Public Subsidies for Professional Sport Facilities - Term Paper Example

of the Number: Paper: Table of Contents National Football League: Nature and Structure 3 External Factors affecting NFL 3 Stakeholders of NFL 4 Stakeholder’s influence on NFL’s financial performance 5 Controversial social responsibility 6 Plan to form a stakeholder coalition group 7 Challenges 7 8 National Football League: Nature and Structure National Football League (NFL) is one of the key professional football leagues of America. The league is mainly formed with 32 teams. These teams are equally divided between the American Football Conference (AFC) and National Football Conference (NFC). This league commences just after Labor Day and runs regularly for 17 weeks till the Christmas. Sixteen games are played by each team and the teams get selected for playoffs on the basis of their performance. Generally, six teams from among each conference qualify for the playoffs. These six teams comprises of four division champions and two teams selected as wild-card entry. Finally, in the end, a single elimination game is organized between the group winners of AFC and NFC. This culmination of the two group champions is known as the Super Bowl. The ultimate winner from the Super Bowl is awarded the Vince Lombardi Trophy. Other awards and accolades are given to the coaches and individual players for their exceptional performance that help a team to win. Most of the games are scheduled on the Sunday afternoons to attract more viewers. During the normal season, some games are planned on other week days like Thursdays and Mondays. The corporate structure of NFL is interesting to study. The league office of NFL is not constrained by income tax, as this unincorporated association earns no profit. However, the individual teams are subject to income tax because individually the teams generate profit. So NFL is like a trade association that is financed by its member teams. The league is mainly operated by the commissioner, treasurer and secretary. The conferences are headed by the president. An election is conducted to elect the commissioner and the president (August, n.d.). External Factors affecting NFL NFLs popularity in America has been growing with time. However, there are several external issues that affect the success of the league. The prevailing weather condition is one of the key factors that affect the league externally. Sometimes the temperature can go below the normal expected temperature. This may negatively affect the league. Matches may get cancelled due to bad weather conditions, as in an extremely chilly weather it becomes difficult for the players to perform. It is also imperative to enhance the game experience for the fans. Initiatives should be taken by the league committee to conduct the games in indoor stadiums in case of adverse weather conditions. There has to be uniformity in the games so that unfair advantage is not given to any of the teams i.e. indoor facilities should be ensured for every match and not for particular matches as the external environment is vital for the team’s performance. Bad weather conditions also negatively affect the sale of match tickets. Thus, weather is an important determinant that affects the success of NFL (Orchard, 2002). The teams of NFL are generally owned by private owners. These owners do not publicly release the financial statements of the teams. The owner is generally not considered as a member of the team. The owner is thus, has an external influence on the team. The decision of the owner indirectly has an impact on the success of the league. So the effectiveness of the owner’s decision is vital for the NFL. Many teams have suffered due to an ineffective decision made by the owners and this has had influenced the success of the league (Hadley, et al, 2000). Stakeholders of NFL There are various stakeholders of the NFL and their relationship with the league is based on the key role they play in the activities of the league. These stakeholders play an important role in the operations of the league. The players of different team form a vital part of the league. It is because of the popularity and the abilities of the players that the league has been able to sustain its operations. The success of the league and the players share a causal relationship. The players benefit from the growing success of the league. On the other hand, the league gains promotion due to the exceptional performance of the players. The sponsors of the NFL also have a great influence on the operations of the league. Major brands and companies invest huge capital to support the activities of the NFL. This is because, the companies understand the popularity of football in America and they want to attract consumers by using the league as a tool for promotion. The league also intensively depends on the sponsors for capital. Finally, the fans and audience of the league who forms the consumer base, is also important for the survival of the league. The league forms an important source of entertainment for the fans. The teams also generate revenue from the fans in the form of ticket sales and sale of merchandises of the different teams. The fans also enjoy certain attractive offers during the league season. The league’s success also significantly depends on the fans (Friedman & Mason, 2004). Stakeholder’s influence on NFL’s financial performance There are many ways by which the stakeholders can influence the financial performance of the NFL. The points are discussed below: Players are the most important assets of the teams. The popular players are purchased by the owners by paying a huge capital. The owners generally resale the players at a higher price to other teams to increase their revenue. Therefore, these transactions help to generate excess cash among the teams which indirectly impact the financial performance of the overall league. The NFL attracts distinguished players in the tournament by providing health facilities in the form of various health insurances. It is beneficial for the league as it help to increase participation of players. This can also prove expensive to the league if the operations do not prove to be sustainable in the long run due to various internal and external factors. The spectators have an influence on the financial performance of the teams which indirectly affects the overall league. There is an increase in revenue when spectators are attracted to the games. This is done through sale of tickets, membership subscriptions, sale of merchandises and other offers and concessions. The league authorities often lobby the government to enhance the financial position. They generally negotiate with the government to get broadcasting rights at reasonably low rates. Sponsorship deals are also settled at low prices for the various teams. This positively affects the financial performance of the league. NFL also enhances its relationship with the financial stakeholders in order to attract higher income and other forms of financial support. The grants in the form of commercial sponsorship help to cover up various costs of the league. Commercial sponsorship helps to increase revenue to a great extent (Friedman & Mason, 2004). Controversial social responsibility NFL follows a campaign which is known as the Crucial Catch during every October. This campaign is done to create awareness about breast cancer. This is a part of their social responsibility program and indirectly helps them in marketing. A controversy was formed when a sports article was published in the United States questioned the motives of NFL. NFL partnered with the American Cancer Society (ACS) to carry on the campaigns. The article stated that, NFL tried to promote their interest more rather than supporting ACS. It was argued that, NFL tried to enhance their brand image among women so that revenues increase by the manipulation of their marketing strategies. The controversy generated various arguments and counter arguments from both the parties. The objections made by the article can be proved wrong by maintaining transparency within the league activities. NFL is answerable to its stakeholders and thus, they should specify their motives behind the campaign to the stakeholders (King, 2001). Plan to form a stakeholder coalition group As a leader of an influential stakeholder group, it is imperative to identify the primary goal of NFL in order to outline a plan to form a stakeholder coalition group. The most important goal of NFL is to promote sports among the mass audience. This can be done if the major stakeholders i.e. the media, sponsors and the governing body of the league form an alliance. The media is an important tool of creating awareness among the population. It helps in promoting the interests of the league by acting as a source of word of mouth. The sponsors can also help in the cause by attracting the population through various marketing strategies. Famous brands generally promote the sports by involving itself with merchandises that are associated with the teams and the players. People are attracted by the brand image and as a result, they indirectly avail the gaming experience. Domestic brands get promoted through international players and globally popular brands help to promote certain team and players with the help of their image. The entire process can be achieved with the help and support of the governing body of the NFL. The board members of NFL play a vital role in promoting the objectives of the league. Thus, it can be seen that the collaboration of the above stakeholders can help to accomplish the goals by forming an intensive marketing plan (Siegfried & Zimbalist, 2000). Challenges There are various challenges faced while convincing the primary goal to others. These challenges can be overcome by following different polices. The challenges and the solutions are discussed below: It becomes difficult to align the goals of the stakeholders as there is a difference in perspectives among the stakeholders. This problem can be solved if a shared platform is created by aligning the ideas of the stakeholders to generate a common framework for accomplishing goals. There can be challenges associated with ineffective communication among the various groups. It is imperative to communicate the purpose of coalition properly to the stakeholders. This can be effectively done only if the objectives are communicated to the different stakeholders by using different mechanisms that would suit the policies of the stakeholders. There should not be a single communication plan for all the stakeholders. It is also difficult to create proper consumer engagement with all the stakeholders. This is because; the potential or target consumer base of the stakeholders differs. It is essential to identify the common consumer base that helps in achieving the primary goal. This problem can be solved by using techniques of identifying the target customer base and then creating promotional activities to reflect the ideas of the stakeholders. It is important that the consumers are influenced by the main coalition goal and not the individual stakeholder values (Atkinson, Stanley & Tschirhart, 1988). References Atkinson, S. E. Stanley, L. R. & Tschirhart, J. (1988). Revenue sharing as an incentive in an agency problem: An example from the National Football League. The Rand journal of economics, 27-43. August, F. (no date). National Football League. NFL Draft, 21. Friedman, M. T. & Mason, D. S. (2004). A stakeholder approach to understanding economic development decision making: Public subsidies for professional sport facilities. Economic Development Quarterly, 18(3), 236-254. Hadley, L. Poitras, M. Ruggiero, J. & Knowles, S. (2000). Performance evaluation of national football league teams. Managerial and Decision Economics, 21(2), 63-7 King, S. (2001). An all-consuming cause: Breast cancer, corporate philanthropy, and the market for generosity. Social Text, 19(4), 115-143. Orchard, J. (2002). Is there a relationship between ground and climatic conditions and injuries in football? Sports medicine, 32(7), 419-432. Siegfried, J., & Zimbalist, A. (2000). The economics of sports facilities and their communities. 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