Tuesday, April 29, 2008
Sports Econ Musings
Free-Agency & MLBPA: Buck Martinez (TBS Analyst for NYY-Cleveland Game)went to some lengths describing the pressure put on C.C. Sabbathia, potentially the marquee free agent pitcher for next off-season, by the MLBPA to follow through and become a free agent rather than resign -- which is what Sabbathia says he prefers. Martinez' imputed rationale for the MLBPA is that getting the top guy on the market sets higher prices for everyone. That's a testable proposition for the sports economists out there with the free agent data sets -- does a higher quality player in the pool raise average offers?
My Ongoing NBA Playoff Beef: (See "Where Hardly Any Game Matters") Sixers beat the Pistons in Detroit, win in Philly, but must win two more to advance and one more to put the Pistons at the very brink of elimination. In spite of the Sixers play, there's been about as much drama as a Seton Hall-Providence matchup. A Celtic-Lakers matchup may be entertaining, but getting there will seem a lot like the WWF.
Labels: labor markets, MLB, NASCAR, NBA
Friday, April 18, 2008
Timeout's and strategy
Labels: NBA, NCAA; basketball; strategy
Monday, January 28, 2008
Public Finance, OKC Style
There are lots of ways to pay for an arena, but Mayor Mick Cornett said city leaders thought the choice was obvious in Oklahoma City.Clever trick, to schedule the arrival of the Sonics right about when the sales tax would otherwise expire, don't you think? That fella Brad Humphreys is working for some pretty sharp cookies (inside joke -- see the comments here).
The Ford Center was built with money from the original MAPS sales tax.
It just made sense to continue the temporary 1-cent sales tax, which was already extended to pay for MAPS for Kids, Cornett said.
If voters approve the Ford Center tax, it will go into effect Jan. 1, 2009, the day the MAPS for Kids tax is set to expire.
"Our citizens seem to prefer a sales tax initiative to other concepts,” Cornett said. "This is following the model that was created by MAPS. MAPS is a proven entity to our voters.”
No other NBA arena was funded exclusively by sales tax money, according to the National Sports Law Institute of Marquette University Law School.
Mayor Cornett goes on to give a doozy of a tutorial on public finance, in case you want a snide chuckle or two. But the real story to me is the timing of this surreptitious little tax - very clever indeed. Thanks to Steve Winkler for the link.
Labels: NBA, stadium subsidies, tax revenues
Wednesday, July 25, 2007
Bringing the Game Back - The Role of Prices
Dave notes his research with Martin Schmidt about attendance following labor strife in professional sports. This research, published in 2004 in the American Economic Review and discussed in their book with Stacey Brook, Wages of Wins, is relevant because we have an event which some say threatened the long-term health of the sport. Schmidt and Berri show that despite the prediction of doom and gloom, attendance comes back to trend quickly after the strife ends. Why? One possibility is through ticket pricing.
According to average ticket price data obtained from the Team Marketing Report Database*, the average real (BY 2005) ticket price in baseball was 6.8% higher in 1994 than in 1993. In 1995, the average baseball club lowered its real ticket prices by 0.1%. Five clubs raised ticket prices and the other 23 lowered their ticket prices. Colorado began play in Coors Field in 1995 and was only in its third year of existence, meaning there was probably still a honeymoon effect going on with the team and the stadium. When we drop Colorado from the calculations, the average ticket price fell by 1.3%.
In 1996, the average real ticket price went up by 2.1%. Thirteen teams lowered their real prices and the other 15 raised their average real price. In 1997, the average real price went up by 6.4% and only 7** teams lowered their average real ticket price. Certainly there are many things that can affect the prices that teams charge, but it appears that part of the reason fans came back after the strike is that the teams set prices to draw them back. Moreover, to the extent that habit persistence explains the demand for baseball, the long-term health of the game after the strike can be partly explained by the pricing decisions of teams immediately after the strike ended.
The current scandal in the NBA, at least what we know now, is isolated and sends few, if any, signals about the overall integrity of officiating. Even so, we'll be able to see how damaging the NBA thinks the scandal will be on demand by looking at team ticket prices next season.
*For those not familiar with the data, The Team Marketing average ticket price series is a weighted average ticket price calculated using prices per section in each stadium weighted by the number of seats in each section. Canadian prices are given in American dollars. The details of the calculations are given at the Team Marketing website.
**7 teams, not 6 as I originally wrote, lowered ticket prices on average in 1997. I've changed the text and the table.
Labels: NBA, referee scandal, strikes and lockouts, ticket pricing
Tuesday, June 05, 2007
19 Years Old, 100% Publicly Financed and Owned, and a Pile of Rubble
The Charlotte Coliseum, the site of 19 years of sporting excellence, has been imploded. This arena was opened in 1988 and was built with 100% of public funds.
Why was it imploded at such a young age? It was imploded in part because it was too big and had too few* luxury boxes. It was also obsolete. Why was it obsolete? Because politicians built the Charlotte Arena for $265 million dollars in part to lure an NBA franchise back to Charlotte. The Hornets left Charlotte in part because a new publicly-funded arena was not forthcoming quickly enough.In some Utopian sports society, where the separation of sports and state are clear, would the Coliseum have been torn down at 19 years of age and would it have been built so big in the first place?
This seems to be one of the things Milton Friedman had in mind when he warned us about spending other people's money on other people.
*Thanks to commenter Frank for noting that I had written the arena had too many luxury boxes when I originally wrote the post
Labels: NBA, stadium subsidies, stadiums
Tuesday, February 13, 2007
David Stern, cartel manager
NBA commissioner David Stern said yesterday that he's "positive" the All-Star Game in Las Vegas this weekend will lead to "initial discussions" about allowing a team to relocate permanently to that city.The story was sent by a longtime TSE reader who understands how an effective cartel operates. He opines:
In an interview with Newsday, Stern said he has not dropped his objections to having a team in Las Vegas while NBA games are on the city's gambling books. But in a significant change in position, Stern said he would not stand in the way if league owners voted to move a team to Las Vegas without taking games off the betting lines.
"Absolutely, not, I wouldn't," Stern said in a 20-minute phone conversation advancing the league's first All-Star Game in a non-NBA city.
So, let's see, the Maloofs just lost in a landslide election in Sacramento, there are no new prospects around here, the Maloofs have stronger ties to Vegas than to Sacramento, and are hosting the All Star game in Vegas this coming weekend, and all the early-exit clauses that went with the original Kings loan expire this coming summer...
Nah. All just a long sequence of pure coincidences. There's no connection here. Nothing to see here, ladies and gentlemen. Move ahead, please.
Har.
Labels: David Stern, NBA, relocation
Anna Nicole Smith
From Dennis Rodman to Lindsay Lohan to Paris Hilton, traditional boundaries of public behavior seem a thing of the past. Why do celebrities tend to be such boors? A study by Clemson University economist Todd Kendall sheds fascinating new light on the question.You can get a copy of Todd's paper here. The bottom line is yes, "people who know they can't be replaced behave the worst." Moreover, the tendency to get teed up during a basketball game is positively related to the number of arrests off the court.
Kendall considers a number of competing economic theories of boorishness. The first, the "Beautiful Mind" theory, is that people who perhaps genetically disregard norms are more likely to have a creative impact. These same people might well behave more poorly than a typical conformist.
Alternatively, it might be that high income makes an individual insensitive to the normal disciplines of society. A third possibility is that celebrities tend to be young, and youths are much more likely to indulge in destructive conduct. Finally, it might be that individuals who can't be easily replaced tend to be the misfits.
...
To establish which explanation of bad behavior works best, Kendall gathered data from the National Basketball Association. Players in that league have been notorious for their rude and at times even criminal behavior. Fights on the court, brutish fouls, and even rape have been in the news in recent years. Kendall set out to discover which players behave the worst.
The NBA is a fine place to test these competing theories. Its players are young, have high incomes and guaranteed contracts. There is also significant variation in ability. Some players, like Kobe Bryant of the Lakers, have such preternaturally special skills that they fundamentally change the competitive level of their team. Others play their positions adequately, yet could be easily replaced. Do the irreplaceable stars tend to misbehave more?
Hassett's piece has some interesting extensions of his analogy that are certainly worth reading. I'm not sure that Anna Nicole Smith's talents were irreplaceable, but hey, she was a bad girl ;) and it's a nice story.
