Germany Business Paper

The industry that we have chosen to analyze is the sports entertainment industry. Our focus on this industry is Men's NCAA College Basketball (division 1). There are 31 conferences in division 1 with a separate Independent Conference for any leftover teams. Amongst these conferences there are 334 individual teams. The main attraction of division 1 basketball is its 65-team single elimination tournament held annually in March; also commonly know throughout the sports world as March madness. Teams compete separately in their conferences for a conference championship and an automatic bid into the final tournament. The rest of the tournament field is selected by a NCAA committee, made up of respected sports analysts and enthusiasts, based on their RPI, final standing, schedule difficulty and quality wins.

RIVALRY FIRMS

There is one major competing firm that rivals NCAA Division I Men's Basketball outside the NCAA; the National Basketball Association (NBA). The reason being is that the NBA is threatening to the success and prosperity of Men's College Basketball. Through research our team has determined that that the NBA's influence on young college and High School athletes has lessoned college basketball's popularity and fan base at an excessive rate. Until this past year when NBA Commissioner David Stern changed the NBA Draft Rule (Stating: to enter the NBA Draft one has to be at least 19 years of age or have completed 1 season of college basketball) many of the glamorous High School Seniors had been foregoing their college eligibility and entering the NBA Draft.

Kevin Garnett of the NBA's Minnesota Timber wolves was not the first (Moses Malone) to enter the NBA Draft after High School but he is responsible for starting this trend of high schoolers jumping to the NBA, back in 1995 when he did it. This decision has become an increasing trend throughout the basketball world influencing NBA All Stars such as, LeBron James (Cleveland), Jermaine O'Neal (Indiana), Tracy Macgrady (Houston), and Kobe Bryant (Los Angeles). This is clearly hurting college basketball because the best prospect and young rising stars and developing and toning their skills in the NBA rather than in the college ranks.

The NBA also implemented another strategy in luring young talent from the amateur game by developing the NBDL in 2001. The NBDL is a developmental league that grooms pure raw talent into fine toned professional athletes. The NBDL can generally be compared to Major League Baseball's minor league system. Just like the MLB, the NBA feels that a professional tutoring of the game is far more beneficial than that of a collegiate one. Also on an Athlete's perspective for skipping college for the pro's is either the financial burden is overwhelming or the academic challenge is far too great. This is evident when an underclassmen will enter the NBA Draft and go undrafted and will eventually settle for the NBDL who pays its players somewhere in the range of $30,000 a season.

The rest of the competition is held internally among the 31 conferences or simply among the 334 college universities competing in Division I. Each university is obligated to have a certain amount of athletic scholarships to compete in Division I sports. However, if it was as easy as whoever offers the scholarship first; that is where the player would attend college we probably would never even talk about college basketball. What makes college basketball so great are the intense rivalries among the competing schools. Each year head coaches decide what players to go after in the recruiting season, which basically lasts 365 days a year. Recruiting can be a very ignorant environment where bad mouthing of others schools often takes and other unethical business practices can occur such as bribery or the issuing of illegal gifts (money etc.). This type of recruiting has always been assumed but has gotten National exposure over the past few years when Michigan and Ohio State were found guilty for practicing this type of recruiting. Also during recruiting loyalty and tradition is often brought up during conversations trying to bestow a sense of school pride to the recruits.

Among the 34 conferences there are only a few that get major national exposure and air time, which are the Big East, ACC, Big Ten, SEC, Pac-Ten, and Big Twelve. Because of this it is much easier for schools in these conferences to get the high profile athletes. However the rest of the schools are not doomed because when it comes tournament time every school gets their chance to showcase their skills in the national spotlight. Take Gonzaga University for example; until 1999 Gonzagas only chance of participating in the NCAA Tournament was through winning their conference tournament. Now after a few Cinderella stories Gonzaga is a national powerhouse and currently ranked 4th in the latest polls. It's almost a guarantee that Gonzage used their success in the tournament in their recruiting process, which helped them go after some of the higher profiled High School athletes.

Besides high school prospects the rival firms, which in this case is all winter sports entertainment industries, also compete for sponsors, whether it be television or radio: nationally or locally. A majority of the top conferences have contracts with ESPN and Fox Sports and other television stations and radio broad castors. These televised or broadcasted games in turn stand for a marketing strategy because during these games there will be a number of commercials promoting their respected schools and conferences. Further more at the conclusion of these games there is often a player of the game selected for both teams and a sponsor donates money towards a scholarship. For example: On ESPN and CBS at the end of a game Chevy announces its Chevrolet players of the game and donates $1,000 to each schools athletic program.

BARGAINING POWER OF SUPPLIERS

The men's basketball division of the NCAA is a huge supplier of revenues to the NCAA. Men's basketball is second next to football in total revenue per school with average total revenues exceeding $4 million dollars and the largest record school was $14.6 million in division I-A in 2003. These revenues can only be accounted for by the mass amount of suppliers to the basketball programs in all of these schools.

Of course, the revenues of all these schools do not account for all of the total revenue that the NCAA men's basketball receives. One of the largest and most creditable suppliers that really make the NCAA so popular is the giant corporate sponsor. Corporate sponsors supply