Write 8 pages thesis on the topic professional sports teams. A good example is the US where the National Basketball Association (NBA), Major Baseball League, and the National Football League (NFL) are a major source of attraction and income for the country (Dobson & Goddard, 2011:206). Commercialization of sports follows the principle of economic of profit maximization, and it is with such understanding that economists have taken a keen interest of evaluating sports club and franchises owners’ objective and their influence on regulations and structure of leagues. This paper seeks to analyze the objectives of team owners and the impact they may have on the regulations and structure of professional sports leagues. From an economic standpoint, professional team sports are a form of enterprise, the owners of the teams being the entrepreneurs and the game being the product. The customers are the fans supporting these teams, while the players and the coaching staff are the inputs (Mayhew, 2003:79). Professional players and athletes earn millions of dollars per season, with team prices shooting past 500 million dollars (for Washington Redskins and New York Jets). With such huge figures, professional sports teams have been organized into sealed leagues with the identity and number of competitors being fixed by the league members themselves, thus the influence of the league by the owners of these teams (Masterlexis & Hums, 2011:295). Figure 1: Graph showing one-year change in total value of football clubs in the US (emphasis on New York Jets and Washington Redskins). Retrieved from http://www.data360.org/dsg.aspx?Data_Set_Group_Id=1358 Unlike other contemporary economic sectors principle of monopoly, success of the professional team sports relies on extreme competition between the teams. The more competitive the game, the higher the ticket charges as well as the attendance, resulting to higher profits. The implication of this fact is that teams with consistent unbroken winning streaks become common and boring. This has led to the formation of leagues that manage and organize games with the aim of eliminating unfair competition in the sector (Rodney, 2004:25). These leagues have become so popular, going past the country’s border and spreading over the world. Prime examples include the Premier League in English football, La Liga football league in Spain, Super Bowl baseball league in the US, and NBA basketball league in the US (Kern, 2000:101). These leagues are multi-billion dollars ventures that contribute significantly to the GDP of their respective countries. Players’ drafts, salary caps, roster limit, and player trading restrictions govern the labor market of professional sports. Gate collection sharing, collective sale of television broadcasting rights, and joint merchandising limit economic competition in the product markets. These agreements apply to such leagues like the ice hockey, baseball, basketball, and American football. These agreements are based on the economic principles of profit maximization, which is often the objective of the professional team owners (Melicher, 2011:9). Team owners in Europe and the US have always deferred in objectives, with the paradigm of profit maximization dominating the North and non-profit making objectives, like maintenance of winning streaks, being a more embraced approach in Europe. In the economy of sports, the objectives of team owners, and the controlling leagues is important, considering the monopolistic nature of the league enterprise.

 

Leave a Reply

Your email address will not be published.