Zach Holland Sport Finance 1/23/12 Unit 1 What are the five forms of financing, how is each used with in sport? • Debt- borrowing money that must be repaid over a period of time with interest. Can be used to finance a new stadium. • Equity- the owners exchange a share or portion of their ownership for money. Used to raise capital after purchasing a sport organization • Retained Earnings- the portion of earnings that a firm saves in order to fund operations or acquire assets. Often used by publicly traded companies, when they choose to reinvest earnings rather than pay them to shareholders as dividends. They are often used to finance the acquisition of players, improve operations, or make other investments. • Government funding- Funds provided by federal, state, or municipal sources and may include land use, tax abatements, direct stadium financing, state and municipal appropriations, and infrastructure improvements. • Gifts- charitable donations, either cash or in-kind, made to an organization.
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