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SPM 205 Midterm: Exam 2 Study Guide

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Sport Management
SPM 205

SPM 205 Exam 2 Study Guide 1. College Sports • History of intercollegiate athletics (forming of IAAUS and NCAA) o The birth of intercollegiate athletics involved a regatta between the Yale and Harvard boat clubs in 1852 o College football emerged shortly after  in football during this time the rules were more like soccer o The first intercollegiate football game was played between Rutgers and Princeton in 1869 o In 1872, the first business enterprise involving college athletics occurred o Admission fees were charged, and tickets sold for the first time, when Ivy League teams Yale and Columbia met on the gridiron o By 1905, football competition became so intense that reform was instituted. One way of implementing reform was to establish associations to govern intercollegiate athletics o Prompted by deaths and charges of brutality, President Theodore Roosevelt hosted the White House Conference on Football in 1905 o Roosevelt’s decree to carry out “both the letter and the spirit of the football rules,” eventually led to the formation of the Intercollegiate Athletic Association (IAAUS), which was officially constituted in 1906, and became known as the National Collegiate Athletic Association (NCAA) in 1910 ▪ NCAA currently has over 1,281 member institutions, conferences and sport organizations dedicated to the administration of intercollegiate sports ▪ NCAA is largest and most influential governing body in field • Classifications of NCAA Divisions o In 1973, a three-tiered classification was established by the NCAA, with Division I, II, and III. Universities and Colleges are classified based on: ▪ Size of Financial Base ▪ Number and Types of Sports Offered ▪ Focus of the Program ▪ Existence of Grant-in-Aid • Comparison of Division I, II, and III o Division 1 Sports: ▪ Generally, have the biggest student bodies, manage largest athletics budgets and offer most generous number of scholarships ▪ With nearly 350 members, DI schools have more than 6,000 athletic teams, giving opportunities to more than 170,000 student-athletes to compete in NCAA sports each year ▪ DI schools must meet minimum financial aid awards, and there are maximum financial aid awards for each sport that a DI school cannot exceed ▪ DI is further divided into I-A institutions (128+ members), I-AA (125+ active members) and I-AAA (about 100 members) ▪ DI is subdivided based on football sponsorship. Schools that participate in bowl games belong to the Football Bowl Subdivision ▪ Those that participate in the NCAA-run football championship belong to the Football Championship Subdivision ▪ A third group doesn’t sponsor football at all. The subdivisions apply only to football; all other sports are considered simply DI o DI Sports must offer: ▪ A minimum of seven sports for men and women ▪ Must have at least two team sports for each gender ▪ Offer full grants-in-aid based on athletic ability. There are 351 DI institutions that are highly competitive and consider many of their athletic events to provide spectator entertainment  only state without a DI school is Alaska o DI programs typically funded through: ▪ Student Fees ▪ Ticket Sales ▪ Television Broadcast Rights ▪ Licensing Revenues  royalties paid to athletic department or leagues by second parties in return for the right to produce and sell merchandise bearing logo or other marks associated with its sports program ▪ Private Donations/Athletic Development o Division II Sports: ▪ Must offer at least five sports for men and women, (or four for men and six for women), and must have two team sports for each gender ▪ There are 307 active member institutions in 44 of the 50 states that offer full grants-in-aid based on athletic ability, but fewer per capita DI schools ▪ Typically financed by their institutions the same was as academic programs on campus, and focus primarily on regional competition ▪ Offers a “partial-scholarship” model for financial aid in which most student-athletes are funded through a mix of athletics scholarships, academic aid, need-based grants and/or employment earnings o Division III Sports: ▪ More than 180,000 student-athletes at 450 institutions make up DIII, the largest NCAA division both in number of participants and number of schools ▪ In DIII, the focus is on participation, rather than competitions of spectator entertainment. These colleges must offer a minimum of five sports for men and women, and two team sports for each gender. There are no athletic scholarships in DIII schools. These schools generally focus on regional and conference competitions. DIII schools are in 35 of the states ▪ Academics are the primary focus for Division III student-athletes. The division minimizes conflicts between athletics and academics and helps student-athletes progress towards graduation through shorter practice and playing seasons. Regional competition also reduces time away from academic studies. Participants are integrated on campus, with a focus on being a student first. • Classification Amendments o 1981 – Adopted by all divisions to permit a member of Division II or III to petition to be classified in Division I in any one men’s sport, other than football or basketball, and in any one women’s sport o 1983 – Adopted by Divisions I and III to require a Division III member institution that has a sport classified in Division I to apply the rules of both divisions to the sport, or the more stringent rule if both divisions have a rule concerning the same topic • Main source of NCAA’s revenue and expense o NCAA generated $989 million in its 2014 fiscal year o The association had $908.6 million in expenses, it ended up with a nearly $80.5 million surplus for the year. Large percentage of surplus went to an ever-growing endowment fund whose main purpose is to safeguard NCAA against a financial catastrophe, particularly related to its primary moneymaker: March Madness basketball tournament o The annual surplus is NCAA’s greatest in at least 10 years and $20 million more than its surplus in 2013. o Ninety percent of its revenue is from TV and marketing rights fees – March Madness – and almost all the rest comes from championship ticket sales • NCAA Support o More than 90% of the NCAA’s revenue goes to support student-athletes o Creates fair playing field for similar institutions and provides student-athletes with a wide spectrum of opportunities by sponsoring 89 championship events o College and university presidents and chancellors guide each division, supported by an extensive committee structure guided by athletics administrators, faculty and student-athlete representatives. Each division creates its own rules that follow the overarching principles of the NCAA • NJCAA, NAIA, AIAW – mission, focus, and significance o NAIA  National Association of Intercollegiate Athletics ▪ Created in 1937 and has 360 member institutions ▪ Open to four-year and upper level two-year colleges and universities in the U.S. and Canada  places a heavy emphasis on academic achievement ▪ 60,000 student-athletes, 13 sports and 23 national championships, $450 million in athletic scholarships ▪ Was the first national organization to offer post-season opportunities to black student-athletes in 1948 ▪ Was also the first national organization to offer athletic championships for women’s sports, beginning in 1980 o AIAW  Association for Intercollegiate Athletics for Women ▪ A national governing body exclusively for women’s athletics was formed in 1971 ▪ Lasted for 10 years and provided many opportunities for female athletes, coaches and administrators. It also offered several national championships, many of which received TV coverage ▪ AIAW Becomes Part of the NCAA • NCAA and AIAW expanded their structure to incorporate women’s athletics. In 1982, the AIAW was dismantled. Currently, both men’s and women’s intercollegiate athletic programs exist under the auspices of the same governing bodies o NJCAA  National Junior College Athletic Association ▪ The National Junior College Athletic Association was formed in 1932. NJCAA seeks to promote and supervise a national program of junior college sports activities consistent with educational objectives of JC’s ▪ There are approximately 550 institutions and the NJCAA is organized into 24 geographical regions. Offers championships in 26 sports • Conferences (first, functions, largest) o Intercollegiate Athletic Conferences  a conference is a group of colleges or universities that governs the conduct of its member institutions’ athletic programs ▪ The first athletic conference was established in 1895, and as known as the Intercollegiate Conference of Faculty Representatives. It later became the Western Conference and is currently known as the BIG 10 Conference o Athletic Conference Functions: ▪ Communication within and beyond membership ▪ Scheduling (regular and post-season) ▪ Officiating ▪ Crown Control and Event Management ▪ Compliance & Enforcement (rules & regulations) ▪ Eligibility of Student-Athletes ▪ Negotiating Television Rights Contracts ▪ Informational Services ▪ Merchandising and Commercial Sponsorship Procurement ▪ Product Endorsement ▪ Membership Surveys and Research ▪ Record Keeping ▪ Negotiating Post-Season Bids (Bowls) o ECAC  Eastern College Athletic Conference ▪ Nation’s largest athletic conference founded in 1938 • Collegiate Arms Race o Between 1995-2001, spending in Division I athletics – after inflation – increased 25%, while institutional spending increased 10%. This was due to a building boom of new facilities and the escalating costs of football and basketball coaching salaries o According to the Chronicle of Higher Education, from 2002 to 2007 schools in the nation’s six premier athletic conferences raised at least $3.9 billion for stadium expansions, new practice facilities o Escalating Costs  In many cases its powerhouses expanding to ensure their dominance, such as the $226 million stadium renovation at Michigan. Or, it’s a striving institution like Oklahoma State putting to use the &165 million pledge by billionaire OSU alumnus T. Boone Pickens. • Knight Commission  The 2001 report found that “more than half of the institutions competing at the top levels continue to break the rules. Wrongdoing as a way of life seems to represent the status quo.” o Most glaring problems cited by Commission: ▪ Academic fraud (tutors writing papers for athletes, athletes receiving copies of tests in advance, changing athletes’ grades to remain eligible) ▪ Low Graduation Rates ▪ Financial Arms Race (excessive spending and poor financial accountability) ▪ Escalating Commercialization that created a “widening chasm between higher education’s ideals and big-time college sports” o As a result, the Knight Commission proposed another one-plus-three model of academic reform. No longer do individual college presidents control the issues; instead a coalition of presidents representing the most powerful athletics conferences, dictate policy o One-plus-Three Model  Part 2 ▪ Knight Commission focused on: • A de-escalation of the athletic arms race • De-emphasis of the commercialization of intercollegiate athletics • Academic reform (minimum graduation rate standards have been established that can affect post-season eligibility) • Drake Group Recommendations  comprised of scholars from around the nation who study college sport, surmised: “college athletics has been transformed into a multi-billion-dollar entertainment industry that had compromised the academic mission of the university.” o Force policy makers to require public disclosure of academic information about athletes o Institutions must offer academic support and counseling services to all students, rather than special services provided to student-athletes o Consideration should be given replacing one-year renewable scholarships that place athletes in dependent relationships with coaches with need- based financial aid o The overemphasis on winning, the monetary payoffs for success and commercialization found in major college athletics, has infiltrated into every aspect of the educational system within the U.S., reaching into elementary schools • NCAA’s Academic Requirement for DI College Athletes o In order to compete, even schools maintaining a balance between athletics and academics have progressively allocated more resources to intercollegiate athletics over the years – to the detriment of the academic experience of students o 2012 NCAA Legislation  In September 2012, NCAA imposed new academic requirements for DI college athletes beginning 2016 ▪ 16 – core course must be complete ▪ 10 – core courses student must finish by senior year ▪ 7 – number of their initial courses that must be in English, Math, and Science ▪ 2.3 – Minimum GPA in 16 core courses o Raising the Bar  based on NCAA statistics ▪ 15.3% of all student-athletes who enrolled in 2009-2010 would not meet the 2016 academic standards ▪ 35.2% of football players who enrolled in 2009-2010 would not meet 2016 standards ▪ 43.1% of men’s basketball players who enrolled in 2009-2010 would fail to meet new college entrance standards • Title IX  expansion of women’s athletics has dramatically increased business costs o Statistics compiled by the Women’s Sports Foundation and National Women’s Law Center show that gender disparity in college athletics remains ▪ To be compliant, college must offer a number of sports for men and women’s teams that is proportionate to overall male/female population of the institution ▪ Women receive about a third of the total dollars spent on athletics ▪ One-third of recruiting dollars are spent on women’s athletics ▪ Slightly more than 40% of scholarship funding is spent on women’s sports ▪ Women make up about 57% of student, but 43% of athletes • NCAA Revenue/Primary Revenue Source o Attendance at college sporting events generates approximately $100 M o College athletics in totality creates about $10.5 B annually, more than MLB, NBA & NHL o About 30% of that goes towards scholarships and financial aid for student- athletes o Estimated NCAA annual revenue is between $800 M and $1 B o 90% is generated from media rights payments o Largest revenue source is 14-years, $10.8 B agreement with Turner Broadcasting and CBS Sports for rights to DI Men’s Basketball Tournament o 60% of NCAA revenue is distributed directly to DI conference, which pass funds to member schools ▪ PAC 12  $374 M (Fox Sports & ESPN) ▪ Big Ten $338.9 M (ESPN) ▪ SEC  $325.9 M (ESPN & CBS) ▪ ACC  $313.3 M (ESPN) ▪ Big 12  $227.7 M (Fox Sports) • Economic Boom  the entrepreneurial instincts of the major athletic conferences created four primary external revenue sources that had changed the face of intercollegiate athletics o Four Primary External Revenue Sources: ▪ Television revenue for football ▪ Television revenue for men’s basketball ▪ Post-season bowls ▪ NCAA Men’s Basketball Tournament o Prior to 1984, NCAA controlled all college football television rights ($78M) o An NCAA TV committee negotiated all network contracts for all colleges and universities in every division • History of TV Right Deals in Intercollegiate Sport o Until 1984, a college program’s television exposure was limited to no more than six appearances over two seasons o In 1984, a successful anti-trust law suit was filed against the NCAA for controlling and limiting the number of games on TV o This resulted in formation of College Football Association (CFA) – with membership limited to major schools and conferences o CFA negotiated TV rights contracts with networks on behalf of its membership o This eventually lead to the demise of the CFA because it was essentially being allowed to do what the NCAA was found guilty of in court – controlling and limiting the number of televised games o As a result, all TV rights were retained by the schools and conferences, but revenues declined by nearly 50% o In the late 1980’s, a Division II athletic conference in PA held a championship playoff game between winners of its two divisions ▪ This event became the precursor of the current playoff format first adopted by the Southeast Conference (SEC), and later by the Big XII and Atlantic Coast Conference (ACC). The SEC receive $15M rights fee to create a conference playoff championship game o Essentially, TV created the BIG EVENT, which left to a sonic boom in intercollegiate athletics o This created the beginning of conference expansion. To justify a conference playoff and enhance television value and exposure, conferences needed to expand membership 2. International Sport • Olympism…Baron Pierre de Coubertin o Overview: ▪ Cost: $11.5 Billion • $4.6 Billion  sport-related cost • $7.1 Billion  infrastructure • $9 Billion+  estimated revenue ▪ 11,237 athletes from 207 countries ▪ 28 sports, 306 events, 4,924 medals ▪ 17 days of competition ▪ Volunteers: 70,000 ▪ Television audience: 3.5 Billion ▪ $1.2 Billion spent by NBC (broadcasting rights + operation) • ($1 Billion in ad sales + @...$250 Million made in profit) o A philosophy of life, exalting and combining in a balanced whole the qualities of body, will, and mind ▪ Conceived by Baron Pierre de Coubertin o There the International Olympic Committee (IOC) was constituted as the supreme authority of the Olympic Movement • Olympic Movement History o Began in 1896 in Athens, Greece o Prior to 1980s, focused on amateur sport o 1984 LA Olympics marked turning point for commercial involvement (Sponsorship); over $200M in profit o Amateurism dropped for 1992 Barcelona Olympics o “Celebrate Humanity” began in 2000 highlight Olympic ideals; building the Olympic brand o Now included 200+ nations, 300+ events, billions of viewers worldwide • Key actors in the Olympic Movement o International Olympic Committee (IOC) o National Olympic Committees (NOCs) o International Sport Federation (IFs) o Organizing Committee for the Olympic Games (OCOG) • IOC Mission, Revenues, and Expenditure  105 individual members o Mission: supreme authority of the Olympic movement; acting as a catalyst for collaboration between all parties of the Olympic family ▪ Ensures the regular celebration of the Olympic Games, supports all affiliated member organizations of the Olympic Movement and strongly encourages, by appropriate means, the promotion of the Olympic values o Goals: to contribute to building a peaceful and better world through sport practices without discrimination of any kind and in the Olympic spirit ▪ Choice of the host city ▪ Organization of the Olympic Games ▪ Equality in sport ▪ Promotion of women in sport ▪ Protection of athletes ▪ Human development assistance ▪ The Olympic Truce • NOC, IF, OCOG, NF (=NGB) o NOC  National Olympic Committee ▪ Responsible for developing and protecting the Olympic Movement in their respective countries • Training, selection and dispatch of athletes • Bidding and organization of Olympic events • Promotion of the Olympic movement o Olympic day celebration o IFs  International Sports Federation ▪ International non-governmental organizations recognized by the IOC as administering one or more sports at world level • Manage and monitor respective sport disciplines • Supervise development of athletes • Promotion and development of sport it governs • Regular organization of competition • Respect fair play o OCOG  Organizing Committee Olympic Games ▪ Organization entrusted by the IOC and NOC to prepare and organize the Olympic Games ▪ The OCOG is responsible for planning, implementing, and staging the Games ▪ Mission: to be the best, to host the best, to show the world the best Olympic Games ever o NFs  National Sport Federation ▪ Organizations governing a specific sport in each country ▪ NGBs approve and sanction competitions open to all athletes in its country ▪ NGBs set national policies and eligibility standards for participation in their respective sports ▪ NGBs are responsible for training, development, and selection of Olympic teams in their respective sports • USOC Mission and Finance o USOC  U.S. Olympic Committee ▪ Mission: to support U.S. Olympic and Paralympic athletes in achieving sustained competitive excellence while demonstrating the values of the Olympic Movement • Amateur Sports Act of 1978  promotes, coordinates, and sets national goals for amateur sport in the U.S. through development of the USOC and national governing bodies • Americans with Disabilities Act of 19
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