Sports Economics

 

Economics 3700

 

David Kiefer
telephone 581-7481
e-mail kiefer@economics.utah.edu

course website: webct.utah.edu

 

This course will be a survey of the theory and literature of the economic issues relevant in professional and big-time collegiate sports. We will discuss issues such as ticket pricing, the building of a new arena or stadium, and Major League Baseball labor issues. All of the topics will be discussed within the context of economics. We will review principles of microeconomics and basic statistical analysis; principles of microeconomics is a prerequisite for this class. Basic computer skills are also presumed.

This is an economics course; it is not a sports course. If you have expectations that include extended discussions about how the Utah Jazz are doing, then perhaps you should reconsider.

The required textbook is The Economics of Sports by Michael Leeds and Peter von Allmen, Addison and Wesley. It is available in the bookstore. We will use the text as the backbone to our class, but I will assign several additional readings beyond the text.

            Grades are based on written assignments, the midterm and the final exams according to the following weights:

·        homework assignments                                           30%

·        midterm exams                                                       40%

·        final exam                                                               30%

I will compute final grades by three methods; your grade will be the highest of the three:

·        The traditional standard: with h 100-93%=A, 92-90%=A-, 87-89%=B+, 83-86%=B, 80-82%=B-, and so on to 59-0%=E,

·        The curve: with an overall average grade of B- (GPA=2.7),

·        The ace-the-final rule: you get an “A” for the course if you score an “A” on the final exam regardless of your point total.

The homework assignments are crucial to the course and will be reviewed in class. Late assignments lose points; copies and exact duplicates are unacceptable. If you seriously attempt all assignments, your chance of doing well on the exams is much improved. Both the midterms and the final are a combination of multiple choice questions and longer problems; both are closed book. The final is comprehensive in coverage. As a general rule I do not give incomplete grades. Exams must be taken at the scheduled time.

 

Topic Outline

 

  1. Introduction

economic theory and sports

regression analysis and sports

  1. Industrial Organization of Sports

revenues, costs and the ego premium

monopoly

antitrust policy in sports

importance of leagues

game theory and sports

competitive balance

  1. Public Finance and Sports

demand for new stadiums

all-or-nothing demand

the winner's curse

what are new stadiums worth

size and shape of stadiums

the costs and benefits of a franchise to a city

stadium financing

public subsidies for sports franchises

  1. Labor Economics of Sports

labor supply, demand, equilibrium

monopsony and the reserve clause

human capital theory

tournaments and superstars

collective bargaining

discrimination theory 

Title IX and paying college athletes

  1. Amateur Athletes

“not-for-profit” sports

NCAA as a cartel

athletic departments as profit maximizers

academic standards as a barrier to entry

  1. Conclusion