Chapter 13 - Sport, Economics, and the Public Subsidy of Professional Sport

Question 1

relation with conflict theory and professional sport

Answer 1

labour relations and the circulation of commodities obscured by ideology

Question 2

major leagues

Answer 2

understood as a cartel that are exempt from anti-trust laws

Question 3

anti-trust laws

Answer 3

competitor franchise join together for mutual benefit by coordination production and pricing

Question 4

cartel

Answer 4

exert monopoly power within a restricted market, restricting supply of franchise preventing competition

Question 5

franchise

Answer 5

the right to offer a nationally known, brand name product (NHL) in a protected market area

Question 6

reason for cartels restricting output quantity

Answer 6

limited supply of franchise, length and timing of season, and increase prices to earn monopoly

Question 7

monopoly rent

Answer 7

profits above what would be earned in competitive market place

Question 8

monopoly

Answer 8

a market with only one seller

Question 9

monopsony

Answer 9

market with only one buyer

Question 10

use of monopsony in major leagues

Answer 10

power to secure labour of the best professional players

Question 11

reverse clause

Answer 11

system of indentured servitude that bound players to a specific team for the duration of their careers

Question 12

Colin Kaepernick

Answer 12

former NFL player who sued NHL for collision (for acting jointly to keep him out of the NFL as a result of political activism )

Question 13

team ownership

Answer 13

1. a club of privilege and power

2. teams are owned by extraordinarily rich men

Question 14

balance quest for profit with need for competition

Answer 14

each team has a vested interest in ensuring financial viability of competitors as well as on-field competitiveness

Question 15

economic rent

Answer 15

a return in excess of a resource owners opportunity cost that teams collectively secure

Question 16

single-entity cooperation

Answer 16

sets structure for play to occur (schedule, rules and regulations)

Question 17

joint venture cooperation

Answer 17

cooperative structure unrelated to play - broadcasting rights, revenue sharing and labour agreements

Question 18

pursuit of revenues in pro sports

Answer 18

1. game day revenues (tickets, concession, parking)
2. local broadcasting revenues
3. sponsorship revenues
4. shared revenues
5. postseason appearance

Question 19

why are players salaries the largest operating expense

Answer 19

due to the collective bargaining of players unions

Question 20

collective bargaining agreement

Answer 20

process of negotiating between owners and players union

Question 21

what is the role of a collective bargaining agreement within a major league

Answer 21

specifies maximum roster size, salary cap, pension, working conditions, drug testing, etc.

Question 22

bilateral monopolies

Answer 22

monopoly union negotiating with monopoly leagues

Question 23

relation between professional sport and public subsidy

Answer 23

1. in 1960 competitions between cities had limited number of pro sport franchise
2. many franchise have taken advantage of these competitions

Question 24

issues with building arenas

Answer 24

scarce public funds will increase as arenas and stadium developments become Moore extravagant and as the business model of pro sport expands to include greater revenue streams

Question 25

the relocation of Oilers

Answer 25

1. owner Peter Pocklington threatened to move oilers to Hudson 2. complained about very low value of Canadian dollar exploding players salaries and less revenue in a small market