Diemer Sport Economics Final
What is a craft union?
A union of workers who share the same skillset.
Explain why top athletes are paid less than top celebrities.
The best athletes are restricted because of the salary cap. Celebrities are obviously in a completely free market. Also, top athletes who do not garner the max contract are vastly under appreciated and undervalued.
Why was the NFL's limited antitrust exception impactful?
This exception allowed the NFL to exert monopoly power in negotiating their broadcast rights. The league represents all of the teams instead of each team going out and finding their own RSN or bigger network deal.
What are frequentism statistics?
This is a way of interpreting statistics. It measures the sum of error within a sample size. The idea is that the more data you get, the fewer errors you will get.
What is the NBA competitive balance (final) ratio?
2.82
What percentage of their value do NFL players in their first 3 years make?
50%
What % of success must make it viable for runners to steal?
70%
How did the modern NFL draft come about?
A college football player was highly coveted by the Brooklyn Dodgers and the Eagles. The two teams went into a bidding war and the Dodgers got the player in the end. The Eagles were not very good but the Dodgers were. The Eagles complained that they could not get better when the good teams were outbidding them for college talent. The league agreed so they created the modern NFL draft where the worst team gets the first pick.
How do American and European team owners differ?
American team owners are primarily concerned with maximizing profits whereas European team owners are much more concerned about on field play.
Why can a team like Arsenal not exert monopoly power but the Chicago Bears can?
Arsenal plays in one of many professional soccer leagues in Europe and have competition all around them. The Bears play in the only major professional football league in the US and they are far from the next closest NFL team.
Explain the difference between Bayes' and Humes' views on predicting human performance.
Bayes says that the more evidence we collect, the more we can lean on it and apply it to predict future events. Humes disagrees. He says that predictions are baseless as humans are random.
How were the Astros bench players decoding pitches?
By getting a video monitor in the dugout with only the center field camera in view to see the pitches being called.
What idea does James propose in Econtalk to speed up baseball?
Incentivize teams to play quicker with money
Is the sports labor market a free one? Why or why not?
It is not because of salary caps, rookies scales, and teams owning player rights.
Is the sports industry relatively competitive or not?
It isn't
Explain how NBA coaches are hypocritical when it comes to play style and playing time.
NBA coaches preach that players should be 'team first' and not be looking to score all the time. Yet, studies have shown that players who score are given the nod more than players who do not score as much.
Were individual Astros players suspended or fined for their role in the scandal?
No
How is the monopoly power effected when there are multiple professional teams in one city?
No team has monopoly power because as soon as one is relegated to starts playing poorly, the citizens will jump ship to the other team in the city that is playing well.
What is Title IX?
Prohibits discrimination based on sex in any educational program or activities funded with federal money
Historically, have baseball teams been more risk-seeking or more risk-averse?
Risk-seeking
How does the MLB have an inefficient labor market?
Teams are finding new ways to maximize talent without spending ridiculous amounts of money. They are following the moneyball method.
Which major league has the lowest ratio?
The EPL
Explain how the KC Chiefs and Royals are in a much different economic situation
The NFL has a league-wide TV deal whereas the MLB lets each team find their own deal with a RSN. Because of this, teams like the Royals (small market team) got a smaller RSN deal than the NY Yankees. Also, the NFL has by far the most generous gate-sharing revenue of the core 4 American leagues. Gate revenue is split much more evenly in the NFL than in the MLB.
Explain how there was a prisoner's dilemma in the track and field sport in relation to doping.
The athletes could not trust each other because there was not regular testing. They had no way to tell if their competitor was doping or not. The dilemma was to either start using PEDs and potentially get caught or not use them and fall behind.
What picks have the most value in the NFL draft?
The beginning of the second round
Explain how a vertically integrated franchise that is owned by a corporation can make their franchise look less profitable than a single entity owned franchise.
The corporation can make their team look less profitable by charging "them" more than what they should. The corporation marks the rent as a revenue but the team marks it as an expense. They do this to pay less into the revenue sharing.
According to the Leeds text, how is that the weakest NL teams are the most profitable?
The teams have a long history and a well-established fan base
What is an industrial union?
They are groups formed in direct opposition to their employer.
In the video with the economist, what did they equate a new stadium to?
They equate a stadium to a Walmart. Both create about the same amount of jobs but the Walmart is always open.
How did the MLB get their antitrust exemption?
They were sued by the Federal League in the early 1900s for colluding to prevent the league from becoming as popular as the MLB. The Federal League said that each team was an individual entity and was therefore colluding by getting together to exert monopoly power. Judge Landis (big baseball fan — later became MLB commissioner) ruled that baseball was exhibition and not interstate commerce. This ruling meant that the MLB was not subject to antitrust law. No court has touched this ruling since.