Pay TV vs Free-to-air TV

This week I’m at the 3rd International Mathematics in Sport conference, taking place within view of Old Trafford, home of Manchester United.

Stefen Kesenne gave a fascinating opening talk on pay TV and free-to-air TV, trying to propose a simple model to explain the very cheap or free airing of US major league sports, yet the high subscription fees faced by European sports observers.

It was a fairly basic micro model with a linear demand curve for sports viewers, and advertising revenues a linear function of viewers (hence customers). However, only by adding in the sponsorship element (companies with names on shirts and stadia) could Stefen achieve the result that free-to-air TV might be more profitable than pay-TV. That’s because in this situation sponsors want the maximum audience possible.

I also listened to another fascinating talk by Peter Dawson on managers and the duration of their spells out of jobs. Managerial experience matters but past playing experience doesn’t.

Today I’ll be listening to talks on the Jabulani ball, Poisson models to describe goalscoring in football (soccer) matches (games), the history of ball sports, competitive balance, assessing performance in football matches, amongst other things…

Over here in Britain

There’s an event taking place next year in London, which has a football (soccer) tournament as part of it that most folk here in the UK tend to ignore because there’s never any representation of any of the home nations (what we call England, Scotland, Wales and Northern Ireland) for Great Britain. But since the Olympics are in our backyard this time there’s been a considerable effort to form a British team out of the four nations that make up Great Britain.

However, progress has been rancourous. Of course, it’s all political in the extreme. The non-England home nations fear that by allowing a Britain team to be formed, their elevated status within FIFA’s governing bodies will be questioned – although they have received written assurances that this will not happen - although given all that has happened at FIFA in recent months, who knows what to believe?

Today there has been an announcement by the British Olympic Association that an agreement has been made such that players from the four home nations can join together and play in a British team – to which both Scotland and Wales have reacted angrily – perhaps unsurprisingly…

It threatens to be an issue that will run and run for many more months yet. I personally hope some kind of compromise is achieved – I would love to see Gareth Bale, Adam Ramsey and the other exciting young players from the home nations together in one team. But I can understand the reluctance of the home nations given their elevated status within FIFA, and FIFA’s less than transparent and honest internal structures. It is, of course, the privileged fighting to protect their privilege, regardless of how justified that elevated status actually is. I’m starting to sound like a libertarian…

NASSM 2011 Conference

Greetings from London, Ontario in Canada.  I am attending the North American Society for Sport Management (NASSM) conference along with co-blogger Brian Soebbing of the University of Alberta.  There has been a lot of talk of competitive balance and uncertainty of outcome in many of the talks, including one given by Brian, myself, and Dr. Humphreys (another one of the IJSF bloggers) about the effects of competitive balance on MLB attendance.  It was good to see a wide focus of sport management talks, and how well sport finance and sports economics were represented.  In the final talk given during the Earle Ziegler award ceremony, there was mention of the seminal work of Simon Rottenberg (1956), as well citation of Humphreys’ (2002) work on competitive balance.

In fact, there were so many talks that directly related back to Rottenberg’s 1956 piece, that some of us noted that they could have formed one or two symposiums focused just on the work of Rottenberg.  I think this is telling of the power of the Uncertainty of Outcome Hypothesis (UOH) which was first noted by Rottenberg (1956) and was also discussed by Neale (1964), as well as the Invariance Principle which can also be found in Rottenberg’s seminal work.

Next up will be the Western Economic Association International conference at the end of June 2011, where there will be many sessions focused on sports economics.

 

On a side note, I’ll be traveling to China, and will try to blog while I am there visiting various sport sites and organizations in Beijing.  I’m hoping to take some nice pictures and give an interesting perspective of sport finance as it relates to China.