 |
| 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.
|
|
