nep-spo New Economics Papers
on Sports and Economics
Issue of 2012‒03‒21
four papers chosen by
Joao Carlos Correia Leitao
University of Beira Interior and Technical University of Lisbon

  1. Some comparative economics of the organization of sports: Competition and regulation in north American vs. European professional team sports leagues By Wladimir Andreff
  2. The institutional framework for doing sports business: Principles of EU competition policy in sports markets By Budzinski, Oliver
  3. Event Clustering and Abnormal Returns: Reassessing the Informational Value of Bets By M. Castellani; P. Pattitoni; R. Patuelli
  4. Il Turismo del Golf e la Sicilia By Rosario La Rosa

  1. By: Wladimir Andreff (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne)
    Abstract: The paper presents the differences between the design of a closed and an open team sports league. Then it compares the theoretical models of a closed league with profit maximizing clubs and an open league with win maximizing clubs. Both models are now outdated by a Nash equilibrium model which is briefly sketeched. In the case of open leagues, a disequilibrium model seems more appropriate and a first attempt at elaborating it are exhibited.
    Keywords: economics of sport, professional sports leagues, organization, competitive balance, competition, regulation, comparative economics
    Date: 2011
  2. By: Budzinski, Oliver
    Abstract: The competition rules and policy framework of the European Union represents an important institutional restriction for doing sports business. Driven by the courts, the 2007 overhaul of the approach and methodology has increased the scope of competition policy towards sports associations and clubs. Nowadays, virtually all activities of sports associations that govern and organize a sports discipline with business elements are subject to antitrust rules. This includes genuine sporting rules that are essential for a league, championship or tournament to come into existence. Of course, 'real' business or commercial activities like ticket selling, marketing of broadcasting rights, etc. also have to comply with competition rules. Regulatory activities of sports associations comply with European competition rules if they pursuit a legitimate objective, its restrictive effects are inherent to that objective and proportionate to it. This new approach offers important orientation for the strategy choice of sports associations, clubs and related enterprises. Since this assessment is done following a case-by-case approach, however, neither a blacklist of anticompetitive nor a whitelist of procompetitive sporting rules can be derived. Instead, conclusions can be drawn only from the existing case decisions - but, unfortunately, this leaves many aspects open. With respect to business activities, the focus of European competition policy is on centralized marketing arrangements bundling media rights. These constitute cartels and are viewed to be anticompetitive in nature. However, they may be exempted from the cartel prohibition on efficiency and consumer benefits considerations. Here, a detailed list of conditions exists that centralized marketing arrangements must comply with in order to be legal. Although this policy seems to be well-developed at first sight, a closer look at the decision practice reveals several open problems. Other areas of the buying and selling behavior of sports associations and related enterprises are considerably less well-developed and do not provide much orientation for business. --
    Keywords: sports business,competition policy,sporting rules,centralized marketing,sports economics
    JEL: L83 L41 K21 D02 M21
    Date: 2012
  3. By: M. Castellani; P. Pattitoni; R. Patuelli
    Abstract: We analyse the links between soccer match results, bets and stock returns of all listed European soccer teams. Using an event study approach, we measure abnormal returns following wins, ties and losses. Wins are associated with positive abnormal returns, and ties and losses with negative abnormal returns. Additionally, we analyse the role of bets in shaping market reactions to unexpected results, which we find to be non-significant. We propose an alternative econometric approach, using seemingly unrelated regression models, to take into account the problem of overlapping events. While our results concerning match results are confirmed, abnormal returns following unexpected results are found to be statistically significant and to magnify the positive (negative) effects of wins (losses).
    JEL: G14 L83 C30
    Date: 2012–03
  4. By: Rosario La Rosa
    Abstract: Golf played by country residents is and golf tourism are widely increasing. In particular, golf tourism is getting increasingly important as compared to the other forms of tourism. The golf tourist has a high income, is more educated and environmentally conscious than the other classes of tourists. Furthermore he pays special attention to the quality and differentiation of golf fields. Differences in golf fields depend: a) on the actual geographical location of the field, which affects the layout and the difficulty of the game, as well as on the environmental and cultural context; b) on the degree of environmental friendliness of the field: in the 90s various national and European institutions have been established for the definition of guidelines in the planning of the fields and for the issue of quality certification; c) on maintenance: it must be noted that technology makes the use of water resources, fertilizers, pesticides, les troublesome from an environmental point of view; d) on the geographical location of facilities like hotels and residences. The golf tourist takes also particular care to the way fields are managed, favoring golf clubs and ‘play and pay’ fields to golf resorts and public fields, which usually have smaller dimensions and fewer difficulties. Furthermore, the golf tourist looks for new experiences and travels long distances. In Europe the ratio of golf players to residents is much higher in the northern countries than in the southern ones. However in northern countries weather is not as nice as in the other countries with the result that golf players tend to move south to find new fields and contexts. Sicily, like southern Spain and Portugal which are the only southern European countries with a large golf tourism, is an ideal setting for golf tourism, but the existing facilities are largely inadequate. Developing golf in this area means fundamentally taking into account the needs and the expectations of golf tourists. Cooperation between public agency and private firms is clearly desirable. Such public agency should be devoted to make sure that the new golf facilities are compatible with a proper conservation of the local environment and properly maintained. They should lead the golf fields to acquire proper certification by the European Golf Association-Ecology Unit and to develop as to meet golf tourists’ demands. Such agency should also draw a map of the areas eligible for golf fields, set up proper facilities for golf players and make sure that golf tourists can also take advantage of the other local sport facilities. It should be noted that adding golf to the existing tourism infrastructure and facilities will put the golf tourist in a position to gain more advantage from what he does in the area. The public agency could also supply local firms with the proper incentives to set up clusters and networks with the effect to generate external economies (also in relation to tour operators). Through all this a ‘golf region’ becomes established with a number of different golf fields, which will attract more a more tourists. When it comes to the localisation of residential buildings it must be noted that Sicily has a number of small towns with large rural areas around, where such buildings could be placed. Golf fields therefore could take advantage of residential facilities nearby without having to produce a negative impact on the area.
    Keywords: turismo; golf; Sicilia
    JEL: L83 R10 R19
    Date: 2011

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