Dominance criteria on grids for measuring competitive balance in sports leagues

Author(s):  
Marc Dubois
2002 ◽  
Vol 3 (2) ◽  
pp. 111-121 ◽  
Author(s):  
Andrew S. Zimbalist

2006 ◽  
Vol 20 (3) ◽  
pp. 345-365 ◽  
Author(s):  
Joel Maxcy ◽  
Michael Mondello

Free agency was reintroduced to professional team sport leagues in the 1970s. Sport enthusiasts expressed concern that competitive balance would diminish as star players congregated to large market cities. However, the economic invariance principle rejects this notion, indicating that balance should remain unchanged. This article empirically examines the effects of changes in free agent rules on competitive balance over time in the National Basketball Association (NBA), National Football League (NFL), and National Hockey League (NHL). Regression analysis using within-season and between-season measures of competitive balance as dependent variables provides mixed results. The NFL and NHL provide evidence that an aspect of competitive balance has improved, but results from the NBA indicate that balance has worsened since the introduction of free agency. We conclude that the ambiguous results suggest that the effects are not independent, but instead depend on the interaction of free agent rights with other labor market and league rules.


2010 ◽  
Vol 11 (6) ◽  
pp. 587-601 ◽  
Author(s):  
Rodney Fort ◽  
James Quirk

2011 ◽  
Vol 12 (3) ◽  
pp. 284-308 ◽  
Author(s):  
Helmut M. Dietl ◽  
Martin Grossmann ◽  
Markus Lang

2008 ◽  
Vol 45 (5) ◽  
pp. 535-549 ◽  
Author(s):  
Michael Lewis

Major League Baseball and other professional sports leagues have long been concerned with competitive imbalances caused by differences in local revenues. The fear is that in the absence of salary caps or other regulatory mechanisms, smaller-market teams will be unable to remain competitive. This research uses a structural dynamic programming model to analyze ownership's payroll investment decisions. This model estimates the relationship between optimal payrolls and local-market populations and the influence of long-term customer equity dynamics on payroll investments. In addition, the author analyzes the impact of a recent policy intervention that implemented revenue transfers from high-local-revenue markets to low-local-revenue markets. The statistical results indicate that market population has a significant impact on the value of a team's payroll investments. For example, optimal payrolls double as the population increases from 2.5 million to 7.5 million. Furthermore, rather than improving competitive balance, the adoption of revenue sharing has decreased the incentives for small-market teams to remain competitive. The author uses the estimation results to evaluate alternative approaches to managing competitive balance. Specifically, the results suggest that basing revenue-sharing payments on local-market population and (higher) attendance rates reduces payroll dispersion.


2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Matthew Doria ◽  
Barry Nalebuff

AbstractIn order to make comparisons of competitive balance across sports leagues, we need to take into account how different season lengths influence observed measures of balance. We develop the first measures of competitive balance that are invariant to season length. The most commonly used measure, the ASD/ISD or Noll-Scully ratio, is biased. It artificially inflates the imbalance for leagues with long seasons (e.g., MLB) compared to those with short seasons (e.g., NFL). We provide a general model of competition that leads to unbiased variance estimates. The result is a new ordering across leagues: the NFL goes from having the most balance to being tied for the least, while MLB becomes the sport with the most balance. Our model also provides insight into competitive balance at the game level. We shift attention from team-level to game-level measures as these are more directly related to the predictability of a representative contest. Finally, we measure competitive balance at the season level. We do so by looking at the predictability of the final rankings as seen from the start of the season. Here the NBA stands out for having the most predictable results and hence the lowest full-season competitive balance.


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