Managing Big League Sports

1. Managing Big League Sports 3.1

2. GOALS • Explain the importance of management for success in big league sports. • Describe ways professional sports teams generate money. • Discuss how opportunities have expanded for women in professional sports. • Describe unique facets of professional sport • Governance • Labor Management

3. GOALS • Significance of TV to professional sports • Major revenue sources for professional sports

4. A Contract • What exactly is a contract?

5. Any agreement enforceable by law. Or A legally binding agreement What is a contract?

6. Elements of a Contract • Offer • Acceptance • Genuine Agreement • Consideration • Capacity • Legality

7. Offer • A proposal made by one party (offerer) to another (offeree) • Indicating a willingness to enter into a contract

8. Acceptance • Agreement of offeree to be bound by the terms of the offer

9. Genuine Agreement • Offer and acceptance go together • Create Genuine agreement • A meeting of the minds • Agreement can be destroyed by • Fraud • Misrepresentation • Mistake • Duress • Undue influence • Almost always requires signatures • Can be a handshake

10. Consideration • The thing of value promised in exchange for something else • Mutual exchange

11. Capacity • Presumes people entering a contract can do so • Minors are generally excused • Mentally incompetent are excused • Drunk and drug inhibited are excused

12. Legality • No contract can contain something that is illegal • Crime • Tort

13. Elements of a Contract • Offer • Acceptance • Genuine Agreement • Consideration • Capacity • Legality

14. Scheduled Quiz Paper Left side # 1 to 10

15. Characteristics of a Contract • Valid, void, voidable, unenforceable • Bilateral or unilateral • Express or implied • Oral or written • Yes a verbal agreement can be a contract • Reference Flyers and Eric Lindros

16. Go to: Sport Agent International sample contract between Agent and Athlete

17. Negotiate a Contract Research • What are ten items an agent would include in a contract with an athlete? • Briefly explain EACH or give contract language as to what it means to the person you represent • Go to: Sport Agent International – sample contract • Example: What the sport agent is in charge of • Managing schedule, partners ---

18. Agent fees • It is important to understand the maximum commission available on player contracts. These cap on Agent fees are only regarding team contracts, and Sports Agents may charge a different fee for marketing endorsements (usually 15%-25% as a rule). • Here are the current fee regulations: • MLB – no capNFL – 3%NHL – no capNBA – 4%

19. It is rare to see a Sports Agent get the maximum percentage in an NBA contract. • Recently, there was a push by NFL players to lower the maximum percentage that an Agent may receive • in an NFL team contract to 2%. • It did not pass, however, the ceiling remains at 3%.

20. Runners • Help secure clients • Most agents have runners or “street agents” • Runners can funnel money to • family, • friends, and • Coaches • roommates • Usually illegal

21. Runners • They attempt to win over players with • Flattery • Cash • Gifts • Players are expected to show “gratitude” • May face threats if not shown

22. Agent Guidelines • The NCAA does not prohibit agents to make contact with players. • Some universities do not allow agents on campus • Some states have regulatory laws on when student athletes can be contacted • Often, agents must pay a fee to register • Contact the administration of college

23. Quick Review • Which one of the following is Not an element of a contract? • A. Offer and acceptance • B. Capacity and consolation • C. Genuine Agreement and Legality • D. All of these are elements of a contract

24. Quick Review - Answer • Which one of the following is Not an element of a contract? • B. Capacity and consolation

25. Quick Review • A $500,000 player contract who pays his agent 3% is paying • A. $1,500 • B $15,000 • C $150,000 • D None of these

26. Quick Review – Correct answer • A $500,000 player contract who pays his agent 3% is paying • B $15,000

27. Quick Review A contract that contains a clause relating to a player having to pass a physical in order to play and be paid is A. Voidable B. Valid C. Unenforceable D. Void

28. Quick Review answer A contract that contains a clause relating to a player having to pass a physical in order to play and be paid is A. Voidable

29. Good Verses evil • Some agents have given profession a bad reputation • Mismanagement of finances #1 problem • Excessive fees • Conflicts of interest • Often the hardest working agents represent free agents

30. Bottom line for agents It is a highly competitive environment Only a few agents gain major benefits and major money

31. To get a full understanding of what an agency can do, summarize the company known as (International Management Group) Who are they? What do they do? What services do they offer? What one service do you find interesting? What is it and why do you find it interesting? Who are some of the biggest names they have as speakers?

32. Answer #1 problem with agents and their reputation A. Excessive fees B. Conflict of Interest C. Have runners do the “dirty work” D. Mismanage players finances

33. Correct Answer #1 problem with agents and their reputation D. Mismanage players finances

34. Owners and General Manager Chapter 3.3

35. Goals • Be able to define the roles of team owners and general managers in a sports franchise

36. Research • What are 3 (for each) key roles and responsibilities for • Owners of a sports franchise? • Of a General manager • Bullets with a brief explanation • Hand in for up to 6 points credit

37. Roles of Owners • Professional sports franchises commonly have an owner or ownership group of certain individuals. • Owners play an important part in • the community • and also have a political influence

38. How to become an owner • Need to have a large amount of money • MINIMUM entry into this elite club is • $250,000,000 • Owning a team is an investment for individuals and owners must show a love for the sport. • Most owners have a childhood attachment to teams

39. Responsibilities • Owners need to see the big picture • Need to make the team as exciting as possible for the fans. • Provide financial management and organizational management for employees. • Provide faculties

40. The General Manager • The General Manager puts the team together. • Many owners are also the general managers • General manager primarily functions • Hiring players • Negotiation of contracts • and trading of players • no longer desired on the team for those they think will help the team out the most • Coaches used to be general mangers

41. Evolution of the GM • The position of general manager used to be occupied by the coach of the team, Once the business aspect of professional sports became more important, the general manager position had to be appointed to someone other than the coach, someone more business oriented. • Work in the draft

42. Owner vs. GM • The gm is an employee of the owner • Owner is business side/GM is sports (business minded) • Everything player oriented is the GM • GMs interact with other teams

43. Best GM over the past decade Baseball-Best GM: Theo Epstein, Red Sox NBA-Best GM: Gregg Popovich/R.C. Buford, Spurs NFL- Best GM: Bill Polian, Colts NHL- Best GM: Ken Holland, Red Wings

44. Summary of 3.3 Agents Contracts Management of a Sports Organization