exam 2 pt. 2

Question 1

The expected dollar value return on each alternative investment, stated as a percentage of the original cost of each investment

Answer 1

Return on investment (ROI)

Question 2

Because the future is uncertain, the future benefits
of any investment cannot be known with certainty
at the time the investment is made

Answer 2

Risk

Question 3

Face no direct competition from rival leagues
Gives them greater bargaining power when dealing
with stakeholders (e.g., players, broadcasters,
corporate sponsors, and local governments) and
allows them to potentially charge higher prices

Allows them to earn much higher profits than would otherwise be the case, as well as enact financial policies (e.g., salary caps, revenue sharing) that would not be possible with direct competition

Answer 3

Sports leagues considered legal monopolies

Question 4

Those interested in a career in sports should have solid grounding in:

Answer 4

Corporate finance
Managerial and financial accounting
Advanced use of spreadsheet software

Question 5

Application of existing laws to the sport setting

Answer 5

sport law

Question 6

Occurs when plaintiff challenges a rule in sport
organization and court determines whether it should review the sport organization’s decision

Answer 6

Judicial Review

Question 7

Occur when a person purposely causes
harm to another or engages in activity that is
substantially certain to cause harm

Answer 7

Intentional tort

Question 8

Sport managers are negligent when:

Answer 8

They commit an act/omission causing injury to a
person to whom they owe a duty of care
Negligence imposes a duty to refrain from careless
acts

Question 9

Allows plaintiff to sue superior for the negligent acts of a subordinate

Answer 9

Vicarious Liability

Question 10

Agency describes a relationship in which one party, the agent, agrees to act for and under the direction of another, the principal
The purpose of agency law is to establish duties that principles and agents owe each other

Answer 10

Agency law

Question 11

Written or oral agreement between two or
more parties; creates legal obligation to fulfill the
promises

Answer 11

Contract

Question 12

A valid contract must have the following elements:

Answer 12

Offer and acceptance (mutual assent)
Consideration (value)
Legality (subject matter legal and not against public
policy)
Capacity (disaffirm at any time)

Question 13

Contract “promise” is broken

Answer 13

breach

Question 14

Contract in which participant
gives up right to sue

Answer 14

Waiver and releases

Question 15

Developed from precedents established by courts
applying language of U.S. Constitution and state
constitutions to actions and policies of governmental entities

Answer 15

Constitutional law

Question 16

Four constitutional challenges frequently arise in
sports

Answer 16

Due process
Equal protection
Unreasonable search and seizure
Invasion of privacy

Question 17

No person shall be discriminated against unless a
constitutionally permissible reason for discrimination exists

Answer 17

Equal Protection: 14th Amendment

Question 18

On the basis of race, religion, or
national origin

Answer 18

Strict scrutiny

Question 19

On the basis of gender; discrimination can occur only if legitimate interest for doing so exists

Answer 19

Legitimate interest:

Question 20

Discrimination on any other status or
classification

Answer 20

Rational basis