Page 2 - SPLS104_Obery.A_Assessment Task 1

Most professional sports leagues are operating as a non-profit organization, but there should be an
extent to this, and I, therefore, believe that certain professional sports leagues should be stripped of
their non-profit status because their success has enabled them to reap the benefits of both a non-
profit and a for-profit organization. This matter should be looked at when it comes to differentiating

non-profit from for-profit structures, as well as the revenue these leagues bring in.

A for-profit organization and sports structure is an organization that has the primary motive of
making money and generating a profit and most businesses and organizations in the world are for-
profit. The owners of for-profit organizations decide what to do with their profits, whether they
want to keep it for themselves, put it back into the business, spread it amongst the staff, or all of the

beforementioned, it’s up to them (What is a for-profit organization? Definition and examples, n.d.).
Common for-profit sport structures are those that sell goods or services to make money. Examples
are sports retail stores such as Sportsman’s Warehouse, Nike, and Under Armour. Sports betting
companies are also good examples of for-profit sports structures as their purpose is to make money
off sports wagers (losing bets to be exact) (How do sports betting companies make money?, n.d.).
According to an article on Bizvibe, based on annual revenue, the most successful sports betting

company (International Game Technology, based in London) generated a revenue of 4,96 billion USD
in 2019 (Top 10 Largest Sports Betting Companies in the World by Revenue 2020, Largest Sports
Gambling Companies, 2020). Sports bars could also be categorized as a for-profit sports structure, as
they offer sports entertainment for their customers, in the form of sports media coverage, but their
main purpose is to sell those customers food and beverages to make money. An advantage that for-

profit organizations have is that they are free to operate however they see fit, as long as they are
not breaking the law (Nash, n.d.) The biggest advantage of a for-profit organization is the fact that
they can make a lot of money and this should not come as a surprise, because their motive is to
make money after all. A disadvantage of a for-profit organization is that the owners are often faced
with a tough decision about what to do with the profits (Kokemuller, 2019). The biggest
disadvantage of a for-profit organization, in my opinion, is the fact that they have to pay tax on their

profits.