ECON 250: ECONOMICS OF SPORT

COURSE DESCRIPTION:

In this class students will examine economic issues surrounding sports industry.  The course is organized into three major sections: Industrial Organization, Public Finance, and Labor Markets. We will examine the industrial structure of pro sports by briefly exploring the history of sports leagues and analyzing the impact that the monopoly-like status has on the profitability of teams, player salaries, fan welfare, and the size of subsidies that state and local governments are paying to sports franchises in the form of stadium construction.  We will examine the power of franchises to extract subsidies from state and local taxpayers. We will explore the techniques that economists use in determining the economic impact of stadium construction and franchise location on a local and state economy.  Questions dealing with player salaries and their impact on the sport will be examined from a number of perspectives: What determines a player’s salary?  Are salaries too high?  What is the impact of salaries on ticket prices?  What impact does free agency have on salaries?  Did the advent of free agency decrease competitive balance within sports leagues?  What impact does a long-term contract have on a player’s productivity?  Is there racial discrimination in pro sport salaries? 

GOALS AND OBJECTIVES:

Students will learn how basic economic principles, many of which were presented in their first economics course, can be applied to the interesting field of sports industry.  Basic economic concepts and models such as opportunity cost, demand and supply, multipliers, profit and revenue maximization, competitive markets, and monopoly power will be reinforced within the context of sports economics.  Students will explore other tools that can help us understand the economic implications of professional sports, such as economic base analysis, input-output analysis, and monopsony pricing.  In addition, students will become familiar with the economic history of leagues and how early decisions of team owners and players have shaped current economic events.

Prerequisite: Econ 11.

REQUIRED TEXT:

The Economics of Sports(3^rd Edition), by Michael Leeds and Peter von Allmen, Addison Wesley, 2007.

IMPORTANT DATES:

Franchise Management

Managing sports side of FFL: http://cuffl250.football.sportsline.com/

Managing economic side of FFL: Fantasy Franchise Management: Click Here!

As an owner of an Econ 250 Fantasy Football League franchise, you will be required to successfully manage your team on the field and in the front office.  You will define your own measurements of success at the start of the semester (with my guidance).  Your grade will be determined by your ability to meet these measures and perform weekly financial analyses and other projects as assigned by the league commissioner. Your grade will be based on the following writing assignments:

Business Plan and League Constitution

Fantasy League Analysis Paper

Determine Franchise Owners: September 4
League Constitution: September 4
No class on September 9 replaced by Free Agent Auction
Free Agent Auction: September 9 at 6 pm

Fantasy League Analysis Paper Due: December 11

League Schedule*

*All starting rosters must be submitted by Noon prior to the first game on each Week, unless otherwise noted.