In 1956, the Journal of Political Economy published Simon Rottenberg’s seminal piece in sports economics, “The Baseball Players’ Labor Market.” In researching a commemorative piece on the impact of that paper on all of us that think about sports business and economics, his wife Annette informed me that Professor Rottenberg passed away in January 2004.
I feel awful about this for two reasons. First, it was never my pleasure to make his acquaintance. Second, how could I not know that this giant, whose broad shoulders nearly all of us working on sports stand on, had died over a year ago?
If you haven’t read the piece, you should. It is approachable by all readers; there isn’t a derivative or a regression to be found. But he lays out the clear logic of the uncertainty of outcome hypothesis, the invariance principle, and a comprehensive specification of attendance demand. He also clearly states what Neale later called the “Curious Economics” of sports leagues. There is also the rudiments of arguments made later by those interested in the imbalanced incentives given to young people when the returns to sports earnings are uncertain and very large.
The invariance principle essentially says the same thing as the weak form of the Coase Theorem, but it is significant that Rottenberg published it fully four years before Coase. He used it to different purpose than Coase, but the logic is there first nonetheless.
Nobody will ever convince me that anybody but Simon Rottenberg is the father of sports economics. Lest we forget.
