IDEAS home Printed from https://ideas.repec.org/a/eee/spomar/v8y2005i2p119-143.html
   My bibliography  Save this article

Comparing Competitive Balance in Australian Sports Leagues: Does a Salary Cap and Player Draft Measure Up?

Author

Listed:
  • Booth, Ross

Abstract

In the period following the introduction by the Australian Football League (AFL) of the team salary cap in 1985 and the player draft at the end of 1986, within-season competitive balance (measured by the seasonal distribution of team win percentages) has increased. This paper continues the investigation into whether the improvement in competitive balance in the AFL can be attributed to these labour market changes by examining competitive balance outcomes and labour market changes in two other Australian sports leagues, the National Basketball League (NBL) and the National Rugby League (NRL). The measurement of competitive balance in this paper is extended to include a simple measure of between-season competitive balance, namely the distribution of championships/ premierships amongst teams/clubs. The evidence suggests that since 1985 within-season competitive balance, as measured by actual standard deviation/idealised standard deviation (ASD/ISD) ratios, has increased slightly in all three leagues. The NRL has been the most balanced and the NBL the least balanced, both pre- and post-1985. The distribution of championships/premierships is, in general, also more even in the post-1985 period in all three leagues. The most significant labour market change in both the NBL and the NRL post-1985 is their adoption of a team salary cap. Thus, the evidence on competitive balance is consistent with the view that the introduction of a team salary cap in all three leagues has improved competitive balance since 1985. However, since 1985 there has also been net expansion in the number of clubs/teams in all three leagues, and a considerable turnover in both the NBL and the NRL, but not the AFL. The expansion and contraction of the leagues is compared with changes in their competitive balance, leading to the conclusion that the number and, in particular, the location of teams/clubs also affects competitive balance.

Suggested Citation

  • Booth, Ross, 2005. "Comparing Competitive Balance in Australian Sports Leagues: Does a Salary Cap and Player Draft Measure Up?," Sport Management Review, Elsevier, vol. 8(2), pages 119-143, September.
    • Handle: RePEc:eee:spomar:v:8:y:2005:i:2:p:119-143
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S144135230570036X
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Allen R. Sanderson & John J. Siegfried, 2003. "Thinking about Competitive Balance," Journal of Sports Economics, , vol. 4(4), pages 255-279, November.
    2. Brad R. Humphreys, 2003. "Comments on “Thinking about Competitive Balanceâ€," Journal of Sports Economics, , vol. 4(4), pages 284-287, November.
    3. Andrew S. Zimbalist, 2002. "Competitive Balance in Sports Leagues," Journal of Sports Economics, , vol. 3(2), pages 111-121, May.
    4. Allen R. Sanderson, 2002. "The Many Dimensions of Competitive Balance," Journal of Sports Economics, , vol. 3(2), pages 204-228, May.
    5. E. Woodrow Eckard, 2003. "The Anova-Based Competitive Balance Measure," Journal of Sports Economics, , vol. 4(1), pages 74-80, February.
    6. Andrew Zimbalist, 2003. "Competitive Balance Conundrums," Journal of Sports Economics, , vol. 4(2), pages 161-163, May.
    7. Stefan Késenne, 2005. "Revenue Sharing and Competitive Balance," Journal of Sports Economics, , vol. 6(1), pages 98-106, February.
    8. Eckard, E Woodrow, 2001. "Free Agency, Competitive Balance, and Diminishing Returns to Pennant Contention," Economic Inquiry, Western Economic Association International, vol. 39(3), pages 430-443, July.
    9. Rodney Fort, 2003. "Thinking (Some more) about Competitive Balance," Journal of Sports Economics, , vol. 4(4), pages 280-283, November.
    10. E. Woodrow Eckard, 2001. "Baseball’s Blue Ribbon Economic Report," Journal of Sports Economics, , vol. 2(3), pages 213-227, August.
    11. Leo H. Kahane, 2003. "Comments on “Thinking about Competitive Balanceâ€," Journal of Sports Economics, , vol. 4(4), pages 288-291, November.
    12. E. Eckard, 1998. "The NCAA Cartel and Competitive Balance in College Football," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(3), pages 347-369, June.
    13. Brad R. Humphreys, 2003. "The Anova-Based Competitive Balance Measure," Journal of Sports Economics, , vol. 4(1), pages 81-82, February.
    14. Ross Booth, 2004. "The Economics Of Achieving Competitive Balance In The Australian Football League, 1897–2004," Economic Papers, The Economic Society of Australia, vol. 23(4), pages 325-344, December.
    15. Joshua Utt & Rodney Fort, 2002. "Pitfalls to Measuring Competitive Balance With Gini Coefficients," Journal of Sports Economics, , vol. 3(4), pages 367-373, November.
    16. Brad R. Humphreys, 2002. "Alternative Measures of Competitive Balance in Sports Leagues," Journal of Sports Economics, , vol. 3(2), pages 133-148, May.
    17. Rodney Fort & Joel Maxcy, 2003. "“Competitive Balance in Sports Leagues: An Introductionâ€," Journal of Sports Economics, , vol. 4(2), pages 154-160, May.
    18. Rodney Fort & James Quirk, 2004. "Owner Objectives and Competitive Balance," Journal of Sports Economics, , vol. 5(1), pages 20-32, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. Fort, Rodney & Maxcy, Joel & Diehl, Mark, 2016. "Uncertainty by regulation: Rottenberg׳s invariance principle," Research in Economics, Elsevier, vol. 70(3), pages 454-467.
    3. Ross Booth, 2009. "Sports Economics," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(3), pages 377-385, September.
    4. Brian M. Mills & Steven Salaga, 2015. "Historical Time Series Perspectives on Competitive Balance in NCAA Division I Basketball," Journal of Sports Economics, , vol. 16(6), pages 614-646, August.
    5. Jakee, Keith & Kenneally, Martin & Mitchell, Hamish, 2010. "Asymmetries in scheduling slots and game-day revenues: An example from the Australian Football League," Sport Management Review, Elsevier, vol. 13(1), pages 50-64, February.
    6. Lenten, Liam J.A., 2011. "The extent to which unbalanced schedules cause distortions in sports league tables," Economic Modelling, Elsevier, vol. 28(1-2), pages 451-458, January.
    7. Meletakos, Panagiotis & Chatzicharistos, Dimitrios & Apostolidis, Nikolaos & Manasis, Vasilios & Bayios, Ioannis, 2016. "Foreign players and competitive balance in Greek basketball and handball championships," Sport Management Review, Elsevier, vol. 19(4), pages 391-401.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ross Booth, 2005. "Comparing Competitive Balance In Australian Sports Leagues, The Afl, Nbl And Nrl: Does The Afl'S Team Salary Cap And Player Draft Measure Up?," Monash Economics Working Papers 02/05, Monash University, Department of Economics.
    2. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
    3. Allen R. Sanderson & John J. Siegfried, 2003. "Thinking about Competitive Balance," Journal of Sports Economics, , vol. 4(4), pages 255-279, November.
    4. Bulent Uyar & David Surdam, 2013. "Searching for On-Field Parity," Journal of Sports Economics, , vol. 14(5), pages 479-497, October.
    5. Young Lee & Rodney Fort, 2008. "Attendance and the Uncertainty-of-Outcome Hypothesis in Baseball," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(4), pages 281-295, December.
    6. Robert J. Lemke & Matthew Leonard & Kelebogile Tlhokwane, 2010. "Estimating Attendance at Major League Baseball Games for the 2007 Season," Journal of Sports Economics, , vol. 11(3), pages 316-348, June.
    7. E. Woodrow Eckard, 2019. "Does the NCAA’s Collegiate Model Promote Competitive Balance? Power-5 Conference Football Versus the NFL," Journal of Sports Economics, , vol. 20(5), pages 654-670, June.
    8. R. Alan Bowman & James Lambrinos & Thomas Ashman, 2013. "Competitive Balance in the Eyes of the Sports Fan," Journal of Sports Economics, , vol. 14(5), pages 498-520, October.
    9. Kelly Goossens, 2006. "Competitive balance in european football: comparison by adapting measures: national measure of seasonal imbalance and Top 3," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 2(2), pages 77-122, Dicembre.
    10. Alistair Dawson & Paul Downward, 2005. "Measuring Short-Run Uncertainty of Outcome in Sporting Leagues," Journal of Sports Economics, , vol. 6(3), pages 303-313, August.
    11. Jan Šíma, 2013. "Static Competitive Balance of Three Chosen Central European Football Leagues," Ekonomika a Management, Prague University of Economics and Business, vol. 2013(4).
    12. Nicolas Scelles & Christophe Durand & Thierno Bah & François Rioult, 2011. "Intra-match competitive intensity in French football Ligue 1 and rugby Top 14," Post-Print halshs-02110792, HAL.
    13. Liam J. A. Lenten, 2009. "Towards a New Dynamic Measure of Competitive Balance: A Study Applied to Australia’s Two Major Professional ‘Football’ Leagues," Economic Analysis and Policy, Elsevier, vol. 39(3), pages 407-428, December.
    14. Meletakos, Panagiotis & Chatzicharistos, Dimitrios & Apostolidis, Nikolaos & Manasis, Vasilios & Bayios, Ioannis, 2016. "Foreign players and competitive balance in Greek basketball and handball championships," Sport Management Review, Elsevier, vol. 19(4), pages 391-401.
    15. Halicioglu, Ferda, 2012. "An empirical study of relationship between FIFA world ranking and domestic football competition level: the case of Turkey," MPRA Paper 35662, University Library of Munich, Germany.
    16. Jaret Treber & Rachel Levy & Victor A. Matheson, 2013. "Gender differences in competitive balance in intercollegiate basketball," Chapters, in: Eva Marikova Leeds & Michael A. Leeds (ed.), Handbook on the Economics of Women in Sports, chapter 12, pages 251-268, Edward Elgar Publishing.
    17. Alexander John Bond & Francesco Addesa, 2020. "Competitive Intensity, Fans’ Expectations, and Match-Day Tickets Sold in the Italian Football Serie A, 2012-2015," Journal of Sports Economics, , vol. 21(1), pages 20-43, January.
    18. Raul Caruso & Ilaria Verri, 2009. "Competitive Balance dopo la sentenza Bosman: il caso della pallavolo in Italia," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 5(1), pages 59-79, Maggio.
    19. Young Hoon Lee, 2009. "The Impact of Postseason Restructuring on the Competitive Balance and Fan Demand in Major League Baseball," Journal of Sports Economics, , vol. 10(3), pages 219-235, June.
    20. E. Woodrow Eckard, 2003. "The Anova-Based Competitive Balance Measure," Journal of Sports Economics, , vol. 4(1), pages 74-80, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:spomar:v:8:y:2005:i:2:p:119-143. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/716936/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.