Cross-subsidisation in professional team sports leagues

2000 ◽  
Keyword(s):  
Team Sports ◽  
Professional Team Sports ◽  
Sports Leagues

Player Rights 1951 and 1957

2017 ◽  
Author(s):  
David George Surdam
Keyword(s):  
Team Sports ◽  
Professional Sports ◽  
Congressional Hearings ◽  
Professional Team Sports ◽  
Sports Leagues ◽  
Professional Sports Leagues

This chapter examines one of the most contentious issues in professional sports leagues that were tackled at the Congressional hearings in 1951 and 1957: player rights. The reserve clause and the player draft allowed owners to minimize competition for players and therefore to have salary-setting power over their players, giving them discretion in how much they paid them. Owners and their commissioners employed novel arguments supporting the necessity of having the reserve clause. This chapter first provides an overview of the sorry state of player salaries in professional team sports before considering the owners' explicit use of the reserve clause and how players began challenging it. It concludes with a discussion of Congress's inquiry into player rights, the challenges to the player draft, the formation of players' associations, the outcome of the hearings, and the inquiry's impact on owner-player relations.

The Impact of Free Agency on Competitive Balance in North American Professional Team Sports Leagues

2006 ◽  
Vol 20 (3) ◽  
pp. 345-365 ◽  
Author(s):  
Joel Maxcy ◽  
Michael Mondello
Keyword(s):  
National Football League ◽  
Team Sports ◽  
National Hockey League ◽  
Competitive Balance ◽  
Free Agency ◽  
Free Agent ◽  
Professional Team Sports ◽  
Dependent Variables ◽  
Sports Leagues ◽  
The Impact

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.

Infant Mortality of Professional Sports Clubs: An Organizational Ecology Perspective

2012 ◽  
Vol 232 (3) ◽  
Author(s):  
Bernd Frick ◽  
Björn Wallbrecht
Keyword(s):  
Length Of Stay ◽  
Team Sports ◽  
Poor Performance ◽  
Organizational Ecology ◽  
Ice Hockey ◽  
Sports Clubs ◽  
Professional Team Sports ◽  
Small Market ◽  
Sports Leagues ◽  
Using Data

SummaryDue to their limited financial resources winning the national championship or qualifying for an international cup competition is not a viable option for most small market clubs in any of the European professional team sports leagues, such as soccer, ice hockey, basketball or handball. However, since a particularly poor performance is usually punished by relegation and since being relegated to the respective second division is associated with a dramatic decline in revenues, avoiding relegation is a target in itself. Using data from seven different professional team sports leagues in four different countries we estimate various parametric and semi-parametric regression models to identify the determinants of the clubs’ length of stay in their respective first division. In line with the organizational ecology literature we find that club experience, previous club performance (number of previous championship titles and number of previous relegations) and market size (average attendance) affect survival in a statistically significant and economically relevant sense. Perhaps surprisingly, founding conditions seem to be irrelevant for a club’s length of stay in its respective first division.

Economics of Sports Leagues

2017 ◽  
Author(s):  
David George Surdam
Keyword(s):  
Bargaining Power ◽  
Sufficient Conditions ◽  
Team Sports ◽  
Professional Sports ◽  
Price Setting ◽  
Professional Team Sports ◽  
Sports Team ◽  
Sports Leagues ◽  
Ticket Prices ◽  
American Economy

This chapter is a general overview of the economic aspects of professional team sports leagues as well as the American economy. The NBA's turbulent birth as the BAA demonstrated that professional sports team owners' twin advantages of price-setting power over ticket prices and enhanced bargaining power over players were not sufficient conditions to ensure profitability. Price-setting power without sufficient demand could still lead to losses. The challenge was to increase demand, which would have led to higher ticket prices, more attendance, and greater revenues and profits. Greater profits would have enabled owners to pay higher salaries and to improve conditions, helping to erase any fly-by-night image. Thus the chapter looks at the issues surrounding profits, player salaries, technology, expansions, discrimination, and so on; as well as how the American economy performed during the years 1945–61 and how it affected attendance and demand for professional team sports leagues.

scholarly journals Contest Theory and its Applications in Sports

2012 ◽  
pp. 399-421 ◽  
Author(s):  
Helmut Dietl ◽  
Egon Franck ◽  
Martin Grossmann ◽  
Markus Lang
Keyword(s):  
Team Sports ◽  
Point Of View ◽  
Competitive Balance ◽  
Theoretical Point ◽  
Contest Theory ◽  
Professional Team Sports ◽  
Tullock Contest ◽  
Sports Leagues ◽  
The Relationship ◽  
Exclusive Focus

This article describes how the theory of contests is applied to professional team sports leagues. It presents the traditional Tullock contest and explains some basic properties of the equilibrium. It then addresses the applications of contest theory in sports. It shows how the assumption of flexible vs. fixed talent supply depends on the league under consideration and how it influences the equilibria. The relationship between competitive balance and social welfare is considered. Finally, it illustrates why many clubs tend to “overinvest” in playing talent in many team sports leagues. It is noted that an exclusive focus on competitive balance may result in inefficient policy conclusions. Due to the contest structure, team sports leagues carry the risk of over-investing in playing talent. The contest theory is a suitable instrument to analyze team sports leagues from a theoretical point of view.

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