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Sports Economics Uncut

Brian Goff

“Sport has the power to change the world.” Sports Economics Uncut expresses this insight from Nelson Mandela, exploring sports as a fascinating mirror of the world and a powerful agent of change. In it, Brian Goff covers subjects ranging from the ebb and flow of racial discrimination, to inequality, law enforcement, managers and risky decisions, club membership, and politics. Much more than merely a review or synthesis, this book extends existing perspectives and explores provocative questions such as: how systematic is racial bias in pro sports today? Is all racial segregation in sports due to racial bias? How much are college athletes really worth, and is league parity really optimal? 
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Preface

Brian Goff

In 1985 as a graduate student, I worked on my first sports economics project with two of my professors, Bob Tollison and Bill Shughart, along with a fellow student, Trey Fleisher. In it, we considered how the enforcement of NCAA (National Collegiate Athletic Association) restrictions worked. Up to that point the area of sports economics amounted to a couple of iconic pieces on baseball free agency by Simon Rottenberg and Gerald Scully and a smattering of work by others, primarily on labor market issues. By the time Bob, Trey, and I published The NCAA in 1992, momentum for the subject was building. Now, 30-plus years later, it has expanded into a full-blown field within economics with its own journals, scholarly books, handbooks, textbooks, and courses with overlap and contributions in other fields including finance, management, marketing, and statistics. It has been rewarding to see the field grow and to have been a part of it near the ground floor.

Much of the work in the area has been devoted to “the economics of sports” – the study of the organizational structures, labor markets, compensation, financial outcomes, and related topics. However, early on, a variety of contributions also took more of a “sports as economics” approach, viewing sports settings as close approximations to socioeconomic outcomes beyond the sports world. This volume is a mix of both of these approaches. It grows out of a variety of sports economic projects that I have worked on over the past 30 years along with topics that I have considered while writing for two blogs – The Sports Economist and Econosports at Forbes.com.

For some, sports economics will always be trivial. I understand that point of view. After all, sports are about games and near-fantasy worlds. But, I think it is an overly narrow perspective on the subject. Sports matter to people. Maybe they should matter less, but they matter. Additionally, sports reflects society as well as influences society in a variety of intriguing and important ways. Current issues related to race would seem to make this crystal clear but also in regard to other topics. Are sporting worlds an exact representation of the rest of the world? Well, no, but they approximate it in ways that are fascinating and informative.

What motivated this effort? After all, as I have already mentioned, sports economics has expanded far and wide. One motive was to call attention to the point that sports matters and the unusual nature of consumer interest in it. Sports entertainment is an industry with very modest revenues but indications of very large intangible values. The other topic was that of race and sports. While there have been many studies related to sports and discrimination, it seemed that some were worthy of deeper or fresh evaluation. How does the Colin Kaepernick situation compare with Jackie Robinson or Tommie Smith and John Carlos? How do markets deal with discriminatory practices? For example, even though the NCAA has been widely discussed by economists, including myself, I continue to see frequent misunderstanding in the media concerning its underlying not-for-profit structure and how this impacts many observed outcomes.

Where did the “Uncut” come from? The publisher suggested the title, but I thought it captured the spirit of the book. I have not tried to be bombastic or provocative for its own sake. However, on a variety of topics but particularly on topics involving race, there are pressures to conform to a narrow set of politically approved explanations for outcomes. While being sensitive to the delicate nature of some of these issues, I have advanced some ideas out of economics that seem to have played an important role. Maybe the most politically incorrect is the idea that not all positional segregation stems from discriminatory motives. Some of it may, but the idea of relative advantage in some skills is widely accepted in most other settings in sports, so why does it not have an influence here? Also, where discrimination has been measured in sports, the ever-growing microscopic nature of its evidence says something important when contrasted to the world in which Jackie Robinson broke into the majors. When competitive balance comes up in the popular media, it seems that complete parity is almost always assumed to be optimal. I have tried to explain how inequality, both in and out of sports, is a much more complex topic than that.

This project has resulted from the contributions of many of my colleagues and associates both recently and in the past. I especially note the contribution of the late Bob Tollison. He was a great motivator and coauthor with boundless ideas. I miss our conversations about sports very much. He had originally signed on to be a coauthor of this effort, but his deteriorating health required him to pull out. Without his encouragement, I would have likely never completed the manuscript. Skip Sauer’s invitation to write for The Sports Economist and his example have been very valuable. My colleague here at Western Kentucky University (WKU), Dennis Wilson, not only coauthored Chapter 5, but has been a sounding board for many ideas even when he did not have time for it, as well as contributing many valuable insights of his own. Several other colleagues at WKU have also offered insights on a variety of topics including Mel Borland, Stephen Locke, Alex Lebedinsky, Craig Martin, Brian Strow, Reed Vesey, and David Zimmer. Over the years, a number of graduate assistants have provided help in data collection and organization. Kevin Allen and Khoa Nguyen merit special acknowledgement for going above and beyond. Finally, my wife, daughters, and son-in-law have been very supportive of my efforts and offered regular encouragements that helped me finish this.