Asiasports: Hockey Night in Hong Kong Essay

5087 Words Apr 24th, 2011 21 Pages
Asiasports: Hockey Night in Hong Kong

Determining the Future Business Strategy of Asiasports Limited In March of 1999 the primary decision makers of Asiasports found themselves at a crossroads. “Barnes, Weir, and Gribble had to make decisions about whether the company should promote hockey outside of Hong Kong and its choice of sports properties. An implementation plan also had to be developed for the chosen strategy” (Delios 1). Although every one of their sports properties was profitable except for the World Ice Hockey 5’s event, Asiasports still experienced a loss in 1998 operations. Therefore Barnes and the primary shareholders of Asiasports were faced with a difficult question regarding the direction of their future business
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The other 50 per cent came from sponsorship income” (Delios 8). Furthermore, they had increased sponsorship income by 50 per cent from 1996-1999, and player fees had grown 20 to 25 per cent annually form 1996-1999. In 1998 the company experienced a net loss on operations, yet all of their sports properties were profitable except for the World Ice Hockey 5’s event. Detailed financial information is available for the 1999 World Ice Hockey 5’s tournament, and it shows that like 1998 the event was not profitable. In 1999 it posted a net loss of 267,407 (HK$). The Gordie Howe event held prior to the tournament lost 154,306 (HK$) on revenues of 235,520 (HK$), while the tournament itself lost 113,101 (HK$) on revenues of 730,869 (HK$). Therefore the Gordie Howe event lost a much greater amount of money relative to revenues generated then the actual tournament. The expense breakdown for the Gordie Howe event shows that hotel costs were the primary expense at 194,000 (HK$) and 68,000 (HK$) were spent on books. If the cost of books was eliminated or passed on to attendees, and if they could get a hotel to donate rooms in exchange for sponsorship, the savings would amount to 262,000 (HK$) which would create a net loss of only 5,407 (HK$) for the entire event. Other opportunity areas present themselves on the tournament side; primarily the lack of a drink sponsor as well as the lack of revenue from Sunday as the title sponsor. Securing a

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