|
on Sports and Economics |
|
Issue of 2012‒04‒10
three papers chosen by Joao Carlos Correia Leitao University of Beira Interior and Technical University of Lisbon |
| By: | Markus Sass (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | This paper analyzes the long-term development of competitive balance in a professional team sports league with win-maximizing clubs facing a strict break-even constraint as imposed by UEFA's new Financial Fair Play Regulations. A classical model of professional team sports leagues is employed to calculate seasonal competitive balance, which solely depends on the market size of clubs. In the multi-period version of the model, a market size function, which captures the empirical fact that a club's revenue potential is positively affected by its historic success, is introduced. The model shows that there is only one long-term steady-state equilibrium, in which big clubs totally dominate small clubs and competitive balance is maximally uneven. The intuition is that a club, which becomes more successful, is able to attract more and more spectators yielding higher revenue and leading to the club being able to afford more playing talent. This in turn leads to greater success, which in turn attracts even more spectators and so forth. Since small clubs are no longer allowed to overspend and thereby invest their way to a greater market size in the future, the model predicts a negative trend in competitive balance to be the result of the new UEFA Financial Fair Play Regulations. |
| Keywords: | Sports Economics, Professional Team Sports, Competitive Balance, UEFA Financial Fair Play |
| JEL: | L83 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:120005&r=spo |
| By: | Huang, Haifang (University of Alberta, Department of Economics); Humphreys, Brad (University of Alberta, Department of Economics) |
| Abstract: | Using data from 56 professional sports facilities opened between 1995 and 2008, we find what at first appears to be a substantial neighborhood revitalization effect: the opening of a facility is associated with an increase in mortgage applications to purchase homes located in the neighborhood of about 20%, compared to those in the rest of the metropolitan area. A closer examination shows that much of the differential is due to the non-randomness of facility location. The new facilities locate in poor urban areas, which grew faster over the sample period even if they were not near a new facility, perhaps because of increasing access to mortgage credit by low-income urban populations. Based on a series of regressions using census-tract level data, we find that conditioning on local income and poverty rates, under which poorer census tracts grow faster regardless of their locations, reduces the “revitalization” effect by more than a half, suggesting that characteristics of locations drive much the increase on mortgage applications associated with new sports facilities. |
| Keywords: | sports facilities; urban redevelopment; residential mortgage applications |
| JEL: | L83 O18 R21 R23 R38 |
| Date: | 2012–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2012_005&r=spo |
| By: | Ginger Zhe Jin; Marc Rysman |
| Abstract: | We study a new data set of US sports card conventions in order to evaluate the pricing theory of two-sided markets. Conventions are two-sided because organizers must set fees to attract both consumers and dealers. We have detailed information on consumer price, dealer price and, since most conventions are local, the market structure for conventions. We present several findings: first, consumer pricing decreases with competition at any reasonable distance, but pricing to dealers is insensitive to competition and in longer distances even increases with competition. Second, when consumer price is zero (and thus constrained), dealer price decreases more strongly with competition. These results are compatible with existing models of two-sided markets, but are difficult to explain without such models. |
| JEL: | D4 L1 L8 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17959&r=spo |