The Economics of Professional Team Sports

by Downward; Paul

• ISBN13: 9780415208734
• ISBN10: 0415208734
• Format: Hardcover
• Copyright: 2000-10-17
• Publisher: Routledge

Summary

A detailed survey of the economic literature on sporting leagues, the demand for professional team sports and the players' labor market.

Table of Contents

List of figures	ix
List of tables	xi
Acknowledgements	xiii
Introduction	1	(10)
Why are professional team sports of interest to economists?	1	(2)
The need for a textbook	3	(2)
Economic methodology	5	(1)
Summary of chapters	6	(5)
SECTION A The market, industry and firm in professional team sports	11	(56)
The market structure of professional team sports leagues: general themes	13	(14)
Introduction	13	(1)
Market structures: a brief overview	13	(5)
Externalities	18	(2)
The peculiar economics of sport	20	(1)
The uncertainty of outcome hypothesis as an organising principle	21	(4)
Conclusions	25	(1)
Discussion questions	25	(2)
The market structure of professional team sports leagues: the firm in professional team sports	27	(15)
Introduction	27	(1)
Club objectives: profit maximisation versus utility maximisation	27	(4)
Sporting leagues as cartels	31	(1)
Coping with interdependence: cartel or monopoly?	32	(4)
Cartel-based explanations of sporting league developments	36	(4)
Conclusions	40	(1)
Discussion questions	40	(2)
Cross-subsidisation in professional team sports leagues	42	(25)
Introduction	42	(1)
The rationale for cross-subsidisation	43	(3)
Cross-subsidisation policies	46	(3)
An economic framework for understanding cross-subsidisation	49	(4)
Empirical evidence on competitive balance	53	(3)
Empirical evidence on the effects of cross-subsidisation policies	56	(2)
The Coase theorem and professional team sports leagues	58	(2)
Conclusions	60	(5)
Appendix 4.1: measuring competitive balance in sporting leagues	61	(3)
Appendix 4.2: competitive balance in sporting leagues under revenue sharing	64	(1)
Discussion questions	65	(2)
SECTION B The demand for professional team sports	67	(114)
Theoretical and empirical issues	69	(31)
Introduction	69	(1)
The theory of demand	69	(1)
The utility function	70	(1)
The budget constraint	71	(4)
Modelling demand: regression analysis	75	(11)
Measuring demand: some key conceptual and data issues	86	(4)
Case study: Scottish professional football and the uncertainty of outcome hypothesis	90	(4)
Conclusions	94	(5)
Appendix 5.1: problems of measuring habit persistence	94	(5)
Discussion questions	99	(1)
Traditional findings and new developments	100	(30)
Introduction	100	(1)
The traditional emphasis of demand studies	100	(2)
Major findings in the literature: sporting versus economic determinants of demand	102	(15)
The long-run determinants of demand: culture, habit persistence and economic effects revisited	117	(6)
Conclusions	123	(6)
Appendix 6.1: time-series econometrics, error correction models and cointegration	124	(5)
Discussion questions	129	(1)
The uncertainty of outcome hypothesis: theoretical and empirical issues	130	(27)
Introduction	130	(1)
The nature of uncertainty of outcome	131	(17)
Conclusions	148	(7)
Appendix 7.1: some properties of uncertainty of outcome indicators	149	(6)
Discussion questions	155	(2)
Broadcast demand and the impact of television	157	(24)
Introduction	157	(1)
A brief history of televised sport: the US and UK	157	(6)
The economics of broadcasting and sport	163	(1)
Television and the demand for professional team sports	164	(4)
Television and competitive balance	168	(2)
Potential changes in league structure: European Super League	170	(3)
The evolution of the media market	173	(5)
Conclusions	178	(1)
Discussion questions	178	(3)
SECTION C The labour market in professional team sports	181	(58)
The traditional view: theory and evidence	183	(20)
Introduction	183	(1)
Some benchmark economic concepts of labour markets: the case of perfect competition	183	(3)
Theories of player labour markets	186	(3)
Case study: US baseball	189	(11)
Conclusions	200	(2)
Appendix 9.1: the principles of derived demand	200	(2)
Discussion questions	202	(1)
Recent developments: theory and evidence	203	(32)
Introduction	203	(1)
The move to increased player power: the rise of free agency in the US	203	(3)
Free agency in the UK and the Bosman ruling	206	(3)
Implications of free agency for professional team sports	209	(1)
The players' labour market	209	(1)
Bargaining theory	210	(3)
Empirical findings	213	(9)
Implications of free agency for league policy	222	(2)
Conclusions	224	(9)
Appendix 10.1: the Nash bargaining model	224	(1)
Appendix 10.2: human capital theory	225	(6)
Appendix 10.3: a model of final-offer arbitration	231	(2)
Discussion questions	233	(2)
Conclusions	235	(4)
A brief review of chapters	235	(2)
Evaluation of the Louis--Schmeling paradoxluncertainty of outcome hypothesis	237	(1)
Implications for future research	238	(1)
Bibliography	239	(6)
Index	245