The issue of borrowing and securing money to support or start a business looms large for...

The issue of borrowing and securing money to support or start a business looms large for investors. The sports industry has many examples of franchises that have made poor investments and ineffective financial decisions. Select a sport team (from any sport discipline) and indicate the investment challenges and pitfalls experienced by ownership.

Expert Solution

The sports team that I have selected is “Karlsruhe SC”. This is a football team that is based in Karlsruhe in Germany. The ownership of this football club is with Stadt Karlsruhe (City of Karlsruhe).

In terms of investment challenges and pitfalls experienced by ownership the most glaring of challenges is being faced in recent times of economic slowdown. The overall economic climate is damp and this has had a negative impact on sports entertainment as well. Attendance at recent football matches is declining considerably and the financial interests of the owners are hurting. It should be noted that demand for attending sporting events is elastic and with fall in disposable income the viewership demand is also falling. This is being felt more in case of a local club like Karlsruhe SC which has a very limited fan base and which does not enjoy a strong loyal fan base on a national scale. As such the owners of the football team are struggling to generate desirable return on its investment.

jeff jeffy answered 3 months ago

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