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SPMT 217 Lecture Notes Exam 3
Foundations of Sport Management (SPMT 217)
Texas A&M University
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Chapter 15 Introduction ● What is sponsorship? ○ Cash and/or in-kind fee paid to a property in return for access to the exploitable commercial potential associated with that property ○ Cici’s Pizza gives A&M $6,000 worth of pizza & A&M can give free advertisin ● One of most prolific forms of sport marketing ● Sponsorship fees often exceed $5,000,000 per year and are structured as multi year deals ● Provides a company with association, value, exposure, and opportunities to leverage their affiliation to achieve marketing objectives History ● Origins traced back to ancient Greek Olympics ● Increasing commercialization of modern sports has led to tremendous growth in sport sponsorship ○ $11 billion spent on sport sponsorships in 2009 ● 1984 Los Angeles Olympic Games ○ Watershed year in the evolution of sport sponsorship ○ “Less is more” sales strategy (President Peter Ueberroth) ● Signed a limited number of companies to exclusive official sponsorship contracts ○ The first Olympic Games to turn a profit for the host city ● **Table 15-1 Top 15 US Sport Sponsors History: Reasons for Sponsorship Growth ● Increased media interest in sports. ● Companies can “break through the clutter” of traditional advertising. ● Sponsorship can reach its target consumer through consumers’ lifestyles. ○ Home Depot figures those who watch Saturday morning games will also visit their stores ● Enable corporate marketers to reach specific segments, such as the following: ○ Heavy users, shareholders, and investors; or specific groups that have similar demographics, psychographics, or geographic commonalities. ● Today, sport sponsorship has become a discipline involving serious research, large investments, and strategic planning. ● Buying decisions have become much more sophisticated, requiring sellers to provide compelling business reasons to the prospective sponsor. ● Return on investment (ROI) ○ Everyone wants this ○ Just no exact science on it Sponsorship Activation ● The sponsor commits financial resources in support of its sponsorship through promotion and advertising that thematically includes the sport property’s imagery. ● The oft-cited rule of thumb for activating a sponsorship is 3 to 1; that is, $3 in advertising/ promotion support for every $1 spent in rights fees. Sponsorship Trends
● Green Partners program today numbers over 20 companies ranging from Eaton Electrical (which supplies electric vehicle–charging stations) to MillerCoors (Mickle, 2013) ● Social media space ○ Among the most active sponsors is the location-based social networking site Foursquare, which over the past several years has inked sponsorship arrangements with sport properties ranging from the U. Open Tennis Championships to the NFL, NHL, and Major League Soccer (MLS) (Botta, 2013). Sales Promotion ● A variety of short-term, promotional activities that are designed to stimulate immediate product demand” (Shank, 2009, p. 312). ● Efforts also aim at increasing brand awareness, broadening sales distribution channels for products or services, and getting new consumers to sample products or services. Sales Promotion: In-Venue Promotion ● Increase the amount of “value-added” benefits that teams provide their paying customers ● Traditional giveaways: Sponsor underwrites the cost of a “premium” item in exchange for its logo on the item and advertising support that pre-promotes the event ● Continuity promotions: Require fans to attend multiple games to obtain giveaways ○ Do you go to a few games or all of them? ● Success of promotion varies widely based on time of season, teams’ win–loss record, day of promotion, opponent, and perceived quality of the item. ● Incremental increase in fans Sales Promotion: In-Store Promotion ● Companies often leverage sponsorships at retail level. ● Premiums ○ Merchandise offered for free or at a reduced price as an inducement to buy a different item or items. ● Contests/sweepstakes ● Sampling ○ One of the most effective sales promotion tools to induce consumers to try a product ■ When you’re at a sport event and you can sample something ■ College football/basketball and NASCAR are good at this ● Point-of-sale or point-of-purchase materials ○ Used by marketers to attract consumers’ attention to their product/service and their promotional campaign at the retail level ■ THink about going to Kroger or HEB ■ Always have those items right in front ■ Want to draw your attention ● Coupons: Free-standing inserts (FSIs) Cross-Promotion ● Joining together of two or more companies to capitalize on a sponsorship is becoming increasingly popular and effective.
○ If you’re AT&T, don’t want to give Dallas Cowboys $20 million unless you’re getting some return on that ● For ROI, companies use the following: ○ Internal feedback, sales/promotion bounce-back measures, print media exposure, television media exposure, primary consumer research, dealer/trade response, and syndicated consumer research ● The evaluation of sponsorships has become a necessary component of the sport sponsorship process. ● Difficult to determine precisely how much incremental sales are directly attributable to a specific sponsorship program. ● Many companies conduct periodic consumer surveys to determine ROI. ● Companies often hire professional sport research firms to perform media evaluation research that examines corporate sponsorship and brand exposure through television and print media coverage of sports events (Performance Research). ○ Looking at how much you’re spending versus how much you’re actually getting back Sponsorship Agencies ● Many companies engaged in sport sponsorship outsource the negotiation and/or implementation of their sponsorship programs. ○ Because they probably don’t have expertise in that and want someone that does ● They rely on agencies because they do not possess the expertise, experience, or resources to negotiate and implement sponsorship programs. Current Issues ● Ethnic marketing ○ Sport organizations have begun to adopt strategies to target ethnic groups more effectively. ● Over commercialization ○ Do consumers have an emotional threshold for accepting a constant bombardment of corporate names, logos, and messages? ○ Think of MBA, NFL, MLB games-- did you get overwhelmed by overcommercialization of products? ● Gambling ○ Sport organizations have embraced gambling (LGEs) as a growing source of sponsorship revenue. Summary ● Sport sponsorship has evolved into a billion-dollar industry that has grown increasingly competitive. ● Competition has heightened the necessary degree of sophistication in the sales, implementation, and servicing of sport sponsorships. ● Companies continue to place an increased emphasis on the evaluation and measurement of the return on their investment. Case Study # ● Shining a “Red Light” on Ambush Marketing ○ International Olympic Committee and each country’s national governing body
face major challenge in seeking to protect official sponsorship rights from ambush marketing ■ Ambush marketing: tactic in which company’s use advertising/promotions in an attempt to imply a commercial association with the Olympics without ensuring official sponsorship rights ○ Call these companies parasites ○ Happened to Canadian Olympic Committee for Sochi ■ Funded almost exclusively by private funding ○ Protect investment of those companies ■ Paid over $100 million to become official Canadian sponsors ● New Advertisement Enforcement Strategies ○ Beginning with Vancouver games, COC decided to move away from heavily- enforced mentality into education mindset ○ Instead, encouraged cooperation from business community to protect integrity of official sponsorship program ○ Education > enforcement ■ 1. Understanding and appreciation that COC is primarily funded by Canada’s business community ■ 2. Importance of sponsorship funding for athletes ■ 3. Fairness in business practice ○ Strategy of killing them with kindness-- proactive to educate businesses ○ Knew that some companies would try and capitalize goodwill associated with the Olympics ○ Days before opening ceremony in Sochi, BUddweiser launched “Let the Goals Begin”-- direct competitor to Molson-- red blimp flew over Canadian cities-- light up in red everytime Canadian hockey team scored ● Budweiser’s Marketing Plan ○ One of Budweiser’s tv ads featured a fictional scene that took place in Russia ■ Fans watching hockey game and red blimps lit up-- red light promotion through social media as well-- no Olympic logo or unfactual ■ Capitalize on NHL and junior hockey seasons-- used disclaimers ○ Over the course of the games, Budweiser blimp lit up 34 times ● Questions to Consider: ○ Do you believe that ambush marketing is ethical? Why or why not?
Chapter 16 Introduction ● Communications ○ Defined as all methods used by a sport organization to deliver its key messages proactively to a diverse group of constituencies (‘stakeholders’) ● Stakeholders are groups and individuals that have a direct or indirect interest in an organization. ● A dramatic shift in the sport industry has occurred because advances in technology have
● Beat reporter: Assigned by local media to maintain daily contact with the team, maintain blogs and Twitter accounts. ● Press release ○ Basic interpretive mechanism to let people know what an organization is doing ○ Sent out to editors and reporters in hopes of stimulating favorable stories about an organization ● Press conference ○ Media invited to specific location for important message ○ Accommodating needs of attending media is top priority ■ You want them to say good things about you ■ Maybe have beverages and provide lunch ● **Figure 16-1 Press Conference Outline ● Annual team media guide publications ○ Must be created and distributed to the media before the season begins ■ Rely on pictures to be correct and names be spelled correct ○ Include staff directories; biographies of all coaches, players, owners, and front- office staff; as well as team and individual records ○ Media guides now usually in digital format, not just print ● Media notes packages contain all the statistical information and biographi cal information about the two teams competing in a game. ● Photography ○ Need capable photographers to cover events (games, press conferences, and community relations events.) ○ Digital photography now the standard ○ Allows quick retrieval and distribution of images ■ Not having to go to a dark room and develop film-- transferred immediately ● Video news release (VNR) ○ Video has quickly become the public’s chosen media. ○ Pre-produced piece that includes a written story summary or press release that is edited for broadcast, making it more attractive for a TV producer to air, as well as online ● B-roll ○ A tape of raw footage that is not a finished segment that would accompany a written news release ■ Somebody that’s just taking footage that's unedited ● Conference calls ○ Successful way to communicate with media fast – Will likely give way to Web conferencing Legal Issues ● Defamation may come into play if the sport communication professional gives inaccurate information to the media. ○ Everybody’s got a camera on and has social media ○ Image is being projected-- better be doing it the right way or else you’re going to
be liable ● Family Educational Rights and Privacy Act (FERPA). ○ Also known as the Buckley Amendment. ○ FERPA sets the parameters for providing personal, academic, and medical information to the media. ○ Requires that student-athletes at universities receiving federal funding consent to release academic and medical information to non-university personnel such as college conferences and the media. ■ What would happen if they refused? Maybe lose their scholarship ● Health Insurance Portability and Accountability Act (HIPAA) ○ Sets limits on providing medical information to others. ○ Excludes from the definition of “protected health information” a student’s college or university education records. ○ Those records continue to be subject to FERPA. Public and Community Relations ● Public relations ○ All non media-related communication efforts aimed at delivering a direct message to the fans ● Most public relations activities are undertaken to have a positive impact on the community, resulting in positive media attention ● Community relations objectives include: ○ The development of substantive programs to benefit charitable causes ○ Educational and outreach programs in an organization’s area of business New Media and the Internet ● New media industry ○ Combines elements of computing, technology, content, and telecommunications ○ Creates products and services that can be used interactively by consumers and business users anywhere ○ Websites and social media, blogs, podcasts,online video streaming, and mobile technology ● Web site: A valuable public relations outlet. ○ Allows for the message to be published in the way that the organization wants it to be presented, and not filtered by the media ○ Allows an organization to distribute message and product to a worldwide audience (i., e-newsletters) ○ GOing to say exactly what you mean it to-- big advantage for sports organizations The Interview ● Interview - A question-and-answer session employed by the media to gather information and present it to an audience. ● First item is to prepare key messages that the organization wants to convey to the media during the interview. ● Sports communications professionals should create a list of potential questions, including suggested responses, before the interview.
● Emerging technology ○ Expect Internet-based communications efforts to increase. ○ Web conferencing will become increasingly popular in sports communications. ● Outside agencies ○ Hiring of outside public relations firms to help develop and administer public relations programs or special events. ● Government relations (lobbying) ○ Most organizations hire outside firms to represent their legislative interests and other government contacts. Case Study # ● Communication Strategies for the Cricket League ○ Landed a job in professional sports-- cricket league ○ Director of Communications-- US soil wants to tap into that market ● Engaging Cricket Fans ○ 3 markets in the US that should host matches & generate local publicity ○ Generate national buzz in the US-- develop & implement strategies ● Questions to Consider: ○ Determine the three cities in the US to host the matches during the cricket tour. ■ What can be done in each market to engage local sports fans? ■ How would you locate and communicate with fans from cricket playing countries living in these markets?
Chapter 17 Introduction: The Electronic Media ● What is electronic media? ○ Radio, television, and the Internet ○ Sound and images are captured by electronic devices and electronically encoded. ○ Information is transmitted at the speed of light (cables or broadcast transmitters/satellites) to receivers. ○ Information is decoded and transformed back to sound and images. ○ Electronic information can also be recorded for use at a later time. Introduction: Broadcasting ● Electronic media has transformed the sport industry and its relationship with the public. ○ Today, sport fans can watch events unfold as they happen. ● Broadcasting has profoundly altered the business of sports. ● Symbiotic relationship between sport organizations and media right holders ○ Sport entities rely on broadcasters for revenue and publicity.
○ Electronic media know that sporting events are a sure-fire means of attracting audiences that advertisers pay to reach. ■ Think about college game day and Home Depot History of Sport Broadcasting ● 1800s: Electronic communications began with telegraph (1844) and telephone which relied on electricity and conductive wires. ● By World War I, “wireless” (radio) was well established. ● 1921: First radio broadcasts of sporting events: ○ April 11, 1921: KDKA in Pittsburgh broadcast the first live sport program, a boxing match. ○ August 5, 1921: KDKA broadcast first baseball game—Philadelphia Phillies vs. Pittsburgh Pirates. ○ Pittsburgh Athletic Co. v. KQV Broadcasting Co. (1938), a federal court ruled that the home team controls all commercial broadcasting rights to a sport event. ● Network radio allowed many local stations across the country to broadcast the same event. ○ Basic idea of what was going on but people would gather around to hear ● Network = linked individual stations via telephone wires. ● Broadcasters understood that sports sold radios. ● Radio’s ability to reach a national audience also created national advertising opportunities. ● 1960s: Technology improved the quality of the product. ● First use of videotaped “instant replay” in a sport telecast was during the 1963 Army– Navy game on CBS (Gelston, 2008). ● “Solid state” transistor-based cameras and zoom lenses enhanced picture quality and mobility, making for increasingly compelling video images. ● Growth in sport broadcasting was dominated by two men. ○ ABC Executive Roone Arledge ○ NFL Commissioner Alvin “Pete” Rozelle ○ Helped bring TV broadcasts right into your living room ■ More shots of cheerleaders and fans, not just the game History: Roone Arledge ● Under Arledge, instead of simply showing the game, ABC would combine sport and entertainment. ● 1960: ABC acquired rights to the new American Football League (AFL) ● 1968: Turned ABC into the “Network of the Olympics.” ○ Olympics broadcast on ABC first ● 1970: Arledge produced Monday Night Football History: Pete Rozelle ● Moved the NFL headquarters to New York City. Home of the TV networks ○ New York was a great place to be associated with for sports ● NFL pools its regular season and playoff TV rights and sells them to the highest bidder ● The Sport Broadcasting Act of 1961 was a result of antitrust litigation over Rozelle’s plan.
○ Arranges for its distribution to the public ○ Recoups its fees and expenses by selling advertising in the game telecast and network distribution rights to cable and DBS operators The Business of Broadcasting: Rights Fee ● In most professional and college sports teams, national television rights are controlled by the league or conference and individual teams retain radio rights and some local television rights. ● For individual sports, such as tennis tournaments and boxing matches, the event organizer controls the television rights. ● Key terms in the negotiation of a rights agreement include: ○ The amount of the rights fees ○ The territory in which the telecast can (or must) be distributed. ○ The number of commercial units to be included in the telecast The Business of Broadcasting: Value ● Broadcasters determine how much they are willing to pay in rights fees by calculating how much money they can make on the programming by selling advertising in the particular programming. ○ Also, determine whether the programming will make the network more attractive to cable/DBS companies. ● NFL: Largest rights fees because of highest rated sport programs The Business of Broadcasting: Revenue Sharing ● Rights fees paid to leagues or conferences usually are shared equally among all member teams. ○ Vanderbilt gets the same as Auburn and Texas A&M ● Because all NFL games are subject to league-wide contracts, all TV revenue is shared equally. ● Revenue disparities can occur where teams receive television fees from both national and local right holders. The Business of Broadcasting: Production ● A network must obtain rights fees. ● If several networks are interested, a bidding war can drive up the rights fee. ● Three typical rights arrangements: ○ Rights and production deal ○ Rights only agreement ○ Time buy ● Rights and production: In addition to paying a rights fee for a particular event or series, a broadcaster must pay the expenses necessary to produce the coverage. ● Setting up cameras at various locations within the playing venue. ○ Ex: camera that swings down to the middle of the field ● Outfitting a booth in the press box for the announcers describing the action. ● Arranging for a remote production facility, frequently called the “production truck,” because it is configured to travel to events. ● The clean feed of the program is transmitted from the truck to a network studio, where commercial and promotional announcements are added.
○ The finished program then is retransmitted to network affiliates. The Business of Broadcasting: Advertising ● For advertisers in search of key demographics (males, ethnic, higher education/income), sport broadcasts are key. ● The traditional advertisement in a sport television program is a 30-second commercial message for a consumer product. ● Commercial formats contain advertising breaks for both national commercials, sold by the networks (or equivalent independent production company), and local advertisements, sold by local stations or cable systems. ● Price of advertisements are calculated on the basis of the number of people watching the telecast (rating). International Sports ● Technological advances have created huge audiences. ● American sport organizations and broadcasting companies are expanding their presence in foreign markets. ● Most valuable international property is the Olympic Games. ● NFL and NBA negotiate rights agreements with networks on a country-by-country basis, while other right holders utilize agents to secure international television coverage. ● Both ESPN and Fox operate domestic Spanish-language sports networks. Career Opportunities ● There are two fundamental types of jobs at networks: business-related jobs and production-related jobs. ● Ex on campus: 12th Man Productions ○ Ex: KBTX ● Business-related jobs tend to be more strategic in nature. ○ The acquisition and exploitation of rights ○ Identifying right holders ○ Analyzing the value of rights and whether particular programming is compatible with the network’s other content ○ Negotiating with right holders ○ Scheduling the network’s programming ○ Administering the working relationship with right holders Case Study # ● The Dominance of ESPN ○ Since the 1980s-- programming rights over NFL, NBA, MLB, Southeastern Conference, ACC, playoffs, masters, US Open Tennis, little leagues, etc ○ 8 domestic tv networks ○ Website is among most viewed sports websites in the US ○ Owns and operates the X games (action sports competition) ○ 30 for 30 movie and documentary series has high quality content ○ In 2017, its parent company Walt Disney Company purchased from FOX ● ESPN’s Decline ○ Despite its great success, ESPN recently has faced challenges ○ Between 2013 and 2017, the network lost approximately 12 million subscribers =
○ Created profitable distribution system ● Company sold directly to retailers at a set price with the guarantee that retailers would sell at a price that Spalding set. ○ Created stable markets for Spalding goods and eliminated price cutting at the retail level ● 1906: The Sports and Fitness Industry Association (SFIA, formerly the Sporting Goods Manufacturers Association) was founded as intercollegiate football leaders and athletic equipment manufacturers sought to make the sport safer. ● 1960s: Imported products arrived in greater numbers in American market. ● 1970s: Increased recognition of product liability and injuries associated with sports equipment. ● 1980s–1990s: Growth as products and consumer demographics became more diverse. ● Adidas and Puma ○ Founded in the 1920s by Adolph “Adi” Dassler (from whose name the company’s would derive) from a family shoe business. ○ Success through production of soccer cleats and track spikes. ○ Dassler established brand equity by convincing U. track star Jesse Owens to wear his spikes in the 1936 Berlin Summer Games. ○ Rudolf Dassler (Adi’s brother) founded Puma after a falling out between the two brothers. ○ The two companies compete for international market share, with Adidas holding an advantage because of its relationship with FIFA. ● Nike and Reebok ○ Nike began as an offshoot of Blue Ribbon Sports. ○ 1980: Nike revenue reaches $269 million a year, and replaced Adidas as the United States’ top sneaker. ○ 1986: Nike temporarily lost its top ranking to Reebok. ○ Late 1980s: The advent of the “Air Jordan” and “Bo Knows” marketing campaigns propelled Nike back to the top of the industry. ○ 2005: Competition trying to catch up ● Adidas bought Reebok for $3 billion in 2005. ○ 2012: Fiscal Revenues = $24 billion ● Licensed products ○ Licensed apparel ■ Based on notion that fans will purchase goods to draw them closer to their beloved organizations and athletes ○ 1947: University of Oregon allowed to use Disney’s Donald Duck image for the university’s mascot. ○ 1973: UCLA credited with being the first school to enter into a licensing agreement. ○ 1975: NCAA formed its properties division to license championship merchandise. ○ 1983: Notre Dame creates licensing program. ● Pro sports licensing ○ For-profit branch of the league is referred to as a properties division.
○ 1963: NFL was the first professional league to develop a properties component under Commissioner Pete Rozelle. ○ 1966: MLB creates properties division. ○ 1969: NHL creates properties division. ○ 1982: NBA creates properties division. ○ Properties divisions approve licensees, police trademark infringement, and distribute licensing revenues equally among league franchises. ○ Players’ associations also administer licensing programs. Industry Structure ● Sporting goods ○ Industry: Manufacturers of sporting goods equipment, athletic footwear, sports apparel, and accessory items to the sport and recreation market ● Trade associations ○ SFIA: Trade association for manufacturers, producers, and distributors of sport apparel, athletic footwear, and sporting goods equipment ○ The industry employs more than 375,000 people and generates $77 billion in domestic revenue wholesale sales (SFIA, 2013) Industry Structure: Licensing ● Manufacturers of licensed products (licensees) pay teams and leagues (licensors) for the right to manufacture products bearing team and school names, nicknames, colors, and logos. ● Enables schools and teams to generate brand recognition, and to increase revenues with very little financial risk. ● Licensees assume the risk by manufacturing the product and paying fee to the licensor (royalty) for the use of trademarks on products. Industry Structure: Trademarks ● What is a trademark? ○ A trademark is defined under the Federal Trademark Act of 1946, commonly referred to as the Lanham Act, as “any word, name, symbol, or device or combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others” (Lanham Act, 15 U.S. § 1051–1127, 1946, p. 1). Industry Structure: Royalty Fees ● Royalty fees generally range from 4% (for toys and games) to 20% (for trading cards and video games) and are based on gross sales at wholesale costs. ● The royalty rates for teams and leagues vary, ranging from 8% to 20%, with the majority at around 12% (“Licensed Sports,” 2012). Industry Structure: Collegiate Sport ● Some NCAA Division I-A schools administer their own licensing programs. – Schools can retain a greater portion of sales revenues. ● The Collegiate Licensing Company (CLC), was formed in 1981, and was recently purchased by sport marketing company IMG. ○ Colleges don’t have to do this if they don’t want to ● Now known as IMG College, it articulates licensing agreements on behalf of
exclusive deal with Reebok and immediately raised prices. ● 2008: Court found in favor of NFL as a single entity but both sides appealed to the Supreme Court. ● 2010: Supreme Court ruled NFL was not a single entity and case must be remanded in lower courts. ● Still to be determined: Whether the NFL’s licensing practices harmed competition Case Study # ● -
Chapter 19 Introduction ● Within the last decade, approximately 26 million Americans played golf on nearly 16, courses. ● During the last quarter of the 20th century, the number of golfers increased from 10 million to 30 million golfers. ● Since then, golf courses and clubs have been challenged by economic and societal changes that have impacted demand and have forced the industry to reevaluate its management and marketing practices. ● Courses are either public or private. ○ Private outnumbered the public until the 1960s. ○ More public courses created, now in mature phase of life cycle History ● The country club originated about 120 years ago and was conceived by affluent Americans. ● The American economic and political climate of the nineteenth century respected individualism and eschewed inherited nobility and the caste system of Europe. ● As America arrived as the world banking center, a moneyed class of individuals was created who sought to spend time with people of their own kind, away from average citizens of modest means. History: Country Club Concept ● Founded in 1882, The Country Club of Brookline, located near Boston, Massachusetts, is considered to be the first country club in the United States. ● The rules of sportsmanship were established in the 1880s at Yale. ● Country club: Place located in a country-like setting with open areas and lots of green space that has a standard meeting facility, the clubhouse. ○ Members go to enjoy sports and sportsmanship, engage in activities for pursuit of happiness, develop friendships, and co-mingle with friends and like-minded others. History: The Game of Golf and Golf Course and Club Development ● Game of Golf originated with the Royal and Ancient Golf Club of St. Andrews, Scotland. ● First introduced to US in Yonkers, NY: Apple Tree Gang ○ 1895: USGA formed ○ 1910s:ClubManagersAssociationofAmerica(CMAA) ○ 1910s:ProfessionalGolfersAssociation(PGA)
● Four major periods of golf course construction ○ 1878-1919: Concentrated in golf club villages ○ After WWI: Included Augusta in 1932 ○ 1950s and 1960s: Increased leisure time and affluence ○ 1970s: Palmer and Nicklaus spurred growth What is a Club? ● Public club: Open to public ● Private club: Restricts membership, may either be private for-profit entity or private non- profit entity ○ Facilities not open to the public ○ Member or individual must be accepted by rest of membership before he or she can join ○ Has a standard meeting place (typically a clubhouse) ○ Place for co-mingling: Social, recreational, or educational ● Public accommodation club (private for-profit club) is open to the public, may have special membership plans, may advertise and compete readily for the public to use and enjoy its facilities, and restricts only for capacity purposes Why Join a Private Club? ● People join private clubs for a variety of reasons: ○ Exclusive atmosphere ○ Statement of social position ○ Recreational facilities ○ Convenient for their types of interests ○ Close by their neighborhood ○ Club’s dining facilities ○ Don’t have to schedule in advance ○ Get ahead in business ● Built for variety of reasons ○ Social reasons, help sell homes, attract visitors Ownership and Types of Clubs: Equity Clubs ● Member-owned clubs ○ Typically have a private, non-profit status (earning reinvested in the club), not open to the public ● 501(c) (7) club: IRS designation, tax exempt ○ Must be a club and organized for club purposes ○ Organized for pleasure, recreation and other non-profit purposes; must be clearly stated in club’s by-laws ○ Substantially all of the club’s activities must be for pleasure, recreation, and other non-profit purposes ○ No inurnment: No earnings benefit for club owners ○ Must not discriminate on the basis of race, color, or religion (Note: Single- gender clubs approved by IRS.) Ownership and Types of Clubs: Non-equity Clubs ● Non-member-owned clubs
SPMT 217 Lecture Notes Exam 3
Course: Foundations of Sport Management (SPMT 217)
University: Texas A&M University
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