Horizon Information Portal

MSOE Library Home

MSOE Library Home

Home

The economics of sport : the Powerade Iceport's economic impact on the City of Cudahy / Jason John William Martin.

by Martin, Jason John William.

Business planning -- Wisconsin -- Cudahy.

Sports and leisure time activities.

Sports facilities -- Economic aspects -- Wisconsin -- Cudahy.

Sports -- Statistics.

v, 107 leaves : ill. ; 29 cm.

Thesis advisor: Dr. Paul Hudec.

Committee members: Gene A. Wright, Dr. Steven Bialek.

The economics of sport: Sport as a commodity -- Economic theory -- Measuring the sports economy -- Comparing countries expenditures on sport -- Demand for leisure time -- Psychology of demand -- Realistic demand for sports -- Sports facility demand -- The PowerAde Iceport: History of the PowerAde Iceport -- Cudahy demographics -- Interviews with industry experts -- Appendices: A: LIRC economic study results ; B: 2001-2004 participation by median age -- Male and female (numbers in millions).

The sports industry is a diverse market with many types of participative sporting events. The involvement of government with expenditure and taxation creates revenue. These revenues can be contributed to the elite or professional sector and the recreational sector of sports. Both sectors receive subsidies but the professional sector may only account for 10 percent of industry revenues. The other 90 percent of this industry's revenues can be financially attributed to the public market. The PowerAde Iceport is one of these facilities that attepmted to gain a large portion of the hockey market in the Milwaukee area.

The connection of personal time, monetary funds, composition cost, and the risk of injury are the influencing aspects of sports participation. For hockey, the composite cost and risk of injury are the major aspects that dissuade participants. This high contact sport may cause serious injuries, especially in older participants. Also, the high cost of equipment, registration, and ice time negatively impacts the participation rate in the United States. Despite this, the designers of the PowerAde Iceport, Sportsites, LLC, believe they could be successful in a low participation market, south-eastern Wisconsin.

The business plan provided to the city of Cudahy by Sportsites could be considered misleading. Sportsites proposed that the facility would be financially successful by the second year while increasing profit margins each year with large debt to the city and bank investors. This was very doubtful from the view of the industry experts. In addition, it has been alleged that Sportsites provided manipulated data that changed from year-to-year. The changing data would lead most people to believe that this was management-poor developer. These characteristics play a role in the management's failure to attract clients for the use of their facility.

The facility's management believed in using poor or deceptive business tactics to entice the youth and adult hockey players in the area to join the PowerAde team. Management did this knowing quite well that these players already belonged to an organization; and in addition, the PowerAde Iceport had previously used unethical negotiating tactics to bully the SHAW organization to join the PowerAde team.

By the time the city's Common Council met to converse about the termination of the project, the Sportsites management team had pressured the hockey participants through the use of questionable business practices, which resulted in the rising up of Cudahy residents in order to speak out aginst the facility. At this time, the Common Council terminated the project due to the controversial past relationships between both parties.

The termination of the project was the end result of a poorly managed and implemented business plan. In addition, the misunderstanding of the hockey market in the south-eastern Wisconsin area and the economic status of the city of Cudahy were indicators of the potential failure of the facility before it was built. The lack of an economic analysis of the area and of the opportunity costs of the land resulted in the city's loss of taxpayer money, as well as the loss of revenues from that land in that time period.

Horizon Information Portal 3.25_9382

Powered by SirsiDynix

© 2001-2013 SirsiDynix All rights reserved.

Horizon Information Portal