Cash Flow Characteristics of Sports Franchises, Essay Example

Introduction

The paper will begin with an introduction of cash flow principles in ordinary business settings and then contextualize these principles in sports franchises. Basically, the paper will introduce a sports franchise as a business front, first and foremost, in a bid to establish particular characteristics of the cash flow dynamics in such franchises.

In the introduction, the paper will define some common terms and terminologies used in cash flow discussions in relation to sports franchises. The scope of the paper and the specific bias adopted shall be highlighted. The thesis statement will center on establishing cash flow characteristics that can be established from contemporary sports franchises and this will be thoroughly developed within the confines of the paper with the aid of real life examples.

Sports Franchises as Business Ventures

In this section, the paper shall discus typical sports franchises in the contemporary world, with a specific bias to basketball and football teams. In essence, such examples shall help construct the corporate structure of such clubs. More importantly, the business nature of such clubs will be exemplified in details.

Cash Flow in Sports Franchises

Having established that sports franchises are business ventures, this section of the paper will examine the specific characteristics of the cash in- cash out scenarios in this businesses. The central question here will be, when does money come in to a sports club account and when does it leave? Essentially, this section will highlight typical expenditures (professional player’s enumeration, club overheads etc) of a club and typical income generating activities of such a club (Community contributions, fans contributions, stadium, charges etc).

Cash Flow Imbalances in Sports Franchises

Sometimes, the money in does not balance with the expenditure entries a sports franchise has. This is what determines, though to a limited extent, the resultant profit or loss. The section will review the significance of cash flow imbalances to a sports franchise financial statements.

Sports Franchise Cash Flow Management

This section of the paper will evaluate some techniques that some sports franchises adopt while managing their cash flow. Such techniques will include:

• Stadium cash flow management
• Multi-teams franchise cash flow management
• Sports channel cash flow management
• Overall franchise cash flow management
• Operating cash flow estimation
• Historical cash flow valuation

Contemporary Issues in Cash Flow Measurement

This final section of the paper shall endeavor to detail how cash flows in sports franchises in contemporary teams are faring. This section will localize some contemporary economic developments to sports franchises cash flows.  Of particular interest will be such issues as:

• Globalization
• Increased IT adoption in business operations
• Recent economic slump/depression/slow down

References

To come up with accurate and reliable data in the discussion, the paper will utilize and source facts from several reliable sources comparatively. These sources will be cited and well referenced, some of them being

Hoye, R. et al. (2009). Sport Management: Principles and Applications. Butterworth: Heinemann

Masteralexis, P. (2003). Principles and Practice of Sport Management. New York: Jones and Bartlett Publishers, Inc.

Shropshire, K. (1995). The Sports Franchise Game: Cities In Pursuit Of Sports Franchises, Events, Stadiums, and Arenas. Pennsylvania: University Of Pennsylvania Press.

Watt, D. (2003). Sports Management and Administration. New York: Routledge.