This summer I am teaching for the first time an economics course at the local community college. The reputation of this course is such that many people dread it - some take it multiple times, and find it difficult to relate to the subject. Business A making X number of widgets has to respond to Community B exhibiting a demand curve that goes like this... There's not a lot for people to grab on to for interest in that, even if they are pursuing business degrees. It is all too theoretical.
Enter this book. I found `The Economics of Sports', by Michael Leeds and Peter von Allmen while taking a topics class in economics at the graduate level. It presents much of the basic theory that one would cover in an economics course, but puts it all in the context of sports. This is sure to get the attention of many (albeit, alas, not all) of the students in the class much more so than widgets and `Business A'.
This book has a decidedly North American slant to it - the primary examples come from Major League Baseball (MLB, and the attendant minor leagues), the National Football League (NFL), the National Hockey League (NHL), and the National Basketball Association (NBA). Within the context of these, topics such as wages and salaries, productivity, internal and external negativities, private vs. public funding, training costs, profit margins, along with simple ideas of supply and demand are covered. The ideas of how a monopoly might work, how reduced competition or restricted trade affects sports and their communities, and what happens with regard to college and amateur athletics (Olympics, among other things) get involved, are covered.
Organised in five broad topics, the book covers: Economic concepts (a brief overview) The Industrial Organisation of Sports Public Finance and Sports The Labor Economics of Sports Sports in the Not-for-Profit Sector Each of these areas is subdivided into smaller chapters. Each chapter ends with a biographical sketch, of someone important not only in sports, but in the development of sports as an ongoing business and institution.
This text does draw in some international angles, particularly in sports that have a broader appeal (soccer, professional golf, etc.). It also allows for various departures - for example, The Economist magazine recently had an article on the attempt in the Caribbean for hosting a World Cup of Cricket, and the problems that arose with that: oversupply of tickets, hotel rooms and other tourist amenities, a large public expenditure in stadium facilities and marketing efforts, a drop in demand when key teams failed to advance in the finals (India, Pakistan, and England, for three), and a host of other issues that relate very directly to the topics in the text.
As the book indicates at the start, sports and sports-related concerns are big business, not only in monetary terms, but also in community terms. Most major newspapers and local newspapers around the world have a sports section, and a good number of the articles in these sections address economic issues, from player salaries to facilities building, and are themselves tapping into the economics of sports by selling papers and advertising space. Indeed, as Leeds and von Allmen indicate, sport is the only major business with its own dedicated newspaper space (and often, broadcast news category) of all the various businesses in the world. That makes it worth exploring in more detail.
This is a textbook rather than a general interest book. Stephen Hawking made the observation that his publishers felt that for every equation in a book, it cut the readership in half. This book is filled with equations, charts and graphs that relate to the economics topics. However, while these are important, they are not crucial to the reader being able to understand the broad strokes of the economics of sports. There are appendices with more complicated ideas (utility functions, indifference curves, regression analysis, game theory, competitive balance, the time value of money, etc.) for the more advanced reader or student, but as the authors indicate in their preface, `to make the text accessible, we have written it assuming that students have had one semester of microeconomic principles.'
This text, in the dry world of economics texts (it isn't called `the dismal science' for nothing), is a very welcome one.
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