ADV 378S Lecture Notes - Lecture 6: Tiger Woods, Trade Association, Individual Sport

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10 May 2016
ADV 378 Feb 15:
Structure of Individual Sports, Cont.
oTournaments and Tours
More centered around tournaments and events than seasons, evolved to
tours and series
More often independent owners and presenters with the backing of one
or more sponsors
Sponsorship is key to make the finances work
Sponsors often divided into primary (title) and multiple secondary
Individual sport events have more control of their events than in team
However, unless event owners gain approval from NASCAR, PGA tour,
etc., they will find it difficult to attract the best competitors
oIndependent Contractors
Competitors are not employees, but independent contractors
Must absorb expenses for training, travel, lodging, equipment of find
No unionized association to bargain for wages, etc.
Unlike team athletes where team guarantees athletes compete for prize
money based on performance (exception is appearance fees, generally
Individual athlete sets their own schedule, though a minimum number of
events via sanctioning body may be required
A few elite athletes have such drawing power that their decision to
participate or not may affect event success
Instead of team standings, individual athletes are ranked, which
quantifies their success/value
Ranking formula may not be fair/consistent and may protect name
players (ATP)
oTournaments and Tours
Far less control over athletes than actual teams
Control founded on tours, series, rankings, and schedules
Sanctioning bodies can extract fees and possibly broadcast rights from
the individual tournament or series owner
3 billion + revenue
3 “leagues”
growing with moving from regional to national and by gaining TV deals,
TV rights were centralized
took a significant financial hit due to economic downturn (automotive
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