing financial information into a dashboard in sport, as stated?
What is the purpose of organizing financial information into a dashboard in sport, as stated?
What is the main Goal of successful sport finance management when it comes to spending?
What is the main Goal of successful sport finance management when it comes to spending?
How does reporting benefit sport organizations?
How does reporting benefit sport organizations?
How can sport organizations improve operations?
How can sport organizations improve operations?
Besides direct funding, what forms of government funding can a sports organization obtain?
Besides direct funding, what forms of government funding can a sports organization obtain?
What is the role of charitable donations in sports?
What is the role of charitable donations in sports?
What is the purpose of cutting out unnecessary expenditures for sports organizations?
What is the purpose of cutting out unnecessary expenditures for sports organizations?
How are financial reports utilized in sports?
How are financial reports utilized in sports?
What is the role of revenue growth in non-profit sport entities?
What is the role of revenue growth in non-profit sport entities?
Which statement is correct? Choose only ONE.
Which statement is correct? Choose only ONE.
Which is NOT an example of good financial practices?
Which is NOT an example of good financial practices?
Flashcards
What are the basics of sport finance?
What are the basics of sport finance?
Following good financial practices; strategy, planning, and budgeting; wise spending; and reporting and analysis.
Financial Management in Sports
Financial Management in Sports
Financial Management in a Sport organization focuses on value creation, revenue growth, and protecting assets similar to other entities.
Strategy, Planning and Budgeting
Strategy, Planning and Budgeting
Defining the business entity (sole trader, partnership, corporation, co-operative, or government entity).
Sport financial management
Sport financial management
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Creating a financial strategy
Creating a financial strategy
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Spending in Sports
Spending in Sports
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Ways to spend wisely in sports
Ways to spend wisely in sports
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Sport Finance Reporting
Sport Finance Reporting
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Analysis in sport finance
Analysis in sport finance
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Other factors that play a role in sports finance
Other factors that play a role in sports finance
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Debt Financing
Debt Financing
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Equity Financing
Equity Financing
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Financing using Retained Earnings
Financing using Retained Earnings
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Government Funding
Government Funding
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Gifts
Gifts
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Study Notes
- The presentation covers financial management in sports, including basics, strategies, and funding.
Basics of Sport Finance
- Successful financial practices are a must
- Strategy, planning, and budgeting are key
- Important to spend wisely and reduce costs
- Consistent reporting and analysis
Profit vs. Non-Profit Entities
- Financial management in sports organizations is similar to other entities, not unique
- Value creation is increasing the firm's worth
- Revenue growth is important
- Striving for a winning championship
- Achieving celebrity status
- Protecting a community asset
Strategy, Planning, and Budgeting
- Vital to determine the organization's business entity type, such as a sole trader, partnership, corporation, co-operative, non-profit, or government entity
- Begins with determining available funds and how to allocate them
- Reviewing past financial records is essential
- For new programs, collaborate with owners and stakeholders to allocate financial resources
- Creating a financial strategy involves being aware of current trends of the sport industry in which the team or organization operates
- Consider internal constraints from past decisions
- Consider external constraints that affect the organization
- Break down expenses like venue, insurance, equipment, travel, marketing, promotions, and personnel salaries
- Accounting for revenue forecasts is key, including membership fees, ticket sales, donations, and dining/apparel sales
- Organize data into a stakeholder-friendly dashboard
- Sport finance professionals should know all regulations relating to their organization
- Evaluate every budget decision with risk versus potential
Spending in Sports
- Successful finance management depends on maximizing value for organizations
- Financial managers need to work with various parties within their organization for success
- Building effective partnerships with high-value vendors can bring success
- Work with organizations that bring visibility and value through high-quality sponsorships
- Seek revenue stream opportunities like in-app purchases
- Cut unnecessary costs and maintain emergency funds for unexpected expenses or income delays.
Sport Finance Reporting and Analysis
- Finance managers measure the impact of all spending
- Propose solutions for financial losses to optimize spending
- Precise and detailed record-keeping
- Create future financial projections for budget accuracy
- Financial reports are needed for business taxes
- Employed to determine both short- and long-term budgeting
- Consider expansions in venue capacity and improvements in training equipment
- Organizations are better able to meet targets with reporting
Other Factors in Sport Finance
- Smaller clubs use raffles to raise funds
- Broadcasting requires financial sponsorships
- Selling merchandise externally requires financial agreements
Ways to Finance Sport Organizations
- The following points are ways to help finance sport organizations
Debt Financing
- Borrowing money repaid over time
- Issuing bonds is an example
- Taking out loans is another example
- Can be short or long term
- Lender does not gain ownership
- Only obligated to debt repayment
Equity Financing
- Exchanging organization ownership for money
- Funds are obtained without debt
- No money repayment
- Stephen Ross sold shares of Miami Dolphins to Marc Anthony and Gloria Estefan which diluted his ownership interest
- Can lack privacy
- Must answer to shareholders
- Demand for winning may conflict with profitability
Financing with Retained Earnings
- Reinvest prior earnings
- Typically used to finance the purchase of players
- Improve operations
- Make other investments
- Improves sustainability
Government Funding
- Includes direct funding
- Receiving Grants
- Land agreements
- Construction agreements
- Receiving indirect funding
- Receiving resources in personnel
- Influencing the private sector through taxation
Gifts
- Includes Charitable donations, cash or in kind
- Major income for sport organizations
- Used to offset rising costs
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