Sunday, September 30, 2007
“We are Geelong, The Greatest Team of All”
These are the first eight words of the theme song of the Geelong Football Club, who yesterday won the Australian Football League (AFL) Grand Final in front of 97,000 fans at the Melbourne Cricket Ground. Geelong (24 goals, 19 behinds = 163 points) defeated the Port Adelaide FC (6 goals, 8 behinds = 44 points) by 119 points to win their 7th Premiership, the last coming 44 years ago in 1963.
How’s this for an impressive season: Geelong were the best performed club in the home & away season, winning 18 of 22 to finish three wins clear of Port Adelaide (who finished second in the home & away season). In the AFL Finals Series (comprising the top 8 of 16 clubs), Geelong posted victories of 106, 5 and 119 points against clubs that finished 4th, 6th and 2nd in the home & away season.
Geelong players won the Brownlow Medal for best & fairest AFL player in the home & away season, the Leigh Matthews Trophy for the most valuable player in the home & away season, Ron Evans Medal for the best first or second year player in the home & away season, the Norm Smith Medal for best on ground in the AFL Grand Final and there were 9 (of 22) Geelong players in the AFL All-Australian Team. Statistically, Geelong had the most potent attack and the most stingy defence in the AFL. Furthermore, the Geelong Reserves team won the Victorian Football League premiership by 74 points and Geelong players won the JJ Liston Trophy for best & fairest in the VFL and the Norm Goss Medal for best on ground in the VFL Grand Final. That’s not bad for the only AFL club based in a regional city (regional population approx 270,000).
In 2007, annual AFL revenue has been estimated at around $274 million (a record), aggregate attendance to the 185 AFL games broke the 7 million mark (a record), and more than 530,000 people were club members/season ticket holders (also a record). The Australian population is about 21 million. Such numbers make the AFL the most popular sporting league in the nation. 2008 will be 112th AFL season, in the year marking the 150th anniversary of the birth of the code of Australian Football.
How’s this for an impressive season: Geelong were the best performed club in the home & away season, winning 18 of 22 to finish three wins clear of Port Adelaide (who finished second in the home & away season). In the AFL Finals Series (comprising the top 8 of 16 clubs), Geelong posted victories of 106, 5 and 119 points against clubs that finished 4th, 6th and 2nd in the home & away season.
Geelong players won the Brownlow Medal for best & fairest AFL player in the home & away season, the Leigh Matthews Trophy for the most valuable player in the home & away season, Ron Evans Medal for the best first or second year player in the home & away season, the Norm Smith Medal for best on ground in the AFL Grand Final and there were 9 (of 22) Geelong players in the AFL All-Australian Team. Statistically, Geelong had the most potent attack and the most stingy defence in the AFL. Furthermore, the Geelong Reserves team won the Victorian Football League premiership by 74 points and Geelong players won the JJ Liston Trophy for best & fairest in the VFL and the Norm Goss Medal for best on ground in the VFL Grand Final. That’s not bad for the only AFL club based in a regional city (regional population approx 270,000).
In 2007, annual AFL revenue has been estimated at around $274 million (a record), aggregate attendance to the 185 AFL games broke the 7 million mark (a record), and more than 530,000 people were club members/season ticket holders (also a record). The Australian population is about 21 million. Such numbers make the AFL the most popular sporting league in the nation. 2008 will be 112th AFL season, in the year marking the 150th anniversary of the birth of the code of Australian Football.
Saturday, September 29, 2007
Hockey team sues NHL
The NHL violated antitrust laws and is acting like "an illegal cartel" by monopolizing control of team promotions, Madison Square Garden claimed in a lawsuit Friday.The NHL appears to be copying major league baseball's approach to managing team websites. Surely there are significant economies derived from MLB running astros.mlb.com, padres.mlb.com, etc. for the team. Baseball's internet operations have turned into a significant revenue generator for the league and its teams, and this revenue growth is surely not derived from restricting competition.MSG, which owns the New York Rangers, said it filed the suit in U.S. District Court in Manhattan because the NHL would begin fining the organization $100,000 per day starting Friday if the company did not give the league complete control over the Rangers' Web site and other promotions.
The league is seeking to control the licensing of teams for all commercial purposes and to stop teams from marketing apparel, merchandise and memorabilia, the suit said. MSG asked that a judge order the league to stop limiting team promotions, and it also wants the court to clarify the boundaries of the league's rights.
The company said the NHL had once worked with teams in a legitimate joint venture but had more recently "veered into unlawful behavior."
"By seeking to control the competitive activities of independent businesses in ways that are not necessary to the functioning of that legitimate joint venture, the NHL has become an illegal cartel," the suit said.
In 2006, Chris Isidore wrote:
One of Selig's greatest legacies might end up being MLB Advance Media, the joint Internet operations for all the clubs. Besides being a leader in things like Web casts and mobile updates for fans, Selig was able to get the owners to agree in 2000 to equally share their Internet revenue, a move that might one day be comparable to Pete Rozelle getting the NFL owners to agree to share their national television revenue.These facts suggest to me that the NHL's website operations can be cast in a joint venture framework. MSG's real complaint could be with the manner in which the venture is produced or, more likely, how the revenues are distributed.
Both newyorkrangers.com and rangers.nhl.com claim to be the "official site of the NY Rangers." They are built from a similar template and look equally crummy, although the Rangers' own site has a "Rangers Account Manager" tool that is lacking on the league-produced page.
Wednesday, September 26, 2007
Beyond the French Quarter
Paul Kuharsky, a sports writer for the Tennessean, confirms Skip's concerns in a Monday article where Kuharsky offers his impressions of life beyond the tourist zones in Saints Prove a Small Band-Aid for a Troubled City. Sounds like not much has changed in a year (See Big Easy MNF).
Sports in post-Katrina New Orleans
At USAToday, Steve Wieberg discusses the Saints, the Sugar Bowl, and the big-event economy that comes with Super Bowls, Final Fours, etc. The piece is a bit puffy, as it trots out quotes from the usual cast of characters -- CEOs of the Sugar Bowl and the New Orleans Sports Foundation, for example -- and you can be pretty sure what they are going to say on the subject. The tenor of these statements, indeed the last word, is that "things are really restored," and that it is essential for New Orleans to convince the marketplace of that.
I can imagine that infrastructure for the tourist economy is largely back in place. But the demand for sport in general in New Orleans must surely reflect the overall state of the economy. A nettlesome fact for promoters is that New Orleans' population, which supports demand for the bread and butter professional game, is now less than 60% of its pre-Katrina level.
As Wieberg notes, the Saints' contract with the State of Louisiana expires after the 2010 season. The negotiations to renew that contract, along with the fate of the NBA's Hornets, will be interesting to follow in the coming months.
I can imagine that infrastructure for the tourist economy is largely back in place. But the demand for sport in general in New Orleans must surely reflect the overall state of the economy. A nettlesome fact for promoters is that New Orleans' population, which supports demand for the bread and butter professional game, is now less than 60% of its pre-Katrina level.
As Wieberg notes, the Saints' contract with the State of Louisiana expires after the 2010 season. The negotiations to renew that contract, along with the fate of the NBA's Hornets, will be interesting to follow in the coming months.
Tuesday, September 25, 2007
Down and Out in South Bend -- Beyond Coaching
As the Fighting Irish slip from mediocre to bad, here is little data comparison of Charlie Weis and Ty Willingham (courtesy of my sports econ colleague here at WKU, Dennis Wilson):
Wins Against Winning Team By Season
Willingham/Weis -- 6/2, 3/5, 3/0 (so far and best guess)
Margin of Losses (Willingham -- Weis)
Season 1 7, 22, 31 -- 3,3,14
Season 2 2, 6, 13, 26, 27, 31, 38 -- 20, 27, 27
Season 3 1, 3, 3, 17, 25, 31 -- 30, 21, 38, 17 (so far)
Score Differential v. USC (Willingham, Weis)
Season 1 -31, -3
Season 2 -31, -20
Season 3 -31, Whatever USC wants it to be
For those who think that coaching has been the main problem at ND, the question is not why was Willingham fired, but why would Weis be given a 10-year extension based on one good game versus USC?
However, I'm more convinced that coaching is not the fundamental problem than when I contemplated Struggles of the Irish after the Sugar Bowl whipping by LSU. This year's situation has startled me -- not the losses but how uncompetitive and overmatched the ND players are. Whether someone might have done better than Bob Davie, Willingham, or Weis, might be debated. However, a 20 year slide from a national championship to pathetic with decent to good coaching begins to point more and more toward some influence other than coaching, at least the non-recruiting end of coaching.
In an "Open Letter" to ND, Sewart Mandel of SI.com gets at what I think is the central issue:
In the earlier post I mentioned how conferences help develop rivalries. In thinking more about the matter, such rivalry may be part of the conference story, but other market forces related to conferences matter more. Not only did major independents join up in the late 1980s and early 1990s, but these and other shifts produced the "mega-conferences." No longer would Texas play the Texas-only Conference. The Big Ten added a major player in Penn State. The ACC went from the Tobacco Road Conference to an entire East Coast Conference. Even the Big East, which seemed sunk in losing Miami, has emerged as a viable football entity where West Virginia is a whole lot better than ND. With all of these moves and the attending TV, other media, and fan exposure along with better coaches, the likelihood of a Tim Brown (from Dallas) eschewing Texas, Oklahoma, or some other big conference school to go to ND diminished in spite of their national alumni base and NBC contract. ND made its bed then and now is wallowing in it.
Wins Against Winning Team By Season
Willingham/Weis -- 6/2, 3/5, 3/0 (so far and best guess)
Margin of Losses (Willingham -- Weis)
Season 1 7, 22, 31 -- 3,3,14
Season 2 2, 6, 13, 26, 27, 31, 38 -- 20, 27, 27
Season 3 1, 3, 3, 17, 25, 31 -- 30, 21, 38, 17 (so far)
Score Differential v. USC (Willingham, Weis)
Season 1 -31, -3
Season 2 -31, -20
Season 3 -31, Whatever USC wants it to be
For those who think that coaching has been the main problem at ND, the question is not why was Willingham fired, but why would Weis be given a 10-year extension based on one good game versus USC?
However, I'm more convinced that coaching is not the fundamental problem than when I contemplated Struggles of the Irish after the Sugar Bowl whipping by LSU. This year's situation has startled me -- not the losses but how uncompetitive and overmatched the ND players are. Whether someone might have done better than Bob Davie, Willingham, or Weis, might be debated. However, a 20 year slide from a national championship to pathetic with decent to good coaching begins to point more and more toward some influence other than coaching, at least the non-recruiting end of coaching.
In an "Open Letter" to ND, Sewart Mandel of SI.com gets at what I think is the central issue:
Mandel focuses a lot on how the independent status hinders ND's scheduling. Maybe scheduling factors in the equation, but their performances go way beyond scheduling.Your school's last national title came in 1988 (and at this point, I think it's safe to assume the next one won't be coming in 2008). Do a Google search for "College football standings, 1988," and click on "Independents." You'll find there were 25 of them that year, including Penn State, Miami, Florida State, West Virginia and Louisville. In other words, you guys weren't exactly alone.
Fast forward to 2007 and there are ... three: Notre Dame, Army and Navy. What's wrong with this picture?
In the earlier post I mentioned how conferences help develop rivalries. In thinking more about the matter, such rivalry may be part of the conference story, but other market forces related to conferences matter more. Not only did major independents join up in the late 1980s and early 1990s, but these and other shifts produced the "mega-conferences." No longer would Texas play the Texas-only Conference. The Big Ten added a major player in Penn State. The ACC went from the Tobacco Road Conference to an entire East Coast Conference. Even the Big East, which seemed sunk in losing Miami, has emerged as a viable football entity where West Virginia is a whole lot better than ND. With all of these moves and the attending TV, other media, and fan exposure along with better coaches, the likelihood of a Tim Brown (from Dallas) eschewing Texas, Oklahoma, or some other big conference school to go to ND diminished in spite of their national alumni base and NBC contract. ND made its bed then and now is wallowing in it.
Monday, September 24, 2007
The Optimal Penalty of Height Infractions in NASCAR
From NASCAR.com
Carl Edwards' race-winning No. 99 Ford failed post-race inspection following Sunday's Dodge Dealers 400 at Dover International Raceway, which could lead to penalties assessed against the Roush Fenway Racing operation later this week.
...Edwards hopes some post-race bumping from teammate Greg Biffle is the cause for the infraction."The worse case would be 25 points, the right-rear being low -- any engineer or crew chief in the garage will tell you that's the last thing you want," Edwards said. "You want the right-rear to be high.
That seems sensible since that's the side of the car lowest to the ground going into turns (assuming an otherwise level car).
"The only thing I can think of is at the end of the race, Greg came up and gave me a couple of love taps to say 'good job, good race' and hopefully they find that that bent the tail of the car down a little bit. There are some braces bent under the decklid so hopefully that's what it is."A similar infraction occurred at New Hampshire in July, when the cars of Johnny Sauter and Kyle Busch failed to meet minimum height requirements. NASCAR took away 25 points apiece and fined each crew chief $25,000.
If a similar penalty is assessed, Edwards would drop from fourth to sixth in the Nextel Cup standings.
If so, NASCAR is justified in docking some points from Edwards. If NASCAR does nothing, this sends a signal to racing teams that they can do some minimum damage to lower a car without worrying about getting docked points. If NASCAR goes too far, they give an incentive for racers in future races to strategically bump leaders to gain an advantage that is outside the realm of competition.
What's the optimal penalty? I can't answer that with much precision, but since there is statistical error inherent in determining the cause of the infraction, if the evidence points to a benign reason, then the benefit of the doubt should go to Edwards (and I'm not saying that because Edwards is a former student of mine :-)).
Labels: NASCAR, optimal penalty
Sunday, September 23, 2007
Book Review: 200 MPH Billboard
The last time I paid attention to stock car racing, Cale Yarborough and Richard Petty were names and I'd never heard of the acronym NASCAR. New England wasn't a place you watched that kind of racing (there were drag races nearby, but no ovals.)
Now, of course, NASCAR has taken off to become the fourth sport of America -- taking out hockey as well as golf and tennis for attention in America. Unlike most sports industry models, as Ross and Szymanski point out, NASCAR is organized more like McDonalds: the participants or the owners of the vehicles or tracks do not control NASCAR; NASCAR is its own separate entity.
In The 200-MPH Billboard: The Inside Story of how Big Money Changed NASCAR, Mark Yost has written a description both of that transformation of NASCAR into a unique business model, and its ability to sell the sport to other businesses. The early chapters tell the story of the Bill France family and its building of the sport's economic model. While it seemed natural that these teams would be sponsored by the makers of automobiles or the parts inside them, it took the vision of France and a few others to see the possibility of using the cars themselves as a means to market other products.
First came Junior Johnson and RJ Reynolds. Still reeling from the decision in the late 1960s that cigarettes could no longer be advertised on television, RJR had an advertising budget with no place to spend it. At the same time, NASCAR was struggling to replace support from the automakers. Yost describes the decision as "the most momentous business decision in the history of NASCAR." Not only did the Winston Cup come into existence in 1971 and RJR funded a $150,000 purse for the Talladega 500 that same year, but RJR was able to convince other corporate entities to join in advertising. Each looked up into the grandstands, says one historian in Yost's book, and saw their customers. And the advertisers saw it in their own interest to help NASCAR create a more uniform feel for their racing venues and their cars. In short, the days of lugging your vehicle to the track and hoping you won enough money to afford gasoline for the drive home were over.
Yost details the expansion of the sponsorship base through the middle of the book. Much like baseball's expansion of advertising from beer and tobacco to credit cards and shaving products, NASCAR's success required them to grow from tobacco, beer and automotive products. By the mid-1980s such brands as Folgers, Tide and Crisco were being advertised by NASCAR vehicles and drivers. Such sponsorships reinforced the need for a uniform, well-regulated competition in NASCAR, which the industry's corporate structure permitted.
The latter half of the book focuses then focuses on case studies of this business model. I found the story of Texas Instruments' use of NASCAR to push its DLP technology for wide-screen television the most interesting of these. Not only did TI create demand from fans and viewers of NASCAR events on television -- the people most likely to buy HDTV -- but they also created events with Circuit City that could help get the latter to push their version of HD in a very crowded market. There are several such B2B stories in the book, which is an aspect of NASCAR sponsorship that has few parallels in the major team sports.
Yost concludes by looking at the challenges NASCAR faces and whether the sport has peaked in popularity and profitability. It's a fair question, though Yost speculates greatly in the last few pages in ways that lead one to think he sees growth still. As NASCAR has 70 Fortune 500 companies as sponsors, it would be hard to bet against it.
Cross-posted at SCSU Scholars.
Now, of course, NASCAR has taken off to become the fourth sport of America -- taking out hockey as well as golf and tennis for attention in America. Unlike most sports industry models, as Ross and Szymanski point out, NASCAR is organized more like McDonalds: the participants or the owners of the vehicles or tracks do not control NASCAR; NASCAR is its own separate entity.
In The 200-MPH Billboard: The Inside Story of how Big Money Changed NASCAR, Mark Yost has written a description both of that transformation of NASCAR into a unique business model, and its ability to sell the sport to other businesses. The early chapters tell the story of the Bill France family and its building of the sport's economic model. While it seemed natural that these teams would be sponsored by the makers of automobiles or the parts inside them, it took the vision of France and a few others to see the possibility of using the cars themselves as a means to market other products.
First came Junior Johnson and RJ Reynolds. Still reeling from the decision in the late 1960s that cigarettes could no longer be advertised on television, RJR had an advertising budget with no place to spend it. At the same time, NASCAR was struggling to replace support from the automakers. Yost describes the decision as "the most momentous business decision in the history of NASCAR." Not only did the Winston Cup come into existence in 1971 and RJR funded a $150,000 purse for the Talladega 500 that same year, but RJR was able to convince other corporate entities to join in advertising. Each looked up into the grandstands, says one historian in Yost's book, and saw their customers. And the advertisers saw it in their own interest to help NASCAR create a more uniform feel for their racing venues and their cars. In short, the days of lugging your vehicle to the track and hoping you won enough money to afford gasoline for the drive home were over.
Yost details the expansion of the sponsorship base through the middle of the book. Much like baseball's expansion of advertising from beer and tobacco to credit cards and shaving products, NASCAR's success required them to grow from tobacco, beer and automotive products. By the mid-1980s such brands as Folgers, Tide and Crisco were being advertised by NASCAR vehicles and drivers. Such sponsorships reinforced the need for a uniform, well-regulated competition in NASCAR, which the industry's corporate structure permitted.
The latter half of the book focuses then focuses on case studies of this business model. I found the story of Texas Instruments' use of NASCAR to push its DLP technology for wide-screen television the most interesting of these. Not only did TI create demand from fans and viewers of NASCAR events on television -- the people most likely to buy HDTV -- but they also created events with Circuit City that could help get the latter to push their version of HD in a very crowded market. There are several such B2B stories in the book, which is an aspect of NASCAR sponsorship that has few parallels in the major team sports.
Yost concludes by looking at the challenges NASCAR faces and whether the sport has peaked in popularity and profitability. It's a fair question, though Yost speculates greatly in the last few pages in ways that lead one to think he sees growth still. As NASCAR has 70 Fortune 500 companies as sponsors, it would be hard to bet against it.
Cross-posted at SCSU Scholars.
Labels: NASCAR
Friday, September 21, 2007
"Billions at stake"
Some recent stories worth reading:
Henry Winter interviews Richard Scudamore, the Chief of the English Premier League. Here are some choice quotes:
Here are two from the dark side.
First, a short piece on Michael Franzese, a former "member of the Colombo crime family," whose job was to use players gambling debts to entrap them. Since 1996, he's been giving lectures as part of a gambling education program for NBA rookies. My guess is that his contract with the NBA limits the candor with which he can discuss his former business, but the term "point shaving" hangs over the story like a big dark cloud.
Finally, the concussion discussion is heating up again in the NFL. Professional football is a terrible beauty of a sport, capable of devouring the lives of the men who play it.
Henry Winter interviews Richard Scudamore, the Chief of the English Premier League. Here are some choice quotes:
On revenue streams: "International TV rights were 10 per cent of our income, and are now 28 per cent of our income. We could be at 50 per cent of our income in three years' time [with international rights touching £1billion]."Two stories on stadiums and team value in the NFL: one with a focus on California; one with a focus on New York. The common denominator: modern stadiums offer differentiated seating and entertainment options, and that feature alone is worth millions upon millions of dollars per year.
On battles over rights to information: "We have a class action against Google and YouTube in the US. They have no appetite for taking down clips. If every clip of every goal is available on YouTube, what appetite will Virgin Media have for buying them?"
On the influx of foreign ownership: Scudamore rejects the suggestion that the Glazers, Lerners, Abramovichs and Shinawatras are here solely for the money. "They could get better returns making other investment decisions. It brings them a credibility, a profile, a reputation, whether in their home country or this one, which you can't get with other investment. Any financial aspirations they may have only work if they deliver success. Their interests are aligned to the fans. You don't buy a Rolls-Royce and try to turn it into a Ford Fiesta."
Here are two from the dark side.
First, a short piece on Michael Franzese, a former "member of the Colombo crime family," whose job was to use players gambling debts to entrap them. Since 1996, he's been giving lectures as part of a gambling education program for NBA rookies. My guess is that his contract with the NBA limits the candor with which he can discuss his former business, but the term "point shaving" hangs over the story like a big dark cloud.
Finally, the concussion discussion is heating up again in the NFL. Professional football is a terrible beauty of a sport, capable of devouring the lives of the men who play it.
Saturday, September 15, 2007
Some NCAA History
The old: Mark Schlabach's essay on the origins of Death Valley, Howard's Rock, & why the Tigers run down the hill at Clemson.
The new: Sarah Thomas will become the first female to referee a Division 1-A college football game in today's Memphis-Jacksonville State contest.
Revisiting a similar moment: I recall an Arsenal - Fulham match at Highbury several years ago, when a female referee's assistant was employed. She blew a few offsides calls. As they all do, as it's an impossible task. Well, English fans can be both vile and humorous with their chants, and the chanting is usually from one set of fans or another, but not both. In this case, to the tune of the "what a load of rubbish," with which dubious decisions are usually serenaded, both the Fulham and Arsenal support bellowed "you should be home cooking dinner." Clever lads.
Refs have a tough job, and for gals managing a game of guys it is that much tougher. I haven't seen a female referee in the Premier League since. I hope that Sarah Thomas meets a better fate.
The new: Sarah Thomas will become the first female to referee a Division 1-A college football game in today's Memphis-Jacksonville State contest.
Revisiting a similar moment: I recall an Arsenal - Fulham match at Highbury several years ago, when a female referee's assistant was employed. She blew a few offsides calls. As they all do, as it's an impossible task. Well, English fans can be both vile and humorous with their chants, and the chanting is usually from one set of fans or another, but not both. In this case, to the tune of the "what a load of rubbish," with which dubious decisions are usually serenaded, both the Fulham and Arsenal support bellowed "you should be home cooking dinner." Clever lads.
Refs have a tough job, and for gals managing a game of guys it is that much tougher. I haven't seen a female referee in the Premier League since. I hope that Sarah Thomas meets a better fate.
Friday, September 14, 2007
Cowboy Capitalism
Forbes has published their current estimates of NFL franchise values. The Dallas Cowboys top the list at $1.5 billion:
The architect of modern-stadium economics and owner of the Dallas Cowboys will unleash a $1 billion stadium (financed with a mix of private and public money) in 2009 that will have other NFL owners begging for mercy.The Cowboys have not finished better than 10-6 since 1995. "Architect of modern stadium economics" may be too strong a term, but American sports dynasties are no longer made on the playing field.
Thanks to their new stadium, which Jerry Jones will operate, the Cowboys are now worth $1.5 billion, putting them atop the NFL team value rankings for the first time in eight years and making Dallas the most valuable sports franchise in the world.
Tuesday, September 11, 2007
Pricing Strategies: Apple & WKU
On the Freakonomics blog, Steve Levitt writes about Apple's i-Phone pricing strategy -- start high ($599) and come down ($399 two months later). As he notes, a strategy to increase profits by identifying and targeting consumers based on willingness-to-pay is standard economics (price discrimination), if you can effectively do so. (Supposing that this was, indeed, Apple's plan, and not a response to poor sales).
In contrast, ESPN's Pat Forde describes the complete opposite strategy employed by my institution (WKU) in its jump to I-A football.
These Apple-WKU highlights the importance of determining whether pricing is taking place with demand given or in a dynamic demand context. Sports decisions makers have sometimes not assessed the difference correctly. Many owners fixate on dividing the pie versus increasing the pie, when over the long term demand growth (or decline) will swamp the effects of small differences in the slice. The destructive outcomes such as the CART-Indy 500 dispute comes to mind. The short term lure of a few more dollars swamps the longer-term view.
In contrast, ESPN's Pat Forde describes the complete opposite strategy employed by my institution (WKU) in its jump to I-A football.
Athletic director Wood Selig rolled back the cost of season tickets to a dirt-cheap $25 for all five home games and made them all general admission -- first come, first served. The plan is to get them in the door, then hope they'll re-up when the prices inevitably increase.Of course, the NCAA 15,000 minimum attendance requirement imposes a strong incentive to adopt such a strategy. Even without this constraint, WKU's approach makes sense when the demand is low, when price discrimination won't do much for revenues. Low ticket prices get people in the door, so that the "experience" will increase the interest in football over the long haul. (The idea got off to a good start last Saturday with a crowd of 17,000 even for a cupcake opponent; last year's average attendance was about 9,000).
These Apple-WKU highlights the importance of determining whether pricing is taking place with demand given or in a dynamic demand context. Sports decisions makers have sometimes not assessed the difference correctly. Many owners fixate on dividing the pie versus increasing the pie, when over the long term demand growth (or decline) will swamp the effects of small differences in the slice. The destructive outcomes such as the CART-Indy 500 dispute comes to mind. The short term lure of a few more dollars swamps the longer-term view.
Monday, September 10, 2007
Drugs in Sport Debate and Union Organisation
Drugs. As always they are a hot topic. But in Australia this year, the central focus of the debate has been on testing for 'illicit' or 'recreational' drugs; with leading players in the Australian Football League, the National Rugby League and Rugby Union (in recent years) all being outed (by admission, by testing or by implication) for the use of such drugs.
There is a federal election due later this year in Australia and the Federal Government has been seeking to score potitical points by criticising sports for 'soft' drugs policies. This follows the proactive stance of bodies such as the AFL and the AFL Players' Association who agreed to a policy testing for illicit substance use on the condition of a confidential process that offers users the opportunity to seek counselling and go through rehabilitation before public identification of drug users. Such policies have been developed in conjunction with sports medicine and drug rehabilitation experts who, this week, published an open letter in several Australian newspapers supporting the AFL and the AFLPA.
The player associations in Australian sport have had enough of the Federal Government's attitude. They have formed an umbrella body (the Athletes Association of Australia) and a recent article in the national newspaper, The Australian, suggests the AAA will take the fight to the Government.
Is this a case where the incentive to win an election will overwhelm a reasoned and thoughtful approach to public policy? And how many issues exist where a multi-sport 'super union' may be an effective lobbyist?
There is a federal election due later this year in Australia and the Federal Government has been seeking to score potitical points by criticising sports for 'soft' drugs policies. This follows the proactive stance of bodies such as the AFL and the AFL Players' Association who agreed to a policy testing for illicit substance use on the condition of a confidential process that offers users the opportunity to seek counselling and go through rehabilitation before public identification of drug users. Such policies have been developed in conjunction with sports medicine and drug rehabilitation experts who, this week, published an open letter in several Australian newspapers supporting the AFL and the AFLPA.
The player associations in Australian sport have had enough of the Federal Government's attitude. They have formed an umbrella body (the Athletes Association of Australia) and a recent article in the national newspaper, The Australian, suggests the AAA will take the fight to the Government.
Is this a case where the incentive to win an election will overwhelm a reasoned and thoughtful approach to public policy? And how many issues exist where a multi-sport 'super union' may be an effective lobbyist?
Friday, September 07, 2007
Today's NFL: a brave new media world?
As we mentioned previously, the media are buzzing over the new approach of the NFL to media. The rule limiting online video at non-NFL sites is particularly nettlesome and controversial. Michael McCarthy's story at USAToday, "NFL calls own number in new media game plan" describes the move:
But I think the issue of image control is overrated. The Michael Vick and Pacman Jones episodes show that when negative issues arise, media spin is difficult or impossible for the NFL to control. You can't keep the cameras away from the perp walk.
The NFL is pushing existing media aside to make way for its own production. It can do this because today's broadcast and broadband technology enable it to bypass an intermediary and former ally. It's not about image. It's simply about the money.
On the Internet, the NFL took hands-on control of NFL.com from CBS SportsLine last fall and has relaunched the site with more video content, according to the league. NFL.com, and the 32 individual team websites, offer one thing other sports and news websites can't match: highlights from games that can be tailored to focus on each fan's favorite players and teams.MLB.com has turned into a significant revenue-generator for baseball, so it only makes sense for the NFL to pursue a similar strategy. But the issue has become intertwined with "controlling the message" that is put forth by the media. As McCarthy puts it:
The league also is trying to boost the relevance of its four-year-old NFL Network by running more exclusive programming, including eight prime-time games on Thursdays and Saturdays late in the regular season, three college bowl games and the NFL's college scouting combine in the spring.
The nation's richest and most powerful sports league has launched a behind-the-scenes effort to seize greater control over what fans see, read and hear — and chart an even more lucrative course for itself in the process. It's taking a series of steps to drive more fans and advertisers toward its own NFL Network cable channel and NFL.com website. And at a time when the NFL is trying to clean up its image by cracking down on athletes who run afoul of the law, the league also is imposing new — critics say onerous — restrictions on how the independent media cover its players, coaches and teams.On the fundamentals, this is right on the money. We are in a period where a dominant trend is disintermediation, literally speaking, in broadcast coverage of sports. More and more coverage is being produced by the "upstream" firm, i.e. a team (as in the Yankees and YES, or in a more limited way, by Notre Dame and NBC) or a league. The Big Ten Network is leading the way in college (and with App State beating Michigan, what a debut! Sorry, Rod).
Together, the moves represent an unprecedented attempt by the NFL to manage how it's portrayed to the public. They also could offer a glimpse of where sports programming is headed: Former White House spokesman Ari Fleischer, now an image consultant and adviser to Major League Baseball Commissioner Bud Selig, predicts sports fans soon will confront an increasingly cluttered media landscape in which more sports leagues, and college conferences, offer their own TV channels and websites.
But I think the issue of image control is overrated. The Michael Vick and Pacman Jones episodes show that when negative issues arise, media spin is difficult or impossible for the NFL to control. You can't keep the cameras away from the perp walk.
The NFL is pushing existing media aside to make way for its own production. It can do this because today's broadcast and broadband technology enable it to bypass an intermediary and former ally. It's not about image. It's simply about the money.
The rise and fall of dogfighting
Edmund Russell, a historian from the University of Virginia explains:
The public outcry over the Michael Vick dogfighting case would have shocked Queen Elizabeth I.I recommend the entire piece, particularly if you've never heard of "bull-baiting." In a few concise paragraphs, Russell conveys the social history, evolution, and demise of blood sport in England. Here is the summary version of the story:
Elizabeth, who ruled England 1558-1603, loved animal combat, hosted contests for visiting dignitaries and would have been astonished to see such contests suppressed. Because the United States inherited most of its dog breeds — and attitudes toward them — from England, British history sheds considerable light on the controversy surrounding Vick's kennel in Smithfield, Va.
There is a direct line from bull baiting at the Smithfield market in London in the early 19th century to dogfighting in Smithfield, Va., in the early 21st. The English created bulldogs good for baits, they crossed bulldogs with terriers to breed dogs suited for fights, and they saw English bull terriers develop into American pit bulls. The ideas of the English humane movement crossed the Atlantic along with those dogs, and they found a receptive audience because the United States underwent similar economic and social changes. The humane movement pointed to the market at London's Smithfield as an example of the behaviors it found reprehensible, and the same is happening today with Vick's kennel in Smithfield, Va.
Wednesday, September 05, 2007
Neanderthal Managing
Michael Silver takes NFL teams and coaches to task on Yahoo! Sports regarding Stone Age thinking about about training camp practices in extreme heat. This has long been sore subject with me, first from a personal standpoint and then as a professional head-scratcher. Growing up in North Texas, it was only my junior year (1977) that coaches permitted water to be consumed at any time during practice. In my freshman year, my one truly "psycho" coach would not permit us to take off our helmets during 3 hour practices in August. Even at those ages, my friends and I could see that heat exhaustion and dehydration reduced rather than enhanced the ability to train both physically and mentally. It was as if the coaches had the idea that the whatever team could enter a sauna and stand it the longest won. Games, by contrast, were played at night, with lots of breaks, water, and explicit attempts to make sure nobody got too worn out. What an idea!
As Silver points out, the "toughening up" in hot weather coach-think still widely persists.
This is one of those areas that does cause me to scratch my head professionally-speaking. I understand that better information and ideas take a while to disperse -- the innovation S-curve. Yet, it's been 30 years since I was in high school and the mentality of many NFL coaches still appears to be driven more by some kind of we're-tougher-than-you group think. Such outcomes don't fit neatly in the rational choice framework.
A nice research project would be to examine winning percentages in opening or early season based on location, time, and temp of training camp practices. It's a bit tricky because many teams now have "bubbles" and some use them more than others.
As Silver points out, the "toughening up" in hot weather coach-think still widely persists.
I'd love to be able to tell you that [Korey] Stringer's death provoked a pronounced change in the way NFL teams conduct their training camps, especially when so many respected doctors, exercise physiologists and even military commanders insist that most organizations are doing a horrible job of preparing their players to compete at an optimal physical level. Certainly, there have been some improvements in the way many teams monitor heat and dehydration, but the dangerous conditions remain.A few owners and coaches do seem to "get it." Dallas owner Jerry Jones says
"No medical person has ever deviated from the fact that trying to get a team ready in extreme heat is just not helpful," said Dallas Cowboys owner Jerry Jones. "It isn't helpful over the long-term or the short-term. I have letters from my medical people spelling it out. This whole business of conditioning can only go so far."Both Jones and long time NFL coach Jim Hanifan acknowledge that the old-school thinking was all about avoiding any sign of weakness. No doubt, some weather acclimation is sensible to prepare for early season games such as the Titans and Jacksonville in the 1 P.M. Florida sun, but tearing people down during the whole month of August is just stupid.
This is one of those areas that does cause me to scratch my head professionally-speaking. I understand that better information and ideas take a while to disperse -- the innovation S-curve. Yet, it's been 30 years since I was in high school and the mentality of many NFL coaches still appears to be driven more by some kind of we're-tougher-than-you group think. Such outcomes don't fit neatly in the rational choice framework.
A nice research project would be to examine winning percentages in opening or early season based on location, time, and temp of training camp practices. It's a bit tricky because many teams now have "bubbles" and some use them more than others.
Sunday, September 02, 2007
New Poster from Australia
Hello everyone,
Rob Macdonald here. Skip has invited me to contribute some posts with an Australian flavour. I look forward to bringing some stories to light with a slightly different skew to that you often find in the North American and European literature and commentary.
We have a small but growing community of academics with expertise in sports economics, sports law and sports management in Australia. Readers from elsewhere in Australia may disagree, but Melbourne (where I'm based) is clearly the sporting capital of the nation and the city itself has, I think, the strongest concentration of researchers in the fields of sports economics, sports law and sports management of any city in Australia. I'm a part of the Sports Law program at the University of Melbourne, my research areas and interests relate to the economics and law of sport, especially league structures, labour market regulations and the mysterious phenomenon of competitive balance; and I've created subjects dealing with labour relations and governance issues in the sporting context for various sporting programs.
As a teaser, how's this for a couple of interesting economic problems from the past week or two:
- You may all enjoy the latest book to be released in Australia (August 2007):
The Games Are Not The Same: The Political Economy of Football In Australia
- The Australian Football League (AFL) has just smashed the annual attendance record, yet this weekend had the peculiar situation where - thanks to the player draft regulations that award 'priority picks' to particularly weak clubs - two clubs playing in the final round of the home & away season today both had a strong incentive to lose (article from The Age, Melbourne);
- Equine Influenza has caused the indefinite closure of the Ranwick racecourse in Sydney (here's something from the Sydney Morning Herald), has disrupted horseracing nationwide and may even impact the running of the best 2 mile handicap in the world, the Melbourne Cup on the first Tuesday in November, if it isn't kept under control;
- The South Sydney Rabbitohs today qualified for the National Rugby League (NRL) finals for the first time in nearly two decades. This comes after they were omitted from the NRL competition at the start of the decade, were readmitted two yeasr later after considerable public opposition and then sold (they were previously a member-owned club) to wealthy businessman Peter Holmes a'Court and moviestar Russell Crowe (this one was just a good news story).
Enjoy!
Rob Macdonald here. Skip has invited me to contribute some posts with an Australian flavour. I look forward to bringing some stories to light with a slightly different skew to that you often find in the North American and European literature and commentary.
We have a small but growing community of academics with expertise in sports economics, sports law and sports management in Australia. Readers from elsewhere in Australia may disagree, but Melbourne (where I'm based) is clearly the sporting capital of the nation and the city itself has, I think, the strongest concentration of researchers in the fields of sports economics, sports law and sports management of any city in Australia. I'm a part of the Sports Law program at the University of Melbourne, my research areas and interests relate to the economics and law of sport, especially league structures, labour market regulations and the mysterious phenomenon of competitive balance; and I've created subjects dealing with labour relations and governance issues in the sporting context for various sporting programs.
As a teaser, how's this for a couple of interesting economic problems from the past week or two:
- You may all enjoy the latest book to be released in Australia (August 2007):
The Games Are Not The Same: The Political Economy of Football In Australia
- The Australian Football League (AFL) has just smashed the annual attendance record, yet this weekend had the peculiar situation where - thanks to the player draft regulations that award 'priority picks' to particularly weak clubs - two clubs playing in the final round of the home & away season today both had a strong incentive to lose (article from The Age, Melbourne);
- Equine Influenza has caused the indefinite closure of the Ranwick racecourse in Sydney (here's something from the Sydney Morning Herald), has disrupted horseracing nationwide and may even impact the running of the best 2 mile handicap in the world, the Melbourne Cup on the first Tuesday in November, if it isn't kept under control;
- The South Sydney Rabbitohs today qualified for the National Rugby League (NRL) finals for the first time in nearly two decades. This comes after they were omitted from the NRL competition at the start of the decade, were readmitted two yeasr later after considerable public opposition and then sold (they were previously a member-owned club) to wealthy businessman Peter Holmes a'Court and moviestar Russell Crowe (this one was just a good news story).
Enjoy!
