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.

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.

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.

Location, Location, Location?

2012 ◽  
pp. 262-282
Author(s):  
Karl W. Einolf
Keyword(s):  
United States ◽  
Facility Location ◽  
National Football League ◽  
Major League Baseball ◽  
Optimal Solution ◽  
Location Model ◽  
National Basketball Association ◽  
Optimal Placement ◽  
National Hockey League ◽  
Sports Leagues

This article explores the location of franchises in sports leagues. It specifically examines the location of franchises within the four major sports leagues in the continental United States: Major League Baseball (MLB), the National Football League (NFL), the National Hockey League (NHL), and the National Basketball Association (NBA). Moreover, a facility location model is used to investigate the optimal placement of sports franchises in a league and to identify the best expansion prospects for a sports league. It is shown that the p-median model's optimal solution is less likely to be the best option for an organization if its facilities are less dependent on the income available at a node on the network. It is noted that the four major sports leagues in the continental United States do not all locate franchises optimally, according to the model.

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.

scholarly journals Online Webcast Demand vs. Offline Spectating Channel Demand (Stadium and TV) in the Professional Sports League

2020 ◽  
Vol 12 (23) ◽  
pp. 9906 ◽  
Author(s):  
Yan Feng ◽  
Jinbao Wang ◽  
Yeujun Yoon
Keyword(s):  
Team Performance ◽  
Professional Sports ◽  
Professional Baseball ◽  
Sports Fans ◽  
Interactive Communication ◽  
Random Coefficient Model ◽  
Sports Leagues ◽  
Relationship Of ◽  
The Impact ◽  
Professional Sports Leagues

This study investigates the online spectating behavior of sports fans. Due to the great mobility and low opportunity/switching costs, webcast sports fans’ spectating behaviors are distinct from those associated with traditional spectating channels such as stadium attendance or TV viewership. We explore the unique characteristics of online webcast demand in professional sports leagues by rigorously modeling all three spectating choices of sports fans. To consider the substitute relationship of the three spectating choices simultaneously, we employ a BLP (Berry–Levinsohn–Pakes)-style random coefficient model. For the analysis, we collect a comprehensive game-level dataset from the Korean Professional Baseball Organization (KBO) League fan samples from three different channels: online webcast viewership, stadium attendance, and TV viewership. We find that the demand for online webcasts is distinctive compared to that of traditional spectating channels. Notably, we find that the impact of team performance is three times stronger than that of TV viewership demand and that the impact of game quality is four times stronger than that of attendance demand. In contrast, a nonperformance variable is relatively less effective in attracting sports fans to online broadcasting. Furthermore, we find evidence of a strong retention effect of online webcast viewers. Our findings indicate that the previous spectating experience of online webcasts increases the next-time choice of sports fans for the webcast because the genuine spectating experience with distinctive webcast services (such as real-time interactive communication or various supplementary programs) can induce consumers to revisit the channel.

Revenue Sharing and Agency Problems in Professional Team Sport: The Case of the National Football League

1997 ◽  
Vol 11 (3) ◽  
pp. 203-222 ◽  
Author(s):  
Daniel S. Mason
Keyword(s):  
Agency Theory ◽  
National Football League ◽  
Professional Sports ◽  
Revenue Sharing ◽  
Team Sport ◽  
Opportunistic Behavior ◽  
The Past ◽  
Sports Leagues ◽  
Business Entities ◽  
Professional Sports Leagues

Although initially developed as cartels of independently owned and operated clubs joining to produce a sports product for spectator consumption, professional sports leagues have emerged as monopolies wielding significant economic power. By increasing revenue-sharing practices, and thus attempting to align owner interests, leagues have become single-business entities that maximize wealth for the league as a whole. Over the past four decades, the National Football League has implemented such practices to become the most popular team sport in North America. Using agency theory, this paper examines how the NFL's former commissioner, Pete Rozelle, and the League Executive Committee used these practices in order to increase League revenues and decrease opportunistic behavior by team owners. However, certain owners continue to act entrepreneurially, to the detriment of the League as a whole. This behavior is congruent with the tenets of agency theory, which contend that interests will diverge within a principal-agent relationship (e.g., the NFL— NFL teams). Until such time that team owners realize that the welfare of the other League clubs, along with their competitive equality, is paramount in retaining interest in and producing the League product, professional sports leagues will continue to be plagued with problems such as unnecessary franchise relocations and other acts of maverick owners.

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.

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