INTRO TO SPORTS ECON What is Sports Economics

INTRO TO SPORTS ECON • • What is Sports Economics? Why Sports Econ? Why now? Branches of Sports Economics Emerging topics in sports economics

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.

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.

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.

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.

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

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

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

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. )

Branches of Sports Economics of Risk & Uncertainty • Evaluating player & coaching talent • Purchase & sale of teams with “old” stadiums

Branches of Sports Econ. Amateur Sports • NCAA • Olympics

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