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The Peculiar Economics of Government Policy towards Sport

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  • Richard Pomfret
  • John K. Wilson

Abstract

Professional team sports enjoy subsidies from government, as well as regulatory exemption from standards that apply to other sectors of the economy. The Australian sports economics literature has, however, focused on competitive balance, with few studies examining government policies. This paper examines government policies such as subsidies, mega-event bidding, salary caps and player draft systems. We argue that the peculiar nature of professional sports provides some justification for such distinctive government policies. However, there is need for greater transparency, better-directed funding, and genuine public debate on some of these policies to enable considered evaluation of their benefits and costs.

Suggested Citation

  • Richard Pomfret & John K. Wilson, 2011. "The Peculiar Economics of Government Policy towards Sport," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 18(1), pages 85-100.
    • Handle: RePEc:acb:agenda:v:18:y:2011:i:1:p:85-100
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    File URL: http://press-files.anu.edu.au/downloads/press/p115201/pdf/ch085.pdf
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    References listed on IDEAS

    as
    1. John K. Wilson & Richard Pomfret, 2009. "Government Subsidies for Professional Team Sports in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(3), pages 264-275, September.
    2. Wladimir Andreff & Stefan Szymanski, 2006. "Handbook on the Economics of Sport," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00270122, HAL.
    3. Wladimir Andreff & Stefan Szymanski (ed.), 2006. "Handbook on the Economics of Sport," Books, Edward Elgar Publishing, number 3274, December.
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    5. Georg Stadtmann & Dirk Czarnitzki, 2002. "Uncertainty of outcome versus reputation: Empirical evidence for the First German Football Division," Empirical Economics, Springer, vol. 27(1), pages 101-112.
    6. Liam J. A. Lenten, 2009. "Unobserved Components in Competitive Balance and Match Attendances in the Australian Football League, 1945–2005: Where is all the Action Happening?," The Economic Record, The Economic Society of Australia, vol. 85(269), pages 181-196, June.
    7. Michael R. Donihue & David W. Findlay & Peter W. Newberry, 2007. "An Analysis of Attendance at Major League Baseball Spring Training Games," Journal of Sports Economics, , vol. 8(1), pages 39-61, February.
    8. James A Giesecke & John R Madden, 2007. "The Sydney Olympics, seven years on: an ex-post dynamic CGE assessment," Centre of Policy Studies/IMPACT Centre Working Papers g-168, Victoria University, Centre of Policy Studies/IMPACT Centre.
    9. Simon Rottenberg, 1956. "The Baseball Players' Labor Market," Journal of Political Economy, University of Chicago Press, vol. 64(3), pages 242-242.
    10. John Siegfried & Andrew Zimbalist, 2006. "The Economic Impact of Sports Facilities, Teams and Mega-Events," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 39(4), pages 420-427, December.
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    Cited by:

    1. Stefan Szymanski & Bastien Drut, 2020. "The Private Benefit of Public Funding: The FIFA World Cup, UEFA European Championship, and Attendance at Host Country League Soccer," Journal of Sports Economics, , vol. 21(7), pages 723-745, October.
    2. Daniel Read & Aaron C.T. Smith & James Skinner, 2021. "A Comparative Analysis of Competitive Balance Between a Closed and an Open League in Rugby League," Journal of Sports Economics, , vol. 22(8), pages 871-892, December.

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