Introduction to Sports Economics

Abstract

Introduction The term sports has many meanings encompassing a wide array of human activity that is neither work nor rest. Sports includes athletic competition, of course, but also recreational hunting and fishing, auto racing, exercise activities, and even poker. For the most part, in this book we focus on the activities covered in the sports section of local newspapers. Even this is fairly broad because that includes both amateur and professional sports, as well as recreational activities of all sorts: cycling, sailing, surfing, hiking, and many others. The coverage extends to both team and individual sports that are played in the United States and around the world. In our study, we touch on many of these, but our attention is largely on the major league professional team and individual sports that are most popular in the United States: football, baseball, basketball, hockey, golf, and tennis. Some additional attention is paid to intercollegiate sports under the auspices of the National Collegiate Athletic Association (NCAA). Studying the economics of sports does not involve much discussion of batting averages, field goal percentages, or rushing yardage. From an economic perspective, these performance statistics are important because they affect the outcomes of the games. To the extent that winning leads to more fans and greater attendance, athletic performance improves economic performance – that is, profit – of the team. This, of course, is important for the team and for the athlete because salaries and bonuses reward performance. Unlike many avid sports fans, however, we will not dwell on performance statistics for their own sake. The point is that we are interested in the business and economics of professional and amateur sports.