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Discuss the effect on the behaviour of firms in spectator sports when profit maximisation is not their primary objective

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´╗┐Discuss the effect on the behaviour of firms in spectator sports when profit maximisation is not their primary objective (15) Spectator sports are a very complex type of market structure, with 2 main features of profit maximisation and club success, an issue for clubs is that weather they put sporting success ahead of profit, supporters surely want supporting success, rather than profit maximisation. The premier league has seen great diversity between super elite clubs, whilst others are facing falling revenue, endangering the competition of the league. The market structure is heavily segmented, with a larger number of spectator?s sports in any one sport, with different sports being a Weak substitute this is due to brand loyalty, as viewers will often mainly watch team For instance both Chelsea and Manchester city have spent vast amount of money in the transfer market to improve their strength of their team, by purchasing talented player and other staff. These clubs are backed by wealthy owners. ...read more.


Cost are very substantiation in this market and continuously rising from players wages and transfer fees, if profit maximisation is not regarded, and success of the club in the longer term they will see a negative flows There is often dispute between the stakeholders within the firms, such as shareholders would want profit maximisation as the main objective, rather than the manager?s success, subjected to a minimum profit constraint, Profit satisfying, may be a better approach to clubs allowing more objectives of the firms to be met rather than having maximum profit, this provides the foundation of other objectives in the long term, like growth and survival. Growth maximisation is another objective for firms within the spectator sports, growing such football teams is different from profit maximisation, is such that extra profit is reinvested into the football team and improving and strengthening team. Such have been seen in Arsenal of the last years with a huge improvement in their infrastructure. ...read more.


will likely to change; this is positively determined by the strength of the extent of barriers to entry and exist. With changes especially within the football industry have seen a higher concentration ration of clubs of gaining major trophy, they have the available amount of capital used to improve clubs performance. This is decreasing the contestability of the market; smaller teams are unable to compete with elite clubs. Manchester united was owned by BskyB, but the deal blocked by the competition commission, this will increase the substantial monopoly Man Utd already has, and damaging the competition of the premier league and other cups, such a merger will increase television rights, acting a barrier to entry for other teams. Regulation in the future and present will affect the market, and hopefully making it more competitive. Such introducing more home-grown players and transfer market limits. From here the market is greatly segmented, with a large number of sub markets (different leagues), spectators sports clubs are not a group which can be viewed as homogenous, there is vast differences between objectives of firms within the whole spectator sport industry, and the different stakeholders of a firm ...read more.

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