nep-spo New Economics Papers
on Sports and Economics
Issue of 2018‒06‒25
six papers chosen by
Humberto Barreto
DePauw University

  5. The distribution of soccer leagues scores that generates the minimum of competitive balance: Truncated-Cascade Distribution By Antonio Ávila-Cano; Francisco Triguero-Ruiz
  6. A Study on the Willingness to Develop Sports Tourism in Taiwan By Wen-Hua Yang

  1. By: Franziska Prockl (University of Paderborn); Dirk Semmelroth (University of Paderborn)
    Abstract: For different sports leagues, studies show the positive effect of competitive balance on fan interest and consequently revenues. Particularly for Northern American leagues, competitive balance is a core concept in the construction of such, also to ensure financial stability of teams. Nevertheless, most studies in the literature concentrate on measuring competitive balance in European football leagues. To enhance the existing literature, our paper analyzes competitive balance in Major League Soccer (MLS), a comparatively young and therefore still developing league. To encompass ex-post results, as well as the ex-ante perception of fans if a league or match is uncertain in its outcome, we distinguish between ´actual´ and ´perceived´ competitive balance. Based on compiled data for MLS from 1996 until 2016 we measure the ´actual´ level of competitive balance in MLS with several commonly used competitive balance measures. Considering the corresponding decimal odds predictions and team wage bill information from 2006 until 2016, the ´perceived´ competitive balance is measured using a seemingly unrelated regression and further explanatory statistics. While the results of the ´actual´ competitive balance measurements indicate a league that becomes more balanced over time, the perception points towards an imbalanced league with clear favorites and reduced uncertainty of outcome.
    Keywords: Competitive Balance, Major League Soccer, Football
    JEL: D40 L10 L83
    Date: 2018–05
  2. By: Franziska Prockl (University of Paderborn); Bernd Frick (University of Paderborn)
    Abstract: The North American top tier Major League Soccer presents a unique research setting to study a regulated labor market. Contrary to the situation in Europe, where player salaries remain private and confidential (the only exception here is “Serie A” in Italy), the player unions regu-larly publish this kind of information for each of the US Major Leagues. In this paper we use an unbalanced panel with detailed player-season-information from the seasons 2006 to 2016 to estimate a multi-stage salary model for MLS players. We differentiate in the analysis be-tween regular and designated players (aka DP, a status unknown in Europe) due to their heter-ogenic profiles. For regular players we find that the impact of age on salaries follows an in-verted u-shape with a very late turning point at 33.6 years. In addition, we find a statistically significant positive of last season’s performance and career performance. Experience abroad yields a significantly higher salary as does tenure with the current team (controlling for team-specific fixed effects). Perhaps surprisingly, career length in MLS is negatively associated with salary. Also, the results suggest that local player suffer a pay discrimination compared to similar players from Western Europe, Central and South America. Thus, we confirm most of the findings that have been reported in previous research using data from European football leagues (e.g. Lucifora & Simmons, 2003; Frick, 2007; Bryson et al., 2014). This finding alone is not straightforward considering the various regulations that help the leagues to keep espe-cially salary budgets in check. The effectiveness of salary regulations, e.g. put in place via Collective Bargaining Agreements, is shown for two instances, as is the impact of a regulatory change. In contrast, the key driver of the unregulated DP salaries are club-specific fixed effects, ex-plaining already 58 percent of the observable variation in player salaries. Next important driv-ers are career games played and the region of origin. Local superstar players earn a surprising premium over players from Western Europe, South America and the Carribean’s. Neither for regular nor for designated players’ positions are rewarded significantly different. This is a big difference compared to European leagues where Forwards are usually paid better.
    Keywords: Wage Differentials, Major League Soccer, Panel Study
    JEL: J31 J49
    Date: 2018–05
  3. By: Bernd Frick (University of Paderborn); Franziska Prockl (University of Paderborn)
    Abstract: The benefits of crowd wisdom / swarm intelligence in the form of superior decision making and problem-solving skills have recently been analyzed and discussed by researchers from various fields. The goal of this paper is to identify the relevance of crowd wisdom for professional team sports leagues by analyzing, first, the emergence of crowd wisdom on a particular online platform ( and, second, by documenting the precision of the collectively gathered information. The authors evaluate the emergence and diffusion of information on that platform over ten consecutive years and find a pattern similar to the one proposed by Bass (1969) in a now seminal study. Moreover, using player values as well as player salaries from Major League Soccer for the seasons 2006 thru 2015, it appears that values are excellent proxies for salaries that are not disclosed, but remain private and confidential in most leagues. These findings encourage researchers to use information from sources like in their empirical studies.
    Keywords: Crowd Wisdom, Swarm Intelligence, Player Salaries, Player Valuations, Major League Soccer
    JEL: D70 D82 J31 L83
    Date: 2018–05
  4. By: Franziska Prockl (University of Paderborn)
    Abstract: The purpose of the presented research is to advance the superstar literature on the aspect of superstar’s characteristics and value. Typically, superstar research is faced with one problem: They apply the same criteria to determine who their superstars are as to describe them later because they lack “an objective measure of star quality” (Krueger, 2005, p.18). To avoid this complication, the author chose to study Major League Soccer’s (MLS) designated players as this setting present a unique, as discrete, assignment of star status. MLS has formally introduced stars in 2007 under the designated player (DP) rule which delivers over 100 star-observations in the last ten years to investigate MLS strategy of star employment. The insights from this data set demonstrate which characteristics are relevant, whether MLS stars can be categorized as Rosen or Adler stars, and what the MLS pays for and in this sense values most. A cluster analysis discovers a sub group of ten stars that stand out from the others, in this sense superstars. A two-stage regression model confirms the value stemming from popularity, leadership qualities, previous playing level, age and national team experience but refutes other typical performance indicators like games played and goals scored or position. Overall, evidence for Rosen and Adler’s theory is found, and an over the time change from hiring old and popular stars to younger but still leadership-prone stars.
    Keywords: Superstar, Major League Soccer, designated players, superstar salary, popularity.
    JEL: J44 L83
    Date: 2018–05
  5. By: Antonio Ávila-Cano (Department of Economics, University of Málaga); Francisco Triguero-Ruiz (Department of Languages and Computer Science, University of Málaga)
    Abstract: Competitive balance can be measured using standardized indexes, such as the Herfindahl-Hirschman index (HHI). The standardized HHI calculus is based on knowing the maximum value of HHI. This value corresponds to the minimum value of the competitive balance. Measuring competitive balance is affected by the scoring system used. There are competitions that have scoring systems that do not award twice as many points for winning as they award for ties. In this case, the scores distribution representative of the minimum competitive balance is unstable because the total points at the end of the championship can vary. This issue has been addressed by reconstructing the results obtained in leagues. Nevertheless, this solution generates cardinal and ordinal negative effects, that we verify for the major European soccer leagues over twenty seasons. The aim of this article is to redefine the perfectly unbalanced distribution in order to construct a new one that generates the maximum level of concentration: we call this truncated-cascade distribution. Thus, we show that the instability problem does not involve recalculating the scoring based on the results. The minimum value of competitive balance is generated by a truncated-cascade distribution of results at a level that can be previously calculated. Thus, we calculate the cut-off point of the truncated-cascade distribution using a 5-grade polynomial equation obtained by recurrent calculation. Besides, we provide the cut-off points and maximum HHI values for leagues with different number of teams.
    Keywords: Competitive balance, Herfindahl-Hirschman index, Perfectly unbalanced distribution, major European soccer leagues
    Date: 2018–06
  6. By: Wen-Hua Yang (Chaoyang University of Technology Author-2-Name: Chih-Wei Lin Author-2-Workplace-Name: Associate Prof. of Department of Leisure Services Management,168, Jifeng E. Rd., Wufeng District, Taichung, 41349 Taiwan, R.O.C Author-3-Name: Wei-Ming Chen Author-3-Workplace-Name: Master's Degree of Department of Leisure Services Management, 168, Jifeng E. Rd., Wufeng District, Taichung, 41349 Taiwan, R.O.C Author-4-Name: Wei Peng Tan Author-4-Workplace-Name: Ph.D. Student of Department of Business Administration, 168, Jifeng E. Rd., Wufeng District, Taichung, 41349 Taiwan, R.O.C Author-5-Name: Su-Shiang Lee Author-5-Workplace-Name: Prof. of Department of Leisure Services Management, 168, Jifeng E. Rd., Wufeng District, Taichung, 41349 Taiwan, R.O.C. Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: Objective – This study aims to construct a model for the willingness to develop sports tourism, using the factors of place attachment, the impact of sports tourism, attitude and willingness to develop sports tourism. Methodology/Technique – The study gathers data via questionnaires. Following this, purposive sampling is used to distribute the questionnaires and the collected data is analysed using descriptive statistics, confirmatory factor analysis and a structural equation model. Findings – Once the aforementioned analysis is conducted, the following conclusions were drawn. First, the model construction fits well. Second, the factor of place attachment has a significant positive influence on the perceived impact of sports tourism. Both the positive perception of sports tourism and the attitude for developing sports tourism have a positive impact on willingness to develop sports tourism. Contrary to this, negative perceptions of sports tourism have a negative impact on the attitude to develop sports tourism, although it has no significant impact on the willingness to develop sports tourism. Novelty – This study demonstrates that the higher the degree of place attachment associated with the inhabitants of Taiwan, the greater recognition there is of the impact of sports tourism. The most important finding of this study is that this positive impact enhances the attitude and willingness of inhabitants to develop sports tourism. The study also develops some practical strategies based on the study results.
    Keywords: Place Attachment; Willingness; Sports Tourism; Tourism Impact.
    Date: 2018–04–16

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