ISS 328- Social Science of Sports Midterm

The first Black head coach of a major US pro sports team was Bill Russell for the team Boston Celtics (NBA).

- Bill Russell - Boston Celtics

How does ESPN make money?

- It receives advertising revenue. - It receives payments from broadcast providers (cable and satellite).

Indirect or "quality of life benefits from having a sports team include

- the benefit to local residents who attend the team's games if the ticket price is less than what they were willing to pay. - the enjoyment received by local residents who do not buy tickets and attend the games, but watch on television. - businesses unrelated that move to the city because of the team.

The largest source of generated revenue for FBS athletics departments is

. broadcasting/postseason earnings.

Under current law, sports team tax deductions for player depreciation are limited to

100% of the team purchase price over 15 years.

Under NCAA rules, the number of permitted scholarships for men's & women's basketball is

15 for women's basketball and 13 for men's

Currently, how many states have adopted legalized and regulated gambling on sports events? (You may want to check the State-by State Sports Bill Tracker noted in the lecture notes.)

22

For 2019 (most recent NCAA data), how many college athletics programs generated positive net revenue (that is, had generated revenue greater than expenses or to put it another way, covered their costs)?

25

What percentage of revenue for the four major professional sports leagues in the US comes from ticket sales, on average approximately?

25%

According to NCAA data, in 2019 what percentage of student-athletes in all components of Division 1 were women?

47%

According to the research by Baade, Baumann, and Matheson reported in the Journal of Sports Economics, over the long run localities that have major college football teams and games

A. see higher income and more employment than similar cities without football. B. have higher income and more employment than similar cities without football if the local team consistently has a winning record. C. have higher income and more employment than similar cities without football if the local team has a large number of home games. D. All of the above are correct. E. None of the above is correct.

Which professional sports team has the highest market value (according to Forbes' latest data)?

Dallas Cowboys

Which statement best reflects recent graduation success rates for college athletes?

Graduation rates for "revenue sports" are lower than for other sports.

Unions of professional sports athletes have

Grown in importance at the same time overall union importance in the economy has declined.

Look at the Fan Cost Index amount for last season (2019) for the NFL teams. Report the team and the amount that was highest, and the lowest, and report the amount for the Detroit Lions.

Highest- Los Angeles Chargers - $820 Lowest- Cincinnati Bengals - $403 Lions- $493

What is the APR for the MSU men's and women's basketball teams according to the most recent data (for 2018-19)?

Men's BB: 995 Women's BB: 953

Which of the four major professional leagues in the US has the greatest average attendance per event?

NFL

Which pro sports league in the U.S. relies on broadcasting (TV) for the largest share of revenue?

NFL

Which professional athlete earned the most in endorsement income for 2019-20 (according to Forbes)?

Roger Federer

According to Forbes, what pro athlete earned the most money in 2019-20, and how much is that?

Roger Federer $106 million

Considering play during the season, which statement best characterizes competitive balance historically (variation in winning percentages) among the U.S. pro sports leagues?

The NFL has been the most balanced and NBA the least.

If an individual buys a ticket to a sporting event from another individual through the official marketplace "StubHub", which is true

The buyer, seller, home team, and StubHub are all better off (or at least not worse off).

More than 45 years after the implementation of Title IX, what happened to the number of men's and women's athletic teams at NCAA member schools?

The number of women's teams increased and the number of men's team increased.

The NFL is the most valuable sports league in the U.S. Who owns the NFL?

The owners of the NFL teams

The NCAA is

a division of the US Department of Education that enforces rules and laws regarding college sports, including Title IX.

The largest cost item in the athletic department budgets of FBS (Division IA) schools, on average, is for

salaries and benefits of coaches and athletic department staff.

The original purpose for which the NCAA was founded was to

set rules of play for college football to curb violence.

Generated" revenue includes all of the following except

student athletic fees.

The "Reserve Clause" meant that

teams had a perpetual option (or right) to keep players.

According to the most recent (2019) estimates, the most valuable of the four Detroit-area professional sports teams is the Detroit Lions primarily because

the Detroit Lions benefit from being in the most valuable of the U.S. professional sports leagues.

Baseball teams might charge higher prices for Saturday games than Tuesday games because

they expect demand to be greater on Saturday than Tuesday.

The current "Full Cost of Attendance" for college athletes according to the NCAA definition equals

tuition, room & board, books, supplies, and transportation

Under its current contract (that runs through 2021) how much does ESPN pay the NFL annually for the rights to broadcast Monday Night Football?

$1.9 Billion

Suppose the demand for tickets to the Big 10 Women's Basketball tournament at Banker's Life Fieldhouse in Indianapolis is shown below. Capacity is 18,000. To maximize revenue from ticket sales alone, what price would the NCAA set and how many tickets will be sold?

$150 and 12,000

Suppose in the NCAA case in problem #4, the demand turns out to be the same but the NCAA only arranged for a facility with room for 10,000 spectators. In that case, what price should the NCAA charge for tickets?

$175

At MSU, what is the direct cost of the Huntington Club seats in Spartan Stadium?

$3,000-6,500 + season ticket

According to research by Rappaport and Wilkerson, the present value of the future income and tax benefits in 2000 to a metropolitan area from having an NFL team was about

$40,275,520

What is the minimum NFL salary for 2020?

$495,000

Super Bowls historically have been among the highest rated TV shows, that is shows with the largest number of viewers. Because of this, Super Bowl advertising is important. In recent years, the typical cost of a 30-second ad on the Super Bowl broadcast has been about

$5,000,000

An all-star game is held in Our City one weekend day. 50,000 spectators attend the event at a price per ticket of $100. The league sponsoring the game receives all ticket revenue. Revenue from concession sales goes to the local arena. Half of the spectators live in OC, and half are from outside the area. If this special event was not being held in OC this day, there would be 5000 similar visitors from outside the City. Residents of OC who attend the game spend $20 at the game besides the ticket price. Residents of OC also regularly spend $20 per day on local weekend entertainment. Visitors to OC to attend the event spend $200 that day besides the ticket price, and, in addition, visitors spend $100 on traveling to OC. The best estimate of the direct local economic impact (no multiplier effects) of the event is

$5,500,000

The District of Columbia government agreed to build a new stadium to attract a MLB team and then borrowed and spent about $500 million to build a stadium currently used by the Washington Nationals. What are the sources of funds that the DC government established to repay the loan?

- A tax on ticket sales for baseball games at the stadium. - A tax on ticket sales for non-baseball events at the stadium. - A tax on concession and merchandise sales at the stadium. - A tax on all businesses in DC with revenue of at least $5 million.

Because of MLB's treatment under the antitrust laws, MLB team owners may engage in which of the following activities that NFL team owners are not allowed to do?

- Block the moves of teams to different cities. - Cooperate in preventing a new baseball league from forming. - Control ticket prices for all of the teams, if the League wished.

Who was Pete Rozelle and what did he do?

- He was Commissioner of the NFL from 1960 to 1989. - He lobbied Congress to adopt the Sports Broadcasting Act in 1961. - As Commissioner, he introduced revenue sharing to the NFL. - He arranged the NFL's first national TV contract (CBS in 1962).

The NFL Super Bowl is the most watched single sports event on television broadcasting in the U.S. each year. Which of the following is correct (identify all that apply)?

- In recent years, about 41 percent of U.S. households with TVs were tuned to the Super Bowl. - Super Bowl TV ratings were higher 10 years ago than in the last several years. - Less than half of the people in the U.S. watch the Super Bowl typically.

The Marginal Revenue product of Labor is

- Marginal Product of Labor x Marginal Revenue. - the monetary gain from another worker. - the demand for labor.

Who was Bill Veeck?

- Owner of the Chicago White Sox and the Cleveland Indians, who first integrated the American League - Originator of the idea for video replay scoreboards and "speed guns" in baseball - A sports promoter who developed a number of advertising ploys to attract fans - Owner who first convinced the IRS that players should have tax depreciation like other assets

In recent years, naming rights for sports facilities have become an important form of marketing and a source of revenue for both pro and college teams. Which statement reflects the state of naming rights for college sports facilities?

- The typical annual value for college naming rights is less than for naming rights of professional sports venues. - The largest college naming rights agreements are for the University of Washington football stadium from Alaska Airlines and the stadium where USC plays home football games from United Airlines.

Which statement best reflects the construction of the newest stadiums in Detroit?

- They have shared financing, with both a public subsidy and team finance. - Specific local or state taxes are dedicated to funding the stadiums.

After the implementation of Title IX

= the number of men's and women's teams are equal at each school. - the coach's salary for women's basketball equals that for men's basketball. - the total (aggregate) amount of money spent for athletic scholarships is the same for women and men student-athletes. - the total (aggregate) amount of money spent for women's sports is within 2 percentage points of the total amount spent on men's sports. E. none of the above is correct.

Which statement regarding NCAA sports and alcohol is correct?

Alcoholic beverages are sold at about 50 college sports venues including several in the Big 10.

Which of the following statements about gambling in the U.S. is false?

An athletics director at an NCAA institution may not participate in the World Series of Poker (in Las Vegas) without violating NCAA rules.

In a recent normal year, about how much money does the Big 10 conference distribute to member schools from its broadcasting contracts and earnings from post-season events (including the College Football Playoff and NCAA basketball tournament)?

At least $50 million

Which of the following gambling activities in the US is legal currently?

Betting on the outcome of a college football game at a casino in Las Vegas.

For the 2019 season, which MLB teams had to pay the "competitive balance tax" (sometimes referred to as the luxury tax)?

Boston Red Sox Chicago Cubs New York Yankees

Among the four major Detroit pro sports teams, which had the highest and which had the lowest attendance for last season?

Highest- Tigers Lowest- Lions

Which of the following is most likely a true local economic benefit to a city from hosting the NCAA Final Four (basketball tournament)?

Increase in restaurant spending during the event compared to other periods

How Did ESPN Begin?

It began as an attempt to broadcast one college's games.

What was the effect of the federal Sports Broadcasting Act of 1961?

It permits the pro sports leagues to negotiate league-wide media contracts and specify how the revenue is divided.

According to the most recent data from USA Today, which college basketball coach has the highest salary and how much is it?

Kentucky, John Calipari - $8,158,000

Among MLB, the NFL, and the NBA in the U.S., which team was the last overall to add non-white players? And which was the last team in MLB only to add non-white players?

Last overall: Washington Red Skins (NFL) Last in MLB: Red Sox

In the U.S. the spectator sports industry accounts for about what percentage of national GDP (that is, total national income)?

Less than 1 percent

In the NFL (pro football), what source of revenue is not shared?

Luxury boxes & suites

Which professional sports league has had the fewest challengers (rival leagues) historically?

MLB

Compare the market value of the Detroit Tigers to the Chicago White Sox (MLB) and the value of the Detroit Red Wings to the Chicago Blackhawks (NHL). ). In each case, which is the higher value team?

MLB- Chicago White Sox NHL- Chicago Blackhawks

Suppose adding pitcher Mark Mulder to the Detroit Tigers roster yielded 3 additional wins and each additional win added $3 million in revenue to the Tigers. The Tigers paid Mulder $5 million. What is the Marginal Revenue Product of Mulder to the Tigers, and what is the amount of monopsonistic exploitation given his salary?

MRP: $9 million Exploitation: $4 million

What is the most recent (cohort year 2012) official Graduation Success Rate (GSR) for the MSU men's and women's basketball teams as measured by the NCAA? (You can look this up using the URL provided in the class lecture notes available on D2L or in the notes.)

Men's BB: 89 Women's BB: 91

Among the major revenue-generating college sports, the sport with the relatively greatest number of Black head coaches is

Men's basketball

Of the four major pro sports leagues in the U.S., which was the first to sell corporate advertising on the uniform?

NBA

Since 2000, which of the pro sports leagues in the U.S. has had the fewest number of teams win the league championship?

NBA

Which of the four major professional leagues in the US was the first to integrate in modern times, that is include non-white players?

NFL

Which pro sports team in the US shares the most revenue?

NFL

Which of the following is true?

NFL and NHL players have the lowest average salary among the 4 major professional sports leagues.

Which pro league gets the largest share (that is, percentage) of revenue from ticket sales?

NHL

Sometimes owners of sports teams are not concerned about the amount of profit earned by the team because they are using the team to sell another product. Historical examples often cited in the US include the Atlanta Braves and Anaheim Mighty Ducks. According to research, pro baseball in Japan, especially represented by the Yomiuri Giants, likely started as a way to increase sales of what product?

Newspapers

If someone spends $5,000 to buy a premium seat at a college athletics event, what amount is tax deductible as a charitable contribution to the college? - 80% of seat is deductible- old law

None; deductions not allowed for this.

If a business buys tickets to take clients to a Detroit Red Wings hockey game, what amount is tax deductible as a business entertainment expense?

None; this is not tax deductible.

Who authored, sponsored, and was most responsible for the adoption of the first major federal antitrust (anti-monopoly) law in the U.S., adopted in 1890?

Senator John Sherman

According to data reported by USA Today, which college athletics department had the greatest revenue in 2018-19?

University of Texas

How much greater was the average attendance at MSU home football games in 2019 than the approximate average attendance per game for FBS college football overall (among the 130 teams in the FBS, the top division of college football) last year?

about twice as great

Suppose a professional sports team in the US has an operating profit for a year (that is, operating revenue is greater than operating costs that year). Despite earning a profit, such a team may pay no US federal business income tax that year because

additional tax deductions for player depreciation may eliminate the operating profit and create a tax loss.

According to the most common application of Title IX, participation on women's intercollegiate athletics teams

and men's teams should be proportional to the enrollment of men and women within +/- 2 percent.

MLB is exempt from US antitrust laws because

baseball is not interstate commerce, according to a Supreme Court case and decision.

The probability of a Division 1-A football or basketball player having a professional career in that sport is:

between 1 and 5 percent

If the quality of a sports team decreases dramatically (that is, it wins many fewer games or loses by larger margins), then

demand for tickets is expected to decrease (shift leftward) because of a change in consumers' attitudes about the team.

If a game is not sold out, then the marginal cost to a team of letting one additional fan into the game venue is

essentially zero.

Recent "APR" reforms of academic standards for student-athletes by the NCAA:

focus more on progress towards graduation than on admission standards.

According to the PASPA

gambling was legal in the U.S. on sports only if it was in states where it existed before 1992.

According to accounting data, athletics departments at NCAA institutions

in the Big 10 only some schools generate positive net revenues for athletics.

The observed increase in sports ticket prices in recent years is primarily due to

increase in fan interest in and increase in the demand for attending games.

Since 1970, the salaries of professional athletes in aggregate have

increased at a faster rate than salaries in the economy overall.

A traditional Full Athletic Scholarship according to the NCAA definition included:

just tuition, room and board, and books

Gambling or betting in the US on the outcome of a college football game is

legal if the bet is placed with a registered gambling organization in a state where the state government has authorized it.

A monopsonist pays a wage that is

less than the marginal revenue product of the worker.

The "Fair Pay to Play" law adopted by the state of California

makes it illegal for California universities to revoke an athlete's scholarship or eligibility for taking money for endorsements.

According to NCAA regulations, a college athlete or coach

may gamble legally but not on any sporting events (college or professional).

A player on the Detroit Lions who lives in Michigan

owes state income tax to Michigan and other states where the Lions play (if that state has an income tax).

Ford Field, where the Detroit Lions play football, is

owned jointly by the City of Detroit and Wayne County.

The Cornell-Dartmouth football game in 1940 is especially interesting because

the eventual outcome represented the notions of high character, honesty, and fair play.

Suppose in one league the observed actual standard deviation in winning percentages among the teams in one year is 0.375. If the teams were all of equal quality so the each team had an equal chance of winning every game, the expected standard deviation of winning percentages would be 0.125. Calculate the competitive balance statistic "R." What do you conclude? (actual/ expected) = R, R= 3

the league is very imbalances

The Chicago White Sox baseball players implicated in the 1919 "Black Sox" Scandal for "fixing" the outcome of the World Series were

tried in court and found innocent but banned from baseball anyway.