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Managing Sport Organizations

Table of contents:
1. Introduction
2. Funding classification
3. The sport organization and environmental analysis
4. Management functions
5. Goals of the organization
6. Mission and goal statement
7. Decision making process
8. References

ntroduction
In the contemporary business environment, the development of sport organizations can be very profitable because sport grows more and more popular in the modern society, while revenues of sport franchises are increasing steadily. At the same time, the development of a sport organization is naturally accompanied by certain difficulties and challenges which a company can face at the beginning. In fact, these difficulties and challenges are closely intertwined with the management of a sport organization. In this respect, the effectiveness of management and effective planning can determine the general commercial success of a sport organization and contribute to high revenues of its founders. In such a context, it is necessary to take into consideration various environmental factors which can affect the development of the sport organization, define sources of funding and focus on the planning, which lays the foundation of the development of business.
Funding classification
On analyzing possible sources of funding of a sport organization, such as a player agency, it should be said that today there is a variety of sources which can be used to raise the business. Taking into consideration the fact that the sport organization is a new company which is just launching business, it is possible to focus on three sources of funding: bank credit, venture fund, and hedge fund. In actuality, either source of funding has its own advantages and disadvantages and the choice should be taken on the basis of the profound analysis of the current business environment and prospects of the sport organization in the market.
Today, bank credit is probably the most widely spread source of funding, especially for new businesses. At first glance, the funding by means of bank credit is convenient for the organization because it allows the company to get money for the start of the business and pay off the debt in the future, when the business can bring considerable profits. Moreover, the payments, made by the company in time periods defined by conditions of the credit agreement between the bank and the company, can be affordable for the company if it progresses steadily and when its revenues cover the current expenditures and credit payments of the company.
On the other hand, the overall payment will exceed the initial sum of money borrowed by the company from the bank. Moreover, the company will need to pay off its debt for a considerable period of time, which may last for years (Leeds and Von Allmen, 2003). In such a context, regular payments can become a serious burden for the company, especially at the beginning of the business development. In addition, there is a risk of problems the company can face in the development of its business. Consequently, it will have some difficulties with paying its debt off to the bank that will put the existence of the company under a threat because, if the company cannot pay in terms and conditions of the credit than the bank can lead the company to bankruptcy in order to return money it lent to the company in terms of the credit. In such a way, the company becomes dependent on the payments to the bank and cannot redirect its financial resources to the development of business, ignoring payments to the bank.
Alternatively, it is possible to use a hedge fund. In fact, a hedge fund is a private investment fund open to a limited range of investors which is permitted by regulators to undertake a wider range of activities than other investment funds and which pays a performance fee to its investment manager (Noll and Zimbalist, 1997). In actuality, the sport organization can attract a hedge fund as its potential investor and use its funds to start and develop its business. The advantage of the hedge fund is the fact that this fund incorporates reliable investors who can support the company and, therefore, they can provide the stable funding of the company. In addition, hedge funds can support risky business if investors are convinced in the overall success of the company. Consequently, the company should convince the investors in its reliability, but, still, it is necessary to remember that the company will hardly remain the only priority of the fund and, in case of crisis or financial problems, the hedge can stop supporting the company, if more profitable investments can be made.
Furthermore, it is possible to use venture capital to fund the sport organization. As a rule, venture capital, which is a form of private equity, is provided to immature, high-potential, growth companies in the interest of generating a return through an eventual realization event such as an IPO or a trade sale of the company (Leeds and Von Allmen, 2003). In fact, the use of this source of funding allows the sport organization to use investments for the fast development. At the same time, the founder or founders of the company will not be able to get the full profit from their company because investors will get their share of the company. To put it more precisely, as the company is sold either via IPO or a trade sale, the founder or founders of the company should either to sell the company out totally or preserve only a share of the company, while other shares will be sold to other companies or private owners in order to return investments of the venture fund.
In such a context, the use of the hedge fund seems to be the most plausible for the company, as well as the use of bank credit. But it is important to start using these funds on the basis of an effective plan of the business development.
The sport organization and environmental analysis
The sport organization is a player agency, which is focused on the employment of players, protection of their interests and organization of sport events involving players which have signed a contract with the agency. In actuality, the organization aims at the involvement of the most gifted and prospective players. In such a way, the agency will have professional sportsmen who can attract sport franchises and teams interested in well-qualified and prospective players. Furthermore, the organization will develop its cooperation with leading sport franchises, teams and sport media in order to promote its players and offer them the most profitable contracts. In such a way, the agency will get its interests, while players will get jobs. Thus, the satisfaction of players’ needs will increase the popularity of the company among professional sportsmen who can use its services and, therefore, the company will be able to expand its business and develop its intermediary activities between sport franchises and sportsmen.
In such a context, it is necessary to take into consideration various environmental factors. First of all, the development of modern sport tends to the growing number of professional sportsmen. Therefore, the company can benefit from the large choice of players on the labor market because the large number of sportsmen increases the competition between them and the company, being able to offer attracting contracts to players, can offer its services to the most prospective and gifted players (Quirk and Fort, 1992). On the other hand, the large number of players raises the problem of the qualification of players that means that the company should develop its scouting system in order to sign contracts only with the best and most prospective sportsmen.
Furthermore, the growing popularity of sport and focus of the modern society on the healthy lifestyle also create favorable conditions for the development of the player agency because the company can focus on young players who are just starting their professional career and who have little experience and low demands concerning their contracts. In such a situation, the company can maximize its profits working with young players on the conditions which are the most beneficial to the company. Therefore, socio-economic environment is favorable to the development of the player agency.
The legal environment is also favorable since the legislation regulates relationships between players, player agencies and sport franchises. Hence, the company will not have any problems with unexpected legal changes which can change consistently relationships between the company and its clients. The political situation is also stable and has little impact on sport and on the performance of the player agency.
Management functions
In the contemporary business environment and sport, the effective fulfillment of management functions can be crucial to the overall success of the sport organization. Basically, there are four main functions of management: planning, organizing, leading and control. All these functions are closely intertwined. In this respect, planning is probably the most important function because it lays the foundation of the business. The planning process on all levels, strategic, tactical and operational, defines the development of business, its goals and ways of their achievement. On the basis of the plan managers organize the work of the staff and the entire organization and led employees to the practical implementation of the plan. At the same time, it is important that managers were able to control the implementation of the plan and organizational performance (Petersen, 1996). Due to the effective control, they would be able to define possible drawbacks of the plan and, if necessary, introduce changes to meet the current needs of the company and introduce new goals and strategies to improve the marketing performance of the organization. In such a way, all four functions are closely intertwined.
Goals of the organization
The definition of goals is an essential part of the planning process. Goals are particularly important for a new company, such as the player agency. In this respect, it is possible to define basic goals of the organization on the ground of its current opportunities and potential (Leeds and Von Allmen, 2003). Firstly, the company needs to find young and professional players which can bring the company high profits with low costs spent by the company on their contracting. Secondly, it is necessary to develop contacts with sport franchises in order to employ players the company has involved in its business in order to gain the respect of players and positive public image as a reliable company. Thirdly, the company needs to develop its own system of scouting in order to find new gifted players in order to offer more prospective players to sport franchises. Fourthly, the company has to start extending its business nationwide and, in a long-run perspective, the company can enter international markets. Finally, the company should increase its share of the market to take the leading position in the industry.
Mission and goal statement
Mission and goal statement is of a paramount importance for a sport organization because they define the ultimate goal the organization has to achieve and basic principles of functioning and development of the organization (Petersen, 1996). In addition, mission and goal statement defines the strategic direction at which the organization should develop its business. In this respect, the statement may be viewed as a part of strategic management which defines the overall goals, while, normally, planning is focused on concrete, current goals and their achievement.
Decision making process
Finally, the decision process in the sport organization, such as the player agency should involve three parties: firstly, the organization itself, i.e. the administration of the organization; secondly, players, whose interest the company should protect to sign most profitable contracts and get maximum profits; and, finally, sport franchises, teams and sport-related media, whom actually the company can offer new players for employment or promotion.

References:
Leeds and Von Allmen. (2003). The Economics of Sports. New York: New Publishers.
Noll, R. G., and A. Zimbalist. (1997). Sports, Jobs, and Taxes: The Economic Impact of Sports Teams and Stadiums. Washington, DC: Brookings Institution.
Petersen, D.C. (1996). Sports, Convention, and Entertainment Facilities. Washington, DC: Urban Land Institute.
Protect Title IX to protect diversity at work. (2003). Retrieved December 22, 2007 from <http://blog.penelopetrunk.com/2003/07/18/protect-title-ix-to-protect-diversity-at-work/>
Quirk, J. and R. D. Fort. (1992). Pay Dirt: The Business of Professional Team Sports. Princeton, NJ: Princeton University Press.


 
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