I. the Economic Impact of Sports & Entertainment

Sports & Entertainment Marketing Name: ______Economics in Sports & Entertainment Directions: Please complete the following outline during the class discussion of this unit. I. The Economic Impact of Sports & Entertainment A. ______won the 2010 FIFA World cup by beating the Netherlands 1-0 in extra time. B. The country of ______hosted the FIFA World Cup in 2010. 1. The South African economy was impacted by 373,000 visitors who traveled to the country to participate in World Cup events. These sports teams and fans stayed an average of 18 days. 2. The gross economic impact on the country’s economy has been estimated at R93 billion (R = rand). (One US dollar equals 8.7 rand.) C. The 2011 World Series brought about 10,000 visitors to ______. These tourists spent $2,655,00 per game in St. Louis. The Regional Chamber and Growth Association estimated $3.1 million in direct spending per game. D. Hosting the FIFA World Cup, the Olympics, the MLB World Series, or the Super Bowl all have a direct and indirect impact on the local economy. E. The ______is the total of new spending resulting from the event. 1. There are approximately 100,000 people who visit the Super Bowl city each year. These visitors stay an average of 3.5 days. 2. The 2013 host city New Orleans predicts a direct economic impact of $434 million and an additional $223.1 million in secondary or indirect spending. F. The ______is determined by the multiplier effect, meaning the portion of the money spent by visitors on local goods and services that is in turn spent locally by employers and employees. 1. Approximately 590,000 people visited England for the 2012 London Olympics. 2. The sustained long term impact on the economy of Great Britain is expected to be over 5 billion pounds. G. The state of ______offers some of the best film and TV tax incentives in the country. 1. Georgia offers an income tax credit of ______for qualified production expenses. 2. This leaves the movie producers with more money for production. 3. The filming of movies and television programs are often done on ______around the country and the world. 4. The location shooting of these entertainment services have significant ______on local economies. II. Producers and Consumers in Sports & Entertainment 1 A. ______are businesses that use resources to develop products and services and provide them to consumers. The 32 owners of the NFL are producers responsible for providing consumers with professional football.

B. ______purchase goods and services to satisfy their own needs and wants. 1. The National Football League is the largest live ______sport in the world in terms of average attendance. 2. The NFL averaged 67,509 live spectators per game, and 17,282,225 total for the season.

C. Finding a ______between what producers are willing to produce and what consumers are willing to buy is one of the major challenges of marketing.

III. The Economic Resources in Sports & Entertainment

A. ______resources, also known as natural resources, includes anything in its natural state.

B. ______, also known as human resources, includes the employees of the business who complete the work.

C. ______includes the money, tools, buildings, and equipment needed for production of products or services.

D. ______refers to the individual who takes the risk of owning and operating the business.

IV. The Laws of Supply and Demand

A. ______is the relationship between the quantity of a product that consumers are willing and able to ______and the price.

B. ______is the relationship between the quantity of a product that producers are willing and able to ______and the price.

C. The ______states that when price goes ups demand goes down, and when price goes down demand goes up.

1. The average price for a ticket to a New York Yankees game is now $72.97 dollars. The league average is $26.74. 2. Will the high cost of tickets reduce the attendance at New York Yankees games?

D. The ______states that when price goes up supply goes up, and when the price goes down the supply produced goes down. 1. Producers must pay attention to what is selling at profitable prices and what is not and adjust production accordingly. 2 2. Television programs that are popular will attract more advertising revenue for the network airing the program. 3. Consumers have limited money to spend on sports and entertainment. 4. When prices rise, producers are encouraged to produce more. 5. However, consumers will generally buy more at lower prices. 6. When prices are too high, consumers will choose other alternatives or do without the goods.

E. ______is created by the difference between our limited resources (money) and our unlimited needs and wants. Scarcity forces everyone, people, businesses, and nations, to make economic choices.

F. The economics of supply and demand can be illustrated by curves on a ______.

G. ______is the point where the supply and demand curves intersect. Equilibrium is rarely ever achieved. In economics it is more common to have either a surplus or a shortage of goods or services.

H. A ______occurs when demand is greater than supply. When a shortage occurs producers can charge more for their products and still sell all they produce.

I. A ______occurs when supply is greater than demand. Consumers will generally pay less for products that are considered to be surplus.

V. The Three Basic Economic Questions

A. All economies must answer the 3 basic economic questions of:

1. ______goods and services will be produced?

2. ______will they be produced?

3. ______will they be produced?

B. A country’s ______system is classified based on how the country satisfies needs and how resources are distributed.

1. Controlled/Command Economy – the government answers the questions.

2. Free Enterprise/Market Economy – the individuals interact in the marketplace to answer the questions.

3. Mixed Economy – all economies are mixed.

VI. The Economic Systems

3 A. ______(or private-enterprise) is an economic system that allows the interaction of supply and demand to drive the economy. Free Enterprise is based on independent decisions by businesses and consumers with limited government regulation.

B. Characteristics of Free Enterprise:

1. Laws encourage ______- the rivalry between 2 or more businesses for customer dollars.

a. ______competition – focuses on factors that are not related to what the product sells for. b. ______competition - focuses on the selling price of a product or service.

2. Competition encourages businesses to develop ______products and services. 3. Antitrust laws make ______illegal – when one business controls the entire market for a good or service. 4. The ______encourages businesses to efficiently provide products, at a profit, that consumers need & want. 5. Consumers cast their “economic vote” when they decide what to purchase.

Video: Is Luxottica a Monopoly?

1. Where is the global headquarters of Luxottica?

2. Name the eye wear retailers owned by Luxottica.

3. Do feel that Luxottica has control over the prices consumers pay for glasses?

4. If monopolies are illegal in the United States does this mean that Luxottica is NOT a monopoly?

C. In a controlled/command economy the government controls all resources.

1. ______has a state-controlled planned economy. 2. Most of the means of production are owned and run by the government. 3. Most of the labor force is employed by the state. 4. The Cuban government sets most prices and rations goods.

4 5. Any firm wishing to hire a Cuban must pay the Cuban government, which in turn will pay the employee in Cuban pesos. 6. The average wage for a Cuban is 334 regular pesos per month ($16.70 per month).

D. All economies are ______economies.

1. There is some government involvement in all economies. 2. The U.S. economy has many examples of government involvement such as banking regulations and social services such as Medicare and Medicaid. 3. Canada has an economy which is very similar to that of the United States but provides more social services such as universal health insurance coverage.

VII. Economic Measurements

A. ______is output per worker hour. In the workplace it can be difficult to measure productivity. In sports, there are clear-cut measures.

B. ______(GDP) is a measure of the goods and services produced using labor and property located in a country.

C. ______occurs when prices rise faster than consumer income. A low inflation rate (1-5 percent) shows that an economy is stable.

VIII. The Business Cycles

A. The ______, also known as the economic cycle, refers to the ups and downs of the economy.

B. During the ______phase of the business cycle there is growing demand for goods and services.

C. The ______is the high point of economic growth.

D. During a time of ______the economy slows down, unemployment goes up, and consumer demand lessons.

E. Depending on the severity of a contraction it may be referred to as a recession or a depression.

F. A ______is a period of economic slowdown. Unemployment begins to rise, fewer goods and services are produced, and consumer spending decreases. Recessions usually last 6-8 months.

G. A ______is a period of prolonged and deep recession. Consumer spending is very low, unemployment is very high, and production of goods and services is down significantly.

5 H. The ______is the low point of a contraction just before recovery begins.

I. ______occurs when the economy shows signs of improvement.

J. A recovery can result in a period of ______when the unemployment rate is very low and consumer confidence is very high.

K. For some businesses the demand for products and services fluctuates with the seasons.

L. The ______for a ski resort would be during the winter.

M. The ______for a theme park would occur during the winter months.

N. Periods of moderate demand are called ______.

IX. Economic Utility

A. Economic ______is the amount of ______, or ______a consumer receives from the consumption of a particular product or service.

B. Businesses use economic utility to increase the chances that consumers will buy their products or services.

C. The four types of utility: Form Utility, Time Utility, Place Utility and Possession Utility.

1. ______utility is the type of utility created when the product or service is physically changed or improved. Taking a movie and changing its format to 3D is an example of form utility. Customers will pay more to see it in the new format.

2. ______utility is created when a product or service is available when it is needed or wanted by consumers. Allowing customers to watch movies at any time using VOD (video on demand) is an example of time utility.

3. ______utility is created by having a good or service at the location where it is needed or wanted. Allowing customers to watch movies or sporting events at home using pay-per view services is an example of place utility. Customers will pay for the convenience of this service.

4. ______utility is created when ownership of a good or service is transferred from one person to another, but it may also occur through renting or borrowing. Allowing customers to rent video games or movies rather than buying them is an example of possession utility. Allowing customers to more easily purchase products using their credit or debit cards is also an example of providing possession utility.