Module 5

Question 1

gov’t operated

Answer 1

local/count/state/national govts typically fund and manage parks and rec, hs athletics, community centers, olympic programs
funded thru govt budgets/taxpayers
do not always run efficiently
goal of org may get lost

Question 2

non profit orgs

Answer 2

provide programs for public benefit
can accept donations (tax deductible)
“profits” should be re invested

Question 3

primary sources of revenue for non profits

Answer 3

membership and registration fees
broadcasting rights
sponsorship sales

Question 4

sole proprietorship

Answer 4

single owner

most common structure

Question 5

advantages of sole proprietorship

Answer 5

easy to form, manage, maneuver, and sell
low startup costs compared to other options
total control by single owner
no shared profits

Question 6

disadvantages of sole proprietorship

Answer 6

limited ability to raise capital
owner takes on all loses
unlimited personal liability against owner
owner must be multi talented
limited long term stability for employees

Question 7

general partnerships

Answer 7

classified by equal division of ownership

shared profits and liabilites

Question 8

advantages of general partnerships

Answer 8

revenues taxed only once
flexibility
enhanced decision mak

Question 9

disadvantages of general partnerships

Answer 9

liability is significant
ability to raise capital limited
possible limited managerial capability compared to corp

Question 10

limited partnership

Answer 10

one owner acts as decision maker
rest only provide financial support
limited partners have limited liability

Question 11

advantages of limited partnership

Answer 11

revenues taxed only once
flexibility
enhanced decision making
easy to form and sell

Question 12

limited partnership disadvantages

Answer 12

liability significant
ability to raise capital limited
possible limited managerial capability compared to corp

Question 13

c corporation

Answer 13

must comply with state laws
must develop and follow corp bylaws
can issue stock

Question 14

shareholders

Answer 14

owners of corp
expects to see return on investment through dividends
hopefully increased value of holdings

Question 15

board of directors

Answer 15

chosen by shareholders to determine policies and decisions

Question 16

advantages of corp

Answer 16

liability protection for shareholders (cant lose more than invested)
ownership easily transferable
easier ability to hire talent

Question 17

disadvantages of corp

Answer 17

complex to legally form
more stringent govt regulations
corporation answers to shareholders (can slow decision making)

Question 18

subchapter s corporation

Answer 18

similar to c corp
up to 35 shareholders
can own subsidiaries and tax exempt orgs
can issue stock
recent reduction in popularity

Question 19

advantages of subchatper s corp

Answer 19

ability to own other companies spreads out liability

Question 20

disadvantages of subchapter s corp

Answer 20

must be based in us

partnerships, corps, & intl investors cannot invest (limits potential sources of income)

Question 21

limited liability company (LLC)

Answer 21

rising in popularity mainly due to simplicity of formation
formed based on state guidelines
can be owned by other companies

Question 22

advantages of llcs

Answer 22

generally classified as partnership for fed tax purposes (reduces overall income tax payments)
similar liability protection to corps
profit or non profit

Question 23

disadvantages of llcs

Answer 23

relatively new
legal issues determined by state laws
laws can vary, no national regulation
uncertainty over law can reduce ability to raise funds

Question 24

sole proprietorships and corps

Answer 24

weakness of one are strengths of other and vice versa

Question 25

vertical integration

Answer 25

firm owns every possible aspect of business process from start to finish

Question 26

cross ownership

Answer 26

multiple franchises

Question 27

advantages of cross ownership

Answer 27

advertising more cost effective, less overhead
can acquire knowledge from one and use it for other
less admin payroll costs if teams located in same areas

Question 28

community (public) ownership

Answer 28

exists but not common

e.g. packers

Question 29

packers ownership structure

Answer 29

only city owned big 4 team
over 100000 stockholders
no dividends
limit on shares
must sell back to team not market
some voting rights

Question 30

celtics ownership structure in 80s

Answer 30

sold shares of stock

shareholders force to sell when team was sold in 2003

Question 31

padres

Answer 31

84 Joan Kroc tried to donate Padres to city of San Diego

MLB did not allow

Question 32

benefits to community ownership for MiLB

Answer 32

team wont move
could be public revenue source
civic pride

Question 33

MLS

Answer 33

started league as syndicate
team managers investors at league level
decisions handled at league level
possible probs with antitrust laws in future