DECA Sports and Entertainment Marketing Practice Exam

Which type of sports are considered nonrevenue sports?

1. Sports that generate high profits for schools

2. Sports funded by schools with no return on investment

3. Sports that require ticket purchases for spectators

4. Popular sports that have major sponsorships

The correct answer is: Sports funded by schools with no return on investment

Nonrevenue sports are those that typically do not generate enough income to cover their costs and are often subsidized by the educational institution. This category includes sports that require significant funding for facilities, equipment, and staffing but do not bring in sufficient revenue through ticket sales, merchandise, or sponsorship deals. The focus is on the lack of return on investment, distinguishing them from revenue-generating sports, which can support themselves financially and contribute to the athletic department's budget. In contrast, the other types illustrate sports that are characterized by high profitability, ticket sales, or substantial sponsorships. These features indicate a solid revenue stream, which fundamentally separates them from nonrevenue sports. Understanding this distinction is crucial in sports and entertainment marketing, as it informs budget allocations, fundraising strategies, and overall management of athletic programs.