Sport Facilities VI

BSM 4001, Sport Facilities 1

Course Learning Outcomes for Unit VI Upon completion of this unit, students should be able to:

1. Recognize the basic principles related to sport facility planning and management.

Reading Assignment Chapter 11: Marketing and Sales Human Kinetics. (n.d.) Chapter 11 [Video file]. Retrieved from

http://videos.humankinetics.com/services/player/bcpid4169931214001?bckey=AQ~~,AAAA0gHQG- E~,UzAFL1pLzn5pdui2fUzY01ghorAx-7uk

Click here to access the transcript for Video 11.1. Chapter 12: Finance and Budgeting Human Kinetics. (n.d.) Chapter 12 [Video file]. Retrieved from

http://videos.humankinetics.com/services/player/bcpid4169931215001?bckey=AQ~~,AAAA0gHQG- E~,UzAFL1pLzn5mBey7ksVqEG3IzNKfKiqh

Click here to access the transcript for Video 12.1. Click here to access the transcript for Video 12.2. Click here to access the transcript for Video 12.3.

Unit Lesson Unit VI looks at marketing and sales, as well as financing and budgeting for the sport facility manager. It takes a keen understanding of the business side of facility management to be a solid manager. Additionally, being able to market a facility is extremely important for its success. Every facility has something of value to offer to the community. Chapter 11 focuses on the importance of marketing and sales, first examining the basic elements associated with marketing and the various methods used to promote an event or facility. New sport facilities might bring some people out; however, it takes using tried and true marketing to keep them coming back. Each facility has specific resources that can be easily marketable. The chapter then analyzes the marketing process, which starts with identifying the customers and positioning the product. The facility manager must figure out what these are. Sports marketing accounts for all activities designed to satisfy needs and wants of sport consumers through the exchange of products, services, or features. The four P’s, product, price, place, and promotion, help determine these features (Fried, 2015). The facility’s marketing department and staff then need to determine who the customers are (the target market) and how to reach them. Most long-time sport managers understand that the price attached to facility use, facility location, promotional strategies used to market the facility, and the product generally influence the level of facility use.

UNIT VI STUDY GUIDE

Marketing, Sales, Financing, and Budgeting

BSM 4001, Sport Facilities 2

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A marketing example from the world of sport facility managers is running a tournament. The four P's are big in this, as having a marketable product (in this case, the tournament), having a product with proper pricing in place (entry fees for each team), place (the actual hosting venue), and promotion of the tournament (marketing of event and facility) can provide an idea for marketing staff that will bring people to the venue (known as the target audience). By the way, tournaments can not only bring in revenue now, but in the future as well, if they are run and marketed well. What about marketing a new facility? While there would be some attractive features for the new venue, marketers must do their part to highlight the qualities just like they would with an older facility. It takes offering a unique sport experience regardless. Focusing on further development of the product is paramount for actual use of the facility. Ticket sales, facility memberships, sponsorships, naming rights, and luxury seats could be part of development in many venues; again, remember that it is all about the total consumer experience. It takes constant product enhancement and modification to drive additional use of the venue as well as provide something to sell (Fried, 2015). One example of this modification is the addition of all-you-can-eat tickets at professional sporting events. Many arenas and stadiums offer tickets that come with unlimited snacks. These seats have become a major money maker for these facilities. The creativity in marketing and sales of the product is endless. Still others would argue the case for increasing the focus on the place element of the marketing mix when marketing sport. This is based largely on the significance of the venue in influencing the promotion of the sport product. For sport managers, it is important to use these elements to their advantage when marketing sport. Chapter 12 highlights the finance and budgeting process. Although this topic is not as exciting compared with marketing a facility, finance is possibly more important. Many people do not like to talk about finance because they do not understand some of the numerous terms and formulas. However, to have any credibility, facility managers need to have a strong grasp of finance and how to run a facility under a budget. Your facility’s vision and/or goals are extremely important in the process of completing your budget, which should be the mirror image of the overall plan for the venue. The process of developing any budget can be demanding and gratifying. However, the key is planning. In addition, your budget depends on your overall plan, and the overall plan will probably change along the way. Analyzing the revenue and expenses generated by the facility through the use of income statements and balance sheets helps inform the manager on how to make more money or reduce costs. Having an understanding of income and expenses as well as assets and liabilities of a facility can determine how well the facility is doing financially (Fried, 2015). One other aspect that needs to be considered when funding a venue is what kind of funding will be sought: public funding or private funding. Public funding may include, but may not be limited to taxes, municipal bonds, certificates of participation, and special authority bonds. Private funding may include, but is not limited to, cash donations, contributions, naming rights, concessionaire and/or restaurant rights, sponsorships, lease agreements, luxury and preferred seating, parking fees, advertising, and gifts shop revenues. In addition, some will combine public and private funding (U.S. Sports Academy, 2008). Financial analysis is used to forecast the future and develop an operating budget that will help the facility reach its goals. If the forecast or budget is wrong, it is almost impossible for a facility to reach its goals. Projecting the future can help the sport facility manager develop an operating budget to reach the objectives of the facility. This process not only looks to the daily financial expectations for running a facility; it may also include developing a capital project to renovate an existing facility or build a new one. It is important to remember that financial analysis should not end when a facility has been completed, it should continue as long as the facility is operating. Financial analysis is also needed when the time comes to dispose of a facility. One of the more dubious venues disposed of was the Seattle Kingdome. It was razed in 2000, but the taxpayers of King County, Washington had to pay for it for another 15 years (talk about poor decision making by the city of Seattle and King County). Expect to hear about these kinds of situations more in the near future,

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as the facility boom continues (especially in Atlanta with the razing of Turner Field and the Georgia Dome. It is worth the time to research that). Prior to completing the reading assignments for the unit, please watch this video from Columbia Southern University faculty member, Dr. Tim Rice. The video addresses the unit’s assignments and provides additional information pertinent to the unit. Click here to watch the Unit VI video, or you may navigate to: Rice, T. (2015, Oct. 22) Unit VI Sport Facilities Overview [Video file]. Retrieved from

https://www.youtube.com/watch?v=XmLMTZNwV_A To turn on closed captioning in the video, click the captions icon at the bottom of the video. Click here to access a transcript of the Unit VI video.

References Fried, G. (2015). Managing sport facilities (3rd ed.). Champaign, IL: Human Kinetics. U.S. Sports Academy. (2008, February). Financing options and facility development. The Sport Journal.

Retrieved from http://thesportjournal.org/article/financing-options-and-facility-development

Suggested Reading If you are interested in learning more about financial concepts, check out this article that uses football to illustrate some of these concepts. The article looks at time value of money and other financial concepts from the sport perspective. Mahar, J., Jr., & Paul, R. (n.d.). Using football to teach finance. Retrieved from

http://www.westga.edu/~bquest/2003/football.htm