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Sport as Business

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  • Andrew Zimbalist

Abstract

There is both a popular and academic literature suggesting that owners of sports teams do not profit maximize. The alternative formulation entails either win or utility maximization, usually subject to a breakeven constraint. Another line of economic analysis holds that team owners do fundamentally profit maximize or that profit maximization provides a useful benchmark against which to assess actual performance. There has been some empirical work attempting to decipher the true objective function of team owners. These results are inconclusive. Objective functions, however, remain important because they affect both owner behaviour and league performance. In practice, owners' objectives vary by team, league, and country and are strongly affected by how the team relates to an owner's other assets. The next task for modelling the behaviour and performance of sports leagues is to take fuller account of the diversity of ownership objectives within a given league. Copyright 2003, Oxford University Press.

Suggested Citation

  • Andrew Zimbalist, 2003. "Sport as Business," Oxford Review of Economic Policy, Oxford University Press, vol. 19(4), pages 503-511, Winter.
  • Handle: RePEc:oup:oxford:v:19:y:2003:i:4:p:503-511
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    Citations

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    Cited by:

    1. Troilo, Michael & Bouchet, Adrien & Urban, Timothy L. & Sutton, William A., 2016. "Perception, reality, and the adoption of business analytics: Evidence from North American professional sport organizations," Omega, Elsevier, vol. 59(PA), pages 72-83.
    2. Dietl Helmut M & Duschl Tobias & Lang Markus, 2011. "Executive Pay Regulation: What Regulators, Shareholders, and Managers Can Learn from Major Sports Leagues," Business and Politics, De Gruyter, vol. 13(2), pages 1-32, August.
    3. Markus Lang & Martin Grossmann & Philipp Theiler, 2011. "The Sugar Daddy Game: How Wealthy Investors Change Competition in Professional Team Sports," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 167(4), pages 557-577, December.
    4. repec:eee:spomar:v:20:y:2017:i:3:p:285-295 is not listed on IDEAS
    5. repec:bla:scotjp:v:64:y:2017:i:4:p:419-444 is not listed on IDEAS
    6. Smith, Aaron C.T. & Stewart, Bob, 2010. "The special features of sport: A critical revisit," Sport Management Review, Elsevier, vol. 13(1), pages 1-13, February.
    7. Raul Caruso, 2008. "Il calcio tra mercato, relazioni e coercizione," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 4(1), pages 71-88, Aprile.
    8. Nyberg, Sten & Priks, Mikael, 2014. "Public Order and Private Payments: Paying for Police Services at Events," Research Papers in Economics 2014:3, Stockholm University, Department of Economics.
    9. Jardin, Mathieu, 2009. "Efficiency of French football clubs and its dynamics," MPRA Paper 19828, University Library of Munich, Germany.
    10. Caruso, Raul, 2011. "Crime and sport participation: Evidence from Italian regions over the period 1997–2003," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 455-463.
    11. Raul Caruso, 2011. "Relational Goods at Work! Crime and Sport Participation in Italy: Evidence from Panel Data Regional Analysis over the Period 1997–2003," Chapters,in: Contemporary Issues in Sports Economics, chapter 3 Edward Elgar Publishing.
    12. repec:eee:pubeco:v:153:y:2017:i:c:p:1-8 is not listed on IDEAS
    13. Mario Nicoliello, 2008. "Reddito e capitale nelle società di calcio: la massima serie italiana 1998-2007," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 4(2), pages 67-94, Agosto.

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