Public Policy and Professional Sports

Public Policy and Professional Sports

International and Australian Experiences

New Horizons in the Economics of Sport series

John K. Wilson and Richard Pomfret

Public Policy and Professional Sports​is a comprehensive analysis of public policy aspects of the economics of professional sports, supported by in-depth international case studies. It covers regulation and competition in the sports industry and its labour markets, public spending on stadiums and mega-events, and governance issues including unethical behaviour (corruption, doping, etc). The innovative feature of the work is the combination of economic analysis and well-known international examples with detailed case studies​ of public policy as it relates to sport in Australia. Australia​is an excellent case study due to the high profile of sport in the national psyche and the range of popular professional sports.

Chapter 9: Conclusions

John K. Wilson and Richard Pomfret

Subjects: economics and finance, political economy, sports, politics and public policy, political economy

Extract

Sport has become big business, first by attracting large crowds of paying spectators and then through radio and later TV audiences. Beyond those direct revenues, merchandise and other add-ons bring further revenue, companies pay to sponsor the top clubs and mega-events, and sports stars earn big fees from endorsements and other activities. Some peculiar features drive economic analysis of the sports industry. Although sport thrives on competition, in the organization of professional sports monopoly is pervasive, as customers demand a single champion. The consequences of monopoly power are most clearly seen in labour markets, but monopoly also underpins rent-seeking and raises questions of ethical behaviour and good governance. Professional sports leagues also require a measure of collaboration – at a minimum in agreeing rules, determining fixture lists, selecting referees – that is delegated to a management board, which will typically deal with disciplinary matters. Leagues, and indeed all sports organizations, go to great lengths to keep their distance from government regulation or the legal system, even when common criminal offences are committed such as fraud or grievous bodily harm. In the first part of the book we focused on the main organizational patterns of professional team sports. The principal difference is between the closed cartels that characterize North American and Australian leagues and the promotion and relegation system of European soccer.

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