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SPAD 604 – Sport Finance & Economics Homework #3 Instructions – Budgeting  Instructions: For this assignment, you will create a Year 1 and Year 2

SPAD 604 – Sport Finance & Economics

Homework #3 Instructions – Budgeting 

Instructions: For this assignment, you will create a Year 1 and Year 2 budget for a proposed varsity-level football team in Lambton County, Canada. The “Bluewater Football Association” case study provides you with information to begin putting together a Year 1 budget. The “Bluewater FA Budget” MS Excel document should be used to organize budgetary information related to estimated revenues and expenses for Year 1 and Year 2.

Year 1 Budget

Use information contained within the “Bluewater Football Association” case study to develop an estimated Year 1 budget of revenues and expenses for a new varsity-level football team in Lambton County, Canada. Fill in relevant revenue and expense line-item cells within the “Bluewater FA Budget” template to calculate projected total revenues, expenses, and net income/loss for Year 1 of team operations.

Important: Make sure to note all assumptions that contribute to your estimated revenues and expenses. There should be assumptions noted for each revenue and expense line item on the budget.

Year 2 Budget

Assume the first year of competition finishes for the Bluewater Football Association and your revenue and expense projections within your Year 1 budget were relatively accurate.

Utilize a modified zero-based budgeting approach to develop a budget for Year 2. Again, make sure to note all assumptions used to generate estimates for Year 2 revenues and expenses. Given the use of a modified zero-based budgeting approach, make sure to note those aspects of each revenue and expense line item that you are “carrying over” from Year 1 to Year 2, as well as any new assumptions being made to produce the budget for Year 2.

Discussion Questions

Based on the work completed for this assignment, answer the following questions on Blackboard to complete your Homework #3 to receive credit for this assignment.

1) What were estimated total revenues for Year 1 of team operations? What were the estimated total expenses? What was the projected net income (or loss) after Year 1 of team operations? List 4-5 key assumptions that you made to produce the Year 1 budget and describe how each assumption contributed to the final net income (or loss) estimate for Year 1.

2) What were estimated total revenues for Year 2 of team operations? What were the estimated total expenses? What was the projected net income (or loss) for Year 2 of team operations? Describe your process for implementing a modified zero-based budgeting approach to compile the Year 2 budget. What were some key factors carried over from Year 1? What were some new assumptions made for the Year 2 budget? Explain your rationale for each carry-over factor and new assumption mentioned above.

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