SIC 7941 Professional Sports Clubs and Promoters

 
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SIC 7941

This category covers establishments primarily engaged in operating and promoting professional and semiprofessional athletic clubs. It also covers establishments engaged in promoting athletic events, including amateur athletics, and in managing individual professional athletes. Stadiums and athletic fields are included only if the operators are actually engaged in the promotion of athletic events. Otherwise, establishments engaged in operating stadiums and athletic fields are classified in SIC 6511: Operators of Nonresidential Buildings. Amateur sports and athletic clubs are classified in SIC 7997: Membership Sports and Recreation Clubs.

NAICS CODE(S)

711211

Sports Teams and Clubs

711410

Agents and Managers for Artists, Athletes, Entertainers, and Other Public Figures

711320

Promoters of Performing Arts, Sports, and Similar Events without Facilities

711310

Promoters of Performing Arts, Sports, and Similar Events with Facilities

711219

Other Spectator Sports

INDUSTRY SNAPSHOT

Sports is one of the fastest growing and most complex industries in the United States. According to U.S. Census Bureau figures, in recent years more than 300 professional and semiprofessional sports teams existed in the United States, with almost 20,000 employees. In 2001, companies in the spectator sports industry generated revenues of approximately $20 billion. In addition to established sports like baseball, football, basketball, and hockey, professional clubs also were springing up across the country in sports such as volleyball, soccer, roller hockey, and lacrosse. The industry additionally supported approximately 775 sports management and promotion firms, with about 14,000 employees. In 2001, the U.S. Census Bureau revealed that promoters of arts, sports, and similar events achieved total revenues of about $9 billion.

Some 50 cities host professional sports teams, while more than 100 cities are home to minor league franchises. Salaries paid to top professional athletes increased dramatically during the 1990s and early 2000s, even as team owners continually expressed a desire to stem the tide. For example, in 1998 National Basketball Association star Michael Jordan made in excess of $30 million for a single season of work. In 1999 the Los Angeles Dodgers of Major League Baseball signed Kevin Brown to a seven-year, $105-million contract. In 2002 the San Francisco Giants' Barry Bonds secured a deal worth $90 million over five years. A decade earlier, players in both baseball leagues averaged less than $500,000 in annual salary.

There was a total of 1,238 sport clubs, managers, and promoters in 2005 (23.5% of the industry total). This industry segment had 11,555 employees and generated nearly $1.3 billion in revenue. Sports management and promotion firms numbered 956, for 18.2 percent of the market, with 6,782 employees (a decline from 2002 figures). Sports promoters garnered $768.6 million in annual receipts. Soccer clubs numbered 760, or 14.5 percent of sports teams overall, employing 3,836 people and producing revenues of $419.8 million. Football clubs represented 11.3 percent of the industry, with 7,740 employees and nearly $1.7 billion in revenues.

ORGANIZATION AND STRUCTURE

Most professional sports teams are organized into leagues that establish rules and regulations controlling nearly every aspect of the business—from competition to player compensation. The three most influential professional sports organizations in the United States are Major League Baseball (MLB), the National Football League (NFL), and the National Basketball Association (NBA). Another large professional sports organization, the National Hockey League (NHL), has franchises in both the United States and Canada, as do MLB and the NBA.

Major League Baseball

As of 2003, MLB consisted of 30 franchises organized into six divisions within two leagues: the National League of Professional Baseball Clubs and the American League of Professional Baseball Clubs. MLB is controlled by the team owners who appoint a president for each league and a commissioner of the entire sport. Bud Selig, formerly of the Milwaukee Brewers, was appointed commissioner in 1998 after acting in that role for several years. Players in the league are legally represented by the Major League Baseball Players Association. Sales for 2001 totaled an estimated $3.5 billion, a 10 percent increase from 2000.

National Football League

As of 2003, the NFL consisted of 32 professional football teams organized into six divisions and two conferences: the American Football Conference and the National Football Conference. The NFL is controlled by the team owners and the commissioner of football, who is appointed by the owners to oversee the league's operation. The former NFL Players Association was decertified after a strike in 1987. In 2001, sales increased by nearly 17 percent from the previous year to reach an estimated $4.2 billion.

National Basketball Association

The NBA includes 29 professional basketball teams organized into four divisions and two conferences: the Eastern Conference and the Western Conference. The NBA also is controlled by the team owners, who appoint a commissioner of basketball. The players are represented by the NBA Players Association. Two professional basketball leagues for women, one of which was affiliated with the NBA, began operations around the United States in the mid-1990s, though by 1998 the NBA-operated league was the only one still in operation.

National Hockey League

The NHL includes 30 professional teams organized into six divisions and two conferences: the Eastern Conference (Northeast, Southeast, and Atlantic Divisions) and the Western Conference (Central, Northwest, and Pacific Divisions). The NHL was formed in 1917, and the players are represented by the National Hockey League Players Association (NHLPA).

BACKGROUND AND DEVELOPMENT
Baseball

An American game that evolved in the early 1800s, baseball is thought to be a derivative of the English game "rounders." Rules for rounders, including the number of players and bases, varied widely by locale. Sports historians believe that sometime in the late 1830s or early 1840s, players in New York decided to stop throwing the ball at base runners, an aspect of the rounders game, and begin tagging them out. A commission established by Major League Baseball in 1906 gave credit to Abner Doubleday for inventing the game in Cooperstown, New York, in 1839. However, the commission's findings were most likely rooted in a patriotic desire to brand baseball as a purely American sport. Historians later disputed whether Doubleday did any more than organize a game of rounders.

During the Civil War, baseball was a favorite pastime for northern troops, who sometimes taught the game to their southern prisoners. When the war ended, the game's popularity led to rivalries between towns, and baseball clubs began enticing the best players with offers of jobs or money. James Creighton, a pitcher for the Excelsior Club of Brooklyn, purportedly became the first professional player in 1860 when his team agreed to pay his lost wages so he could join them on a road tour. When the National Association of Base Ball Players was founded in 1858, the organization had restrictions against professionalism. By 1868, however, the association had more than 300 member clubs in 17 states and officially recognized two classes of players, professional and amateur.

By the late 1860s, promoters were building enclosed ballparks and charging spectators for admission. To attract the best teams to their fields, the promoters shared a percentage of the gate receipts. In 1871, players from 10 professional baseball clubs from New York formed the National Association of Professional Base Ball Players. Nine clubs eventually paid a $10 membership and competed for the first national baseball championship.

National League

In 1876, the Cincinnati Red Stockings and seven other teams formed the National League of Professional Base Ball Clubs. The league set ticket prices, agreed to pay umpires, and prohibited playing games on Sundays and selling alcoholic beverages in the ballparks. The league granted the Chicago-based sporting goods company of A.G. Spaulding & Brothers the exclusive right to supply baseballs to the league; the company remained the exclusive provider of baseballs to the league for 101 years. Albert G. Spaulding was a former baseball player in Boston and Chicago who broke ranks with the players' association because he believed baseball needed to be run by businessmen. He later became league president.

In 1878, the National League created the League Alliance to cover minor league baseball. For a $10 membership fee, the National League would recognize a minor league's territorial rights and player contracts. It was the first working agreement between Major League Baseball and the minor leagues. The most controversial act by the young league, however, was its adoption of the "reserve rule" in 1879. The reserve rule, at first a secret agreement among team owners, gave each club the exclusive right to re-sign players from one season to the next. Only if a club gave up that right could...

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