INTEGRATING ECONOMICS AND FINANCE IN THE GRADUATE SPORT MANAGEMENT CURRICULUM

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1 INTEGRATING ECONOMICS AND FINANCE IN THE GRADUATE SPORT MANAGEMENT CURRICULUM Glenn Gerstner Associate Professor of Sport Management St. John s University 8000 Utopia Parkway Queens, NY (718) gerstneg@stjohns.edu Presented at the Annual Meetings of the Eastern Economic Association February 28, 2010

2 Introduction Humphreys and Maxcy (2007) identified two critical issues surrounding the role of sports economics in the undergraduate sport management curriculum. First, few programs required a course dedicated to sports economics. Second, there may be an opportunity for economists to teach sports economics courses in sport management programs, since many programs lack qualified faculty to teach them. This paper builds on the work of Humphreys and Maxcy by examining issues of importance to economists in the graduate sport management curriculum. Many authors have noted the rapid growth of the sport management major since its inception in the late 1960 s (Stier, 2001; Weise, 2002; Danylchuck & Boucher, 2003; Jones, Brooks, & Mak, 2008). This has been accompanied by a commensurate growth in graduate sport management programs, which indicates that the opportunities for economists to impact sport management programs will continue. The Current Status of the Sport Management Major Sport management is exploding as a field of study at both the undergraduate and graduate levels. In 1980 there were fewer than 20 undergraduate sport management programs in the United States, and by 1988 there were still only 95 (Danylchuk & Boucher, 2003). In 2007, Humphreys and Maxcy counted 143 programs, and today the North American Society for Sport Management (NASSM) web site lists 236 undergraduate programs. 1 At the master s level, there were 90 in 2007 (Humphreys and Maxcy) and today there are 135 (Table 1). At my own institution (St. John s University), our undergraduate sport management enrollment was 194 in 1996 and is 425 today. In September, 2007, we began a MPS in Sport Management program 1 The literature often contains variations in the number of sport management programs that exist. The NASSM list is incomplete (several programs not listed there were added by the author), and there is no consensus on what should count as a sport management program. 1

3 which now has 53 students. So by any measure, sport management has become a popular field of study. It is clear that sport management is a fast growing and popular major. Despite the growth of the number of programs and students, the discipline still faces several challenges. Three are paramount. First, there is no consensus about where the sport management department should be housed within the university (Jones, Brooks & Mak, 2008). A quick survey of the sport management programs listed on the NASSM finds them part of physical education, kinesiology, business, parks and recreation, or hospitality departments. Second, there is no consensus on degrees or degree titles (Jones, Brooks & Mak). Graduate degrees include, MS, MA, MS Ed, and M Ed. in sport management, sport administration, sport studies. There are also degrees in business, physical education, kinesiology, and health sciences with a specialization or concentration in sport management. Third, there is a serious shortage of credentialed faculty to meet the increased demand for programs and courses. This is a welldocumented problem that has been confirmed by a number of empirical studies (Pedersen & Schnieder, 2003; Mahoney, Mondello, Hums & Judd, 2004; Mahoney, Mondello, Hums & Judd, 2006). In an age where Universities demand terminal degrees, the supply of new sport management Ph.D s fall far short of the current demand. Finally, sport management (and other para-professional or popular culture majors) has been subject to criticism from other disciplines that the subject matter was less than rigorous. Combined with the perception that sport management is a jock major, sport management academics have had a difficult time being accepted by the academy (Costa, 2005). Sport Management Curriculum, Accreditation, and Department Characteristics In the late 1980s, NASSM and the National Association for Sport and Physical Education (NASPE) began the arduous process of accrediting the increasing number of sport management 2

4 programs in North America (Case, 2003). The organizations created the Sport Management Program Review Council (SMPRC), and in 1993 published standards (known as the NASSM/NASPE standards) that became the benchmark for granting accreditation to sport management programs. Like most accrediting bodies, the SMPRC established minimum requirements for faculty, curriculum, course content, and so forth. The curriculum standards required coverage of the subject areas of budget and finance and economics (Table 2). Despite the content requirement, Humpreys and Maxcy (2007) reported that only 16% of undergraduate programs require sports economics, and only 48% require any economics course. That is low even considering that only about 20% of all sport management programs in the U.S. are accredited. Recently, NASSM/NASPE have recently replaced the SMPRC with a new accrediting body, the Commission on Sport Management Accreditation (COSMA). While the name has changed, the philosophy of the organization has remained the same: COSMA is is a specialized accrediting body whose purpose is to promote and recognize excellence in sport management education in colleges and universities at the baccalaureate and graduate levels (Commission on Sport Management Accreditation, 2009). The new requirements include economics, accounting, and finance as required common professional components of the sport management curriculum (Table 3). Suggested topics to cover are not included in the new standards, but most programs will likely fall back on the 2000 standards to get an idea of what material should be included in the economics and finance areas (Tables 4 and 5). To say the least, the nature of the typical sport management department is somewhat different than the typical economics department. Jones, Brooks and Mak (2008) surveyed 50 undergraduate sport management programs and reported the following: 3

5 1. The total number of faculty in programs varied from 1 to 12. Five programs had only one faculty member and 75% had five or less members. 2. Half of the programs have less than 60% of the faculty with terminal degrees 3. Only 42% of all terminal degrees are in sport management. 4. Half of the programs had less than 100 students enrolled. 5. Only 35% of the programs generated research grants totaling $1500 or more. It can be concluded from this data that most sport management programs have only a few full-time faculty members, many without terminal degrees in the discipline and many without serious research aspirations. Many departments depend on adjunct faculty or faculty from other departments throughout the university with some expertise in a specific subject area to teach courses. While no systematic data has been collected about graduate programs, it is likely that the problem of finding credentialed faculty is more acute, given the fact that graduate courses need to be taught by doctorally-qualified faculty. Economics and Finance in the Graduate Sport Management Curriculum The issues discussed in the previous sections illustrate the opportunities that economists have to contribute to graduate sport management programs. Table 1 lists 135 institutions which offer master s degrees in sport management; Table 6 is a summary of this data. Of the 132 schools which listed course requirements on their website, 63% required a sport-specific finance course but only 11% required a sport-specific economics course. A few of these courses listed both finance and economics in the course title; these were counted as economics courses. Some programs required courses in general finance and/or economics, predictably, the majority of those were MBA programs. 4

6 For those who have an interest in teaching sports economics, the data presented in this paper has numerous implications: 1. More and more schools will decide to get into the sport management arena. Although there is always the possibility of over-saturation, the greater New York area has seen five schools (Columbia, Manhattanville, NYU, St. John s, and Seton Hall) start graduate programs in the past five years. By all accounts they are all thriving, and reaching totally different audiences (Columbia and NYU are stand-alone graduate programs; Manhattanville is primarily for industry professionals, St. John s is piggy-backing on their 400+ enrollment undergraduate program, and Seton Hall offers an MBA). 2. There are opportunities out there to integrate economics into the sport management curriculum. Only 11% of the programs require a sport-specific economics course. Most offer a finance course, but there is no reason in practice that a good dose of economics cannot be integrated into those courses. 3. Few sport management departments have faculty trained specifically in finance or economics, so they may come calling to the economics department. If you are asked to teach a class, just keep in mind that most sport management students, even graduate students, may not have taken economics in a number of years. The course content should be adapted to the audience (Gerstner, 2007). Summary Clearly there are opportunities for sports economics to be integrated into a graduate sport management program. This needs to be tempered by a few realities. First, it is unclear that everyone (besides economists) agrees that finance and economics have a place in the curriculum. In 2000, Stier and Schneider reported that although sport management faculty believed that the 5

7 economics of sport was a suitable area of study, industry practitioners were ambivalent. A more recent study by Pedersen and Pierce (2009) found that of the 10 curricular standards for sport management, practitioners working for the NFL, NBA, and MLB ranked economics 7th and budget and finance 8th. 2 The good news is that faculty, not practitioners, determine curriculum, but majors such as sport management must produce graduates that meet the expectations of the industry. Second, it is possible that the rush to receive accreditation might slow down. Williams and Colles (2009) found that faculty were in favor of the philosophy of accreditation, but some of the practical issues specifically costs, standards, and the credibility of NASSM/NASPE has led some departments to choose not to choose accreditation. Third, MBA programs in sport are growing (from 3 in 2007 to 12 today), but it may not lead to opportunities for sport-specific courses. Most MBA programs leave only four to six courses in the area of specialization, so there may be no room for economics. 2 It should be noted that the opinions on economics had the highest standard deviation among the 10. Also, when asked about specific course topics, on a 1 to 5 scale NFL administrators rated a course in Stadium and Arena Economics at 4.17 while NBA administrators rated it a

8 6 Table 1 Graduate Sport Management Programs United States Institution Degree Type Finance Economics American Military University MS - Sport Management Sports Finance x American Public University MA - Sports Management Sports Finance x Ashland University M Ed - Sport Sciences x x Auburn University M Ed - Sport Management Sports Finance and Marketing x Barry University MS - Sport Management Financial Applications to Sport x Baylor University MS - Sport Management Financial Management in Sport x Belmont University Master of Sport Administration Sport Finance x Bowling Green State University MS - Sport Administration Budget and Planning for Sport and Leisure x California Baptist University MS - Kinesiology x Economics of Sport California State -Long Beach MA - Kinesiology Sport Finance x California State -Fresno MBA - Sport Marketing Principles of Finance Economics of Sport California University at Pennsylvania MS - Sport Management Sport Finance x Canisius College MS - Sport Administration Financial Aspects in Sport Economics Cardinal Stritch University MS - Sport Management Sports Finance x Central Michigan University MA - Sport Administration Financial Management of Sport x Cleveland State University M Ed - Sport Management x Economic Concepts Columbia University MS - Sport Management Sports Accounting and Finance x Concordia University (IL) MA - Sports Leadership Sports Finance Economics of Sports Delaware State University MS - Sport Administration Financial Aspects of Sport x Drexel University MS - Sport Management x Economic Issues in Sport East Carolina University MS - Exercise and Sport Science Financial Management in Sport x East Central University M Ed - Sports Administration Principles of Finance and Marketing in Sports x East Stroudsburg University MS - Sport Management Sports Business and Finance x East Tennessee State University MA - Sport Management The Financing of Sport x Eastern Illinois University MS - Sports Administration x x Eastern Kentucky University MS - Physical Education Financial Aspects of Sport x Eastern Michigan University MS - Sport Management Financial Administration of Physical x Education and Athletics Eastern New Mexico University MS - Sport Administration x x Florida A&M University M Ed - Physical Education *** *** Florida Atlantic University MBA - Sport Financial Aspects of Sport Management x Florida State University MS - Sport Administration Fiscal Management in Sport x George Washington University MBA - Sport Management Sport Finance x

9 7 Institution Degree Type Finance Economics Georgetown MPS - Sports Industry Management Sport Business and Finance Sports Economics Georgia Southern University MS - Sport Management Financial and Strategic Management in Sport x Georgia State University MS - Sport Administration Budgeting and Finance in Sports and Recreation x Grambling State University MS - Sport Administration Sport Finance High Point University MS - Sports Studies x x Idaho State MS - Athletic Administration x x Illinois State MS - Sport Management Fiscal Management in Sport and Recreation x Indiana State University MS - Sport Management Financial Management and Development x in Recreation and Sport Indiana University (PA) MS - Sport Science x x Indiana University (IN) MS - Kinesiology Advanced Financial Analysis x Ithaca College MS - Sport Management x Sport Economics Jacksonville University M Ed - Sport Management and Leadership x x James Madison University MS - Sport Leadership x x Kent State University MA - Sport and Recreation Management Financial Aspects of Sport and Recreation x Lindenwood University MA - Sport Management Financial Policy x Lipscomb University MBA - Sport Management Financial Management and Strategy x Louisiana State University MS - Sport Management Financial Management x Loyola University Chicago MBA - Sport Management x Managerial Economics Lynn University MBA - Sports and Athletics Administration Managing for Financial Performance Manhattanville College MS - Sport Business Management x Economic and Financial Aspects of Sport Business Management Marshall University MS - Sport Administration *** *** Michigan State University MS - Kinesiology Planning, Budget, and Evaluation x Middle Tennessee State University MS - Health, Physical Education, and Recreation Survey of Financial Management x Minnesota State University, Mankato MS - Human Performance Financial Aspects of Sport x Mississippi State University MS - Sport Administration Funding of Sport x Missouri Baptist University MS - Sport Management Sport Finance x Montana State University MS - Sport, Recreation, and Fitness Management x x Morehead State University MA - Sport Management Financing the Sport Enterprise x Neumann University, MS - Sport Management Finance x Economics and Finance of New York University MS - Sports Business (Four electives in Finance ) Sports North Carolina State University MS - Parks, Recreation, and Tourism Management *** *** North Dakota State University MS - Sport Pedagogy and Leadership x x Northern Illinois University MS - Sport Management Sport Finance x

10 8 Institution Degree Type Finance Economics Northwestern University MA - Sports Administration Principles of Sports Finance and Accounting x Advanced Financial Issues for the Sports Industry Ohio State University MA - Sport Management Sport Finance x Ohio University MBA/MSA - Sport Administration Finance x Old Dominion University MS Ed - Sport Management Fiscal Planning and Management x Robert Morris University MS - Instructional Leadership x x Saint Leo University, FL MBA - Sport Business Financial Aspects of Sport x Saint Mary's College of California MS - Kinesiology x x San Diego State University MBA - Sports Business Management Financial Management Sport Economics San Jose State University MS - Kinesiology Financial Aspects of Sport x Seattle University Master of Sport Administration and Leadership Administrative Control of Sport Organizations x Seton Hall MBA - Sport Management Finance Economics Slippery Rock University MS - Sport Management Budgeting and Finance in Sport x Southeast Missouri State University MA - Higher Education Administration x x Southern Illinois University MS Ed - Sport Studies x x Southern New Hampshire University MS - Sport Management Finance and Economics of Sport Economics for Business Southwestern Oklahoma State University M Ed - Sport Management x x St. Edward's University MA - Teaching x x St. John's University MPS - Sport Management Financial Perspectives in Sport x St. Thomas University, FL MS - Sports Administration Sports Financial Management x SUNY at Brockport MS Ed - Athletic Administration Budgeting, Finance and Facility Management x in Physical Education and Sport SUNY at Cortland MS - Sport Management Business and Finance of Sport x Temple University MS - Sport and Recreation Management Financial Management x Texas A&M MS - Sport Management x x Texas Tech University MS - Exercise and Sport Science Financial Management in Sport x Texas Women's University MS - Sport Management Sport Finance x Troy University MS - Sport and Fitness Management Sport Finance x United States Sports Academy Master of Sport Science Sports Finance x Financial Aspects of Sports x University of Alabama MA - Human Performance Sport Finance x University of Arkansas at Little Rock MS - Health Sciences x x University at Arkansas M Ed - Education x x University of Connecticut MA - Sport Management x x University of Dallas MBA - Sports and Entertainment Management Managerial Finance x University of Florida MS - Sport Management Sport Finance x

11 9 Institution Degree Type Finance Economics University of Georgia MS - Sport Management and Policy Sport Finance Economics and Policy Analysis in Sport University of Illinois MS - Sport Management Finance and Budgeting x University of Kentucky MS - Coaching, Teaching and Sport Leadership x x University of Louisville MS - Sport Administration Financial Principles in Sport x University of Maryland MA - Kinesiology *** *** University of Massachusetts MS - Sport Management Sport Finance and Business Economics of Sports University of Memphis MS - Health and Sport Science Sport Finance x University of Miami MS Ed - Sport Administration Fiscal Management in Sport Administration x University of Michigan MA - Sport Management Financial Management for the Sport Industry x University of Minnesota MA - Sport Management Business of Sport x University of Nevada-Las Vegas MS - Sport Administration and Leadership Financing Sport and Athletic Programs x University of New Hampshire MS - Kinesiology x x University of New Haven MS - Management of Sport Industries Applied Fiscal Management for Sports x and Facility Managers University of New Mexico MS - Sport Administration Financing Sport x University of North Carolina MS - Sport Administration x Economic and Financial Management in Sport University of Northern Colorado MS - Sport and Exercise Science Financial Management for Sport Organizations x University of Oregon MBA - Sports Business Fundamentals of Finance Managerial Economics University of San Francisco MS - Sport Management Accounting and Budgeting in Sport Sport Economics and Finance University of South Carolina MS - Sport and Entertainment Management Sport and Entertainment Finance x University of Southern Mississippi MS - Sport Management Financial Aspects in Sport x University of St. Thomas MA - Athletics and Activities Administration x x University of Tennessee MS - Recreation and Sport Management Fiscal Policies for Recreation and Sport Organizations x University of Texas MS - Sport Management Sport Finance Sport Economics University of the Incarnate Word MBA - Sport Management Financial Management Managerial Economics University of Washington M Ed - Intercollegiate Athletic Leadership Budgeting and Financial Reporting for x Intercollegiate Athletics Managers University of Wisconsin-LaCrosse MS - Sport Administration Financial Management for Sport Programs x Virginia Commonwealth University M Ed - Sport Leadership x x Washington State University MA - Sport Management x x Wayne State College MS - Organizational Management x The Economy of Sport Wayne State University MA - Sports Administration Sport Finance x Webber International University MBA - Sport Management Financial Reporting Global Economic Environment Financial Decision Making West Virginia University MS - Sport Management Sport Finance x

12 10 Institution Degree Type Finance Economics Western Illinois University MS - Sport Management Financial Issues in Sport x Western Kentucky University MS - Recreation and Sport Administration Fiscal Practices in Recreation and Sport x Western Michigan University MA - Sport Management Financial Management in Sport x Wichita State University M Ed - Sport Management Financial Management in Sport Economics of Sport Xavier University, OH M Ed - Sport Administration Sport Administration: Finance x Note: List of programs from North American Society for Sport Management (2010). Degree type and course offerings from each institution s web site as of February, X no course of that type offered *** - course requirements not available on-line

13 Table 2 NASSM/NASPE content areas Socio-cultural dimensions in sport Management and leadership in sport Ethics in sport management Marketing in sport Communication in sport Budget and finance in sport Legal aspects of sport Economics in sport Governance in sport Field experience in sport management Note. From Sports Management Program Review Council (2000). Table 3 COSMA Common Professional Components A) Social, psychological and international foundations of sport B) Management Sport management principles Sport leadership Sport operations management/event & venue management Sport governance C) Ethics in sport management D) Sport marketing and communication E) Finance/accounting/economics Principles of sport finance Accounting Economics of sport F) Legal aspects of sport G) Integrative experiences, such as: Strategic management policy Internship Capstone experience Note. From Commission on Sport Management Accreditation (2008). 11

14 Table 4 NASSM/NASPE content area - Economics in sport Premise: Sport is an industry in the national economy and, as a result, it is shaped by external economic influences. As a major national industry, it also contributes to the shaping of the national economy. The student will obtain an understanding of economic principles. Required content (all topics must be addressed): Delineation of micro and macro economic principles Economic growth of the sport industry in the 20th century Concepts of competitive strategy (supply and demand) Economic impact principles Economic theory applied to sport manufacturing and service industries Economic theory applied to professional sports Economic perspectives applied to labor relations in professional sports Economic theory applied to stadiums and arenas Economic theory applied to intercollegiate sports Recommended content (a minimum of 50% must be addressed): Relating infrastructure to competitive strategies in the manufacturing and service industries Impact of television industry on professional sports Impact of television industry on intercollegiate sports Economic theory applied to the sport club industry Economic impact of venues and events Note. From Sports Management Program Review Council (2000), p

15 Table 5 NASSM/NASPE content area Budget and finance in sport Premise: The student will understand why budget and finance in sport is a critical component of all sports related industries. The student will also be familiar with sound financial control, its methods and principles. Required content (all topics must be addressed): Basic accounting principles types of accounting Financial statements Sources of revenues for financing public sector vs. private sector, governments, membership, fees, PSL s, taxes, bonds, etc. Principles of budgeting types (capital, master, departmental, line item, zero-based, PPBES) Budgets as a method of control, organization, and reallocation Budget development Spreadsheet utilization (Lotus, Excel, or Quicken s Quickbooks) basic laboratory experiences Financial aspects of facilities management Recommended content (a minimum of 50% must be addressed): Present financial status of the sports industry collegiate, professional, private manufacturers Concessions and merchandising trademark licensing, inventory, cost control, cash management For profit and not-for-profit budgeting Development and fund-raising principles and methodology (campaigns, alumni, auctions) Financing facilities Note. From Sports Management Program Review Council (2000), p

16 Table 6 Finance and Economics Requirements Graduate Sport Management Programs N = 132 Require Finance % Require Sport-Specific Finance % Require Economics % Require Sport-Specific Economics % Require Neither % Require Both % Note: Requirements as published on each institution s web site as of February,

17 References Case, R. (2003). Sport management curriculum development: Issues and concerns. International Journal of Sport Management, 4(4), Chalip, L. (2006). Toward a distinctive sport management discipline. Journal of Sport Management, 20(1), Commission on Sport Management Accreditation. (2008). Accreditation principles and selfstudy preparation. Retrieved January 28, 2010, from Commission on Sport Management Accreditation. (2009). About. Retrieved February 2, 2010, from Costa, C. (2005). The status and future of sport management: A Delphi study. Journal of Sport Management, 19(2), Danylchuk, K. E., & Boucher, R. (2003). The future of sport management as an academic discipline. International Journal of Sport Management, 4(4), Gerstner, G. (2007). Teaching sports economics to sport management majors. Paper presented at the annual meeting of the Eastern Economic Association. Retrieved January 29, 2010, from Humphreys, B. R., Maxcy, J. (2007). The role of sports economics in the sport management curriculum. Sport Management Review, 10(2), Jones, D. F., Brooks, D. D., & Mak, J. F. (2008). Examining sport management programs in the United States. Sport Management Review, 11(1), Mahony, D. F., Mondello, M., Hums, M. A., & Judd, M. R. (2004). Are sport management doctoral programs meeting the needs of the faculty job market? Observations for today and the future. Journal of Sport Management, 18(2), Mahony, D. F., Mondello, M., Hums, M. A., & Judd, M. R. (2006). Recruiting and retraining sport management faculty: Factors affecting job choice. Journal of Sport Management, 20(3), North American Society for Sport Management. (2010). Sport Management Programs: United States. Retrieved February 7, 2010, from Pedersen, J., & Pierce, D. (2009). Professional sport league assessment of sport management curriculum. Sport Management Education Journal, 3(1),

18 Pedersen, P. M., & Schneider, R. G. (2003). Investigating the academic openings in sport management: An analysis of the field s professional position announcements and hires. International Sport Journal, 7(1), Sports Management Program Review Council. (2000). Sport management program standards and review protocol. Houlton, ME: North American Society for Sport Management. Stier, W. F. (2001). The current status of sport management and athletic (sport) administration programs in the 21st century at the undergraduate and graduate levels. International Journal of Sport Management, 2, Stier, W. F., & Schneider, R. C. (2000). Sport management curricular standards 2000 study undergraduate level. International Journal of Sport Management, 1, Weese, W. J. (2002). Opportunities and headaches: Dichotomous perspectives on the current and future hiring realities in the sport management academy. Journal of Sport Management, 16(1), Williams, J., & Colles, C. (2009). Specialized accreditation of sport management programs: Perspectives of faculty and administrators. Sport Management Education Journal, 3(1),