Historical Perspectives on Sports Economics
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Historical Perspectives on Sports Economics

Lessons from the Field

Edited by John K. Wilson and Richard Pomfret

The sports sector, apart from being of economic significance in itself, is clearly one that many citizens share a great interest in. It is not mere results, but aspects such as history, statistics, interest in labour markets and finances that often spark people’s interest. Historical Perspectives on Sports Economics explores a variety of topics including mega-event analysis, sports governance, anthropometrics, gambling, industrial organisation, infrastructure development and racial issues. 
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Chapter 3: Home ground advantage: the determinants of sharing versus sole occupied stadium arrangements

Richard Pomfret and John K. Wilson

Abstract

A stadium is by far the largest capital investment undertaken by a professional sporting team. A new stadium incurs large fixed costs and ongoing maintenance and future upgrade requirements. Yet in most cases, it is used only for a few hours per week during a season, and often not used at all for lengthy periods in the off-season. Why then is ground-sharing not more prevalent? We examine the nature and extent of ground-sharing, and why its frequency has varied over time and across jurisdictions since the emergence of professional sports teams in the late 1800s. In the USA, ground-sharing for the main winter and summer sports (NFL and MLB) was popular in the period of rapid expansion in the second half of the twentieth century, but the model is increasingly being abandoned in favour of sole occupancy. In Italy and Germany some soccer clubs share but it is uncommon, and ground-sharing is practically unknown among soccer clubs in England; although there is some sharing between soccer and rugby teams, the arrangements have rarely lasted long. In Australia sharing has been more common, particularly in the VFL/AFL. We examine the possible impediments to ground-sharing arrangements in different jurisdictions and football codes, and attempt to identify conditions which lead clubs to have their own stadium. As an empirical phenomenon, we identify an inverted-U pattern of increased ground-sharing as a sport begins to attract large crowds and subsequent reversal of the trend as the wealthiest clubs prefer to have their own grounds. The pattern is, however, often moderated by country or city-specific histories or by exogenous changes.

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