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on Sports and Economics |
| By: | Ross Booth |
| Abstract: | In the period following the introduction by the Australian Football League (AFL) of the team salary cap in 1985 and the player draft at the end of 1986, within-season competitive balance (measured by the seasonal distribution of team win percents) has increased. This paper continues the investigation into whether the improvement in competitive balance in the AFL can be attributed to these labour market changes by examining competitive balance outcomes and labour market changes in two other Australian sports leagues, the National Basketball League (NBL) and the National Rugby League (NRL). The measurement of competitive balance in this paper is extended to include a simple measure of between-season competitive balance, namely the distribution of championships/premierships amongst teams/clubs. The evidence suggests that since 1985 within-season competitive balance (measured by ASD/ISD ratios) has increased slightly in all three leagues, and both pre- and post-1985 the NRL has been the most balanced and the NBL the least balanced. The distribution of championships/premierships is, in general, also more even in the period post-1985 period in all three leagues. The most significant labour market change in both the NBL and the NRL post-1985 is their adoption of a team salary cap. Thus, the evidence on competitive balance is not inconsistent with the view that the introduction of a team salary cap (at least) in all three leagues has improved competitive balance since 1985. However, since 1985 there has also been net expansion in the number of clubs/teams in all three leagues, and a considerable turnover in both the NBL and the NRL, but not the AFL. The expansion and contraction of the leagues is compared with changes in their competitive balance, leading to the conclusion that the number and, in particular, the location of teams/clubs is also likely to have been another major influence on competitive balance. |
| Keywords: | Australian sports leagues; Australian Football League (AFL); National Basketball League (NBL); National Rugby League (NRL); competitive balance; player draft; salary cap. |
| JEL: | L83 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2005-02&r=spo |
| By: | Ross Booth |
| Abstract: | This paper begins with a brief review of the evolution of the unique brand of Australian football and the development of a fully-professional and national Australian Football League (AFL) comprising 16 clubs from the Victorian Football League (VFL) formed in 1897. Analysis of clubs’ finances and stated objectives suggest that AFL clubs are win-maximisers (subject to breaking even financially) rather than profit maximisers. The win-maximising objective stems from the nature of club ownership. Of the 16 clubs, ten are owned by their members, one is shareholder-owned, four are owned by their respective state football Commissions and one licence is held by the AFL. The objectives of the league and the changes in its governance are also discussed. The history of labour market devices and revenue sharing rules the VFL/AFL has used to try to increase competitive balance is outlined. Six different periods between 1897 and 2003 are identified and the different levels of competitive balance are calculated for each year and then matched against the devices and rules used in each period. It is suggested that the high levels of competitive balance achieved in the VFL/AFL in the most recent period could well be the result of the introduction of both a national player draft and team salary cap. |
| Keywords: | Australian Football League (AFL); economic development; competitive balance; club ownership; club objectives; league objectives; league governance; player draft; salary cap. |
| JEL: | L83 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2005-03&r=spo |
| By: | Ross Booth |
| Abstract: | Whilst gate revenue as a source of revenue for the (member-owned win-maximising) clubs in the Australian Football League (AFL) is relatively small and declining as a proportion, it is still an important source of revenue difference between clubs, and potentially their on-field playing performance. Until 2000, gate revenue was shared between the home and away teams (after the deduction of match expenses), after which the policy was changed to allow the home team to keep all of the (net) gate receipts. In the AFL, membership income, reserved seat and corporate box income has never been shared, but the league does share the revenue from key income streams such as national TV broadcast rights (there is no local TV revenue), corporate sponsorship and finals. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2005-21&r=spo |
| By: | Vinod Mishra; Russell Smyth |
| Abstract: | This study examines the impact of the Indian cricket team’s performance in one day international cricket matches on returns on the Indian stock market. The main conclusion of the study is that there exists an asymmetric relationship between the performance of the Indian cricket team and stock returns on the Indian stock market. While a win by the Indian cricket team has no statistically significant upward impact on stock market returns, a loss generates a significant downward movement in the stock market. When Sachin Tendulker, India’s most popular cricketer, plays the size of the downward movement in returns is larger. |
| Keywords: | Cricket, India, Stock Market, Stochastic Dominance, Investor Psychology. |
| JEL: | D87 G14 L83 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2008-09&r=spo |