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Professional Sport

Professional Sport. Chapter 15. CARTEL. Definition An organization of independent firms with restrictive or monopolistic control of the production or sale of a commodity as well as control of wages. Parity Benefits increase for the powerful few at the expense of the many. Pro Sports….

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Professional Sport

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  1. Professional Sport Chapter 15

  2. CARTEL • Definition An organization of independent firms with restrictive or monopolistic control of the production or sale of a commodity as well as control of wages. • Parity • Benefits increase for the powerful few at the expense of the many.

  3. Pro Sports…. • History: • MLB: 1876 • NHL: 1917 • NFL: 1921 • NBA: 1949 • Negro baseball League Late 1800’s – 1947 Brooklyn Dodgers • Jackie Robinson (color barrier) 1947

  4. Women’s Pro Sports • All American girls baseball 1943-54 • 4 Failed attempts at basketball leagues from 1979-91 • American Basketball League 1996 • Women’s National Basketball Association 1997

  5. Pro Sports as a Cartel • Restrict inter team competition for players; control players rights via player drafts, contracts, and trades. • Act in concert to admit or deny new teams and control the location and relocation of teams. • Divide local and regional media markets and negotiate as a single entity (league) national media fees. • Exempted from the Sherman Antitrust Act of 1890-forbids conspiracy in the restraint of trade and efforts to monopolize an industry

  6. Pro Sports Team Owners • Symbiotic relationship with communications industry • Extremely wealthy (white males) • Fun and capital accumulation via resale of team franchise • Tax advantages-depreciation allowances; athletes treated as commodities and depreciated a like equipment; secretive business with limited information about profits and losses

  7. Pro Sports Team Players • Producers of the goods (laborers) • Treated as a commodity that can to sold, traded, moved by owners • No access to power which is controlled by the owners and leagues • Cast as the “villains” by owners in the eyes of the public (high salaries) • Players have no rights in the operations of teams/leagues; their interests and power in limited to salaries only!

  8. Unique Aspectsof Professional Sports • Interdependence • Structure and governance • Labor-management relations • The role of electronic media

  9. Interdependence • AGAIN, • “cooperate and compete” simultaneously • “League Think” • Sharing Revenue • Grow together… • NFL • MLB • Large vs. Small Market

  10. Structure and governance • “the league office” • Tiered system • League Commissioner • Board of governors or the team owners • A central administrative unit • Negotiating contracts and agreements • Scheduling • Licensing • Coordinating publicity and advertising

  11. Structure and governance • MLB • 2 Leagues & 6 divisions • Minor league system • Minor league system in other major professional leagues • NHL >> AHL • NFL >> NFL Europe • NBA >> NBDL • Single-entity structure

  12. Labor-management relations • Antitrust Exemption • Collective Bargaining • Free Agency • Salary Caps • Player Draft * 1974- Curt Flood (St. Louis Cardinals) * 1976 Messersmith/McNally Ruling

  13. Antitrust Exemption

  14. Collective Bargaining

  15. Free Agency

  16. Salary Caps

  17. Player Draft

  18. Electronic media • Television • Greatest single factor causing increase in revenues in pro sports; Late 1950’s early 1960’s • ABC Monday Night Football • Super Bowl • World Series • NBA Finals • Sources of Media Coverage

  19. Revenues Sourcesfor Pro Sports • Media Contracts • Accounts for about 60-70% of teams revenues • Gate Receipts • Account for about 30-40% of teams revenues • Increase ticket sales or increase ticket prices • Luxury boxes & club seats

  20. Revenues Sourcesfor Pro Sports • Licensing and Merchandising • Sponsorship • Sponsorship • Rotating Signage • Virtual Signage • Naming Rights • Public financing – Subsidization?

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