Economic Impact of Professional Sports teams

Economic Impact of Professional Sports teams

Introduction

For the past few decades, sport plays an increasingly important role especially in United States. Professional sports teams are present in several cities and are posing challenges territorial. Previously, sports arenas were built in the suburbs or at least the periphery of city centers. Today, teams require the construction of stadiums in smaller town centers and this, in order to make the sport more user-friendly theaters, better integrated, more human and boost attendance at these town centers. However, the renewal of this infrastructure has a price and it is often high. It is actually still not sure that economic benefits alone can justify the public expenditure.

We know that sports and physical activity act favorably on the health of individuals, but the specific value of professional sports teams in the US has not so far been estimated. However, sports teams provides a significant contribution to US sport system and the welfare of our citizens: since it is through the teams that millions of young Americans are introduced to the sport, sports teams offers them unparalleled experiences that will enable them to acquire knowledge of life and contribute generously to the fabric of American society. Certainly, the sports teams maintain a sense of national pride like no other - a feeling that unites us around a common goal.

It is interesting to note that although an increasing number of researches suggest that sport can benefit differently from many sectors of socioeconomic life, most of these studies do not distinguish between individual sports and team sports. Our report aims to study the specific benefits that professional sports teams bring to economy and society.

Discussion

Sport exhibits a number of characteristics that distinguish it from other fields of economic endeavor. Notable among these characteristics is the applicability of one of the fundamental assumptions of economics, namely that the driving motivation behind any business is the desire to maximize profit. However, the application of this assumption to sports firms has been criticized as inaccurate given the social status that accompanies ownership of such a culturally important asset. Owners may be motivated to own teams as a means to boost their ego, increase their public profile, or even (as with basketball's Dallas Mavericks owner Mark Cuban) to relive their childhood dreams of playing professional sports. The realization of any of these motives is dependent on the playing success of the team. Therefore, some owners might be willing to sacrifice profits in order to have a team that wins more games.

ECONOMICS OF TEAMS AND LEAGUES

In most industries cooperation between competing firms is called “collusion” and is prohibited. Antitrust legislation exists to enforce this prohibition. However, in the sports industry cooperation between competing teams is standard business practice. All professional sports teams cooperate by forming into leagues. Originally this cooperation was done in an effort to formalize the rules. Teams in different regions often operated under vastly different rules, making competition difficult. Teams also quickly realized that fans would be much more ...