welcome to the economics of sports! michael a. leeds 106e speakman hall 215-204-8030...
TRANSCRIPT
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
Pe
Qe
How About the Flyers? First Union Center
holds ~17,000 Veterans Stadium
held ~60,000 Should Flyers sell
out? What about prices?
PMC
MR
D
MC
Pe
Qe
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?