Volume 4, Issue 3 of the IJSF is now out. The journal has four articles and an executive interview in this issue. The interview is with David Taylor of UEFA by Troels Troelsen. Here are the abstracts from this issue, and links to the papers:
- The Underpayment of Restricted Players in North American Sports Leagues
by Anthony C. Krautmann & Peter von Allmen & David Berri
In this paper,we consider whether underpaying players restricted by the reserve clause is a common practice in the three largest sports leagues in North America—the NFL, NBA, and MLB. Our results are consistent with the hypothesis that owners of professional sports teams do exercise monopsony power whenever and wherever they can. Although differences exist across the three sports, our results indicate that in general: restricted players are underpaid; when the negotiating power of players rises, owners are less able to extract a surplus; and, the greatest surplus tends to be extracted from those who create the greatest amount of value.
- Facility Age and Ownership in Major American Team Sports Leagues: The Effect on Team Franchise Values
by Phillip A. Miller
This paper examines the franchise values of American professional sports teams in the NBA, the NFL, and the NHL. It is argued that team franchise values depend on the ownership status of the facility in which the team plays. If a team owns its playing facility, it capitalizes the value of the facility in the team franchise value, driving the latter higher. If a team plays in a facility owned by another entity, the franchise value should be lower. The empirical evidence suggests that the franchise values of NFL and NHL teams are higher for teams that own their playing facilities. No such effect is found for NBA teams.
- Estimating Demand for Aggressive Play: The Case of English Premier League Football
by R. Todd Jewell
This study estimates a demand curve for physically aggressive play in the English Premier Football League (EPL), the highest level of professional association football (soccer) in England. Employing a league-point-maximization framework in which a team chooses its level of aggressive play as an input, optimum aggressive play is assumed to respond to its price, where price is the reduction in the probability of a win or a tie resulting from aggressive play. The results indicate that aggressive play by EPL teams, as measured by total disciplinary points, is responsive to opportunity cost for both the home and away teams in a given match, although the responsiveness of the away team is shown to be much larger than that of the home team. Therefore, EPL teams can be expected to respond to policies that are designed to reduce aggressive play through increases in the cost of such behavior, and such policies can be expected to influence the behavior of away teams more than home teams. If fans of EPL football have preferences for less aggressive play, then the league may be able to increase revenues by reducing aggression through increases in opportunity cost.
In this theoretical analysis, we try to find out what the impact is of pooling and sharing, and not just the sharing of broadcast rights, on the competitive balance in a sports league. We are using a simplified 2-club non-cooperative Nash equilibrium model with the hiring of talent as the only decision variable. The conclusion is that the individual sale of broadcast rights, combined with a pure performance-related sharing arrangement of the money, offers the best guarantee for an improvement of the competitive balance.