Deck 3: Financing Sport Facilities

Question 1

1 Which of the following is a key factor in determining how much a sport facility is worth?

A) How well the sport facility is performing financially
B) The condition of the land, buildings, fixtures, and local infrastructure
C) The opportunity for future development internal and external to the sport facility
D) All of the Above

Answer 1

D
Explanation: Sports facilities are investments that have the potential to grown in value. Most property tends to increase in value over time and sports facilities are no different. One method by which investors can profit from their initial investment in a sports facility is by selling it for a higher price than the facility cost to develop in the first place. Choice D (All of the Above) is the correct answer because some of the key factors that determine how much a business is worth are:
how well the business is performing financially;
the condition of the land, buildings, fixtures, and local infrastructure; and
the opportunity for future development in the locality

Question 2

2 As much as what percentage of lifetime costs attributable to a sport facility is determined by decisions made in the early stages of management and operations?

A) 80%
B) 85%
C) 90%
D) 95%

Answer 2

C
Explanation: Choice C is correct because the importance of being aware of life cycle costing can be appreciated by the finding that as much as 90% of the lifetime costs attributable to an asset are determined by decisions made in the early part of the asset's life.

Question 3

3 What is the definition of economic impact?

A) The net economic change in a host community that is directly attributable to a facility or an event
B) The gross economic change in a host community that is directly attributable to a facility or an event
C) The net economic change in a host community that is indirectly attributable to a facility or an event
D) The gross economic change in a host community that is indirectly attributable to a facility or an event

Answer 3

A
Explanation: As defined in the chapter, economic impact is the net economic change in a host community that is directly attributable to a facility or an event (Choice A).

Question 4

4 Hard taxes are assessments that are applied to the entire population. Which of the following are NOT hard taxes?

A) Real Estate and Property Taxes
B) Income and General Sales Taxes
C) Road and Utility Taxes
D) Sin Taxes, such as on liquor and tobacco

Question 5

5 Soft taxes are assessments applied specific product users, or to non-residents of a municipality. Which of the following are NOT soft taxes?

A) Road and Utility Taxes
B) Sin Taxes, such as on liquor and tobacco
C) Hotel/Motel and Restaurant/Food Service Taxes
D) Automobile Rental and Taxi/Limousine/Livery Service Taxes

Question 6

6 Which of the following is a private source of revenue?

A) Private Seat Licenses
B) Debentures
C) Ticket Sales
D) All of the Above

Question 7

7 Which of the following are NOT types of public-private partnerships?

A) Public Sector Leasing and Private Sector Leasing
B) Public Sector Trusts and Private Sector Trusts
C) Public Sector Takeovers and Private Sector Takeovers
D) Private Pump Priming and Multiparty Arrangements

Question 8

8 The Tax Reform Act of 1986 significantly reduced the availability of tax exempt bonds for building sport facilities. According to the chapter, this was during what period in the history of sport facilities?

A) Period of Antiquity
B) Period of Discontinuance
C) Period of Change
D) Period of Revitalization

Question 9

9 In what period in the history of sport facilities was there a transition from fully public financing to public-private partnerships?

A) Period of Antiquity
B) Period of Discontinuance
C) Period of Change
D) Period of Revitalization

Question 10

10 Which of the following statements about the future of sport facilities going forward from 2010 is TRUE?

A) There is an emergence of the voluntary sector as an additional niche in the financing of sport facilities
B) As a result of the globalization of sport, the effects of currency values as related to international/global investments will be significant
C) Both a and b
D) None of the Above

Question 11

As discussed in the chapter, positive economic benefits can be delivered by a sport facility across five key areas. You are in charge of bringing a multi-court basketball to your community. Explain how your facility will bring economic benefits to the community.

Question 12

There are always questions about the uncertainty by the public about whether available alternative sources of private financing should supersede the use of public financing, and the contention that the economic returns accruing from public investments do not necessarily equate to the initial investment in the sport facility. For the sport facility discussed in question 11, justify your use of public subsidies to finance the sport facility in terms of the appropriate spillover benefits discussed in the chapter. Defend your answer.

Question 13

Continuing with the multi-court facility, explain how you would secure private sources of revenue from each of the categories describe in the chapter.

Question 14

Assume you have decided that in order to maximize success, your multi-court basketball facility should enter into a public-private partnership. Which method of public-private partnership would you implement? Defend your answer.