Sport policy analytics for professional sports leagues

Evans, Richard (2014) Sport policy analytics for professional sports leagues. Working Paper. Birkbeck, University of London, London, UK.

Abstract

The organisers of most professional sports leagues now employ one or more forms of policy intervention such as revenue sharing and salary capping schemes. The focus of the sports economic literature was initially directed towards the theoretical effects of these policies on competitive balance, wage rates and owner profits in the context of Major US sports leagues. That work has since been broadened in the literature to include other types of policy intervention and other model assumptions such as ‘win maximising’ owners and ‘open’ labour markets that characterise other professional leagues such as for association football. This paper consolidates the analytical treatment in the sports economics literature of both product market and labour marke t policy interventions by league sports organisers to form a standardised set of techniques presented in a generally accessible format. This is intended to provide the reader with the method and approach for similar analysis of other combinations of assum ptions and policy specification as appropriate to particular professional sports leagues. More recent policy intervention has included the regulation of financial performance of professional (association) football clubs. This paper adds to the literature by also provid ing a framework for analysing the effect of this policy intervention on professional sports clubs.

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