Deck 1: Introduction to Sport Finance

Question 1

Three interrelated sectors exist within finance. Which of the following sectors focuses on security choices made by individual and institutional investors as portfolios are being built?

A) Money and capital markets
B) Investments
C) Financial management
D) Derivative trading
E) None of the above

Answer 1

B

Question 2

When an organization borrows money that must be paid back over time, usually with interest, what kind of financing is being used?

A) Debt
B) Equity
C) Retained earnings
D) Government
E) Gift

Answer 2

A

Question 3

Three interrelated sectors exist within finance. The goal or outcome of those working in which of the following sectors is to acquire and secure funds to maximize shareholder wealth?

A) Money and capital markets
B) Investments
C) Financial management
D) Derivative trading
E) None of the above

Answer 3

C

Question 4

This type of financing includes charitable donations, either cash or in-kind, made to an organization and is the primary source or operating and investing income for major collegiate sports programs.

A) Debt
B) Equity
C) Retained earnings
D) Government
E) Gift

Question 5

Three interrelated sectors exist within finance. Which of the following includes securities markets, investment banking, insurance, and mutual fund management?

A) Money and capital markets
B) Investments
C) Financial management
D) Derivative trading
E) None of the above

Question 6

Typically, owners in a specific industry compete for wealth maximization. Owners in sport might not be interested in this goal. Rather, they may be interested in __________.

A) Winning championships
B) Seeking celebrity status
C) Protecting a community asset
D) All of the above
E) None of the above

Question 7

For all sport and entertainment organizations, __________ financing may include land use, tax abatements, direct facility financing, and infrastructure improvements.

A) Debt
B) Equity
C) Retained earnings
D) Government
E) Gift

Question 8

Of the following statements regarding the Arts, Entertainment, and Recreation segment (NAICS 71) of our economy, which of the following is true?

A) The industry employs a large number of full-time workers and relatively few seasonal and part-time workers.
B) Those working in the industry tend to be older than those working in other industries.
C) Wages for those working in the industry tend to be higher than wages paid to those working in other industries.
D) Almost all leisure time activities, including watching movies, are a part of this sector.
E) Rising incomes and increasing leisure time over the next 10 years should lead to an increase in demand in this sector.

Question 9

Under this sport franchise ownership model, __________ is the most common model of team ownership.

A) Single Owner/Private Investor Model
B) Multiple Owners/Private Investment Syndicate Model
C) Multiple Owners/Publicly Traded Corporation Model
D) Single Entity Model
E) Distributed Club Ownership Model

Question 10

Other than __________, sport leagues in the United States are subject to the Sherman Act.

A) The National Football League
B) The National Basketball League
C) Major League Baseball
D) The National Hockey League
E) Major League Soccer

Question 11

The sport industry relies on the discretionary income of spectators and participants.

Question 12

The single entity structure is used by MLB, the NBA, the NHL, and the NFL.

Question 13

The single entity structure is used by Major League Soccer.

Question 14

Distributed club ownership model leagues are sometimes structured as non-profit organizations.

Question 15

Yankee Stadium was financed by the team using a form of equity financing.

Question 16

Gift financing is a minor source of operating income for major collegiate sports programs.

Question 17

The sport industry is classified as an industry by the U.S. Census Bureau.

Question 18

The largest grouping of sport businesses is within NAICS 71, the Arts, Entertainment, and Recreation segment.

Question 19

The Gross Domestic Sports Product (GDSP) is the market value of a nation's output of sport-related goods and services in a given year.

Question 20

Antitrust law applies to single-entity sport leagues.