Preface | p. xiii |
Introduction and Review of Economic Concepts | p. 1 |
Introduction | p. 3 |
Three Major Areas of Economics Explored | p. 6 |
The Role of Models | p. 7 |
Positive Versus Normative Economics | p. 8 |
Biographies | p. 9 |
Sports History and Balance of Coverage | p. 9 |
The Organization of the Text | p. 10 |
Additional Support and Sources | p. 11 |
Review of the Economist's Arsenal | p. 13 |
Introduction | p. 13 |
Opportunity Cost and Comparative Advantage | p. 14 |
A Reintroduction to Supply and Demand | p. 15 |
Demand, Supply, and Equilibrium | p. 16 |
Supply and Demand Curves and the Price of Baseball Cards | p. 19 |
Price Ceilings and the Benefits of Scalping | p. 27 |
Market Structures: From Perfect Competition to Monopoly | p. 28 |
A Note on the Definition of Output | p. 28 |
Perfect Competition | p. 29 |
Monopoly and Other Imperfectly Competitive Market Structures | p. 31 |
Applying the Models: Evaluating an Increase in Costs | p. 35 |
The Development of Professional Sports | p. 37 |
Choices under Uncertainty | p. 38 |
Biographical Sketch | p. 43 |
Summary | p. 44 |
Discussion Questions | p. 44 |
Problems | p. 45 |
Utility Functions, Indifference Curves, and Budget Constraints | p. 47 |
Constrained Maximization | p. 47 |
Using Indifference Curves and Budget Constraints: The Rise of Soccer and Baseball | p. 54 |
Regression Analysis in Brief | p. 57 |
Multiple Regression and Dummy Variables | p. 62 |
The Industrial Organization of Sports | p. 65 |
Sports Franchises as Profit-Maximizing Firms | p. 67 |
Introduction | p. 67 |
The Importance of Leagues | p. 68 |
Setting the Rules | p. 69 |
Limiting Entry | p. 71 |
Controlling Entry as Cooperative Behavior | p. 75 |
League Contraction | p. 76 |
Marketing | p. 77 |
What Are Profits and How Are They Maximized? | p. 79 |
A Detailed Look at Revenue | p. 80 |
Gate Revenue | p. 82 |
Television Revenue | p. 85 |
The Effects of Revenue Sharing | p. 92 |
Cost | p. 94 |
Opportunity Cost-Teams on the Move | p. 95 |
Taxes, Profit, Owner Behavior, and Vertical Integration | p. 95 |
Turning Losses into Profits: The Accounting Game | p. 99 |
Using Sports to Maximize Profits Elsewhere | p. 99 |
Operating Income, Book Profit, and Bill Veeck | p. 100 |
Soccer's Alternative Business Model | p. 102 |
Profit Maximization in Soccer | p. 103 |
The Impact of Promotion and Relegation | p. 104 |
The Financial Dangers of an Open System | p. 106 |
Soccer in America: The MLS and a Single-Entity League | p. 107 |
Biographical Sketch | p. 107 |
Summary | p. 108 |
Discussion Questions | p. 109 |
Problems | p. 109 |
Monopoly and Antitrust | p. 111 |
Introduction | p. 111 |
What's Wrong with Monopoly? | p. 112 |
Monopolists and Deadweight Loss | p. 113 |
Promotion, Relegation, and Monopoly Power | p. 115 |
Monopolists and Price Discrimination | p. 116 |
Consumer Surplus and Personal Seat Licenses | p. 119 |
Monopoly Stood on Its Head: A Brief Introduction to Monopsony | p. 120 |
What's Right with Monopoly? | p. 121 |
Barriers to Entry | p. 124 |
Society's Response to Monopoly and Monopsony: Antitrust Laws | p. 125 |
An Important Anomaly: Baseball's Antitrust Exemption | p. 126 |
The Economic Impact of the Antitrust Exemption | p. 131 |
Limited Exemptions: The NFL and Television | p. 133 |
The NCAA: An Incidental Cartel | p. 134 |
Prisoner's Dilemma: How Rational Actions Lead to Irrational Outcomes | p. 137 |
Biographical Sketch | p. 140 |
Summary | p. 142 |
Discussion Questions | p. 142 |
Problems | p. 143 |
An Alternative Application of Game Theory | p. 144 |
Competitive Balance | p. 147 |
The Fan's Perspective | p. 148 |
The Owners' Perspective | p. 151 |
The Effect of Market Size | p. 152 |
How Competitive Balance can be Measured | p. 154 |
Within-Season Variation | p. 154 |
Between-Season Variation | p. 158 |
Attempts to Alter Competitive Balance | p. 160 |
Revenue Sharing | p. 162 |
Salary Caps and Luxury Taxes | p. 162 |
The Reverse-Order Entry Draft | p. 163 |
Schedule Adjustments in the NFL | p. 163 |
The Effects of Attempts to Alter Competitive Balance | p. 164 |
The Coase Theorem and Competitive Balance | p. 165 |
Salary Caps | p. 166 |
The Draft | p. 168 |
Revenue Sharing and Luxury Taxes | p. 169 |
Promotion and Relegation | p. 169 |
Biographical Sketch | p. 170 |
Summary | p. 172 |
Discussion Questions | p. 172 |
Problems | p. 172 |
Two Additional Ways to Measure Competitive Balance: The Lorenz Curve and the Markov Chain Method | p. 174 |
Public Finance and Sports | p. 179 |
The Public Finance of Sports: The Market for Sports Franchises | p. 181 |
Introduction: How Walter O'Malley Changed the Landscape of Sports | p. 181 |
The Competition for Teams and the Value of a New Stadium | p. 185 |
How Teams Exploit Market Forces | p. 190 |
Leagues, Cities, and Monopoly Power | p. 191 |
The All-Or-Nothing Demand Curve | p. 193 |
The Winner's Curse | p. 195 |
How the Olympics and the World Cup Induce Overspending | p. 196 |
The Form and Function of Stadiums and Arenas | p. 200 |
What's in a Name? | p. 201 |
The Size and Shape of Facilities | p. 202 |
Location, Location, Location | p. 208 |
Biographical Sketch | p. 211 |
Summary | p. 212 |
Discussion Questions | p. 213 |
Problems | p. 213 |
The Costs and Benefits of a Franchise to a City | p. 215 |
Introduction | p. 215 |
Why Do Cities Do It? The Benefits of a Franchise | p. 216 |
Privately Built Facilities | p. 216 |
Is a Stadium a Worthwhile Investment for a City? | p. 217 |
Why Governments Subsidize Sports Franchises | p. 219 |
Multiplier Effects | p. 227 |
Can Anyone Win at This Game? | p. 231 |
The Impact of Special Events | p. 234 |
A Public Choice Perspective | p. 235 |
Financing Facilities | p. 237 |
An Economic View of Taxes: Who Should Pay? | p. 238 |
Sales Taxes | p. 241 |
Incremental Financing | p. 242 |
Taxes That Broaden the Burden | p. 243 |
The Benefits of Debt | p. 244 |
Biographical Sketch | p. 246 |
Summary | p. 247 |
Discussion Questions | p. 247 |
Problems | p. 248 |
The Labor Economics of Sports | p. 249 |
An Introduction to Labor Markets in Professional Sports | p. 251 |
Introduction | p. 251 |
Overview of Labor Supply and Demand | p. 252 |
Labor Supply | p. 253 |
Labor Demand | p. 255 |
Market Demand and Equilibrium | p. 258 |
Imperfect Competition and the Demand for Labor | p. 258 |
Human Capital Theory | p. 259 |
Monopsony and Other Restrictions of Competitive Markets | p. 262 |
Monopsony | p. 262 |
The Reserve Clause | p. 264 |
Free Agency | p. 265 |
Final Offer Arbitration | p. 266 |
Salary Caps | p. 268 |
The Draft | p. 270 |
Empirical Evidence on Restricted Player Movement and Player Salaries | p. 271 |
The Impact of Rival Leagues | p. 275 |
The Economics of Tournaments and Superstars | p. 277 |
Evidence on the Potential Inefficiency of Tournaments | p. 281 |
What Is a Gold Medal Worth? | p. 285 |
An Exception to the Rule: NASCAR | p. 285 |
The Distribution of Income | p. 287 |
Biographical Sketch | p. 290 |
Summary | p. 292 |
Discussion Questions | p. 292 |
Problems | p. 293 |
The Labor-Leisure Choice Model of Indifference Curves | p. 295 |
Labor Unions and Labor Relations | p. 303 |
Introduction | p. 303 |
A Brief Introduction to the Economics of Unions | p. 304 |
An Overview of Strikes | p. 308 |
Labor Conflict in Professional Sports | p. 314 |
A Change of Pace: The 2002 Baseball Agreement | p. 315 |
Thrown for a Loss: The NFLPA and Salaries in Professional Football | p. 317 |
Reversal of Field: Recent Settlements in Basketball and Hockey | p. 320 |
Professional Tennis Associations | p. 324 |
Biographical Sketch | p. 330 |
Summary | p. 331 |
Discussion Questions | p. 332 |
Problems | p. 333 |
Discrimination | p. 335 |
Introduction | p. 335 |
Becker's Theory of Labor Discrimination | p. 337 |
Different Forms of Discrimination in Professional Sports | p. 339 |
Employer Discrimination | p. 339 |
Does Anyone Win with Employer Discrimination? | p. 344 |
Employee Discrimination | p. 350 |
Consumer Discrimination | p. 353 |
Discrimination by National Origin in European Soccer | p. 355 |
Positional Discrimination or Hiring Discrimination | p. 357 |
Gender Equity-A Special Case? | p. 360 |
Title IX and Discrimination in College Sports | p. 362 |
Biographical Sketch | p. 364 |
Summary | p. 366 |
Discussion Questions | p. 366 |
Problems | p. 366 |
Sports in the Not-for-Profit Sector | p. 369 |
The Economics of Amateurism and College Sports | p. 371 |
Introduction | p. 371 |
The Troublesome Concept of Amateurism | p. 373 |
A Brief History of Amateurism and "the Olympic Ideal" | p. 373 |
Amateurism, Profits, and the NCAA | p. 376 |
The Code of Amateurism: Academic Ideals or Monopsony Power? | p. 377 |
Pay for Play: The Grant-in-Aid | p. 381 |
What's in a Name? The Lot of the "Student-Athlete" | p. 382 |
Measuring the Net Value of Athletes to Colleges | p. 382 |
Dividing the Profits: The NCAA as an Efficient Cartel | p. 383 |
College as an Investment for the Student-Athlete | p. 387 |
The NCAA and the Uneasy Coexistence of Athletics and Academia | p. 392 |
Why Schools Promote Big-Time Athletic Programs | p. 394 |
The Difficulty in Regulating College Sports | p. 397 |
The Knight Commission on Intercollegiate Athletics | p. 398 |
Academic Standards: Bulwarks of Integrity or Barriers to Entry? | p. 399 |
Academic Standards as a Barrier to Entry | p. 403 |
The Finances of College Athletics | p. 404 |
Do Colleges Make a Profit from Athletics? | p. 404 |
College Athletics and Profit Maximization | p. 407 |
Biographical Sketch | p. 409 |
Summary | p. 410 |
Discussion Questions | p. 410 |
Problems | p. 411 |
Works Cited | p. 413 |
Index | p. 433 |
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