Now in a fully revised and updated third edition, this essential textbook introduces the fundamentals of sport finance and sound financial management in the sport industry. It is still the only textbook to explain every aspect of finance from the perspective of the sport management practitioner, explaining key concepts and showing how to apply them in practice in the context of sport. The text begins by covering finance basics and the tools and techniques of financial quantification, using industry examples to apply the principles of financial management to sport. It then goes further, to show how financial management works specifically in the sport industry. Discussions include interpreting financial statements, debt and equity financing, capital budgeting, facility financing, economic impact, risk and return, time value of money, and more. The final part of the book examines financial management in four sectors of the industry: public sector sport, collegiate athletics, professional sport, and international sport. It provides an in-depth analysis of the mechanics of financial management within each of these sport sectors. Useful features, such as sidebars, concept checks, practice problems, case analysis and case questions will help students engage more deeply with financial techniques and encourage problem-solving skills. This new edition includes a completely new chapter on international sport, reflecting the globalized nature of the modern sport industry, as well expanded coverage of current issues such as digital media finance, recent legal cases affecting collegiate sport, and the central importance of collective bargaining. Financial Management in the Sport Industry is an essential textbook for any undergraduate or postgraduate course in sport finance, and an invaluable supplement to any course in sport business or sport management. It is also an important reference for all sport management practitioners looking to improve their understanding of finance. The book is accompanied by updated and expanded ancillary materials, including an instructor’s manual, PowerPoint slides, and an image bank.

Financial Management in the Sport Industry provides readers with an understanding of sport finance and the importance of sound financial management in the sport industry. It begins by covering finance basics and the tools and techniques of financial quantification, using current industry examples to apply the principles of financial management to sport. It then goes beyond the basics to show how financial management works specifically in sport - how decisions are made to ensure wealth maximization. Discussions include debt and equity financing, capital budgeting, facility financing, economic impact, risk and return, time value of money, and more. The final section focuses on sport finance in three sectors of the industry - public sector sports, collegiate athletics, and professional sport-providing in-depth analysis of financial management in each sector. Sidebars, case studies, concept checks, and practice problems throughout provide practical applications of the material and enable thorough study and practice. The business of sport has changed dynamically since the publication of the first edition, and this second edition reflects the impact of these changes on financial management in the sport industry. New to this edition are changes to reflect the global nature of sport (with, for example, discussions of income tax rates in the Premiere League), expanded material on the use of spreadsheets for financial calculations, a primer on accounting principles to help students interpret financial statements, a valuation case study assignment that takes students step by step through a valuation, a new stadium feasibility analysis using the efforts of the Oakland Raiders to obtain a new stadium, a new economic impact example focusing on the NBA All Star game, and much more.

The market for athlete endorsements represents a multi-billion dollar market that continues to grow. Athlete endorsement is clearly a popular marketing tool that receives significant attention in the trade/popular press, but the academic literature specifically focused on athlete endorsements (as a subgroup of celebrities) is sparse. As such, the authors undertake an analysis of the endorsement market to determine the factors that drive variation in endorsement earnings, including exposure of the athlete to the public, familiarity of the athlete, and likability of the athlete. The data used for this analysis span Sports Illustrated's Fortunate 50 list for nine years. Six regression models are examined, with resulting analyses yielding goodness-of-fit measures ranging from 43% up to 86%.

All three sections in this chapter are interrelated. Expansions and relocations, especially in the early years of a league, are often the response to upstart rival leagues. More recently, relocations have occurred because another city offers a better facility lease regardless of whether the league as a whole is better off or not. Relocations, more so than expansions, often end up in court whether as an antitrust case accusing the league of monopolistically restricting business or as an eminent domain suit attempting to prevent a team from relocating. Recent rulings have allowed a league to enforce a relocation fee that is commensurate with the harm caused to the rest of the league because of the move. Rivalries often begin with a few teams in major cities competing head-to-head with the existing dominant league. Inevitably, the sport ends up with one major league providing top level play, begging the question of whether sports leagues are natural monopolies. This occurs either with a merger, a partial merger, an acquisition or, most commonly, a failed rival league. Often the incumbent league emerges from the rivalry a stronger, more stable business, having been forced to address a weakness exploited by the rival (e.g., MLB failing to recognize the western markets). Additionally, the new locations of franchises have often been vetted by the upstart rival to determine which few are most profitable and sustainable.

Unlike most businesses or cartels, firms in a sports league need viable competitors. While a certain amount of domination is optimal, from an individual owner's perspective, too much will result in league dissolution, and thus a lower utility for every owner. Hence, there is a limited positive production network externality. This paper examines the optimal level of the externality in professional baseball using data from each game of the 1996 MLB season. Both absolute and relative quality are important determinants of the demand for sports contests. In fact, fans prefer a game in which two high quality teams are competing, but the home team has approximately twice as good of a chance as the visiting team of winning.

Understanding how event tourists behave, and targeting customized offers to them based on their sunk cost of travel to the event, can therefore provide additional opportunities to increase the economic impact of an event. For event stakeholders tracking this economic impact, categorizing attendees according to their distance traveled may also provide a more comprehensive and nuanced analysis of the impact.

“Paperless Ticketing” refers to a transaction where the purchaser uses her credit card to get into an event instead of having a ticket, PDF, or mobile phone scanable file. As implemented by TicketMaster, the secondary or resale market of tickets originally sold by TicketMaster must go through TicketMaster's own resale site, TicketExchange (or its wholly owned sister site, TicketsNow). Preventing other platforms like StubHub, RazorGator, and the like from being used severely limits the resale market. In an empirical study of over 1,600 tickets, some sold as “Paperless Ticketing” tickets and others sold as conventional tickets, the price in the secondary market for the “Paperless Ticketing” tickets was nearly $100 higher than comparable conventional tickets sold. In addition, the quantity of “Paperless Ticketing” tickets available and sold in the secondary market relative to comparable conventional tickets was about 10 percent. In other words, the supply of “Paperless Ticketing” tickets available for sale in the secondary market was much lower and the prices were much higher. This is consistent with the theoretical findings, and standard economics findings, of downstream attempted monopolization by an upstream supplier.

Given the changing landscape of Division I athletic competition, determining the most advantageous commitment to athletic programs is an important issue in sport and university policy. With the recent autonomy granted to select Division I Football Bowl Subdivision conferences and pending antitrust litigation vying for college athlete compensation, many universities are considering alternative courses of action in reducing their existing commitment to Division I athletics. Accordingly, this study sought to examine the impact of de-escalating Division I commitment -- specifically discontinuing a Division I football program -- on the status and reputation of the university and athletic department. In considering the entire population of universities which have discontinued their Division I football program from 1981 to 2010 (N = 21), the results revealed that football program discontinuation had little positive or negative impact on academic status and reputation, and a slight negative impact on athletic status. The implications of this research contributes important information on assessing previous decisions to discontinue a Division I football program and what became of those decisions.

Simulations have long been used in business schools to give students experience making real-world decisions in a relatively low risk environment. The OAKLAND A'S BASEBALL BUSINESS SIMULATOR takes a traditional business simulation and applies it to the sport industry, in which sales of tangible products are replaced by sales of experiences provided to fans. The simulator asks students to make decisions about prices for concessions, parking, and merchandise; player payroll expenses; funding for a new stadium; and more. On the basis of these inputs, the program provides detailed information about the state of the franchise after each simulated year, including attendance, winning percentage, revenues versus expenses, revenue sharing, and stadium financing. The use of simulations such as this one enhances students' organizational skills and students' ability to think critically and imaginatively about the data while applying relevant knowledge and an appropriate strategy to achieve the best possible results. This is particularly important in the field of sport management, in which few, if any, other simulators exist that are specific to the field.

Major League Baseball (MLB) rules restrict the movement of any franchise into another's territory. These territorial rules are designed to protect each team's potential local revenue sources as well as to provide stability throughout the league. Recently, Major League Baseball approved financial compensation for the Washington Nationals move into the Baltimore Orioles' territory - primarily because it was in the best interest of MLB even though it hurt the Orioles. However, the Oakland Athletics were unable to even negotiate a potential compensation plan for a move into the San Francisco Giants territory, despite the apparent financial benefit the move could have provided for every other league franchise. The Athletics are already located within 15 miles of the Giants, and their potential 40 mile move to San Jose, California would not add a new team to the San Francisco Bay Area; rather, it would simply be a move of a current team to a different location within the metropolitan area. The refusal of the Giants or MLB to negotiate a potential compromise has kept the Oakland Athletics in a substandard facility and has led to their potential move to Fremont, CA - a less desirable location than San Jose. This paper investigates the legal, policy, and financial considerations concerning Major League Baseball's territorial rules. Specifically, it addresses antitrust law as it pertains to American professional sport, relative sport franchise relocation cases, financial arguments why leagues desire to control relocation, financial components of MLB's current Collective Bargaining Agreement, and the legal and financial impact of a challenge to MLB's territorial rules - an option the Oakland Athletic initially investigated prior to their decision to pursue a potential move to Fremont.