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Introduction The essays in this collection span a decade and a half of exciting action in the sports industry. They represent a selection of op-eds and journalistic pieces I have written for numerous newspapers and magazines.l While the examples change, the environments mutate, and the dollars grow, the basic dilemmas and dynamics of the sports industry remain very much the same. Dollar growth is the easy part to document. Between 1990 and 2004, Major League Baseball's gross revenues increased roughly from $1.3 billion to $4.3 billion (annual growth rate of8.7 percent), the National Basketball Association 's revenues increased from $843 million to $2.9 billion (annual rate of 10.1 percent), the National Football League's revenues rose from $1.3 billion to $5.3 billion (annual rate of 11.4 percent), and the National Hockey League's revenues grew from $518 million to $2.2 billion (annual rate of 11.9 percent).2 NASCAR and golf witnessed even more rapid growth. Elucidating the underlying economic dynamic of team sports leagues is more challenging. Team sports leagues are different from other industries in one fundamental way. The teams (companies) that compete against each other on the playing field must also cooperate with each other to a certain degree as businesses. General Motors can produce cars by itself; it does not need Chrysler. The Yankees, however, cannot playa game of baseball without another team. In the team sports industry, then, it takes at least two companies to produce the desired output. Moreover, the two teams must be sufficiently balanced so that the outcome of each game is uncertain. In practice, of course, there will be many more than two teams in each league, because it is not only the outcome of each game that lThe essays have been edited slightly to avoid redundancy, to provide greater clarity, and occasionally to update material. One entry comes from testimony I gave before the u.s. Congress. 2These figures are all estimates from Financial World and Forbes. They are given here only to suggest the general magnitude of growth. Major League Baseball's figures represent fourteen years of growth, while the other three sports represent thirteen years. Hockey's faster growth rate in large measure results from the more rapid expansion in the number of its franchises (from twenty-one to thirty teams) over the period. Adding the four sports together, total estimated revenues grew from $4 billion in 1990 to $14.8 billion in 2004, for a 10.3 percent annual growth rate. 2 Introduction is at stake, but the outcome of the competitive season, as well. A league that functions effectively will also be one where the outcome of each season is uncertain and where the fans in most cities believe that their team has a reasonable chance of making it to post-season competition. The car industry could function effectively if Toyota sold 50 percent of the cars, GM sold 30 percent, and Chrysler and Ford each sold 10 percent. That is, it would be OK, other things equal, if Toyota dominated the other companies year after year. Such an outcome, however, would not lead to a very successful sports league. Ifteams in a sports league were not allowed to cooperate economically, then there would be a very strong tendency for big-market teams to dominate. A team in a market of 8 million people would be able to generate several times more revenue than a team in a market with 1 million people. Yet the two teams would go to the same players' market to sign up talent. While there is not a perfect correlation between team payroll and performance, having a higher payroll certainly increases a team's chances of winning. These market imbalances are exacerbated by the different ownership circumstances on each team. Owners have different motives for buying teams. Some are interested solely in the sport. Some see the sport as programming to support their other investments (e.g., media outlets, stadiums or arenas, concessionaire companies, car- or jet-rental businesses, etc.). The latter group of owners may treat the team itself not as a profit center but, rather, as a means to generating profits for their other investments. When these owners go to the players' market to sign players, they may be asking multiples questions : How much revenue will the player generate for the team? How much will he generate for the owner's regional sports channel, for the planned...

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