September 30- Office work (6 hours)

This week the focus was about how the prospects theory influence the investment decision in the world of sport and sport entertainment. This theory is focused on perceptions. In fact, it is not based on real gains or risks but on perceived gains and perceived risks. The concept behind this theory is that investors make decisions based on perceived gains instead of perceived losses. It is also known as the loss-aversion theory (Prospect Theory: What It Is and How It Works, with Examples, 2022). There are three main key aspects that characterizes this theory.

I. Investors value gains and losses in different ways. The focus is more on perceived gains than perceived losses

II. Investors that have to make a decision, will pick the choice presented as possible gains

III. The reason behind the focused on potential gains is that losses cause a greater emotional impact. In sport, this theory doesn’t influence just financial decisions, but also some strategic ones such as the acquisition of talents: an organization in sport entertainment or a team that is looking for signing a potential prospect (fighter, player, performer etc.) is more likely to invest money on someone that is not affirmed yet in the market, because the perceived value of the possible return on the investment (in financial, economic and brand terms) is valued more than a potential loss. This week I had to report daily with my mentor to provide data and financial proofs that would justify the results of the research. It was the most difficult week so far