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The Economic Development Of The Australian Football League

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  • Ross Booth

Abstract

This paper begins with a brief review of the evolution of the unique brand of Australian football and the development of a fully-professional and national Australian Football League (AFL) comprising 16 clubs from the Victorian Football League (VFL) formed in 1897. Analysis of clubs' finances and stated objectives suggest that AFL clubs are win-maximisers (subject to breaking even financially) rather than profit maximisers. The win-maximising objective stems from the nature of club ownership. Of the 16 clubs, ten are owned by their members, one is shareholder-owned, four are owned by their respective state football Commissions and one licence is held by the AFL. The objectives of the league and the changes in its governance are also discussed. The history of labour market devices and revenue sharing rules the VFL/AFL has used to try to increase competitive balance is outlined. Six different periods between 1897 and 2003 are identified and the different levels of competitive balance are calculated for each year and then matched against the devices and rules used in each period. It is suggested that the high levels of competitive balance achieved in the VFL/AFL in the most recent period could well be the result of the introduction of both a national player draft and team salary cap.

Suggested Citation

  • Ross Booth, 2005. "The Economic Development Of The Australian Football League," Monash Economics Working Papers 03/05, Monash University, Department of Economics.
  • Handle: RePEc:mos:moswps:2005-03
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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2005/0305afleconomicdevelopment.pdf
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    References listed on IDEAS

    as
    1. Andrew S. Zimbalist, 2002. "Competitive Balance in Sports Leagues: An Introduction," Journal of Sports Economics, , vol. 3(2), pages 111-121, May.
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    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.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Australian Football League (AFL); economic development; competitive balance; club ownership; club objectives; league objectives; league governance; player draft; salary cap.;

    JEL classification:

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

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