Study Guide for Intro to Sport Management Test 2 By Gregoire Narcisse Chapter 6 Professional Sport Professional sport is any sport activity or skill for which the athlete is compensated Compensation can be in the form of salary bonuses reimbursement for expenses or any other type of direct payment Chapter 6 focuses on four primary aspects of North American Sport teams Its historical development Its unique aspects Its revenue sources 1 2 3 4 The variety of career opportunities associated with professional sport Nature of Professional Sport Occupies a very powerful role in society Demands on the three principles that form the professional sport industry labor management and governance are complex diverse and ever changing o Labor o Management Def a collective group of athletes in team sports who unionize so that they can bargain collectively with the league owners i e management Labor is typically represented by a union head in negotiations with management Labor aggressively continues to protect and procure additional resources for its membership which is made up of the professional athletes Def when referring to the collective bargaining process management refers to the collective group of ownership that is negotiating with the players or labor Management is typically represented by a league commissioner who is technically an agent for the owners in negotiations with labor Management or the owners of professional teams is trying to win back some leverage and control lost to labor over the past few decades o Governance Made up of the professional sport leagues attempts to regulate but not completely control both labor and management Examples NFL MLB and NHL History of Major American Professional Sports Professional sport can be traced back to ancient Greece with the Olympic Games in 776 BCE Baseball was the first team sport to employ professionals o 1869 the Cincinnati Red Stockings became the first professional baseball team First professional sport league National Association of Professional Base Ball Players NAPBBP 1876 National League was the precursor to MLB today 1917 NHL emerged 1921 NFL created 1949 National Basketball League NBL and Basketball Association of America BAA merged to form the NBA Inclusion and Exclusion in Professional Sport o Until 1947 professional sport opportunities were segregated o Jackie Robinson broke baseball s modern color line not color barrier this was broken by Fleetwood Walker in the 1880s o Women sports progressed even slower o WNBA example of the growth of women sports Factors affecting growth of professional sport o Success of professional sport largely tied to the media o Before radio broadcasts and the 3 main TV stations ABC CBS NBC which were off at night were the only forms of media available o Antitrust law Congress in 1961 passed the Sports Broadcasting Act Before leagues could not negotiate network television contracts on behalf of their members Sports Broadcasting Act gave leagues an exemption from the antitrust law granting the right to negotiate fees collectively with the networks This is why today highly lucrative television deals pervade professional sports Unique Aspects of Professional Sport Four unique aspects o Interdependence o Structure and Governance o Labor Management relations o Role of the electronic and new media Interdependence o Teams depend on one another to stage the games that constitute the product The need of teams to compete and cooperate simultaneously o League think Def pioneered and most effectively implemented by the NFL this term represents the notion that teams must recognize the importance of their competition and share revenues to ensure that their competitors remain strong David Harris describes it in his work on the NFL titled The League o Teams share revenue o Luxury Tax Def device used by the MLB and the NBA to tax the teams that spend the most or spend too much as defined by the collective bargaining agreement CBA on player payrolls and those taxes are then shared with teams that do not have high payrolls Structure and Governance o Main Components of the league office League Commissioner Board of governors or committee structure composed of the team owners A central administrative unit that negotiates contracts and agreements on behalf of the league and assumes responsibility for scheduling licensing record keeping financial management discipline and fines revenue sharing payments marketing and promotional activities developing and managing special events and other functions such as coordinating publicity and advertising on behalf of the team as a whole Labor Management Relations o Five unique circumstances and conditions related to labor management relations Baseball s anti trust exemption gives MLB the right to undertake strategies that would prevent the establishment of competitive leagues Allows the MLB to be a monopoly Collective Bargaining def process used to negotiate work terms between labor and management All active league players are in a bargaining unit and thus form a collective unit i e labor for negotiating and bargaining with the owners i e management Free Agency the ability of players after fulfilling an agreed upon through CBA number of years of service with a team to sell their services to another team with limited or no compensation to the team losing the players Salary Caps def agreements collectively bargained between labor and management that establish a league wide team payroll i e salaries bonuses and incentive clauses threshold that cannot be exceeded in most cases The salary cap is typically set using a percentage of league gross revenues as a starting point Player Draft in accordance with league think the player draft is designed to be an equitable system for distributing new talent among all league members Role of the Electronic and New Media o Network television cable satellite TV radio internet o Importance of television No single factor has influenced the popularity of sport more than television TV has helped elevate professional sport beyond competition and athleticism into the realm of entertainment Need TV for three reasons Leagues and member teams receive significant revenue from TV TV enhances the enjoyment associated with watching professional agreements sports TV helps increase the amount that teams and leagues can charge for sponsorship because of the increased exposure The internet has made it so that fans can watch their teams wherever they are Satellite