Sport Finance Exam 1 Questions & Answers Already Passed!!

(T/F) Most Collegiate athletic Programs are losing money - Answer-True Continuous building of bigger and better facilities for the sole purpose of landing key recruits. (Salaries, travel, uniforms/merchandise, television/network deals, scholarships) - Answer-Arms Race -NCAA Television Deals (March Madness) -Conference Television Deals (Football, mbb) - Answer-Revenue Distribution Avenues companies pay to associate their products and services with NCAA or conferences - Answer-Corporate Sponsorship programs 60% of the NCAA's disbursements. Most prominent expense category in the NCAA' budget - AnswerDisbursement to D-1 Schools Locked in at set % -D-II 4.37% of annual expense -D-III 3.18% of annual expense - Answer-Disbursements to D-II/III schools (T/F) Conferences set policy on how revenue is distributed to individual schools - Answer-True Provides for money to be distributed to Division I conferences based on their performance in the Division I men's basketball championship over a six-year rolling period - Answer-Basketball Fund NCAA control of football TV rights violated Sherman act - Answer-NCAA vs. Board of Regents (1984) Top Revenues for Football Bowl Subdivision (FBS) - Answer--Ticket Sale -Donations -Television (NCAA/Conference Distribution)Top Expenses for Football Bowl Subdivision (FBS) - Answer--Salaries (# of employees in department increasing) -Grant in Aids -Facility Maintenance Major Department Expenses - Answer--Coach's salary -Scholarship -Travel -Facility Construction Why is understanding financial management important? - Answer-Constructing new facilities directly impact local residents, businesses, and government -Example: New York Stadium (new job opportunity) Other purpose for money being used - Answer-Opportunity Cost Issues in Financial Management - Answer--Competition forces us to spend (money=winning) -REVENUE GENERATION (#1) -Revenue sharing -ongoing operating expenses (Pressure to spend in industry) to maintain competitive balance, being too good can hurt the game (UConn women basketball) - Answer-Revenue Sharing Commodification of Leisure - Answer--Go where money is -see how people are spending free time and make money -pay to play model Finance - Answer-Management of money and other assetsprocess of calculating what was earned and what was spent in a given period - Answer-Accounting number of financial projections from numerous companies to explore future trends - Answer-economics Economic indicators - Answer--unemployment (we want people to have discretionary income to spend on sports) -the stock market -consumer price index (what people are spending, especially around holidays) plan expressed in monetary terms (financial statements) that highlight all anticipated revenues, assets, expenses, debt, and net worth - Answer-budget Simmilarities with other industries - Answer--value creation -revenue growth Differences with other industries - Answer--diverse objectives of owners -imbalance in competition -revenue sharing and other forms of cooperation Ways to finance - Answer--Debt financing (have plan to pay off bonds) -Equity (investors) -reinvestment of retained earning -government (taxes) -gift (donations, fundraising) Market Value of a nation's output of goods and services in a given year - Answer-Gross Domestic Sport Product Financial and economic factors affecting sport - Answer--economic cycle (rely on discretionary income)-television revenue -real estate -sustainability -politics Public Sectors - Answer-government sponsored