Monday, September 29, 2008
The BCS and bowl matchups
Al Roth's foray into sports economics, "Unraveling Yields Inefficient Matchings: Evidence from Post-Season College Football Bowls" is pretty interesting (pdf). Roth is perhaps the foremost economist interested in the process of match-making, and college bowl games provide an interesting set of matchups to study.
While every fan with a laptop or a mike piles on the BCS system of matching teams for every conceivable sin, Roth and his co-authors do what economists are paid to do: examine the data in light of a) relevant theory and b) a potentially important policy change: the implementation of the BCS system in 1992. Roth et al. find that the matchups improved. Roth is more interested in the efficiency of kidney exchanges, doctor-hospital matches etc., but in the bowl system study, he and his colleagues provide "as far as we know, the first direct evidence and measurement of the inefficiency due to early transaction times in a naturally occurring market."
That's a good example of using the availability of sports data to attack an economic question that might be less tractable elsewhere. But the results are also relevant to the debate over how the bowl system should be structured. Here is Roth's interview on the topic at Working Knowledge, a daily newsletter from the Harvard Business School. Roth's answer to the opening question suggests he has no dog in the BCS fight.
While every fan with a laptop or a mike piles on the BCS system of matching teams for every conceivable sin, Roth and his co-authors do what economists are paid to do: examine the data in light of a) relevant theory and b) a potentially important policy change: the implementation of the BCS system in 1992. Roth et al. find that the matchups improved. Roth is more interested in the efficiency of kidney exchanges, doctor-hospital matches etc., but in the bowl system study, he and his colleagues provide "as far as we know, the first direct evidence and measurement of the inefficiency due to early transaction times in a naturally occurring market."
That's a good example of using the availability of sports data to attack an economic question that might be less tractable elsewhere. But the results are also relevant to the debate over how the bowl system should be structured. Here is Roth's interview on the topic at Working Knowledge, a daily newsletter from the Harvard Business School. Roth's answer to the opening question suggests he has no dog in the BCS fight.
Q: "What led you to research football teams? Are you a sports fan?"While Roth agrees with most commentators (presumably) that "the current organization of bowl games leaves much to be desired" his anecdotes and analysis are informative and cut to the heart of the problem:
A: "I'm a matching fan."
Q: What particular changes do you see in the design of matching?We all have our gripes with the BCS, but when it comes to matchups, it really is as simple as that.
A: For football bowls, the Bowl Championship Series helps to delay bowl matchups until the completion of all the games in the regular season, so that the top teams can more often be matched with each other in a championship game.
Labels: college football, sports economics
Franchise Value of the Cubs
I was quoted in a recent Chicago Tribune story on the value of the Cubs franchise.
Wrigley Field casts a long shadow as prospective buyers review the Cubs' confidential financial records and prepare the next round of bids for the stadium and team.
At issue is not whether the Cubs will remain at the beloved, 94-year-old ballpark, but how much it will cost to preserve and enhance Wrigley. The price that the franchise and stadium fetch will depend largely on how much more revenue can be wrung out of Wrigley.
"The franchise value is a guess on what future profits will be," said Phillip Miller, an associate professor of economics at Minnesota State University-Mankato, who has studied baseball economics. "If you have to gut the place in the extreme case, that would affect the value."
Bidders aren't publicly discussing their plans for the stadium because the sales process is ongoing. But their concerns go beyond maintaining the stadium in a safe condition. Fans and players have expressed the desire for more modern amenities, such as a larger clubhouse and more space for concessions and bathrooms, without losing the vibe and charm of the old ballpark. If a new owner has to privately finance such improvements, fans could see higher ticket and food prices, and even the stadium's sacrosanct name replaced with a corporate sponsor.
Fans would bear higher prices partly because of the honeymoon effect associated with renovations that improve the fan experience, but better amenities for players wouldn't directly affect the prices fans pay. If anything, it could attract more players to Wrigley, possibly decreasing the salaries the Cubs pay at the margin (a compensating differential).
Cross-posted at Market Power
Labels: franchise values, renovations
Saturday, September 27, 2008
MLB and the Dominican Scouting Scandal
Lots of money, extreme poverty, ignorance and innocence. Bring these together and the situation is ripe for the exploitation of the poor, ignorant and innocent by the unscrupulous. That is exactly what has been happening in the Dominican Republic with their baseball academies. As the facts are revealed, the one big question is how far the criminal behavior goes.
It will be interesting to see what if any rules changes MLB will adopt to keep this thievery from happening in the future. Given there is no draft for Dominican players, or any players from outside the US, perhaps this will induce MLB to implement one.
It will be interesting to see what if any rules changes MLB will adopt to keep this thievery from happening in the future. Given there is no draft for Dominican players, or any players from outside the US, perhaps this will induce MLB to implement one.
Thursday, September 25, 2008
Welfare & the Italian national team
Economists are used to the fact that government spending gets diverted towards strange special interests. But this example from the sports world is stunning:
European Union funds meant to help a poor region of Italy are set to be spent sponsoring the Italian national football team.While I'm no expert, one possibly productive use of the money would be to fight corruption. </naivete'>
The regional government in Calabria, a southern province, wants the money to go on promotional branding during Italy's World Cup campaign.
It would cost them 1.8m euros (£1.4m) over three years.
Regional officials argue it can help raise the profile of their area, both within Italy and overseas.
The idea is that the promotion will attract more tourists to Calabria....
According to one website promoting Italian tourism, Calabria is currently "little-respected by other Italians and little-known to tourists".
It is also home to the N'Drangheta, one of Italy's most powerful and violent mafia organisations.
Labels: corruption, economic development, soccer
Wednesday, September 24, 2008
NFL Team Valuations & the Corporate Stadium
Forbes has their annual valuation of NFL franchises up.***
Some of the interesting bits:
--The average NFL team is valued at $1 billion, up 8% from last year and 66% from five years ago. Dallas is worth the most, at $1.6 billion. Minnesota props up the valuation table at $839 million.
--Each of the top ten teams is playing in a modern stadium, or will be by 2010. Minnesota, Oakland, Atlanta, and Buffalo are not, and are listed as likely "to be sold or moved to a new city."
--The NY Giants and Jets are each "expected to net an additional $125 million" in annual revenue from their new (shared) stadium.
--TV revenues "no longer cover player expenses. Team owners now dig into cash from luxury suites and stadium advertising to pay players." (Poor Jerry Jones!)
The story oddly fails to consider the implications of a strategic focus of the NFL and pro sports in general on corporate money. On this issue, Bob Ryan has an interesting "Don Quixote rant", written in the context of the new Yankee Stadium: "You do not matter. The Yankees are only interested in the kind of people who will populate the luxury suites and who will pay somewhere between $500 and $2,500 per person, per game, to sit in the first five to eight rows of the new ballpark."
Ryan's rant and associated quotes from the Yankee marketing effort are quite eye-opening, but the big issue is how the focus on corporate money will work out given the meltdown in the financial sector. This Forbes story - How Wall Street's Woes May Whack Sports - states that one quarter of the $10 billion in annual corporate sponsorship in sports comes from the financial services industry. That's not chump change. My hunch is that the market price of luxury suites will be moving up and down with the value of CDOs for at least the near future.
Some of the interesting bits:
--The average NFL team is valued at $1 billion, up 8% from last year and 66% from five years ago. Dallas is worth the most, at $1.6 billion. Minnesota props up the valuation table at $839 million.
--Each of the top ten teams is playing in a modern stadium, or will be by 2010. Minnesota, Oakland, Atlanta, and Buffalo are not, and are listed as likely "to be sold or moved to a new city."
--The NY Giants and Jets are each "expected to net an additional $125 million" in annual revenue from their new (shared) stadium.
--TV revenues "no longer cover player expenses. Team owners now dig into cash from luxury suites and stadium advertising to pay players." (Poor Jerry Jones!)
The story oddly fails to consider the implications of a strategic focus of the NFL and pro sports in general on corporate money. On this issue, Bob Ryan has an interesting "Don Quixote rant", written in the context of the new Yankee Stadium: "You do not matter. The Yankees are only interested in the kind of people who will populate the luxury suites and who will pay somewhere between $500 and $2,500 per person, per game, to sit in the first five to eight rows of the new ballpark."
Ryan's rant and associated quotes from the Yankee marketing effort are quite eye-opening, but the big issue is how the focus on corporate money will work out given the meltdown in the financial sector. This Forbes story - How Wall Street's Woes May Whack Sports - states that one quarter of the $10 billion in annual corporate sponsorship in sports comes from the financial services industry. That's not chump change. My hunch is that the market price of luxury suites will be moving up and down with the value of CDOs for at least the near future.
***(Here is the Forbes story, with lots of links to stats, but sundry annoyances too. Here is a cleaner presentation of the story at Yahoo Sports.)
Labels: NFL, sports economics
Tuesday, September 23, 2008
Temporarily Banning Beer Sales Near Wrigley?
From the Chicago Sun-Times:
Bars and restaurants around Wrigley Field will be asked to stop serving alcohol after the seventh-inning stretch -- just as they do inside the ballpark -- to prevent Cubs playoff celebrations from turning ugly.
Ray Orozco, executive director of the city's Office of Emergency Management and Communications, said the proposed seventh-inning cutoff -- discussed at a playoff security meeting Monday -- would occur "only if it's a clinch game." Liquor sales could resume once the game is over, he said.
The voluntary moratorium would be effective on Sheffield between Newport and Irving; on Clark from Irving Park to Newport; and on Addison from Wilton to Racine.
"We're asking bar owners in the area to participate in the interest of public safety so we celebrate in the most responsible manner possible," Orozco said.
"It stops people from drinking for probably at least an hour. If they choose to, they can pick it up again. You're assuming everyone is going to start drinking again [after the final out]. I don't know if that's necessarily so. But if you stop drinking at 3:26 p.m., you won't be as physically impaired at 4:26 p.m."
My forecast: if implemented, it will result in people stocking up on beers before the 7th inning stretch. It's unclear whether this ban would have any effect on drinking, and it certainly could make fans more unruly because of the queues the ban would likely produce.
Cross-posted at Market Power
Labels: beer, Wrigley Field
Monday, September 22, 2008
New York PILOT Decision, Part II
I was in Washington DC last Thursday testifying in a hearing that is part of the ongoing investigation by the House Committee on Government Reform, Subcommittee on Domestic Policy into the financing of the New Yankee Stadium in the Bronx. For those who have not been following this controversy, here's a brief summary:
The PILOT issue is interesting for several reasons: it's a clear example of the tensions that arise between the people who make the laws (Congress) and the people who implement the policies that are dictated by those laws (the IRS in this case); it makes for great political theatre, as the parties involved are high profile organizations; and as Dennis Zimmerman pointed out in his testimony at the March 29th 2007 hearing, the PILOT decision has a desirable, although probably unintended consequence of forcing the one group of taxpayes who benefit most from the new stadium (sports fans) to pay for the majority of the financing.
Somewhat predictably, the Yankees and NYC have stuck to their orginal claim that the tangible economic benefits justify the ruling, rather than the more creative position that, despite the bad intentions surrounding the PILOT decision, it actually results in almost good economic policy. I say almost good because the lower interest rates on those tax exempt bonds represent an implicit subsidy from every taxpayer in the United States to baseball fans in New York City.
- 1986: Congress passes a law (the Tax Reform Act) that says sports facility construction projects can only be financed with tax exempt bonds if the principal and interest are paid using tax revenues.
- 2006: The IRS issues Private Letter Rulings that allow New York City and the Yankees (and later the Mets) to finance the construction of two new baseball stadiums using tax exempt bonds and pay off the principal and interest on these bonds using payment in lieu of taxes (PILOTs), and not tax revenues collected by New York City or the State of New York. This ruling effectively guts the 1986 Tax Reform Act. The rationale for this decision was that these stadiums would generate significant positive economic impact in the community, and thus serve the public interest.
The PILOT issue is interesting for several reasons: it's a clear example of the tensions that arise between the people who make the laws (Congress) and the people who implement the policies that are dictated by those laws (the IRS in this case); it makes for great political theatre, as the parties involved are high profile organizations; and as Dennis Zimmerman pointed out in his testimony at the March 29th 2007 hearing, the PILOT decision has a desirable, although probably unintended consequence of forcing the one group of taxpayes who benefit most from the new stadium (sports fans) to pay for the majority of the financing.
Somewhat predictably, the Yankees and NYC have stuck to their orginal claim that the tangible economic benefits justify the ruling, rather than the more creative position that, despite the bad intentions surrounding the PILOT decision, it actually results in almost good economic policy. I say almost good because the lower interest rates on those tax exempt bonds represent an implicit subsidy from every taxpayer in the United States to baseball fans in New York City.
Labels: economic development, economic impact, scandals, stadium subsidies
Friday, September 19, 2008
Economic Meltdown in DC
It's not happening at the Treasury Department, or at the Board of Governors of the Federal Reserve. According to today's Washington Post, it's happening down on the waterfront, at the new Nationals Park. Academic research indicates that new sports facilities typically draw gobs of fans for the first 4-5 years. There are a number of studies documenting this "novelty" effect in various sports, but for some reason I'm fond of this one.
But something different is happening on the banks of the Anacostia River this season. The Nationals have put an astonishingly bad team on the field, and despite having a shiny, new, publicly financed $600 million ballpark, they are averaging under 30,000 a night (19th best in MLB). The bad news is that DC is financing the principal and interest payments on the bonds used to finance the construction of this new stadium based, in part, on taxes collected at the stadium. DC expected to collect over $16 million in tax revenues at the stadium this year, but it looks like the actual figure will be closer to $13.5 million. Worse, the Nat's owners still have not paid $3.5 million in rent that was due at the beginning of the season because they claim that the stadium is still not finished.
I have argued many times that the claimed economic benefits in "economic impact studies" are forecasts, not gurantees, and that the people who generate those "studies" need to state explicitly that they are forecasting these numbers and provide decision makers with the appropriate information for making informed decisions. Like confidence bounds on their forecasts, or margins of error. But the subsidy seekers want everyone to believe that their economic impact estimates are hard facts, not forecasts of future events. The DC government is learning this lesson the hard way.
In another shocking development, the projected ancillary business and retail development in the neighborhood surrounding the new Nationals Park is also not appearing. I am shocked! Shocked, I say!
But something different is happening on the banks of the Anacostia River this season. The Nationals have put an astonishingly bad team on the field, and despite having a shiny, new, publicly financed $600 million ballpark, they are averaging under 30,000 a night (19th best in MLB). The bad news is that DC is financing the principal and interest payments on the bonds used to finance the construction of this new stadium based, in part, on taxes collected at the stadium. DC expected to collect over $16 million in tax revenues at the stadium this year, but it looks like the actual figure will be closer to $13.5 million. Worse, the Nat's owners still have not paid $3.5 million in rent that was due at the beginning of the season because they claim that the stadium is still not finished.
I have argued many times that the claimed economic benefits in "economic impact studies" are forecasts, not gurantees, and that the people who generate those "studies" need to state explicitly that they are forecasting these numbers and provide decision makers with the appropriate information for making informed decisions. Like confidence bounds on their forecasts, or margins of error. But the subsidy seekers want everyone to believe that their economic impact estimates are hard facts, not forecasts of future events. The DC government is learning this lesson the hard way.
In another shocking development, the projected ancillary business and retail development in the neighborhood surrounding the new Nationals Park is also not appearing. I am shocked! Shocked, I say!
Labels: baseball, economic impact; marketing
Tuesday, September 16, 2008
Ticketless Trojan Game
I've had an longtime fascination with gameday ticket resell, not just the analytics and systematic data study but in a "hands-on" way -- I guess you could call it "behavioral" research. Various friends and I have attended FSU-Miami (91), Auburn-Alabama (Birmingham), Auburn-Florida (Auburn), TN-Arkansas (98), Texas A&M-Baylor (College Station), Ohio St.-Michigan (Columbus), Michigan-Penn St. (Ann Arbor), plus odd assortment of Arkansas, SMU (pre-death penalty), UK, and Vandy games without tickets in hand. The only "shut out" was the Notre Dame-FSU game in 93.
Differences in ticket prices at various NCAA football games tend to follow supply and demand in predictable ways with game quality, stadium capacity relative to the population of the market highly influential, and local resale restrictions and their enforcement highly influential. In recent years, tickets can be secured via online brokers, but the expiring option nature of a ticket frequently means lower prices closer to game time -- the actual process of this price movement is interesting to observe if you aren't too concerned about seeing the kickoff.
The availability of ticket sellers is a different matter. In places such as Ann Arbor, Knoxville, Auburn, Birmingham, or College Station gameday resale comes close to an organized exchange in volume of tickets for sale. The price varies, depending on the game's characterisitcs but ticket sellers abound. At places like Columbus or Florida State where (when I visited) resell restrictions were in place and modestly enforced, resellers existed but in much smaller numbers and with less obvious marketing. This makes sense.
That brings me to last Saturday and my head-scratcher. My family and I drove to campus very early, hung around until near game time, and canvassed the campus and Coliseum area. In total, we saw 3 tickets openly marketed. I also observed two others being sold. According to sources that I had consulted, local authorities sometimes discourage resell near the Coliseum, but not on campus. In fact, the tickets that I observed being resold were near the Coliseum in full view of strolling police officers. So why so few tickets openly marketed? The online sites posted a large number of tickets as late as noon on Saturday. Any ideas in the Sports Economist world?
Differences in ticket prices at various NCAA football games tend to follow supply and demand in predictable ways with game quality, stadium capacity relative to the population of the market highly influential, and local resale restrictions and their enforcement highly influential. In recent years, tickets can be secured via online brokers, but the expiring option nature of a ticket frequently means lower prices closer to game time -- the actual process of this price movement is interesting to observe if you aren't too concerned about seeing the kickoff.
The availability of ticket sellers is a different matter. In places such as Ann Arbor, Knoxville, Auburn, Birmingham, or College Station gameday resale comes close to an organized exchange in volume of tickets for sale. The price varies, depending on the game's characterisitcs but ticket sellers abound. At places like Columbus or Florida State where (when I visited) resell restrictions were in place and modestly enforced, resellers existed but in much smaller numbers and with less obvious marketing. This makes sense.
That brings me to last Saturday and my head-scratcher. My family and I drove to campus very early, hung around until near game time, and canvassed the campus and Coliseum area. In total, we saw 3 tickets openly marketed. I also observed two others being sold. According to sources that I had consulted, local authorities sometimes discourage resell near the Coliseum, but not on campus. In fact, the tickets that I observed being resold were near the Coliseum in full view of strolling police officers. So why so few tickets openly marketed? The online sites posted a large number of tickets as late as noon on Saturday. Any ideas in the Sports Economist world?
Friday, September 12, 2008
One reason to root for Kansas
QB Todd Reesing:
There is no playbook in Todd Reesing’s backpack, only business textbooks and three back copies of his favorite read: The Economist, the weekly newsmagazine that he says gives him a concise overview of what is going on in the world. He has a broad vision for a numbers guy.Here's the rest of an interesting story, from Joe Drape in the NY Times.
Last year as a sophomore quarterback, Reesing saw the football field well enough to throw for 3,486 yards and 33 touchdowns and lead the Jayhawks to a 12-1 season and a victory in the Orange Bowl over Virginia Tech. When he faces South Florida on Friday in a battle of undefeated and ranked teams, Reesing will do so as the nation’s top-rated passer, completing 76.7 percent of his passes and throwing for six touchdowns.
He is perhaps more dazzling in the classroom. Reesing earned first-team academic all-Big 12 honors last year as a dual major in economics and finance, and he is on an accelerated track to graduate next fall. This week, for example, he was just as consumed with calculating marketing and revenue projections for an imaginary hand lotion — part of an independent study course — as he was preparing for the No. 19-ranked Bulls.
Labels: college football
Clutch, or not?
The numbers guy at the WSJ examines the case of "clutch" hitting. A-Rod "lack of clutch" takes center stage.
Jahn Hakes and I looked pretty carefully for clutch effects several years ago. We were excited since newly available retrosheet data offered new ways of looking at the issue, including the "leverage" effects (changes in probability) of different hits at different times. We found nothing significant. Zip, zilch, nada. And we tried hard. We tried hard because I think real factors (psychological makeup, physical condition) have time-varying effects and thus contribute to some streaks. But randomness is so dominant in baseball that it apparently conjures up the bulk of them.
Jahn Hakes and I looked pretty carefully for clutch effects several years ago. We were excited since newly available retrosheet data offered new ways of looking at the issue, including the "leverage" effects (changes in probability) of different hits at different times. We found nothing significant. Zip, zilch, nada. And we tried hard. We tried hard because I think real factors (psychological makeup, physical condition) have time-varying effects and thus contribute to some streaks. But randomness is so dominant in baseball that it apparently conjures up the bulk of them.
Labels: baseball
Doping in NASCAR - Why is Testosterone Banned?
Perhaps you haven't heard, but there is a doping scandal in NASCAR:
NASCAR officials said Thursday that they plan to meet with Craftsman Truck series driver Ron Hornaday Jr. to talk about his admitted use of testosterone.Ramsey Poston, NASCAR managing director of corporate communications, said the meeting will take place “to get a better understanding of his condition.” He did not say when the meeting will be.
Hornaday, the 2007 trucks series points champion, admitted to using the drugs during an interview Tuesday with ESPN.
He said he used the drugs to treat a medical condition that was later diagnosed to be a hyperactive thyroid.
But officials of NASCAR say the use of testosterone doesn't do anything:
Poston said NASCAR has consulted drug experts about use of testosterone by drivers.
“Based on what we currently know,” Poston said, “our outside experts have said the prescription he had did not enhance performance or impair judgment on the track. It’s our understanding that Ron’s very serious health issue is being addressed.”
Maybe this just refers to Hornaday's use, but if not then the banning of the substance in NASCAR is odd. If the use of testosterone improves a driver's effort and it carries risks, then one can make a positional externality argument for banning (I'd rather not use it but my opponent uses it. So I better use it to maintain my relative position in the sport). But that doesn't seem to be the case here.
I also can't see that NASCAR officials would encourage its use if it doesn't improve the overall effort of the drivers. If something that is considered a "performance enhancer" in other sports does not enhance absolute or relative performance in NASCAR, then why is it banned?
Cross-posted at Market Power
Labels: doping, motor sports; racing; NASCAR, testosterone
Thursday, September 11, 2008
584 fans?
The Marlins want a new, subsidized stadium built where the Orange Bowl once sat. But demand for baseball in Miami (despite two recent World Series titles) does not seem to warrant a stadium subsidy:
For the 455th consecutive time last Wednesday afternoon, 96-year-old Fenway Park in Boston sold every seat for a Red Sox game, tying baseball's record.That's the start of an informative editorial at Miami Today. Thanks to John J. for the link.
At the same time that Boston's Daisuke Matsuzaka was throwing his first pitch before 37,373 paid customers, Florida Marlins pitcher Chris Volstad was throwing one at 21-year-old Dolphin Stadium before 584 fans — counted by the players themselves.
That's all you need to know to understand why government's frenzy to waste half a billion dollars to build a Marlins stadium is off base.
As auto dealer Norman Braman plays his hand in court as the only public figure willing to buck the giveaway, the Marlins play to the smallest attendance in baseball, by thousands, day after day.
Even the Marlins' pitiful average of 16,576 paid through last Wednesday's game is suspect, because while players were counting 584, the Marlins were reporting an "official" 11,211 — though that's still far less than a third of capacity. Whether almost nobody bothered to use their tickets to see a team fighting for a title or the Marlins were fudging numbers, who knows?
What is perfectly clear is that few show up. No new stadium would change that.
Labels: Major League Baseball, stadium subsidies
Re-pricing Triathalons
Some interesting items reported in this NYT story on triathalons. First, the demand to compete in a triathalon is increasing and so is price.
The triathlon is a sport that has grown increasingly expensive in the last five years. Entry fees for the sport’s premier Ironman-branded events have risen 40 percent since 2003. But even at $525 for a standard Ironman entry, the price has not put a dent in demand.Second, branding is important:
Today the Ironman logo (a symbol called M-dot) can be found on baby strollers, suitcases, organic Kona coffee and even tattooed on the bodies of race finishers.Finally, public agencies appear to supping at the trough:
Entry slots for the original Hawaiian Ironman race (now called the Ford Ironman World Championship, to be held Oct. 11) are so coveted that last year, more than 8,000 people entered a lottery for 200 slots; the handful of entries sold through a race-sponsored charity auction on eBay regularly go for more than $40,000 each.
The lottery and auction are the only ways for athletes who are not the fastest in their age group to race the Kona event; organizers reserve most of the 1,800 entries for athletes who qualify through a top result in another branded event.
Races without the M-dot logo generally cost about $300 versus $525 and don’t garner high demand.
“I don’t know of one that sells out in panic mode,” said Mike Greer, the founder of the Ironman 70.3 Buffalo Springs Lake in Lubbock, Tex., and a three-time Ironman Hawaii finisher. “When you spend a year training for something, you want all the hoopla. You want the M-dot.”
Tom Cotton, a race organizer with Firstwave Events in Los Gatos, Calif., said that over the last few years, his budgets have increased by 50 to 100 percent, mostly because of city, county and state agency fees.Memo to Tom: maybe it's time to play the "economic impact" card!
“California State Parks now wants 25 percent of the gross,” he said. “Police overtime has doubled in one city I work in.”
Labels: demand for sports
Wednesday, September 10, 2008
"Naming Rights and Historical Wrongs"
In this NYT article, Sandomir discusses the prospect of the NFL's Giants and Jets playing in Allianz Stadium:
The Giants and the Jets face moral and public-relations questions as they negotiate the possible sale of the naming rights to their new stadium with Allianz, a Munich-based insurer and financial services company with disturbing connections to Nazi Germany.This is an intriguing dilemma. At some point - as with slave reparations in the U.S. - one must decouple form the past and take actions which make for a better a future. Allianz is not the only German company with past Nazi ties, and as Feldman's history and the related facts suggest, the company has owned up to much of it. But the weird thing to me is this: what does Allianz expect to gain from having its name on the stadium? Is this kind of visibility (Allianz is a big, but behind-the-scenes insurer in the U.S.) worth paying for?
Allianz insured facilities and personnel at concentration camps like Auschwitz and Dachau. Kurt Schmitt, its chief executive in the 1930s, served as Hitler’s second economics minister and can be seen in a photograph from a rally wearing an SS-Oberführer’s uniform and delivering the Nazi salute with Hitler standing in front of him.
Like other insurers in Germany at the time, Allianz followed anti-Semitic policies by terminating or refusing to pay off the life insurance policies of Jews, and sent cash that was due beneficiaries and survivors to the Nazis.
It also became the insurer of Jewish valuables taken by the Nazis.
Gerald Feldman was a historian asked by Allianz in 1997 to produce an unfettered history of its role in Hitler’s Germany. He wrote in “Allianz and the German Insurance Business, 1933-1945” about when the company extended its group accident insurance for engineers working for the notorious I.G. Farben chemical company at Auschwitz.
“It was just one more piece of business in the Third Reich,” he wrote in his book, which was published in 2001, “but it demonstrated that such pieces on any large scale made contact at some point with all that is represented by the name ‘Auschwitz’ — from slave labor to extermination — virtually inescapable.”
A deal with Allianz would not be easy to sell publicly, like Citigroup’s with the Mets. The possibility of an Allianz Stadium will make some people cringe, especially in a market that is home to many Jewish people, and in which the Tisch family, which owns half of the Giants, has supported many Jewish causes.
“There must be sensitivity to the psychological impact this would have,” said Elan Steinberg, a vice president of the American Gathering of Jewish Holocaust Survivors and Their Descendants. “Survivors are still alive. It would not be appropriate to affix the Allianz name to a stadium name in an area where a lot of survivors still living.”
Labels: new stadium, NFL
Monday, September 08, 2008
Myrtle Beach Golf Conference
Announcing the first Myrtle Beach Golf Conference. The following is from an email I received from Andrew Weinbach of the Department of Economics at Coastal Carolina:
This year the first annual Myrtle Beach Golf Conference will be held in Myrtle Beach , November 13-15. It will be an interdisciplinary group, including academics and industry folks. We so far have 3 sports economics papers on golf lined up, and would welcome a few more.
The website: http://www.myrtlebeachgolfconference.com/
Details:
The deadline for submissions is October 15, and a copy of the soft-cover 2008 proceedings will be produced by Spring.
Please let me know if you are interested, and pass this along to those who might be. I’d be happy to answer any of your questions.
Thank you for your time.
Andy
If you are interested in presenting, you can contact Andy:
Andrew Weinbach
Assistant Professor of Economics
E. Craig Wall Sr. College of Business Administration
Coastal Carolina University
(843) 349-6542
Fax: (843) 349-2455
Labels: golf, Myrtle Beach
NFLPA: "Fantasy Sports Must Pay -- On Two"
In a preemptive move, CBS has launched a court case, claiming pressure and a likely suit from the NFLPA regarding use of players' names and statistics on fantasy sites. The Yahoo! summary states:
CBS seeks a court ruling saying that “the Players Association may not seek to control the use of player statistics in fantasy games and may not continue to extract money from CBS Interactive for the use of publicly available football statistics.”In Fantasies & Externalities in June of '08, I commented on the issue after the Supreme Court refused to review the 8th Circuit's decision against the MLBPA in their attempt to force compesation on users of baseball statistics. Apparently, the NFLPA either thinks they have a different angle, or, maybe, they're just going to keep their pads lower and feet moving. As my high school coach would say, it's all a matter of leverage.
Labels: NFL; fantasy sports
The College Football Encyclopedia
I'd like to thank the folks at Skyhorse Publishing for sending me a copy of The USA Today College Football Encyclopedia
. With a picture of last season's BCS Title Game between LSU and Ohio State on the cover, you know it is up to date, and it has 1353 pages of data, game summaries, award winners, etc. etc., dating back to 1953. The development of each season is described, along with the exploits of the outstanding players and coaches.
I get lots of utility from reading monster sports encyclopedias, even in the internet era. The book is marked down from $25 to $15 at Amazon, which makes it a steal for anyone who likes to review sports data in unplugged fashion.
. With a picture of last season's BCS Title Game between LSU and Ohio State on the cover, you know it is up to date, and it has 1353 pages of data, game summaries, award winners, etc. etc., dating back to 1953. The development of each season is described, along with the exploits of the outstanding players and coaches. I get lots of utility from reading monster sports encyclopedias, even in the internet era. The book is marked down from $25 to $15 at Amazon, which makes it a steal for anyone who likes to review sports data in unplugged fashion.
Labels: college football
Friday, September 05, 2008
Golf, the International Language? (update)
The LPGA has backed down on its proposal to require tour members to be proficient in English in the face of criticism. My personal criticism of the now defunct rule was not that it was discriminatory, but that it would deprive the tour of many of its best players. I noted that the NBA would never consider banning Yao Ming for poor vocabulary.
One comment to the previous post by frequent reader Bartman suggests that while "the NBA might love Yao Ming, but they'd hate having 3 Chinese starters on every team."
That's a thought-provoking statement with which I think I ultimately disagree, and I believe the data back me up. While the economics literature is full of papers that show that consumer discrimination exists in sports, most of these papers adjust for player quality. Therefore, while a white fan may prefer Larry Bird or Mickey Mantle to roughly equally talented black players such as Magic Johnson or Hank Aaron, the same data also show that white fans nearly always prefer a black star to a white scrub. While Mantle's baseball cards sell for more than Aaron's, Aaron's still sell for more than Joe Shlabotnik's.
Remember, the NBA's fan base is largely white despite an overwhelming percentage of African American players, and Arsenal remains one of the mosts popular sides in the EPL despite fielding almost no English players. If China brings 3 starters to every team each with the skills of LeBron, Kobe, or KG, the NBA will quickly learn to love these players.
One comment to the previous post by frequent reader Bartman suggests that while "the NBA might love Yao Ming, but they'd hate having 3 Chinese starters on every team."
That's a thought-provoking statement with which I think I ultimately disagree, and I believe the data back me up. While the economics literature is full of papers that show that consumer discrimination exists in sports, most of these papers adjust for player quality. Therefore, while a white fan may prefer Larry Bird or Mickey Mantle to roughly equally talented black players such as Magic Johnson or Hank Aaron, the same data also show that white fans nearly always prefer a black star to a white scrub. While Mantle's baseball cards sell for more than Aaron's, Aaron's still sell for more than Joe Shlabotnik's.
Remember, the NBA's fan base is largely white despite an overwhelming percentage of African American players, and Arsenal remains one of the mosts popular sides in the EPL despite fielding almost no English players. If China brings 3 starters to every team each with the skills of LeBron, Kobe, or KG, the NBA will quickly learn to love these players.
Labels: discrimination, golf
Wednesday, September 03, 2008
MLB revenue sharing and stadium financing
Readers of the Sports Economist are likely to be familiar with revenue sharing in professional sports. Leagues have different approaches to sharing revenues, and the extent to which revenue sharing affects competitive balance is an interesting topic of conversation. I am afraid I have to admit that the inner workings of some of the revenue sharing arrangements are, to me at least, cures for insomnia. But I have just learned of one aspect of revenue sharing in MLB that overlaps with one of my favorite sporting issues, stadium finance.
In particular, consider that MLB allows team expenditures on stadium finance to offset revenue sharing. This has, apparently, been going on for a couple of years or so. Enter the Yankees and the financing of Yankee Stadium using PILOTS (payments-in-lieu-of-taxes). PILOTS are a way by which state and local governments, or quasi-governmental agencies like the New York City Industrial Development Authority, borrow money which is used to finance essentially privately owned development projects which are "owned" by the pubic agency. Interest costs are about 25% lower this way than if the private company had borrowed directly. (PILOTS sprung up in response to restrictions on the use of state and local government debt for essentially private purposes, of which stadiums and arenas were a prime example. NY Senator Moynihan was instrumental in getting such legislation through Congress.) The new development does not pay property taxes, for instance, because the public agency owns the property. To offset the loss in taxes, the user of the facility makes payments in lieu of taxes, which are used by the agency to pay the principal and interest on the borrowing. The Yankees secured agreement from MLB to count the PILOTS toward their revenue sharing obligations.
Congressional hearings on the use of PILOTS and Yankee Stadium financing are set for later this month. Allegations of inappropriate assessment of the land on which the new stadium sits are also under investigation. It promises to be a pretty interesting set of hearings.
For more, check out this.
In particular, consider that MLB allows team expenditures on stadium finance to offset revenue sharing. This has, apparently, been going on for a couple of years or so. Enter the Yankees and the financing of Yankee Stadium using PILOTS (payments-in-lieu-of-taxes). PILOTS are a way by which state and local governments, or quasi-governmental agencies like the New York City Industrial Development Authority, borrow money which is used to finance essentially privately owned development projects which are "owned" by the pubic agency. Interest costs are about 25% lower this way than if the private company had borrowed directly. (PILOTS sprung up in response to restrictions on the use of state and local government debt for essentially private purposes, of which stadiums and arenas were a prime example. NY Senator Moynihan was instrumental in getting such legislation through Congress.) The new development does not pay property taxes, for instance, because the public agency owns the property. To offset the loss in taxes, the user of the facility makes payments in lieu of taxes, which are used by the agency to pay the principal and interest on the borrowing. The Yankees secured agreement from MLB to count the PILOTS toward their revenue sharing obligations.
Congressional hearings on the use of PILOTS and Yankee Stadium financing are set for later this month. Allegations of inappropriate assessment of the land on which the new stadium sits are also under investigation. It promises to be a pretty interesting set of hearings.
For more, check out this.
