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BTEC Sport as a Business

Module Introduction

Nathan Thomas

on 24 September 2014

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Transcript of BTEC Sport as a Business

What do you understand by a Sports Business?
All Must:
Describe the structure of the module, how it will be assessed & 4 Learning Outcomes
Give examples of how business can affect sport and specifically rugby.
Most Should:
Understand key terms that we will study during the module.
Some Could:
Reflect on their experiences of rugby and link this to business.
Learning Outcomes
BTEC Sport as a Business
On completion of this unit a learner should:
1 Know how businesses in sport are organised
2 Know what makes a successful sports business
3 Know the legal and financial influences on sport as a business
4 Be able to use market research and marketing for a sports business.
Sports as a Business Unit Spec
1. Successful Sports Businesses and Legal Factors - Report (2500 min.)
10th December 2013

2. Sport Marketing - PowerPoint/Prezi (2 Maximum)
25th March 2014
How does David Beckham link to this subject?
In what ways are David Beckham and Sports Business' linked?
Individually list at least ten different Sports Businesses?

Attempt to classify the listed businesses.

E.G. Sole Trader, Private Health Club etc.
Losing Heineken Cup would be a 'crazy concept' - Roger Lewis
(12 September 2013)

Is the business world positively or negatively affecting sport?
BBC Business of Sport Website
In groups come up with three examples of how sport has been affected (positively or negatively) by business.

One example must not be rugby.

Group Task
Gareth Bale - World's Most Expensive Footballler... and he is Welsh naturally!!
What three things do you know now, that you did not know at the start of the lesson?
What is the benefit of a marketing strategy such as the one just used by Saracens?

Think of a promotional idea which you could use for a team of your choice?
Week One
Week Two
ALL must:
1. Develop an idea for a ‘Sports Business.’
2. Know the main classifications of ‘Sports Businesses’ regarding products and services.
MOST should:
3. Know how businesses are affected by and created considering their ‘target audience,’ ‘current market’ and USP’s.
SOME could:
4. Critique the other sports business ideas on originality, current market and classification.
In groups, you will have 20 minutes to come up with a new sports business. You must consider –
• Current market
• Target audience
• USP/Originality
Dragon's Den
Presentation Time
Tweet your summary of today's session.

Classification of businesses
Target Audience
Current Market

Points for panel to consider:
Originality of product
Current market of proposed product/service (Feasibility)
Classification of business
Week Three
Why did we do Dragon's Den last week?
Why did we do this last session?
Everybody write down your response.
Product or Service?
Legally recognised organisation
What is a Business?
Provides goods or services
Variety of markets
Different types of businesses
Types of Business
Sole Proprietorship
A sole proprietorship is the simplest and most common structure chosen to start a business. It is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner. You are entitled to all profits and are responsible for all your business’s debts, losses and liabilities.
A partnership is a business where there are two or more owners of the enterprise.
Most partnerships are between two and twenty members though there are examples like John Lewis and some of the major world accountancy firms where there are hundreds of partners.
A limited company has special status in the eyes of the law.

The ownership of a limited company is divided up into equal parts called shares. Whoever owns one or more of these is called a shareholder.

Because limited companies have their own legal identity, their owners are not personally liable for the firm's debts - limited liability (which is the major advantage of this type of business legal structure).

Unlike a sole trader or a partnership, the owners of a limited company are not necessarily involved in running the business, unless they have been elected to the Board of Directors.

Manchester United plc

A PLC is a company whose securities are traded on a stock exchange and can be bought and sold by anyone.

Limited Liabilty

Public companies are strictly regulated, and are required by law to publish their complete and true financial position so that investors can determine the true worth of its stock (shares).

Public limited company and its abbreviation Plc are commonly used in the UK in the way that Corporation and Inc. is used in the United States.
Manchester City have announced a partnership with baseball giants the New York Yankees to form a new Major League Soccer franchise.

New York City Football Club will enter the MLS in 2015 after a deal thought to be worth $100m (£66m) was struck.
Franchising is the practice of using another firm's successful business model.

For the franchisor, the franchise is an alternative to building 'chain stores' to distribute goods that avoids the investments and liability of a chain.

The franchisor's success depends on the success of the franchisees.

The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business.

Essentially, and in terms of distribution, the franchisor is a supplier who allows an operator, or a franchisee, to use the supplier's trademark and distribute the supplier's goods.
Fill in boxes to give examples of each sports industry business
Rugby & Business?

Answer one of the following questions……

What category would you place –
Sky Sports?
A Specific rugby club?
Read the article and answer the question:
NFL looking to build fan base in United Kingdom
Write down three things you learned today and one question you would like to ask about today.
Week Four
Choose a business type:
Sole Trader
Private Limited Company
Public Limited Company
Starter - Research Task - 20 mins
What are the key features of the business?
What are the advantages and disadvantages?
Sporting Business Example?
Mission Statement?
Product/Service? What specifically does it do?
Think in terms of size, structure, income, and any other areas that can be used for comparison for your assignment.

EXTENSION: Compare/Contrast with another business? Judge the success of your business.
Sole Trader
Most common form of ownership
No complicated legal requirements
Decisions can be made quickly
Close contact with customers and employees
All profits retained/high satisfaction

All decisions are made by owner
Long hours
Unlimited liability
Sourcing finance
2-20 people in a partnership
Partners can share skills/knowledge
Organisation could provide 24/7 service
i.e. they could share the workload
Easier to raise finance

Unlimited liability (except sleeping partner)
Difficult to raise large amount of capital
Decision making process is slower

Private Limited Company
Characteristics of a Public Limited Company (LTD.)
2 to 50 owners called shareholders.
Shares (part ownership) cannot be bought by the general public.
Shareholder’s receive a vote for every share they own
Must have Ltd. After it’s name.
Shareholders receive a share of the profits called a dividend.
Limited liability
- If the business fails you can only lose the money that you invested in the company. (Your own personal wealth cannot be touched.)
Business continues even when an owner dies.
Shareholders are “invited” - may be family or friends
Easier to raise finance
as you have up to 50 shareholders.

Legal Documents are needed to set up a co.
to set up.
Decision making and profits are
Restricted availability of finance
Public Limited Company (plc)
to set up as a plc.
Would you want competitors knowing how much profit you are making?
Possible threat of
Original shareholders could lose control
Shareholders expect income from dividends
Business may have to concentrate on short term.
May be better to work on longer term objectives, such as growth and investment.
Better access to capital – i.e. raising share capital from existing and new investors
Liquidity – shareholders are able to buy and sell their shares (if they are quoted on a stock exchange
Value of shares
Shareholders have limited liability
Cheaper borrowing and bulk purchasing
Gives company prestigious profile
Existing, established product therefore more chance of success
Cheaper market research and promotional costs
May receive help and training from franchiser
Lower start up costs
The reputation of the company is out of their control.
Franchisees are bound by contract which restricts what they do
Part of profits/turnover must be paid to franchiser
NIKE - Mission Statement

Ensure you record the relevant information for each of the different types of business.
Choose two businesses that you intend to use for your assignment.

Start to plan how you will compare and contrast these businesses.
Organisational Structures
Ways to Structure a Sports Business
Why is a good business structure important?

All businesses have to organise what they do
All Sports businesses need a structure in order to function efficiently
Structure will show clearly defined roles
Foster good communication between staff
Sports company structures will depend on products, size of business, staff numbers and nature of work
The FA Group Management Organisational Structure
Can you think of an additional department that could potentially be in this business?
1. Make an attempt at designing the organisational structure of an amateur rugby team?
Task - Work in Pairs
2. Make an attempt at designing the organisational structure of a large sports company , such as Nike?
Some Key Business Structure Terms
Flat or tall structure
Span of control
Chain of command
Family Organisational Structure
The routes of communication between different parts of the organisation
The levels of control and authority within the organisation
The parents are at the top of the diagram (or should be!) as they are responsible for and control, the family
Communication flows both horizontally and vertically
Family v Business
If you compare the family with a business you will see how an organisation should function, and can go wrong.
Any failure in communication routes or in control could result in serious problems and inefficiencies - just as it does in a family.
Functional/Hierarchichal Structure
A hierarchy is a series of levels of people, each level controlled by the level above it.
Flat Structure
You will see from this diagram that:
There are few 'layers' in the organisation
One level of command
The boss has a 'Span of Control' of six employees
The boss will presumably carry out the main business functions
Divisional Structures
Organised by Geographical Area
Organised by Product
Organised by Function
Specialisation – each department focuses on its own work
Accountability – someone is responsible for the section
Clarity – know your and others’ roles
Closed communication could lead to lack of focus
Departments can become resistant to change
Coordination may take too long
Gap between top and bottom
Clear focus on market segment helps meet customers’ needs
Positive competition between divisions
Better control as each division can act as separate profit centre
Duplication of functions (e.g. different sales force for each division)
Negative effects of competition
Lack of central control over each separate division
Serve local needs better
Positive competition
More effective communication between firm and local customers
Conflict between local and central management
Duplication of resources and functions
Other Organisational Structures

By Customer:
Similar effects to structuring by product

By Process:
Similar to structuring by function
Consider how an international standard professional rugby player would be managed, and by who, during his rehabilitation from injury?

HINT: It is not a structure we have looked at yet?
Imagine you are going to form a business with some close friends.
You are not sure what is the best set up for your company, so you decide to make some comparisons.
Choose TWO different types of Sports business and assess how they are organised. Give details of;
The type of business and structure
Aims and purpose of the business
Staffing levels
Products and services
Week 6
Imagine you are going to form a business with some close friends.
You are not sure what is the best set up for your company, so you decide to make some comparisons.
Choose TWO different types of Sports business and assess how they are organised.
Give details of;
The type of business and structure
Aims and purpose of the business
Staffing levels
Products and services
eg public sports and leisure clubs,
private sports and leisure clubs,
professional sports clubs,
amateur sports clubs,
coaching services,
health and fitness facilities.
Types of business
 eg sole trader,
 partnerships,
 private limited companies,
 public limited companies,
 franchises,
 nationalised industry;
 eg senior management,
 management,
 functional departments,
 regional structures;
 eg chief executive,
 duty manager,
 sales manager,
 reception,
 leisure attendant.

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