Welcome to The Economics of Sports! Michael A. Leeds 106E Speakman Hall 215-204-8030

Slides:



Advertisements
Similar presentations
Clicker Review.
Advertisements

A market is a series of individual exchanges conducted by pairs of consenting parties for a defined product or service over a specific period of time.
Introduction Here we just raise some questions without answers, as well as point out some ideas we may encounter later. 1.
Warming Up 1. Sports in the economy The US economy in 2010 generated about $14 Trillion in goods and services. The author of our book tells us that in.
What Next for Baseball?. New Collective Bargaining Agreement (Dec ) Announced in late Oct –Reached with minimal rancor between players,
1 Price discrimination A form of Monopoly Power. 2 Our story of monopoly is incomplete. We have seen the case where the monopolist charges all customers.
What Is A Monopoly? A monopoly firm is the only seller of a good or service with no close substitutes Key concept is notion of substitutability Hall &
Chapter 8: Economics of Professional Sports. Time Honored Myths Team owners are losing money. They stay in the game for the fun if it! The ball park is.
Team Cost, Profit and Winning Here we start with definitions and then look at idea of how a sports owner might run the team. 1.
1 Compare Monopoly to Competition. 2 Compare monopoly with competition The main results here are the ideas that ----1) a monopoly firm will charge a higher.
Profit Maximization and the Decision to Supply
Harcourt, Inc. items and derived items copyright © 2001 by Harcourt, Inc. Monopoly u A monopoly is the sole seller of its product.  its product does not.
2014 Milwaukee Brewers Franchise/Roster Evaluation By: Philip Sophinos, Professor: James Wible 2014 Milwaukee Brewers Franchise/Roster Evaluation By: Philip.
1 QTCTFCTVCATCAFCAVCMC
Economics 101 – Section 5 Lecture #16 – March 11, 2004 Chapter 7 How firms make decisions - profit maximization.
Economic Applications of Functions and Derivatives
Monopoly ECO 230 J.F. O’Connor. Market Structure Perfect Competition –participants act as price takers and cannot by individual behavior affect market.
The Four Market Models How do businesses decide what price to charge and how much to produce? It depends on the character of its industry.
VBS: Lesson 1 TICKET PRICING. Sports Marketing Learning Target(s) I will be able to determine and set the price level for my VBS tickets. I will be able.
4 Market Structures Candy Markets Simulation.
Chapter 6 The Public Finance of Sports: The Market for Teams 1.
A market is a series of individual exchanges conducted by pairs of consenting parties for a defined product or service over a specific period of time.
SEATTLE MARINERS By Jansen Crossley. Mariners Professional Roster and players salary Pitchers NO.NAMEPOSAGESALARY 49Blake BeavanSP24$506,700 58Carter.
 Stadium Trends  Arguments for Public Funding of Stadiums  Arguments against Public Funding of Stadiums  The Dollar Value of A Fans Pride  Who should.
Chapter 11 Marketing Plans. Chapter Overview Lesson 11.1 Promotion Lesson 11.2 Marketing Research Lesson 11.3 Developing a Marketing Plan Lesson 11.4.
MONOPOLY © 2012 Pearson Addison-Wesley eBay, Google, and Microsoft are dominant players in the markets they serve. These firms are not like the firms.
Effects of Salary Caps in Professional Sports
Chapter 22 Microeconomics Unit III: The Theory of the Firm.
The Economics of Sports Review of the Economist’s Arsenal
A-Rod Case Study Daniel O’Reilly Cambria Wallrich.
Monopoly Demand Curve  The industry and the firm are the same  The demand curve is downsloping.
Monopoly. A firm that is the sole seller of a product No close substitutes Many barriers to entry Sources of market power: – Firm owns a key resource.
Chapter 7 Profit Maximization and Perfect Competition Slide 1Chapter 7.
Today n Oligopoly Theory n Economic Experiment in Class.
Pricing and Strategies
Monopolies!!! Are they good for society?. Monopoly Characteristics: 1. Number of Firms = 1 2. Variety of Goods = None 3. Barriers to Entry = Complete.
Course Introduction The Winning Business. Class Overview 1 The Winning Fallacy Sports organizations cannot rely on winning to be successful in the sports.
{ Curse of A-Rod By: Mickey Odden and Colin Jamison.
Keeping Fans in the stands is getting harder to do Claire Viall
Course Outline. Part 1: General Economic Theory Basic Theory –Definition –The Economic Problem –5 Tenets of Economics –Sectors of the Economy (Players)
Major Players in Sports/Entertainment Marketing Rights Holders Broadcasters Facilities/Venues Promoters Buyers/Sponsors Agents/Athletes Event Management/Operations.
INTRO TO SPORTS ECON What is Sports Economics?
By: Serenity Hughes ECONOMICS 101.  The markets for many important products are dominated by a small number of very large firms. IMPERFECT COMPETITION.
Theory of The Firm:- Profit maximization 1. 2 The Goal Of Profit Maximization To analyze decision making at the firm, let’s start with a very basic question.
Chapter 11 Monopoly.
SEM A - Pricing PI - Describe pricing issues associated with SEM products PI - Identify factors affecting pricing of SEM products
1 Monopoly Economics for Today by Irvin Tucker, 6 th edition ©2009 South-Western College Publishing.
Fantasy Football Team Financials Team: Name:. Summary ItemExpensesRevenue Player Salary Tickets Sponsors Concessions Parking Merchandise Total Revenue:
By: David Homanko. Introduction Games are too expensive Competition Suffers Players switch teams regularly What a salary cap could do. Conclusion.
Lonni Steven Wilson, Medaille College chapter 7 Approaches to Financial Planning.
Distribution of Sports Getting the Experience to the Fans Written by: Memory Reed Georgia CTAE Resource Network 2010.
Chapter Five: Supply 12 th Grade Economics Mr. Chancery.
Purpose of Sports? Baseball vs. Football
Economics of Sports Unit 2  Economics.
Competitive Balance and Attendance in the MLB
Purpose of Sports? Baseball vs. Football
Economics of Sports Bob Donchez
Today Oligopoly Theory Economic Experiment in Class.
Economics of Sports Unit 2  Economics.
Economics of Sports Unit 2  Economics.
Purpose of Sports? Baseball vs. Football
Market Failure #3 Monopolies
Economics of Sports Unit 2  Economics.
For the cost function (given in dollars), find the marginal cost of 1,521 units. {image} $ $21.50 $ $
For the cost function (given in dollars), find the average cost of 1,422 units. {image} $69,978 $1,170 $2,516,940 $1,
Purpose of Sports? Baseball vs. Football
Purpose of Sports? Baseball vs. Football
Economics of Sports Unit 2  Economics.
Announcements Midterm results posted next week
Pure Monopoly Chapter 10.
Presentation transcript:

Welcome to The Economics of Sports! Michael A. Leeds 106E Speakman Hall

Two Important Warnings This is an ECONOMICS course Need not “know sports” Can discuss boxscores – after class Text: The Economics of Sports Numerous Links on Blackboard Will assign “current” readings

Technological Matters You should all be on Blackboard Vital for Communication/Information Occasional readings Grading If not – see me ASAP Syllabus on Blackboard – read it!

Keys to Success Read twice Skim before class Read carefully afterward Review notes weekly See me if confused

Overview of Course Review of Basic Economics Will largely assume you know this – see me if you do not! Industrial Organization Do Teams/Leagues Maximize Profits? Do/Should Antitrust Laws Apply? Public Finance Why/how do cities finance facilities? Labor Why Do Athletes Make So Much? Unions & Discrimination The NCAA, the Olympics, and Amateur Sports

Review of Basic Economics Will cover just a few highlights: The irrelevance of fixed costs Impact of A-Rod on Ranger ticket prices The importance of capacity constraints Do Phillies charge too much? Do Flyers charge too little? Uncertainty and Risk Is losing a good strategy? Why sell season tickets?

Maximizing Profit How do we define profit?  = TR-TC Where are profits maximized? MR=MC What do Rangers sell? What kind of cost is Alex Rodriguez’s salary?

Phillies Pricing Strategy A monopoly Demand slopes down What is MR? Why does it look like this? MC a backward “L” Does it pay to sell out? $ MR D MC PePe QeQe

How About the Flyers? First Union Center holds ~17,000 Veterans Stadium held ~60,000 Should Flyers sell out? What about prices? P MCMC MR D MC PePe QeQe

Uncertainty: Can Losing be a Good thing? Are the Yankees bad for baseball? Are dynasties a bad idea? How often should the home team win? Why do teams sell season tickets? Why do fans buy them? First of several reasons

Can Losing be Good? Cleveland Browns won all the time in AAFC Fans of AAFC lost interest Even Browns fans Attendance fell Attendance fell in MLB in 1950s NY teams in every World Series (sort of) Why go see Pittsburgh play Cincinnati? Study looked at attendance in MLB Controlled for day, time, weather, quality of opponent Attendance highest when home team won 60% of time

Season Tickets Transfers risk from team to fans Why would fans assume risk? What other reasons? Do teams want to sell only season tix?