Introduction

2017 ◽  
Author(s):  
David George Surdam
Keyword(s):  
National Football League ◽  
Major League Baseball ◽  
Professional Sports ◽  
Economic Power ◽  
Sports Teams ◽  
Congressional Hearings ◽  
Meat Packing ◽  
Sports Leagues ◽  
Territorial Rights ◽  
Professional Sports Leagues

This book examines the economics of the antitrust aspects of the three professional sports leagues—Major League Baseball (MLB), the National Football League (NFL), and the National Basketball Association (NBA)—based on the information presented at the hearings conducted by Congress during the 1950s. In the late 1800s, Americans worried about the growing concentration of economic power in the hands of large corporations and big trusts such as oil, railroads, steel, meat packing, and tobacco. In response, Congress passed the Sherman Antitrust Act of 1890. While owners of professional sports teams may not have resembled industrialists, they labored under the same antitrust statutes. This book explores some of the major issues tackled in the Congressional hearings, including mergers between rival football and basketball leagues, player rights, general antitrust exemptions, territorial rights, franchise relocation and sales, franchise expansion, and television policies.

A Look Back at the Hearings

2017 ◽  
Author(s):  
David George Surdam
Keyword(s):  
Professional Sports ◽  
Revenue Sharing ◽  
Financial Data ◽  
Free Agency ◽  
Congressional Hearings ◽  
Look Back ◽  
Sports Leagues ◽  
Territorial Rights ◽  
Shed Light ◽  
Professional Sports Leagues

This conclusion discusses the aftermath of the Congressional hearings. During the hearings, the owners' general prerogatives survived essentially intact, although free agency of some sort was imminent in all sports by 1976. Legislators did not repudiate the reserve clause, the reverse-order draft, or territorial rights, despite their qualms regarding these institutions. The legislators and their aides missed some opportunities to subject the team financial data from the 1950s to analysis, which could have shed light on such questions as the effects of revenue sharing. Some fans gained when their hometown landed an expansion or existing franchise, while other fans lost when legislators did not prevent franchise relocation. Congress has held several hearings in the intervening decades since 1989. The professional sports leagues have also evolved. Technology has altered the landscape.

Closing the Last Vestige of a “Free Market” In Labor 1964

2017 ◽  
Author(s):  
David George Surdam
Keyword(s):  
High School ◽  
National Football League ◽  
Major League Baseball ◽  
Free Market ◽  
Professional Sports ◽  
National Basketball Association ◽  
Reverse Order ◽  
Sports Leagues ◽  
The Impact ◽  
Professional Sports Leagues

This chapter examines the issues surrounding player draft in professional sports leagues. During the postwar era, baseball officials and players often mentioned free agents. Unlike the free agents of our era, however, these players were talented amateur players. Indeed, high school and college players constituted the remaining vestige of a free market for baseball labor during the postwar era. The owners quickly discovered that this free market for labor was costly and made attempts to curb spending on amateur players, sparking allegations of cheating that led to distrust among them. This chapter first considers the creation of the amateur draft in Major League Baseball (MLB) before discussing the reverse-order draft in the National Football League (NFL) and the player draft in the National Basketball Association (NBA). It concludes with an assessment of the impact of the draft on owners and players.

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.

An Overview of the Hearings

2017 ◽  
Author(s):  
David George Surdam
Keyword(s):  
World War Ii ◽  
Major League Baseball ◽  
Professional Sports ◽  
World War ◽  
Congressional Hearings ◽  
Major League ◽  
Sports Leagues ◽  
Professional Sports Leagues

This chapter provides an overview of the hearings conducted by Congress in the wake of player unrest after World War II and growing demand for new baseball franchises. The Congressional hearings began in 1951, when Emanuel Celler (N.Y.), chair of the House Subcommittee on Anti-trust and Monopoly, initiated an inquiry into Major League Baseball (MLB). For the first hearings, Celler told reporters that the committee's purpose was to “help baseball against itself.” During the hearings, few of the legislators impressed with their savvy. Some did not appear to understand the testimony. On occasion a few made dubious comments. The hearings occasionally lapsed into farce. The chapter considers sports owners' reluctance to release their financial records as well as professional sports leagues' search for antitrust exemptions.

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.

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 Big Leagues Go to Washington

2015 ◽  
Author(s):  
David George Surdam
Keyword(s):  
New York ◽  
Professional Sports ◽  
Economic Data ◽  
The West ◽  
Congressional Hearings ◽  
Key Issues ◽  
Sports Leagues ◽  
Professional Sports Leagues ◽  
Ownership Control

Between 1951 and 1989, Congress held a series of hearings to investigate the antitrust aspects of professional sports leagues. Among the concerns: ownership control of players, restrictions on new franchises, territorial protection, and other cartel-like behaviors. This book chronicles the key issues that arose during the Congressional hearings and the ways by which opposing sides used economic data and theory to define what was right, what was feasible, and what was advantageous to one party or another. As the book shows, the hearings affected matters as fundamental to the modern game as broadcast rights, drafts and players' associations, league mergers, and the dominance of the New York Yankees. It also charts how lawmakers from the West and South pressed for the relocation of ailing franchises to their states and the ways by which savvy owners dodged congressional interference when they could and adapted to it when necessary.

NFL team revenue distribution and revenue sharing: a median voter theorem

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Justin Ehrlich ◽  
Shankar Ghimire ◽  
Shane Sanders
Keyword(s):  
Design Methodology ◽  
Median Voter ◽  
National Football League ◽  
Professional Sports ◽  
Revenue Sharing ◽  
Content Type ◽  
Median Voter Theorem ◽  
Sports Leagues ◽  
Average Revenue ◽  
Professional Sports Leagues

PurposeRevenue sharing is ubiquitous among North American professional sports leagues. Under pool revenue sharing, above-average revenue teams of a league effectively transfer revenues to below-average revenue teams. Herein, the authors find and prove that a league will vote into policy a pool revenue sharing arrangement if and only if mean team revenue is greater than presharing median revenue, where this condition is equivalent to the presence of positive nonparametric skewness in a league’s distribution of team revenues. This represents a median voter theorem for league revenue sharing.Design/methodology/approachThe authors consider the case of revenue sharing for the National Football League (NFL), a league that pools and equally shares national revenues among member teams.FindingsThe authors find evidence of positive and significant nonparametric skewness in NFL team revenue distributions for the 2004–2016 seasons. This distribution is observed amid annual majority rule votes of League owners in favor of maintaining the incumbent pool revenue sharing model (as opposed to no team revenue sharing). Distribution of revenues – namely the existence of outlying large market NFL teams – appears to consistently explain the historical popularity of NFL revenue sharing.Originality/valueThe median voter theorem uncovered in the case of NFL applies to all professional sports leagues and can be used predictively as well as descriptively.

Should Antitrust Apply to Sports? 1957 and 1958

2017 ◽  
Author(s):  
David George Surdam
Keyword(s):  
National Football League ◽  
Professional Sports ◽  
National Basketball Association ◽  
National Hockey League ◽  
Competitive Balance ◽  
Congressional Hearings ◽  
Farm Systems ◽  
Antitrust Legislation ◽  
Territorial Rights

This chapter focuses on the Congressional hearings conducted in 1957 and 1958 to address whether basketball, football, and hockey should be given a broad antitrust exemption similar to that of baseball. It first considers the introduction of different bills pertaining to professional sports and antitrust following the Supreme Court's ruling in Radovich v. NFL, with particular emphasis on antitrust legislation focusing on the National Football League (NFL), before discussing the farm systems in baseball and hockey pioneered by Branch Rickey of the St. Louis Cardinals. It also looks at the issue of the reserve clause and its effect upon competitive balance and concludes with an assessment of Congress's decision not to grant even partial antitrust exemptions for the reserve clause, draft, territorial rights, and commissioner powers in the NFL, National Basketball Association (NBA), and National Hockey League (NHL).

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