Posts Tagged ‘Johannes Sander’

High Salaries of Players – the Good, the Bad and the Ugly

Thursday, November 21st, 2013

Sport became a fundamental part in people’s life and created an enormous profitable business environment. A study of the sport industry indicated that the industry revenue generation exceeds $213B. Furthermore corporate sponsorship of sports properties in 2005 estimated to be in excess of $7.7B. The NFL franchise was worth of $755M which showed a 17% increase over 2003) (http://www.slideserve.com/osmond/sport-the-economy). All these indicators suggest that the sport industry is on the raise and in fact through this lucrative business job opportunities are developed.

In this blog I discuss mainly the high salaries of professional athletes and the positive and negative outcomes of these salaries to the sport teams. There are lots of different businesses and companies involved in the sport industry; therefore in order to be specific, I will concentrate on the sport teams which are an essential part of the sport performance segment.

 “The industry also contributes 456,000 jobs with an average salary of $39,000 per job.”

http://www.economicmodeling.com/2013/07/09/not-just-a-game-the-impact-of-sports-on-u-s-economy/

Two major winners of this profitable business are the athletes and the owners. Through the action of the rise in NFL salaries, player salaries continuing to rise, and therefore sport managers are “facing the challenges of generating sufficient revenue to match those increased costs” (Pedersen et al, 2011). Certain NFL teams, which are a part of the sport performance industry, are concerned with the high salaries of athletes in order to maintain their goal of being a profitable organization.

     “I’ve got partners out there right now whose teams are making less money than their linebackers,” Bisciotti said. ” I think we’ve got an acute problem here with the general profitability of the teams. We always knew this was not a big cash-flow business, but when you’ve got guys like Jacksonville tarping up 10,000 seats to stop blackouts, when you’ve got teams that are voluntarily staying at the minimum of what they have to spend on the salary cap in order to not go upside down financially, then we already have a structural problem.”

http://www.nfl.com/news/story/09000d5d8162e7da/article/bisciotti-many-nfl-teams-struggling-financially-lockout-possible

These words of Ravens owner Scott Bisciotti in 2010 indicate that NFL teams are facing the lack of having no significant cash flow. Thus teams have problems of generating a profit and long-term problems are created in order to have a healthy and stable business. Tremendously high salaries of professional athletes are not helping to create a cash-flow business. Furthermore the heightened power of the players unions in the professional sport leagues plays a significant role in increasing the salaries and raising the salary caps. Furthermore the players unions contributed to an increase in labor stoppages, which also effects negatively the financial situation of the teams.

Screen shot 2011-04-24 at 8_31_42 PM

 

Nevertheless there are also positive economic results for teams regarding giving professional athletes a high salary. For example the Los Angeles Lakers has a 5-year average profit of $38M (http://www.forbes.com/pictures/emdm45hle/2-los-angeles-lakers/). Kobe Bryant probably has a major influence as a player and a brand in the profit of the Lakers. He is by far on the top of the Lakers’ salary list with $30.45M in 2013-2014; the second one is Pau Gasol with $19M (http://www.hoopsworld.com/los-angeles-lakers-team-salary). In my opinion one cause of the high salaries of professional athletes is that clubs and their owners are dependent on these athletes. The thought of “we need you more than you need us” is a reason why owners pay their players so much money. As mentioned in the YouTube video below, which discusses reasons of the inequality of salaries between people. It is discussed that capital used to keep talent in place, because capital was scarce. Now a day’s talent keeps capital/money, the reason for that is that talent is what scarce, and thereby athletes demand a higher salary from their employers’ because they realize their unique and in demand talent.

http://www.youtube.com/watch?v=EZ83YOptIZ8

All in all high salaries of professional athletes definitely help to keep talented and high skilled players, who generate profits for their teams because of their unique performances. Never the less high salaries can be a burden for club owners in order to generate profit and to create cash flow. The players unions are a major issue of clubs because of their constant demand of higher salaries. Fact is that not every single team has a Kobe Bryant who generates a ton of money. Smaller clubs are facing major problems in order to keep up with the payment of high salaries.

Fc Barcelona Fitness App, a different nontraditional form of communication

Tuesday, November 12th, 2013

“Social marketing eliminates the middlemen, providing brands the unique opportunity to have a direct relationship with their customers.”

Bryan Weiner, CEO at Digital Agency 360i

The quote of Bryan Weiner describes the importance of nontraditional forms of communication, like Twitter, Facebook, and Co, which can help enormously to advertise a product, brand or organization. Through my browsing on the Sports Business Now homepage, I found an article about the new and first Fc Barcelona Fitness App (http://sportsbusinessnow.com/fc-barcelona-extends-brand-with-fitness-app/). I asked myself, is an App a nontraditional form of communication like Twitter or Facebook? I would definitely say yes, of course it depends on the App, but through my research about the Fc Barcelona Fitness App I discovered that people all over the world can compete against each other or with their friends.

This YouTube video of the Fc Barcelona Fitness App gives a quick overview about the concept and purpose:

http://www.youtube.com/watch?v=xf1zdDpKfQM

The Fc Barcelona is the third world’s most valuable sports organization with a value of $2,6 billion and with a whopping $613 million in annual revenue (http://www.csmonitor.com/Business/2013/0717/The-world-s-most-valuable-sports-teams-Meet-Forbes-top-10/Barcelona). Social media is probably Barcelona’s most important tool to communicate and connect with fans all over the world.

“It’s not just a question of numbers. FC Barcelona uses Social Media as a service channel. Twitter, Facebook and Youtube are the best way to connect to a lot of people around the world. We are proud of our values and our identity and this is a good way of spreading them. So, the return of investment is not only in economic terms.”

http://digital-football.com/recommendation/fc-barcelona-see-the-real-value-in-social-media-interview/

As mentioned in the quote, Twitter or Facebook are used as service channels to advertise and promote Barcelona as one of the most successful soccer clubs in the world. Furthermore Barcelona uses these social media platforms to create a brand image and to let their fans be part of their ideology.

badenhausen-social-sports-graphicThese graphs and list show that Barcelona has a huge amount of Twitter followers, 60,8 million, which is more than the whole NFL together.

One of the Fc Barcelona Fitness App goals is to motivate people to get physically fit and to incorporate FCB Fitness into fans daily life. Through this App Barcelona develops a certain life style. With that is meant that fitness is not just fitness anymore, it is Fc Barcelona Fitness. Thereby Barcelona creates a fitness brand, which could develop into gear selling. I could imagine FCB gear which particularly promotes FCB Fitness. Furthermore Barcelona is stepping towards the future of “Mobile” to get fans involved through and with their phones. I also think that the idea of taking Barcelona with you, if it is running or weight lifting, is a major thought here.

“Mobile phones are the future of connectivity. The challenge is to convert Camp Nou in a “mobile friendly” zone.”

http://digital-football.com/recommendation/fc-barcelona-see-the-real-value-in-social-media-interview/

Through this App, Barcelona wants also to achieve an increase of awareness and popularity worldwide. These innovations allow Barcelona to be interactive with their fans and to get them involved with their idols.

All in all the Fc Barcelona Fitness App’s purpose is to interact with their fans and to create a unique brand image. Furthermore Barcelona creates a different brand “FCB Fitness” through their new innovation and takes the next step toward the future of being “mobile” accessible.

To achieve their goal of creating an even better brand image and schema to their fans, it would be a great idea for Barcelona to create a petition on the website https://www.change.org/. This website helps individuals or companies/organization to speak up and to get supporters for social, environmental etc. issues. https://www.change.org/petitions/stop-this-american-horror-story-tell-walmart-to-stop-torturing-pigs, this link is an example of a petition on change.org. This certain petition wants to stop that Walmart tortures Pigs. Barcelona should use this platform to get involved in social or environmental projects.

Mother Russia tries to be sustainable, also soc(h)ially???

Tuesday, November 5th, 2013

pic 1

General Information

The 2014 Winter Olympics or the 22nd Winter Olympics will take place from the 7th to the 23th February 2014, in Sochi, Russia. The Olympics and 2014 Paralympics are being structured and organized by the Sochi Organizing Committee (SOC), which was established on October 2, 2007 by the Russian Olympic Committee, the Federal Agency for Physical Culture and Sports, and the Administration of the City of Sochi (wikipedia.org).

pic2

 

The map above shows the location of the Russian state Krasnodar Krai (red area). Sochi which is located in Krasnodar Krai, is situated on the Black Sea coast near the border between Georgia and Russia.

Sustainability

Sustainability consists of three-pronged elements, which are the environment, the economic and social (cultural) well-being (Pedersen, Parks, Quarterman & Thibault, 2011, p.238).

Social Objectives of Sochi 2014

The Sochi Organizing Committee focuses on promoting a “healthy lifestyle” within the community of Sochi and Russia. Therefore it main focus lies on the creation of conditions to make it possible for people with disabilities to engage in sport and to develop medical support for professional sport, employees and participants of the mass events. To achieve these goals, the Sochi Organizing Committee concentrates on physical education to increase the knowledge of the importance of physical activities and to make mass sport popular. This education focuses especially on children and the youth. One of the educational purposes is to teach the youth about a healthy nutrition, and the dangers of smoking and alcohol. Moreover another committee’s stated task is to increase the physical activity of people with disabilities (http://www.sochi2014.com/en/games/strategy/sustainability/life/).

In my opinion the educational objective and the objective of focusing on the sport participation of people with disabilities are two achievable goals. It is important to implement certain physical education classes, which mainly focus on nutrition, and the positive physical and psychological outcomes of sport. Furthermore the Winter Olympics and Winter Paralympics create great opportunities for the local community of Sochi to involve people with disabilities in physical activities or jobs. It is important that the committee creates a long-termand sustainable plan of keeping people with disabilities involved in projects, jobs and sport.

The goal of creating a medical support system especially for workers and employees of the Winter Olympics Games is an unachievable objective for now. Let’s face the problems, Russia is still known as a country who forgets too many times the human rights. The violation of human rights is often mirrored by the violation of fair labor.

“Construction companies have been accused of not paying their workers, bussing in illegal laborers and taking scant care of their existing employees as Russia rushes to complete its preparations.

Last year at least 25 people died in accidents and many more were injured. The estimated 95,000 workers who have worked on the project have seen little of that £32 billion.

A Human Rights Watch report published in February found that some employers’ cheated workers out of wages, required them to work 12-hour shifts with few days off, and confiscated passports and work permits, apparently to coerce workers to remain in exploitative jobs.”

(http://www.telegraph.co.uk/sport/othersports/winter-olympics/10416297/Sochi-Winter-Olympics-2014-rising-concerns-over-Games-mar-100-days-to-go-celebrations.html).

These examples of the work condition in Sochi indicate that corruption and unfair labor treatment is still a concern in Russia. We can hypothesize that Russia won’t solve these problems in Sochi, because Russia has to finish their projects until beginning next year and to be honest Russia won’t invest money to create better conditions for their workers because if workers complain they get laid off and another bus of migrant workers from the former Soviet Union will arrive.

Other social objectives are to develop patriotism, the feeling of national pride, maintain cultural diversity, ensuring access of cultural events, and maintaining the cultural legacy. Through the creation of certain themes for each year, for example 2013 is the year of museum; Russia explains and promotes their history and culture to their people and to their visitors. This is a great way of making people proud of their country and to achieve the goal of patriotism and national pride. Never the less Russia fails of creating diversity or cultural diversity in certain aspects. After a new federal law approved in Russia in June 2013 that bans “homosexual propaganda to minors” an important wave of criticism followed and many voices have claimed to boycott the 2014 Winter Olympics (http://en.wikipedia.org/wiki/Sochi). This action of the Russian government clearly prohibits the diversity of different groups of people and creates a certain type of racism. Russia shows again that they are still a country who doesn’t respect human rights. With this law Russia limits their people’s freedom once again.

Economic Objectives of Sochi 2014

The goals of developing a stable economy, creating a well-working job market and to developing the city of Sochi as both a mountain climate resort and a sports center at an international level are the main economic objectives for Sochi, the Krasnodar region and all of Russia. To achieve these objectives the Sochi 2014 Organizing Committee focuses on using local and regional labor resources, materials, components, and equipment. Furthermore it wants to create new jobs and train/develop local labor resources. Furthermore Sochi will get a more developed and efficient infrastructure with that is meant that modern roads and railways, new transport hubs or new gas pipes are getting built. The city of Sochi and its people will definitely profit through the projects of the Winter Olympics and it creates new job opportunities in all different kind of fields. Therefore I think the Olympics will definitely benefit Sochi and its people economically and as a community. On the other hand,

“Sochi borders Russia’s six autonomous republics of the Northern Caucasus, home of the Chechen wars and violent feuding that surfaced after the breakup of the Soviet Union and continues to date. All of the republics have severe social problems that stem from massive unemployment and bad governance. Islamist extremism and the terrorism associated with it continue to be a threat” (http://www.spiegel.de/international/world/opinion-will-olympic-flame-dim-in-sochi-a-680560.html).

These problems and issues could have negative effects of the economic development of Sochi’s region. It is hard for me to imagine that expressions of peace, tolerance, and fairness would be held hostage to a region where these values have little meaning. Never the less this Olympic Games could be a changing point for the tensions of this region. Russia needs to find the dialog between the different groups and also invest into these regions to create a more stable and sustainable economy.

Environmental Objectives

One environmental concept is the “Green Office”. “Green” rules are in place inside Organizing Committee’s buildings. This means that plates, bowls and cups used by the Organizing Committee are all re-usable. The napkins, towels and toilet paper are all made from recycled materials (http://www.sochi2014.com/en/games/strategy/sustainability/nature/game_nature/green_office/). In my opinion that is a great move of being economical sustainable and to reduce resources and waste. Furthermore to reduce the waste, the committee developed the “Zero Waste Games”, which focuses on upgrading the system of waste treatment in Sochi and on the stimulation of separate waste collection and waste recycling. The committee also developed a concept of how to use these new waste systems in the post-games period. With that is meant that they will adapt waste treatment systems, which were formed in the period of the games delivery, to the needs of Sochi (http://www.sochi2014.com/en/games/strategy/sustainability/nature/waste/).

Moreover the Sochi 2014 Organizing Committee works together with “Dow” Worldwide Partner and the Official Chemistry Company of the Olympic Games. Together they will focus on energy-efficient technologies, with improved greenhouse gas (GHG) emissions performance in the key areas of infrastructure, industry and agriculture (http://www.dow.com/sustainability/pdf/Q1SustainabilityReport2013.pdf). Through this partnership the committee wants to achieve the goal of having a minimal impact on the climate. This is an efficient and effective step of creating a long-term economic benefit to Russian economy, because these new technology methods can be used throughout Russia to improve sustainability and to protect the environment.

Conclusion

In my opinion the economic and environmental objectives are the most realistic one’s to achieve. In fact I think most of the ideas and actions will be effective and will help Sochi and its people to develop to a more sustainable city. The major concerns are the social objectives. In my opinion Russia has to enable the freedom of speech and has to realize the importance of diversity. Moreover it has to improve their way of treating workers fairly and to protect them from exploitation.

 

 

Sport participation should be a “Right” for everyone

Monday, October 28th, 2013

It turns out that advancing equal opportunity and economic empowerment is both morally right and good economics, because discrimination, poverty and ignorance restrict growth, while investments in education, infrastructure and scientific and technological research increase it, creating more good jobs and new wealth for all of us.
William J. Clinton

I used Clinton’s quote to point out the importance and meaning of equal opportunities to the society.  In this case we have definitely a situation of inequality for Sondra and her children because of their economic hardship. In my opinion “sport participation” needs to be a right for every human being and not just a privilege. The numerous benefits of sport participation indicate how important sport is for the improvement of the human’s physical and psychological level. Especially for children sport helps to prevent for obesity and improves the overall quality of life. Furthermore sport participation creates a social capital, a greater sense of belonging and increased bonds (Pedersen, Parks, Quarterman & Thibault, p.194). The American Academy of Pediatrics says that “every child and adolescent should have an opportunity to participate in sports and regular physical activity.” (http://www.livestrong.com/article/213081-sports-programs-for-low-income-families/).

The ethical issue

In this certain case, the recreation center’s director’s decision, not letting Sandra’s children participate without paying the fee of $125, would probably not improve the children’s psychological and physical level. Through this decision the children basically are cut out of a certain social environment and do not have the chance of getting involved in a team sport. The decision of the director involves a choice between the good alternative, to let the children participate without paying the fee, and the bad alternative, not letting them play because their mother cannot effort the fee of $125. Furthermore through the fact that the sport participation of children is not written down as a right, this issue is more about what is efficient than what is legal. The recreation center director seems to be more interested in making profit than to care about the well-being of the children. His choice to insist on the money suggests that his decision is based on the most efficient option, which helps him financially.

Creative options and alternatives

As the director, we have to make sure that the well-being of the children is the priority, because we know the importance of sport participation for children.  Therefore it has to be our goal that we will find a way/solution of letting these two children participate in the baseball league rather than too insist on the $125. The equally accessibility to sport is one relevant key to a well-working community. This means to give low-income families the same opportunities to participate in sports than any other families. This decision process needs a more social thinking than a capitalistic and financial thinking. The most important aspect here is to find creative options and alternatives so the children can participate in the baseball league or in another sport. The first alternative is to ask if it would be possible to let the children participate in a different sport, maybe certain sports require a lower fee or no fees need to be paid. Another option would be to ask certain organizations like the “National Alliance of Youth Sports”, which promotes honesty, fairness and equality on their homepage (www.nays.org) or the “Little League Baseball and Softball”, for any special funding for low-income families. Moreover we should have a look at Harford’s recreation centers in Connecticut (p.197). For example, “children in Hartford are eligible for free, eight-week summer camps at one of the city’s parks. In most cases children can participate in any structured program offered at the city’s recreation center at no cost”, (Pedersen, Parks, Quarterman & Thibault, p.197). Hartford’s model shows that the city offers sports and activities to all their residents. It is important for them that everyone has equally accessibility to sportive activities. Furthermore a different option would be to subsidize these recreation programs for residents who have a much lower average socioeconomic status and increase maybe the local tax dollars and user fees for high income families. In this way we could use the created extra money to finance the participation of lower income families (This is a socialist thought. I see certain socialist decisions like in Germany more critical than positive. Too much socialism creates people who think they don’t have to work anymore because they get payments from the government. Especially the middle class has to work harder to subsidize certain people’s lives or lifestyles, but this is a whole different discussion).

Which option works the best?

We have to evaluate the above listed options or alternatives to analyze which option is the most effective and efficient one. The option of asking certain organizations for funds to finance the participation of low-income families would probably produce the most good and do the least harm, because we are not increasing local tax dollars or user fees (utilitarian approach, p.22).  The option of using Hartford’s model would probably lead to increase local tax dollars and user fees in order to finance the participation of lower income families. This option would best serves the community as a whole, not just some member, because we are creating these extra income channels to give these families an equal opportunity to participate in community sports (the common good approach, p22).

We have to make a decision

In my opinion we should focus on finding an organization or charity that helps financially children to participate in athletics. This option is probably the most efficient and effective one. “Athletics for kids” is a Canadian charity, funded and sponsored by certain organizations and contributors. Their mission statement is, “by providing funding assistance, we ensure all British Columbia children, regardless of their socioeconomic status, have access to youth amateur sport” (http://www.a4k.ca/). A charity like this one would help Sondra to let her children participate in the baseball league. I have not found a similar organization/charity/foundation in the U.S., but I’m sure that communities have organization/charities/foundation that are helping to finance the participation of children in sports.

How effective and efficient is our decision?

With this decision to contact an organization/charity, which helps lower income families, we are not pressuring other families to pay higher local tax dollars and to pay higher user fees.  Through that we are taking care to the concern of all stakeholders. In my opinion a good director, especially for a recreation center, which concentrates on the community’s well-being, should always think of solutions to solve different problems. In my opinion there is usually a solution to every problem. A strong will to help these children to participate in sports will create a solution to help this family. My decision will probably turn out well, because I am confident that I will find an organization/charity that will help financially this family. Through that the children can participate in the baseball league and can experience the positive aspects of a team sport.