Business Studies Case Study on challenges facing Sports Firms

Business Studies Case Study on challenges facing Sports Firms

Key challenges facing Sports Firms

Major Soccer League is a sports firm that promotes soccer in North America. Soccer is known as football in other regions of the world, and it is considered the most popular game globally. The fan base of soccer in North America is very small compared to basketball, hockey, and American football. MLS is concerned with making this game popular and at the same time generate revenue from it. The key challenges facing this firm is the management structure and continued apathy to soccer by the Americans and Canadians.

The Management

The management is essential to the performance of a firm. The management structure of MLS is not as solid as observed in other sports associations. This company is an association of teams that are technically owned by investors. The investors are the ones that run those teams as if they are privately owned entities. Most of the investors that own these teams are mere businessmen, having little background in sports. They also tend to hire managers that lack experience in the same field, and this results in less than optimal performance of the firm. Discipline is still a major drawback in sports, which has resulted in increased cases of doping, biased selection procedure, violence in sports, and match-fixing.

 

 

External Analysis

For a business to grow, it must put into consideration and deal with changes in its external environment. The following explains how the external environment influences the way the MLS operates.

Market

This is a glaring challenge for MLS. This is because there are very few Americans and Canadians that follow soccer devotedly. The firm, therefore, does not get the marketing opportunities that are afforded other sporting associations such as NBA or NFL. This, however, attributed to the fact that the association is young compared to the competitors. The fan base for soccer, despite being small, has continued to rise steadily, with the Americans that were interested in European soccer slowly turning their attention to the local leagues. This, however, has not been enough to rake in significant revenues.

Media

Some sports have enjoyed wide publicity while others record minimal publicity. MLS has majorly experienced the latter. This is because soccer is not a favorite of many in North America. The popularity of baseball, hockey, and basketball dwarfs the influence of soccer. This makes the media snub soccer, to the detriment of this company.

Legal and Political Factors

Changes in law affect sports and recreational activities the same way it affects other businesses through taxation, laws relating to gaming machines, and environmental law. The  legal aspects of sports have been kind to this company, and this can be attributed to the discipline of the players, which has been impeccable in the two decades that MLS has been operating. There no instances of doping, indiscretion in the field or match fixing recorded for this organization.

Economic Factors

The sports industry is very much related to the entertainment industry. During the lean times, less is spent on sports entertainment, harming the revenues of the sports company. Ever since the 2008 global recession, the economy in North American has been on the path to recovery, and this is reflected in better, though modest performance of MLS in the recent years.

Internal Analysis

These are the factors within MSL which are under the control of the company through planning and management processes. The internal factors include:

Staff attitudes

From the looks of things, the staff working for the sports firm is not fully defined, as each of the teams under the association is run independently by the owners with little input from the management of MSL. There is an expectation that the staffs in the different teams have varying attitudes, dependents on the leadership styles of the investors.

Assets

The assets associated with MSL are owned by the teams and are therefore managed by the investors. No problems or challenges have been reported by any of the investors in the management of the assets.

Participation Numbers

Getting the right players in this league is the responsibility of MSL together with the managers of the teams. This association made a good decision by deciding to sign up prominent players from the European leagues. These players, the most prominent of them being David Beckham, have given the league international recognition and in the process expanded the fan base for soccer locally.

Possible Solutions to the Challenges

The management problem can be solved by either hiring managers that have been involved in the soccer sports industry for a long time or training the present management team through benchmarking using the European leagues. The problem of having a small fan base can be talked by the association investing in aggressive promotions or partnering with the European leagues.

Recommendation

In response to the management challenge, benchmarking using the European league management is recommended. The justification for this is that it can make MSL have a global audience just as the European leagues. The recommended solution for the small fan base is to partner with the European leagues and tap into the global audience that follows EPL and other major leagues in Europe.