INTRO TO SPORTS ECON
•
•
•
•
What is Sports Economics?
Why Sports Econ? Why now?
Branches of Sports Economics
Emerging topics in sports economics
1
Sports Econ.
• Economics is the study of allocating scarce
resources among competing human wants.
• Sports economics then is the study of
allocating scarce resources among
competing wants in the context of sports.
– EX: Competitive Balance in the NFL, MLB etc.
2
What qualifies as a Sport?
• This begs the question what is a sport?
– As defined by TV coverage? (NFL Vs. Timbersports, World’s Strongest Man/Woman)
– Sports as defined by physical exertion,
competitive situations? (American Gladiators)
– What about recreational sports like fishing,
hunting, mountain biking etc.
3
Why Sports Econ.? Why now?
• The coincidence of several factors has led to
the rapid emergence of this exciting field.
– Eminent scholars (who also happen to be sports
fans) looking for new challenges.
– The availability of sports data.
– Journal of Sports Economics & The Economics
of Sport
– Public visibility such as stadium funding
– Student interest & compatibility with student
research.
4
Branches of Sports Econ.
• Various branches of sports economics have
sprung up around the areas of expertise of
the scholars that have founded the
discipline. For example:
– Labor economists who turned their attention to
sports studied the determinants of wages in
various sports.
– I.O. economists studied issues of competitive
balance in various sports.
– Environmental economists have used CVM to
value Sports Teams as a public good.
5
Branches of Sports Econ.
Theory of the Firm, Industrial Organization & Sports
• Theory of the Firm
– Do sports franchises & TV networks maximize profit?
– The decision to buy, sell or move a team
• Monopoly & Antitrust issues
– Are the NFL, NCAA etc. monopolies/cartels?
– Is that economically efficient?
• Competitive Balance & the health of leagues
– Why is the NFL more competitive than MLB?
• Formation &decline of leagues
– NFL Vs. XFL
6
Branches of Sports Econ.
Public Finance, Regional Econ. & Sports
• Who pays for the stadium?
– Taxes Vs. Bonds
• Benefits of a team to the host city.
– Impact studies: Corporate Vs. Academic
• Team Sale/Relocation
– Game with multiple rounds
7
Branches of Sports Econ.
Labor Economics of Sports
• Unions, strikes & negotiations. (Game
Theory?)
• Determinants of Wages
• Economics of Discrimination
• Hiring& firing team managers, coaches etc.
• Contracts, incentives & performance
8
Branches of Sports Econ.
Consumer Theory & Sports Economics
The Demand for Leisure:
• Determinants of Game day attendance
• Determinants of TV ratings
• Participation in recreational sports such as
IM soccer, flag football, golf, winter sports,
outdoor activities (fishing, hunting, hiking
etc.)
9
Branches of Sports Econ.
Economics of Risk & Uncertainty
• Evaluating player & coaching talent
• Purchase & sale of teams with “old”
stadiums
10
Branches of Sports Econ.
Amateur Sports
• NCAA
• Olympics
11
Emerging Branches of Sports Econ.
• Econometrics/Stats. of winning strategies
• Sports & Exercise as a habit/addiction
– Sports & alcohol, performance substances
•
•
•
•
•
Sports & Gambling
Sports & Domestic Violence
TV Ratings & sports
NASCAR, PRCA, WNBA, MLS
Recreational youth sports
12