By Neil Longley
This ebook takes a multi-disciplinary method of interpreting the character of ‘competition’ and ‘competitive virtue’ in the U.S. professional activity undefined. through many measures, the 4 significant seasoned activities leagues within the U.S. – the nationwide soccer League (NFL), nationwide Basketball organization (NBA), nationwide Hockey League (NHL), and significant League Baseball (MLB) – are actually one of the most winning enterprise entities within the nation. whereas those confirmed leagues have typically been hugely ecocnomic all through their respective existences, the previous twenty years were rather profitable, with franchise values in all 4 leagues turning out to be speedily, and at degrees well past industry charges of go back. inside of this context, the e-book seeks to discover the character of the aggressive virtue that those leagues it seems that own. the aim is to spot not just how those leagues were in a position to get to the place they're this day, but additionally to envision the aggressive threats and possibilities that those leagues face as they circulate ahead. A key contribution of the ebook is that it analyzes those matters from a multi-disciplinary technique together with a conventional economics viewpoint, public coverage and public selection concept and strategic administration, to supply a parallel cause of the luck of every of the 4 significant leagues. It argues that no unmarried conceptual strategy can, in itself, properly clarify the whole richness of the problem. Its stresses that those a number of methods should still commonly be considered as enhances, instead of as being at the same time unique, and complete realizing of the problem calls for one to undertake a multi-disciplinary standpoint, making it of curiosity to students in strategic administration, activity administration, and economics. it will possibly function a good educating device in either graduate and upper-level undergraduate classes for college students in those fields, and is very necessary for colleges looking to emphasize to their scholars the significance of a multi-disciplinary, integrative, method while interpreting enterprise and administration matters. The booklet can also be of curiosity to leaders in the activity itself, and may aid to supply perception and viewpoint as leagues search to augment their aggressive virtue within the marketplace.
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Additional info for An Absence of Competition: The Sustained Competitive Advantage of the Monopoly Sports Leagues
First, the 76ers and Flyers, as entertainment products, are not perfect substitutes for some fans. In fact, there would be a significant group of Flyers fans that would have little or no interest in basketball or the 76ers and vice versa. Economists formally measure this concept by calculating the degree of cross-price elasticity, which, in essence, measures the degree to which consumers see two products as substitutable. Thus, by any reasonable definition of the term, the Flyers operate in a monopoly environment, even though they face competition from non-sport entities.
For example, in baseball, the annual value of the New York Yankees local TV contract is more than ten times what the Kansas City Royals generate from their local TV deal. The same is also true, on a smaller scale, for gate receipts—larger markets will have an inherent revenue advantage over smaller markets. 20 2 Some Conceptual Foundations… These issues directly relate to the monopoly power possessed by leagues—the local monopolies that each franchise possesses through territorial rights mean that large markets are protected from intrusions into their territory by other league members; the result is that revenues across a league’s franchises can be quite widely varying.
The exact percentage going to players varies across leagues and with each new CBA, but, in general, players have tended to receive about 50 % of league revenues. Again, as with salary caps, this guaranteed distribution to players could only occur in a monopoly league. If a competitor league were to exist, established leagues would not be willing to introduce a salary cap, and without a salary cap, they would not be willing to provide revenue guarantees to players. 5 The Current State of the Monopoly Leagues: Structure, Conduct, and Policies 21 dynamics of the marketplace determines allocations to owners and players, not predetermined contractual agreements.
An Absence of Competition: The Sustained Competitive Advantage of the Monopoly Sports Leagues by Neil Longley