Left Field Contributions: ‘Origins’

Greetings from the new wordpress version of The Sports Economist.

To start off things at the new/old site it’s time to unveil a new regular post: ‘Left Field Contributions’.

When we think about the origins of sports economics, the classics of Simon Rottenberg (1956) ‘ The baseball players labor market’ and Walter Neale’s (1964) ‘The peculiar economics of professional sport’ typically spring to mind. We have seen articles and conferences in honour of Rottenberg and the 50th Anniversary of his first contribution spawned a superb book as well (Rodriguez, Kesenne & Garcia, ‘Sports Economics after Fifty Years: Essays in Honour of Simon Rottenberg’, University of Oviedo Press, 2006).  Roger Noll and Peter Sloane both offer fine surveys of the field in that book and elsewhere Rod Fort, and Allen Sanderson & John Siegfried presented good reflections upon the meaning and (mis)interpretation of Rottenberg’s work.

But what came before that?

The occasional author has noted the legal literature to find the work of Jay Topkis:  Topkis, J.H. (1949). Monopoly in professional sports. Yale Law Journal, 58, 691-712.  I like this one.  Last year I gave one of his nice quotes to one of my sports eco tute groups and they were astounded it came from the 1940s: 

‘ …there is still another reason why with free competition no one club would buy up all the talent and spread-eagle the field: baseball managers are not fools.  If anyone got together a group of perfect players, who would pay to see them play the other teams in the league? Everyone will try hard to assemble perfect teams. But not too perfect. there would be no money in it (p.708).’

Indeed!

Topkis isn’t the earliest to have substantive commentary on essentially economic issues published in a law journal – and the poster / blogger who can come up with a citation for the earliest gets (should get) a prize.  But Topkis does suggest something important; an upper bound on how much competitive balance is enough (if we define the notion of competitive balance as increasing to the upper limit of perfect competitive balance on ‘any given sunday’.) 

Recent works have started investigating this issue by suggesting there is an optimal level of competitive balance and that it might vary depending upon the economic characteristics of our league; or at least our league model.  That is, whether, in our league, we sell tickets at the gate, seasons tickets, more people prefer to watch the sport live than at the gate, our league is concentrated in key population centres or a one-team-one-town league, etc. On such themes, some of the more recent research of Rod Fort, James Quirk and Stefan Szymanski springs to mind, as well as John Vrooman and  Dan Rascher (and I’ll be posting more on this in the future); but so does a fellow who wrote before any of us.  Do league planners have the ability to ascertain what this optimal level of competitive balance actually is?  If yes, do they have the ability to devise and implement regulatory and structural changes to the league before those competitive balance fundamentals change with the world around us?  If yes, would they do so, or would it be so costly to do so that there was ‘no money in it’?