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Comparing Competitive Balance In Australian Sports Leagues, The Afl, Nbl And Nrl: Does The Afl'S Team Salary Cap And Player Draft Measure Up?


  • Ross Booth


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 percents) 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 (measured by ASD/ISD ratios) has increased slightly in all three leagues, and both pre- and post-1985 the NRL has been the most balanced and the NBL the least balanced. The distribution of championships/premierships is, in general, also more even in the period 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 not inconsistent with the view that the introduction of a team salary cap (at least) 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 is also likely to have been another major influence on competitive balance.

Suggested Citation

  • 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.
  • Handle: RePEc:mos:moswps:2005-02

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    References listed on IDEAS

    1. Andrew S. Zimbalist, 2002. "Competitive Balance in Sports Leagues: An Introduction," Journal of Sports Economics, , vol. 3(2), pages 111-121, May.
    2. E. Woodrow Eckard, 2003. "The Anova-Based Competitive Balance Measure," Journal of Sports Economics, , vol. 4(1), pages 74-80, February.
    3. 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.
    4. E. Woodrow Eckard, 2001. "Baseball’s Blue Ribbon Economic Report," Journal of Sports Economics, , vol. 2(3), pages 213-227, August.
    5. 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.
    6. Stefan Kesenne, 2000. "Revenue Sharing and Competitive Balance in Professional Team Sports," Journal of Sports Economics, , vol. 1(1), pages 56-65, February.
    7. Brad R. Humphreys, 2003. "The Anova-Based Competitive Balance Measure," Journal of Sports Economics, , vol. 4(1), pages 81-82, February.
    8. Joshua Utt & Rodney Fort, 2002. "Pitfalls to Measuring Competitive Balance With Gini Coefficients," Journal of Sports Economics, , vol. 3(4), pages 367-373, November.
    9. Brad R. Humphreys, 2002. "Alternative Measures of Competitive Balance in Sports Leagues," Journal of Sports Economics, , vol. 3(2), pages 133-148, May.
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    Cited by:

    1. Fort, Rodney & Maxcy, Joel & Diehl, Mark, 2016. "Uncertainty by regulation: Rottenberg׳s invariance principle," Research in Economics, Elsevier, vol. 70(3), pages 454-467.
    2. 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.

    More about this item


    Australian sports leagues; Australian Football League (AFL); National Basketball League (NBL); National Rugby League (NRL); competitive balance; player draft; salary cap.;

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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