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Sport Economics

Convenor: Mr Sean Hamil
Assessment: A two-hour examination (75%) and a coursework essay of a maximum 2500 words (25%). The deadline for the coursework is 11th November 2011 (Absolute Cut-Off deadline – 2nd December 2011).

Aims

The aims of this module to introduce students to the economics of the sport industry, with special reference to professional football, focusing in particular on the factors that distinguish the sports industries from most other types of industry.   Football and other professional league sports differ from standard industries in a number of important ways.  Firstly, the product that is offered is partly a ‘league product’ and partly a ‘club’ product - this joint production has a number of important implications for the way the industry is organised and governed.  Second, sports leagues usually redistribute income from stronger to weaker clubs in order to promote competitive balance.  Hence the industry is characterised by a mixture of competition and cooperation.  Thirdly, the nature of the relationships between a football/sport club and different stakeholders is atypical. For example, the customers of football clubs - supporters - have a very high degree of brand loyalty which means that they are unlikely to switch allegiances even when the product being offered to them is poor.  Fourthly, unlike most other businesses, football clubs have a dual objective - to win on the pitch and to run the business side of the club.  Fifthly, the labour market for football players is unusual in that it has been highly regulated and players have monopoly power over their talent.

Learning Objectives

At the end of this course, students should be able to:

  • Demonstrate a thorough understanding of the “peculiar” economics of sports leagues (Neale, 1964)
  • Explain the historical development of sport from its roots as a recreational pastime through to its transformation into a major commercial business.
  • Explain key theoretical issues in sport economics e.g. need to maintain competitive balance, financial stability, integrity of sporting competitions etc.
  • Reflect on how the application of the key theoretical principles in sport economics informs the design of professional sports’ leagues.

Background reading

  • Andreff, W and Szymanski, S (2006) Handbook on the Economics of Sport. Cheltenham, Edward Elgar.
  • Downward, P; Dawson, A. & Djonghe, T. (2009). Sport Economics: theory, evidence and policy. Oxford: Butterworth-Heinemann. Chapters 7-9.
  • Gerrard, B. (2006). The Economics of Association Football: Volumes 1 & 2. Cheltenham: Edward Elgar.
  • Neale, W (1964) The peculiar economics of professional sports, Quarterly Journal of Economics, 78:1-14
  • Szymanski, S. (December 2003). “The Economic Design of Sporting Contests”, Journal of Economic Literature. Vol. XLI. Pages 1137-1187.
  • Syzmanski, S. (2009). Playbooks and Checkbooks. Princeton: Princeton University Press.