scholarly journals Of Bricks and Bats: New Stadiums, Talent Supply, and Team Performance in Major League Baseball

2017 ◽  
Vol 20 (1) ◽  
pp. 3-24 ◽  
Author(s):  
Duane W. Rockerbie ◽  
Stephen T. Easton
Keyword(s):  
Team Performance ◽  
Major League Baseball ◽  
Professional Sports ◽  
Revenue Sharing ◽  
Empirical Results ◽  
Major League ◽  
Sports Team ◽  
Budget Decision ◽  
New Facility

This article considers whether publicly financed new facility investments encourage professional sports team owners to increase their investments in costly talent. We develop a model of a sports league that incorporates publicly financed facility investments, the unique characteristics of the talent market, and revenue sharing to explore the complementarity between new facility amenities, the team budget decision, and team performance. Our empirical results suggest that publicly financed new stadiums do little to improve team performance, not due to restrictions in the talent market, but rather due to a lack of fan response.

scholarly journals Revenue Sharing in Major League Baseball: The Moments That Meant so Much

2018 ◽  
Vol 6 (3) ◽  
pp. 71 ◽  
Author(s):  
Duane Rockerbie ◽  
Stephen Easton
Keyword(s):  
Major League Baseball ◽  
Professional Sports ◽  
Revenue Sharing ◽  
Higher Order ◽  
Risk Averse ◽  
Positive Effects ◽  
Small Market ◽  
Major League ◽  
Sports Leagues ◽  
Professional Sports Leagues

Revenue sharing is a common league policy in professional sports leagues. Several motivations for revenue sharing have been explored in the literature, including supporting small market teams, affecting league parity, suppressing player salaries, and improving team profitability. We investigate a different motivation. Risk-averse team owners, through their commissioner, are able to increase their utility by using revenue sharing to affect higher order moments of the revenue distribution. In particular, it may reduce the variance and kurtosis, as well as affecting the skewness of the league distribution of team local revenues. We first determine the extent to which revenue sharing affects these moments in theory, then we quantify the effects on utility for Major League Baseball over the period 2002–2013. Our results suggest that revenue sharing produced significant utility gains at little cost, which enhanced the positive effects noted by other studies.

Professional Sports Team Community Protection Acts 1982 and 1984–1985

2017 ◽  
Author(s):  
David George Surdam
Keyword(s):  
Los Angeles ◽  
National Football League ◽  
Major League Baseball ◽  
Professional Sports ◽  
Revenue Sharing ◽  
The United States ◽  
Congressional Hearings ◽  
Sports Team ◽  
Community Protection ◽  
Predatory Tactics

This chapter focuses on the Congressional hearings conducted in 1982 and 1984–1985 to address the issue of franchise relocation. It first considers the so-called community protection acts that were introduced during the early 1980s in the wake of franchise relocations in the National Football League (NFL) and the lingering ill-will triggered by the expansion Washington Senators' move to Texas. It then looks at the legal wrangling between the NFL and Al Davis over his relocation of the Oakland Raiders to Los Angeles, along with legislators' push for franchise expansion and their doubts about revenue sharing in the NFL and Major League Baseball (MLB). It also examines the United States Football League's (USFL) antitrust suit against the NFL accusing it of being an illegal monopoly and using predatory tactics to thwart the USFL.

The Consequences (and Nonconsequences) of Ownership Change: The Case of Major League Baseball

2017 ◽  
Vol 20 (1) ◽  
pp. 72-90 ◽  
Author(s):  
Philip L. Hersch ◽  
Jodi E. Pelkowski
Keyword(s):  
Major League Baseball ◽  
Professional Sports ◽  
General Manager ◽  
Major League ◽  
Sports Team ◽  
Ultimate Responsibility ◽  
Transition Change

Although ultimate responsibility for a professional sports team lies with the owner, little is known about the repercussions of having a new owner at the helm. This article investigates ownership change in Major League Baseball. Estimates indicate that new owners do not impact on-field success relative to teams with continuous ownership. A temporary 8% bump in player payrolls, however, is observed in the first few years of owner transition. Change in ownership increases the odds of general manager and manager dismissals and is also more likely to trigger modifications to team logos and player uniforms.

Risk-Averse Team Owners and Players’ Salaries in Major League Baseball

2016 ◽  
Vol 18 (1) ◽  
pp. 19-33 ◽  
Author(s):  
Anthony C. Krautmann
Keyword(s):  
Major League Baseball ◽  
Professional Sports ◽  
Risk Averse ◽  
Empirical Results ◽  
Major League ◽  
Carry Over

This article looks at the role an owner’s attitude toward risk plays in his salary bids for free agents in Major League Baseball. We show that risk-averse owners will pay a premium for consistency on the field. Our empirical results are consistent with the hypothesis that a free agent’s contract terms are negatively related to the degree of variability in his performance. To the extent that our results carry over to all players, this suggests a heretofore unrecognized factor affecting the market for talent in professional sports.

Is offense worth more than defense and pitching? Marginal revenue product and revenue sharing in major league baseball

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Justin Andrew Ehrlich ◽  
Joel M. Potter
Keyword(s):  
Major League Baseball ◽  
Revenue Sharing ◽  
Ordinary Least Squares ◽  
Decision Makers ◽  
Marginal Revenue ◽  
Content Type ◽  
Marginal Revenue Product ◽  
Major League ◽  
Team Decision ◽  
Revenue Product

PurposeSports economists have consistently found that winning positively impacts team revenue fans prefer to allocate their entertainment dollars to winning teams. Previous research has also found that fans do not have a preference for how their team wins. However, this research ignores the significant variability in revenue that can exist between teams with similar attendance figures. The authors contribute to the literature by testing whether profit maximizing teams should pay different amounts for different types of production by estimating the marginal revenue product of a win due to offense, defense and pitching.Design/methodology/approachUsing data from the 2010–2017 Major League Baseball seasons and an Ordinary Least Squares-Fixed Effects approach, the authors test whether a unit of offensive, defensive and pitching production generates differing amounts of team revenue both before and after revenue sharing. The authors then test if team Wins Above Replacement is a good approximation of actual wins while accounting for the previously observed nonlinear relationship between wins and revenue.FindingsThe authors found that marginal revenue product estimates in the postrevenue sharing model for mowar, pwar and dwar are nearly identical to each other. Further, after predicting prerevenue sharing, the authors find that fans have no preference for mowar, pwar or dwar play styles.Originality/valueThe findings illustrate that team decision-makers appear to be acting irrationally by paying more for offense than they do for defense. Thus, the findings suggest that team decision-makers should value defensive wins and pitching wins at the same rate as offensive wins on the free agent market.

Damn Yankees and Relocations 1964 and 1965

2017 ◽  
Author(s):  
David George Surdam
Keyword(s):  
New York ◽  
National Football League ◽  
Major League Baseball ◽  
Professional Sports ◽  
Professional Football ◽  
Major League ◽  
Sports Leagues ◽  
Professional Sports Leagues

This chapter examines the issue of franchise relocation. Legislators had two main concerns throughout the series of hearings: to procure teams for their constituents while avoiding losing teams via relocation. The legislators' concerns were imbued with an element of reality, at least. Cities with multiple Major League Baseball (MLB) teams usually had one team that was struggling, and legislators held a different attitude to such teams relocating than they would with regard to later relocations of prosperous teams. This chapter first considers three options for acquiring a big-league team: purchase an existing team, hope for an expansion team in an established league, or enter a team into a new league. It then discusses the economics of franchise relocations, along with the early histories of franchise turnovers in professional sports leagues, including the National Football League (NFL) and its predecessor, the American Professional Football Association. It also looks at Columbia Broadcasting System's (CBS) purchase of the New York Yankees during the 1964 season that sparked fears of an unfair alliance.

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