2. If we do everything right this year and win
again, we probably will be able to break even.
And I’ll tell you this much: I didn’t buy this
team to break even.
-Minnesota Twins Owner Carl Pohlad, 1992.
3. Read Fort Ch. 2 p. 13-20
Answer Worksheet Q#2
Continue working on anthology
09/13/08
4. • Economics
• Scarcity
• Opportunity Cost
• Comparative Analysis
• The Law of Supply/ Demand
• Elasticity
• Utility
6. Players
› Greedy & lucky?
Owners
› Greedy & manipulative?
Teams
› Raise prices so the fans take on the burden?
09/13/08
7. • TSN 100- only 10% of the most
powerful people in sports are players.
• Owner behavior- stadiums, admission
prices, TV rights, player negotiations.
• Teams that spend the most have the
better chance of winning- why?
8. Fans pay to see them perform/play
› They produce the product
Compensation should be based on the
revenues they are generating
Careers are short, so their salaries
should be high
Few have true POWER!
09/13/08
9. How is player pay, just like pay for, a
non-sports/athletic job?
How does fan envy play into everything?
09/13/08
10. -Gary Cavalli, ABL Co-founder on shutting
down a franchise (AP, NY, 8/26/98)
11. Independent legal entities
› Free to make/ lose money depending how
they operate
Abide by league agreements
› Including modifications from Player’s Union
in Collective Bargaining Agreements
Want the best team to make $$$
› Players, front office employees, coaches
Player’s can use agents to negotiate
individual contracts
09/13/08
12. Why do teams/owners that spend the
most, generally win the most?
› Is this true at DI? DIII?
Do owners have any incentive to
misrepresent the economic welfare
generated for them by team ownership?
Remember their relationships with:
› Players
› Fans
› State & local government officials
09/13/08
13. Why study the sport
enterprise? Reason #1
Sports is big business.
Over $10 billion in public money has
been spent in the last 15 years just on
new stadiums and arenas.
12
14. Why study the sport
enterprise? Reason #2
Sports has cultural importance far
beyond its economic significance
Pro-sport industry ~ same size as
cardboard box industry
› Nobody talks about boxes around the water
cooler on Monday
13
15. Why study the sport
enterprise? Reason #3
Sports is a laboratory for social
experiments
› Discrimination/Integration
› Women’s Rights
› Pay for performance/ contracts
› Public finance/Urban economics
› Demand for tickets
› Competitive balance
› Revenue sharing
14