Factors Influencing a Competitive Balance in Sports
Factors Influencing a Competitive Balance in Sports
Following the American Psychological Association’s Guidelines
Frank Therber
Concordia University-Chicago
Abstract
The structures of revenue sharing, the player draft, reserve clause and salary caps across the professional sports landscape are all efforts or were efforts to maintain a sense of competitive balance in the industry. Leagues go about revenue sharing and the question of a salary cap in different ways depending on the sport, but all are intended to either generate as much revenue as possible through teams gaining a maximum amount of interest on the part of their respective markets or keeping a level playing field. A high appeal on the part of teams to fans creates a multitude of avenues for increased revenue from an ownership perspective. Teams drawing a positive, ample following are likely to have high merchandise, concession, gate and sponsorship revenue. Fans want to wear the jersey of an established player on the team competing for a Lombardi Trophy in football. Those who can afford the often high price of admission want to be in attendance for intra-divisional rivalry game with an unbeaten season at stake. An accounting firm wants to gain exposure by having its name and/or logo behind home plate when a high percentage of homes across the country are tuned in during the playoffs at Yankee Stadium. None of this is desirable, in many cases, without a club’s ability to compete and remain competitive. Some fan bases, such as those of the Pittsburgh Steelers, Cleveland Browns, New York Yankees and Boston Celtics do not rely as much on consistent success. However, the aforementioned holds true for the majority of sports organizations across the United States. Moreover, leagues adapt and build off of prior efforts to maintain competitive balance. Old schools of thought have evolved to keep the balance while keeping up with the current times. This is
Following the American Psychological Association’s Guidelines
Frank Therber
Concordia University-Chicago
Abstract
The structures of revenue sharing, the player draft, reserve clause and salary caps across the professional sports landscape are all efforts or were efforts to maintain a sense of competitive balance in the industry. Leagues go about revenue sharing and the question of a salary cap in different ways depending on the sport, but all are intended to either generate as much revenue as possible through teams gaining a maximum amount of interest on the part of their respective markets or keeping a level playing field. A high appeal on the part of teams to fans creates a multitude of avenues for increased revenue from an ownership perspective. Teams drawing a positive, ample following are likely to have high merchandise, concession, gate and sponsorship revenue. Fans want to wear the jersey of an established player on the team competing for a Lombardi Trophy in football. Those who can afford the often high price of admission want to be in attendance for intra-divisional rivalry game with an unbeaten season at stake. An accounting firm wants to gain exposure by having its name and/or logo behind home plate when a high percentage of homes across the country are tuned in during the playoffs at Yankee Stadium. None of this is desirable, in many cases, without a club’s ability to compete and remain competitive. Some fan bases, such as those of the Pittsburgh Steelers, Cleveland Browns, New York Yankees and Boston Celtics do not rely as much on consistent success. However, the aforementioned holds true for the majority of sports organizations across the United States. Moreover, leagues adapt and build off of prior efforts to maintain competitive balance. Old schools of thought have evolved to keep the balance while keeping up with the current times. This is
References: Howard, D. & Humphreys, B. (2008). The Business of Sports: Perspectives on the Sports Industry. Santa Barbara, CA: Praeger. Lawrence, Mark (2005, August 5). Football 101: The Salary Cap. Retrieved July 13, 2013, from http://football.calsci.com/SalaryCap.html