Orlando Magic:

Make Case analysis outline.

Problem Statement & the reason why you choose it as a problem statement

Analysis for the case

Alternative 1: (give an innovation solution)

-pros

-cons

Alternative 2:

- pros

-cons

Recommendation

Implementation

Transcribed Image Text:

Case If you've ever been to a professional basketball game, you know how exciting it can be. The roar of the crowd shouting "De-fense!" The peanut guy walking up and down the stands, "Peanuts! Get yer fresh roasted peanuts here." Ice-cold beer in plastic cups and salty hot dogs in foil lined paper bags. Foam fingers with the team logo on it. For sports fans, a night at the ballgame can be a magical evening indeed. But, the real magic lies behind the scenes. For, professional sports teams are like any other business-all about the profit. While fans are rooting for their team to win, owners are rooting for their fans to spend. And spend they do! In The Economics of Professional Sports, author Duane Rockerbie says, "Despite rapidly increasing costs during the last two decades, professional sports remains profitable for most clubs due to revenues that have increased even faster. This increase in revenues has been driven by higher demand for tickets to major league sporting events, higher ticket prices (partly justified by the incredible expansion in new stadiums and arenas over the last decade) and more lucrative national and local broadcast agreements." In addition, the financial impact of professional sports reaches far outside the stadium. Rockerbie goes on to say, "Professional sports is also big business and most people consume the products produced directly or indirectly by the professional sports industry in some way. Many other industries rely on the professional sports industry to survive. From printed media, to national, local and specialty cable networks, to food services, marketing, construction, transportation and other industries that spin off of professional sports. While the economic size of the professional sports leagues themselves is not large, their importance to gross domestic product1 (GDP) is significant. Plunkett Research estimated that the total revenue generated by the professional sports industry in the United States was $425 billion in 2012. The estimate of U.S. GDP for 2012 is $16.62 trillion, so the professional sports industry accounted for approximately 2.56% of annual GDP. That is twice the size of the U.S. auto industry and seven times the size of the movie industry." That's pretty impressive for a game where a group of men wearing oversized shorts run up and down a court so that they can throw a ball into a basket. Because the industry is so powerful, and competition to sign high-profile athletes is fierce, it can be challenging for smaller franchises to stay profitable. What do you to if you can't afford to sign a player of the caliber of a Kobe Bryant or a LeBron James? Higher payrolls result in greater team success on the field and bigger profits. To achieve this, the revenue growth from team success on the field would have to be higher than the growth in payroll needed to improve the team. If revenue comes largely from ticket prices, and ticket prices are determined by the "star power" of the team (as well as the team's performance), how can a team increase its profit margin? Big Data Leads to Big Profit The answer lies in the concept of "big data." The term big data refers to data sets that are so large and complex that it would be difficult to analyze or make use of them with only conventional forms of analyses. Case If you've ever been to a professional basketball game, you know how exciting it can be. The roar of the crowd shouting "De-fense!" The peanut guy walking up and down the stands, "Peanuts! Get yer fresh roasted peanuts here." Ice-cold beer in plastic cups and salty hot dogs in foil lined paper bags. Foam fingers with the team logo on it. For sports fans, a night at the ballgame can be a magical evening indeed. But, the real magic lies behind the scenes. For, professional sports teams are like any other business-all about the profit. While fans are rooting for their team to win, owners are rooting for their fans to spend. And spend they do! In The Economics of Professional Sports, author Duane Rockerbie says, "Despite rapidly increasing costs during the last two decades, professional sports remains profitable for most clubs due to revenues that have increased even faster. This increase in revenues has been driven by higher demand for tickets to major league sporting events, higher ticket prices (partly justified by the incredible expansion in new stadiums and arenas over the last decade) and more lucrative national and local broadcast agreements." In addition, the financial impact of professional sports reaches far outside the stadium. Rockerbie goes on to say, "Professional sports is also big business and most people consume the products produced directly or indirectly by the professional sports industry in some way. Many other industries rely on the professional sports industry to survive. From printed media, to national, local and specialty cable networks, to food services, marketing, construction, transportation and other industries that spin off of professional sports. While the economic size of the professional sports leagues themselves is not large, their importance to gross domestic product1 (GDP) is significant. Plunkett Research estimated that the total revenue generated by the professional sports industry in the United States was $425 billion in 2012. The estimate of U.S. GDP for 2012 is $16.62 trillion, so the professional sports industry accounted for approximately 2.56% of annual GDP. That is twice the size of the U.S. auto industry and seven times the size of the movie industry." That's pretty impressive for a game where a group of men wearing oversized shorts run up and down a court so that they can throw a ball into a basket. Because the industry is so powerful, and competition to sign high-profile athletes is fierce, it can be challenging for smaller franchises to stay profitable. What do you to if you can't afford to sign a player of the caliber of a Kobe Bryant or a LeBron James? Higher payrolls result in greater team success on the field and bigger profits. To achieve this, the revenue growth from team success on the field would have to be higher than the growth in payroll needed to improve the team. If revenue comes largely from ticket prices, and ticket prices are determined by the "star power" of the team (as well as the team's performance), how can a team increase its profit margin? Big Data Leads to Big Profit The answer lies in the concept of "big data." The term big data refers to data sets that are so large and complex that it would be difficult to analyze or make use of them with only conventional forms of analyses.

Answer rating: 100% (QA)

Case Analysis Outline Problem Statement Professional sports teams like any other business aim for profitability However smaller franchises face challenges in staying profitable especially if they cant ... View the full answer