Tuesday, April 17, 2007

Sports Economics Post

There are a couple of interesting articles on sports economics up.

The first is an article interview with JC Bradbury, a sports economist who wrote the book The Baseball Economist. The free link is here. His Baseball blog is here.

This is the aspect I find most intriguing.

Are the final standings a product of pure financial determinism, or do small cities have a fighting chance?

JCB: While it is true that the big-market Yankees have been one of the most successful franchises and the small-market Brewers one of the worst in recent baseball history, these teams differ in more than just the sizes of their fan bases. Over a 10-year span from 1995–2004, I calculate that every 1.6 million residents of a city translates into one additional win for the team in that market. Given the disparity in market sizes between New York and Milwaukee, the Yankees were expected to win about 11 more games a season than the Brewers. That is not chump change; however, the actual disparity between these franchises was a whopping 26 games. Market size explained a minority of the difference (about 40 percent) between these organizations, which means that a majority of the blame must be placed somewhere else: the ineptitude and skill displayed by the front offices of these teams.

In itself this is an interesting point. But I wonder, just how good is league parity to begin. Football, America's most popular sport, has league parity. But has league parity done the NBA any good? ESPN.com argues no.

On the flip side, when the Lakers, Celtics, Sixers and Pistons were battling for control of the 1980s, did anyone care that the Clips, Cavaliers, Warriors and Kings were dreadful? Was it a coincidence that the NBA peaked from 1987 to 1993, with a lopsided league of quality teams and crummy teams? Call it the 600/400 Rule: More teams finishing above .600 (50 wins or more) and under .400 (50 losses or more) makes for a more entertaining league.

It seems that a few questions need to be asked

1) Has the NFL benefited from league parity? Was the league less popular in the early 90's when Dallas and San Fran dominated?
2) Are different sports different? That is, does league parity work for some leagues (NFL), but not for others (NBA).
3) Would increasing parity in baseball improve the sports popularity given that you would have to weaken teams in areas where baseball is extremely popular (New York, Boston)?

These would be good topics for an extra credit assignment.

No comments: