The Sports Economist

At 8 a.m. we are back in the classroom -- Wells, with a fresh apple, in the same seat -- this time for the annual umpires' presentation, delivered by umpire supervisor Rich Garcia. Garcia notes that the average time of game increased by one minute last year, to 2:51, and players need to be aware of pace-of-game guidelines. He also says more strikes on the upper and lower edges of the strike zone will be called this year -- too many were called balls last year, according to the laser-guided QuesTec umpire information system.

Johnson asks Garcia if it is true that QuesTec allows a two-inch buffer zone on each side of the plate when grading umpires. Garcia acknowledges that it's true, and adds that if you include the three-inch width of the baseball, the 17-inch plate actually becomes a 27-inch plate to QuesTec.

There are grumbles in the back of the room.

"Schilling gets more."

"Pedro gets more."

Garcia moves on to beanballs. The quick warnings issued by umpires are designed to cut down on brawls. "And they have," he says. "We had only three last year. Myth: Once a warning is issued, my guy can't pitch inside. Fact: 75 percent of hit batters following a warning did not result in an ejection. So it's working."

"I thoroughly disagree!"

It is Batista, raising a loud objection.

"Last year I was given a warning for throwing a changeup in the dirt," he says angrily. "A changeup!"

Garcia admits umpires can make mistakes but reiterates that brawls are terrible for the game's image and the umpires will act aggressively to prevent them.

Labels: MLB, rules, technology

"The prize money has grown so much on the PGA tour that now the today's purse is $8 million with $1.5 million to the winner and $800,000 to second place. $800,000 is a lot of money."

Labels: gambling, monopsony, point shaving

There was a recent exchange on a sports economics listserv on player share of gate revenues from the playoffs in baseball. As usual, the shares are defined by the collective bargaining agreement. From MLBPA.com:

Q: How is the players' playoff pool created and how is it distributed? 

A: The Players' pool is created from 60% of the total gate receipts from the first four World Series Games; 60% of the total gate receipts from the first four games of each League Championship Series; and 60% of the total gate receipts from the first three games of each Division Series. The Pool is distributed as follows: World Series Winning Team: 36%; World Series Loser: 24%; League Championship Series Losers (two teams): 12% each; Division Series Losers (four teams): 3% each; Non-wild Card Second Place Teams (four teams): 1% each. The division of a team's Players' pool shall be made by a vote of the Players, in a meeting chaired by the Player Representative.

Dan Marburger (permission granted) notes in an email to the listserv:

Note how the players only receive a share of the minimum number of games played in each
series.  This is a response to a potential agency problem: if players
received a share of every game, they'd have a financial incentive to
extend each series to its maximum.  

Well put!

Univision's prime-time coverage of Mexico's SuperClásico between Club America of Mexico City and Guadalajara Sunday in Mexico City drew 4.3 million viewers ages 2 and over, making it the largest audience for a club soccer game on American television in the past 13 years. The viewership of the America-Chivas game surpassed the U.S. viewership of every National Hockey League telecast on both NBC and Versus (formerly OLN) during the 2005-2006 and 2006-2007 NHL seasons with the exception of Game 7 of the 2006 Stanley Cup final series between Carolina and Edmonton, which aired on NBC and drew 5.45 million viewers age 2 and over.

"The difference between teams like Purdue and us is not big. We're a good basketball team, but so is Purdue. The margin for error in games like this on neutral courts is very small."

One of the biggest culprits in the scare is outplacement firm Challenger, Gray & Christmas, which gives estimates of the value of lost productivity due to the tournament. Its latest figure, $1.2 billion, is less than a third of last year's estimate of $3.8 billion, which was four times the $889 million estimated two years ago. The latest swing is due to the firm considering for the first time the number of Americans who have Internet access at work.

Even Challenger, whose figures have been criticized, admits its productivity-loss estimates are unscientific and "tongue-in-cheek," a spokesman says. Calling the productivity hit "disastrous" last year, Challenger concedes this year that 94% of HR executives "do not consider ... the tournament a problem."

Labels: soccer, television

As a football player at UCLA, Ramogi Huma found there was always more month than money when it came to the reality of daily living.

His scholarship paid for tuition, books, food and housing, but didn't cover toothpaste, travel expenses or phone bills. When "people came peddling credit cards in front of the athletic department," Huma applied and accepted a sports water bottle as a free gift.

He charged what he needed to survive.

"I thought I could get a job in the summers to pay it off, but when I was playing, I wasn't allowed to work because the NCAA didn't allow it," said Huma, who owed $6,000 at 19 percent interest upon his 1998 graduation.

That experience -- and the National Collegiate Athletic Association's suspension of a teammate who accepted groceries when his scholarship money ran out -- led Huma in 2001 to found the Collegiate Athletes Coalition to improve conditions for student athletes.

Now, as the NCAA prepares for its annual "March Madness'' basketball championships, it is locked in a legal battle with the CAC that could change the future of college sports.

Labels: labor, legal, NCAA

Officially, the convention is a strictly Denver affair. Convention organizers put together clusters of hotels where rooms could be dedicated to the event and shuttles could efficiently ferry people to the Pepsi Center.

The bureau is trying to concentrate the action in downtown Denver. It's planning a marketing campaign to encourage metro-area residents to come to downtown Denver during the convention. The bureau wants to avoid a repeat of the 2005 National Basketball Association All-Star Game, held at the Pepsi Center in 2005.

Fears about traffic around downtown that weekend kept many people away and hurt the area economically, Grant said.

That's a far cry from the 100,000 visitors the convention bureau was predicting back in January 2005. Strangely, the predictions all made headline news in the local papers, but the actual economic figures are buried in an tangentially related article published two years later. That's like writing a story on the front page of the sports section about the betting line for a big game but then not even reporting on the game itself.

Of course, economists who study mega-events routinely cite crowding-out and congestion as major factors that limit the positive net economic impact of these events; however, economic impact predictions rarely take this issue into account. As Denver prepares for a 2018 bid to host the Winter Olympics, I hope that they talk to a couple of dismal scientists willing to tell them that the glass is half-empty instead of hired consultants being paid to tell the city that the glass half-full (or overflowing, even.)

Chicago would be responsible for as much as $500 million if the 2016 Olympic Games operated in the red and other guarantees fell short, officials said Friday.

Here's the article. Wow. What is the incentive to control costs when other people will pay your overruns? Of course the IOC is using its monopoly status to suck as much as it can from public coffers (HT to Don Coffin). But back to the first article.

But Chicago 2016 Chairman Patrick Ryan insisted that no other host city has ever lost money in the Summer Games, and "we would have to be the first really incompetents to do that" if the reserves had to be tapped.

This sounds like the twin-from-a-parallel-universe of Paul Beeston's famous quote "I can turn a $4 million dollar profit into a $2 million loss and get every national accounting firm to agree with me.

And it's not always about accounting revenues and losses.

Labels: stadium subsidies

Teams seeking public subsidies commonly claim that building a new stadium will improve the team's revenue flow, allowing it to acquire more talent and improve the quality of the team. No doubt building a new stadium improves team cash flow, but the important question is "what is this cash being spent on?"

If fans are spending the extra cash on amenities at new stadiums, then there is no reason for teams to invest more in team quality. In other words, players have no claims to these revenues. The critical question is whether capital augments labor: do new stadiums improve the marginal product of players and, thus, improve their contribution to team revenue? If so, then teams have an incentive to increase spending on players.

Quinn, Bursik, Borick, and Raethz (2003) find that a new stadium may be complementary to on-field production, but only for baseball. But a recent Wall Street Journal article (reproduced here) provides an example how capital augments labor in sports in general:

In a separate study published this past summer, a Ph.D. candidate in Canada took saliva samples from 14 players on a minor-league hockey team before and after games. The key finding: Levels of testosterone, which have been found to facilitate assertive and aggressive behavior, were 25% to 30% higher before home games, suggesting the home arena triggered players' elemental instinct to protect their territory. "It has the potential to go a long way in developing techniques to create the ideal physiological profile prior to playing," says Justin Carre, the doctoral candidate at Brock University in St. Catharines, Ontario, who co-authored the study.

...Mr. Poulson made his name in the 1990s, overseeing construction of the Portland Trail Blazers' arena for owner and Microsoft co-founder Paul Allen. Mr. Allen, an avid fan of both music and sports, wanted the new venue to draw top bands for concerts but not if that meant using materials that would deaden crowd noise during basketball games. Ellerbe Becket came up with a novel although expensive solution: rotating ceiling panels with a soft, absorptive side for concerts and a hard side that reflects crowd noise back to the court during games.

...At other schools, it's more than just musical chairs that's going on. When Oklahoma State University expanded its Gallagher-Iba Arena -- already one of the loudest venues around -- it went overboard to make sure that those deafening noise levels didn't drop. After taking sound readings and measuring reverberation times throughout the building, architect Gary Sparks came up with a strategy: Instead of building the extra 7,300 seats outward, he stacked them on top of the existing seats on a steep slope. He also added a flat ceiling stripped of almost all absorptive materials. The goal was to give every sound wave a direct path to a hard surface that would send it ping-ponging around for as long as four seconds.

The author of the article also notes that visiting teams and referees are adversely affected by home team crowd noise. He also notes that in the interest of fairness, some leagues are looking at ways to control noise.

The push for fan power is ratcheting up a cat-and-mouse game between teams looking for an edge and league officials charged with keeping things fair. A number of college-basketball conferences, including the ACC and the Big East, are cracking down on the practice of seating pep bands directly behind visitors' benches to make it harder for coaches to talk to their teams during timeouts. Last year, Major League Baseball instituted new rules governing stadiums with retractable roofs, which can be closed to keep out the elements -- but also to keep in the noise. Teams now have to tell the league by May their criteria for deciding when to open or close their roofs during the season, and in the postseason the final decision is up to MLB.

Seemingly this is another way that leagues standardize the effect of capital across teams. Leagues do this with standardization of playing field dimensions and equipment. While they may try to legislate against some ways to distract players, let's hope they don't go too far. We wouldn't want to be deprived of wonderful scenes like this.

Labels: capital, labor, marginal revenue product, stadiums

The coaches of six of the tournament's Elite Eight teams a year ago parlayed their success into new deals for this season. They'd have gone 7-for-8, but Billy Donovan of national champion Florida chose to postpone a discussed extension.

Their raises were substantial. At the five schools where raises are public — George Mason, LSU, Memphis, Texas and UCLA — the coaches got a collective bump of about $1.7 million, or about $332,000 each when they extended their contracts. With those new agreements, and others, at least 20 of last year's 65 tournament coaches are making $1 million or more this season...

Labels: manager efficiency

Labels: curling

The black binders contained more than 700 pages and documented the misdeeds of the University of Kansas men’s and women’s basketball and football programs. Among the findings were payments to athletes and academic fraud. The report suggested remedies like self-imposed probation and a reduction in scholarships.

The investigation and the sanctions did not come from the National Collegiate Athletic Association. Instead, they were produced by a private law firm stocked with former N.C.A.A. investigators and hired by Lew Perkins a day after he became the Kansas athletic director in 2003.

Last October, the N.C.A.A. accepted most of the recommended sanctions and agreed not to impose a postseason ban on its teams. For two years of legal work, Kansas paid the law firm, Bond, Schoeneck & King, nearly $480,000. It was nothing, however, compared with the $23 million that the basketball and football programs generate annually.

Labels: infractions, NCAA

Of the 119 Division I-A schools, only six have black head football coaches. There are even fewer in the lower divisions: five in Division I-AA, two in Division II and one in Division III. The figures exclude historically black colleges.

In addition, there are only 12 black athletic directors in Division I-A, and not a single major conference commissioner is black.

Labels: coaches, college football, discrimination