ECON 250 Economics of Sport



Franchise Management

League Constitution

The student franchise owners must write a league constitution. They must decide how to initially share league revenue and how to make adjustments to this agreement later in the season. Franchise owners must also decide whether they wish to implement a cap on payrolls. Franchise owners will report this agreement to the commissioner before the season begins.

The student franchise owners must decide how revenue will be shared in the league. The teams determine how broadcast revenue, ticket revenue, concessions revenue, and merchandise revenue will be shared among franchise owners. Because teams are located in markets with varying degrees of attendance and television draws, the owners must decide how to fairly distribute revenue. Students may discuss the differences between the National Football League and Major League Baseball. The teams discuss revenue sharing alternatives and salary caps, and they illustrate their implications on competitive balance in the league.