2. Literature review and in-depth critical examination of the issue 1,095/1315 words – old college The ‘Sugar Daddy Game’ received an increased academic attention in recent years; researchers observed and compared many aspects and implications of that phenomenon. To start with Dietl et al. (2009) and their analysis of social welfare and difference between profit-maximising and win-maximising leagues; then Lang et al. (2011) analysed benefactors influence on industry competitiveness; then Madden (2012) studied implications towards the economic stability of the industry; then Franck & Lang (2012) observed growing trend towards riskier strategic investments amongst ‘sugar-daddy’ owned clubs; and finally the possible outcome of new …show more content…
As noted by Lang et al. (2011) ‘sugar daddy’ investments makes big clubs even more dominant within their league. This is because such clubs have more financial capabilities to attract and hire the best talent (Lang et al., 2011) available on rather inelastic marketplace (Madden, 2012). Franck & Lang (2012) decided to analyse the strategic decisions undertaken by ‘sugar daddy’ owned clubs and concluded that these clubs choose riskier investments strategies as compared to clubs without benefactor owners. However they built very limied theoretical framework, whereas they created only ‘one-club-model’ which enabled them to analyse very narrow scope of potetial incentives and implications within broader industry settings. Nonetheless they found that these riskier investments usually take form of overspending on transfer fees and players remuneration. Franck & Lang (2012) also identified existance of ‘too-big-to-fail’ phenomenon which assumes that ‘suggar daddies’ have to inject money to keep the club from bankruptcy only if it acquired sufficiently large market share, otherwsie it is easy to quit and leave the club as a bankrupt. Another interesting issue researched by acadmics was related to the motivation behind acquiring a football club. According to Franck (2010) individuals may seek for positive spillover and higher recognition of their core businesses; they also may seek for political and social acceptability after acquiring their
(iv) The company can form tie-ups with the popular European football clubs like Manchester United, Barcelona,
The primary sources for these revenues are from ticket sales, sponsors, broadcasting, apparel sales, and donations which all generate that money (Chait 1). Athletes are recruited to colleges because the coaches think they have the talent to help the team succeed in their sport. At Auburn University, Cam Newton received a full ride scholarship. He became the “star” quarterback for the team, which produced a lot of revenue for the football team and the university (Belson 1). The school thought of additional methods to create more profit, so they put Newton’s number on jerseys, sweatshirts, hats, and other wanted apparel. Those sales alone increased the profit margins enormously (Belson 1), and it all went to the team and the university. All the extra money that resulted from promotional efforts generated even more controversy. Questions arose, such as where to spend the additional funds, whether the school needed new athletic facilities, or even whether the star quarterback should receive a portion of the profits, and were debated. Both sides held passionately to their opinions, and the topic generated a strong response from people on both sides of the debate (Belson 2).
For over a century, college athletics have thrilled generations of fans; from alumni gathered in stadiums to armchair quarterbacks, the fervor of team loyalty reaches spiritual proportions. This popularity is evident from the gigantic economy college athletics have created, with the NCAA raking in nearly eleven billion dollars last year (Edelman 7). A problem overlooked in spite of this boom is the exploitation of the people who make this venture so profitable: the players. Although it has not always been the case, the majority of players now are grossly undercompensated for contributions to their alma maters, the sport, and the burgeoning economy created by the two. College athletes are exploited when universities refuse to acknowledge
With how many sporting events that there are in this country, it is common to see fans that love multiple games. Professional sports are typically favored by most followers, but there is a clear deficiency that hurts the leagues. Professional sports are exhilarating if one is a fan of a playoff team or especially a team that wins championships on a regular basis. While this is great for traditional powerhouses and teams with endless amounts of money, the majority of teams in these leagues serve as punching bags for years or even multiple decades. There is a fine line between these teams and other organizations that struggle just to make financial ends meet. Teams in financial
College sports is a business that brings in a lot of money to schools and athletic programs. Division I college athletes, particularly football and basketball players, get many perks for contributing to the team’s season and devoting so much time to the sport. What is not often thought about is the money that football and basketball brings in and what the athletes get in return for bringing this money to the university. Many athletes are taken advantage of because the schools use the money for their own benefit, do not take into consideration the athletes busy schedule and not having time for a job, their living and medical expenses, and how important they are to bringing in money for the school.
The UEFA Financial Fair Play (FFP) Regulations have come to terms in 2009 and it has been widely discussed due to the nature of the rules that was imposed on the clubs. The aim of this short essay would be to discuss the impacts of FFP Regulations on the competitive balance in European Football. The first section of this essay is an introduction to the UEFA FFP Regulations. Second, we briefly introduce the Fort and Quirk Model that will be used to analyse the effects on competitive balance. Thirdly, we look at findings from sports economists on the FFP Regulations. The final section will be a conclusion and summary on the effects of UEFA FFP Regulations on the competitive balance of the leagues.
The men’s football and basketball programs indisputably bring in the most money, and the next program pales in comparison. Ryan Vanderford, a law associate who deals with white collar matters, states in his law journal that one player at the University of Texas is estimated to be worth $578,000 dollars alone; he goes on to mention that the school only pays roughly $37,000 dollars on that student (1). That is just one example of this scenario, there are many other athletes with very similar situations. The student’s likeness is sold to video game companies, used on jerseys and posted in ads, and because of this the NCAA generates substantial revenue. Division I college athletics was approximately worth eight billion dollars last year (Simpson 3). In a
With the number of clubs which have participated in the UEFA competition over the past 12 years, a sample size of 6 teams will be selected for this dissertation. These clubs who must abide by Financial Fair Play regulations to participate in their competitions are Arsenal, Manchester United, Chelsea, Manchester City, Liverpool and Tottenham. It is also important to note that all clubs selected in this analysis has expense greater than €45 million, as UEFA’s break-even rule is subject to an exception of an acceptable deviation up to €45 million if the shortfall is covered by equity investment. As the Financial Fair Play has been in existence since 2010, financial statements and balance sheets for the selected clubs and the league have been
Although, the case study of Manchester United gives us a good example of a brand’s ability to globalize, it does not give us a clear picture into how a league as a whole accomplishes these same goals. To get this clear picture of a successful global soccer league we can review a case study by Matthew Holt that examines the UEFA Champions League and its ability to succeed. The UEFA Champions League(UCL) was established after the UEFA European cup started to see more revenue increases based on the increase in television and digital technologies. (Holt, 2007) The goal of the UCL was to increase revenue through a newly structured European club soccer league. The first way that UCL accomplished this was through centralized marketing. This was accomplished through selling the television rights as the UCL brand rather than allowing the clubs to individually sell the rights to the games. This increased the value of the television rights and in turn increased the profitability of the clubs. (Holt, 2007) UEFA sold this UCL brand
Based on author, David Halberstam’s quote that “ Sport is a window on a changing society”, I have learned that high in rank companies, and leagues make many of their decisions based on money and how it can help and hurt their company. Sports are a great example of this thinking because of how public it is and many of the business decisions they make can be viewed by anyone. The American society is changing a lot and it can be seen greatly through
In the United States, new sports stadiums are commonly seen as a vital part of the redevelopment of a city having a great economic growth with the production of jobs and a positive income builder. After this, the owners of the pro sports teams with millions and millions of dollars of subsidies for the construction of new stadiums and arenas and expect these facilities to generate economic benefits exceeding these subsidies by large margins. However, a growing body of fact indicates that professional sports facilities, and the franchises they are home to, may not be engines of economic benefit anywhere claims Sachse, “. In reality, sports franchises typically account for a very small proportion of the total economic output of the cities in which they reside.” Some economical studies on the amount of income and employment in US cities find no evidence of positive economic benefits associated with past sports facility construction and some studies find that professional sports facilities and teams have a net negative economic impact on income and employment. It just shows that these results suggest that at best, professional sports teams and facilities provide non-pecuniary benefits like civic pride, and a greater sense of community, along with consumption benefits to those attending games and following the local team in the media; at worst, residents
Economic theory introduces us to four different types of markets: perfect competition, monopolistic competition, oligopoly, and monopoly. Professional sports teams operate in an environment that is different than the typical business structure. The goal of this paper is to look at this industry, in particular the NFL, in an economics context and gain an understanding of the market structure of this unique industry. To do this I will discuss a brief history of the National Football League in the U.S. and how this organization is structured. I will also discuss typical market structures and type of
In this assignment I will be exploring the ways in which Internal and external factors have an impact on the core revenues of Clubs and how clubs themselves can potentially help put the factors in their favour. Topics such as Fans and their behaviour and Player conduct on and off the pitch will be explored. Things that can occur which clubs have little or no power over – such as a major political shift – which can affect a clubs income will also be covered.
It has been suggested that the UCL is a product of societal evolution. After forty years without change the European Cup had become commercially obsolete to broadcasters and sponsors due to the lack of guaranteed matches involving Europe’s biggest clubs (Ahlstrom, 2002). The knockout format allowed for clubs who would bring in large sums of revenue to be eliminated after merely two games.
Some European football clubs have in, approximately in the last three decades, developed from being relatively small local organizations, into global giants in terms of multi-million businesses supported and followed by millions of stakeholders from all over the world. How does one relate