ECON 3520 - Sports Economics III

North Terrace Campus - Winter - 2017

The course analyses the economics of the professional sports industry, which is not only big business but also benefits from public policy favour. The sports industry has many peculiar characteristics that are amenable to economic analysis. Among other topics, the course covers market structure, the labour market, public subsidies for stadia, public funding of bids for mega-events and for the events themselves, and corruption.

  • General Course Information
    Course Details
    Course Code ECON 3520
    Course Sports Economics III
    Coordinating Unit School of Economics
    Term Winter
    Level Undergraduate
    Location/s North Terrace Campus
    Units 3
    Contact Intensive course up to 14 hours per week
    Available for Study Abroad and Exchange Y
    Prerequisites ECON 1000 and ECON 1004 or ECON1012; ECON 1008 or ECON 1011
    Assumed Knowledge ECON 2504, ECON 2506
    Course Description The course analyses the economics of the professional sports industry, which is not only big business but also benefits from public policy favour. The sports industry has many peculiar characteristics that are amenable to economic analysis. Among other topics, the course covers market structure, the labour market, public subsidies for stadia, public funding of bids for mega-events and for the events themselves, and corruption.
    Course Staff

    Course Coordinator: Professor Richard Pomfret

    Course Coordinator and Co-Lecturer: Professor Richard Pomfret
    Office location: Nexus 10 Building, Room 4.36
    Telephone 8313 4751; Email richard.pomfret@adelaide.edu.au  

    Co-Lecturer: Professor John Siegfried
    Office location: Nexus 10 Building, Room 4.29 
    Telephone 8313 4926; Email john.siegfried@vanderbilt.edu

    Tutor: Aaron Blanco

    Professor Siegfried will be primarily responsible for the course from its beginning through the mid-course examination. Professor Pomfret will be primarily responsible for the course after the mid-course examination. The final examination will cover the entire course.

    Course-related announcements are communicated via email.   Please check your student email and MyUni regularly.
    Course Timetable

    The full timetable of all activities for this course can be accessed from Course Planner.

    Lectures and seminars:
    11am - 1 pm on Monday, Tuesday, Wednesday, Thursday and Friday.
    Location: Ligertwood 231

    Tutorials:
    Tutorials are daily except for Monday 3 July, Wednesday 12 July or Friday 21 July
    Location:
    2-3pm in Ligertwood 113
    3-4pm in Ligertwood 112

    Examinations:
    Mid-course examination - 90-minute on Wednesday, July 12, at 11:00 am
    Final examination - two-hour on Friday, July 21 from 11am - 1 pm

  • Learning Outcomes
    Course Learning Outcomes
    The University of Adelaide is a research-intensive university, which seeks to develop graduates of international distinction by supporting high quality education. The University of Adelaide provides an environment where students are encouraged to take responsibility for developing the graduate attributes listed below. Additionally, the continuing development of good inter-personal and communication skills is widely recognised as important for all graduates, and this course specifically seeks to develop students’ abilities to make oral presentations to their tutorial group, and to write a short research report based on assigned reading material.

    On successful completion of this course students will be able to:
    1 have gained knowledge of the branch of economics devoted to the sports industry
    2 have enhanced their analytical skills
    3 have gained experience in presenting a report and discussing its content
    4 have developed inter-personal and communication skills in small-group discussion
    University Graduate Attributes

    This course will provide students with an opportunity to develop the Graduate Attribute(s) specified below:

    University Graduate Attribute Course Learning Outcome(s)
    Deep discipline knowledge
    • informed and infused by cutting edge research, scaffolded throughout their program of studies
    • acquired from personal interaction with research active educators, from year 1
    • accredited or validated against national or international standards (for relevant programs)
    1, 2
    Critical thinking and problem solving
    • steeped in research methods and rigor
    • based on empirical evidence and the scientific approach to knowledge development
    • demonstrated through appropriate and relevant assessment
    2
    Teamwork and communication skills
    • developed from, with, and via the SGDE
    • honed through assessment and practice throughout the program of studies
    • encouraged and valued in all aspects of learning
    3, 4
    Career and leadership readiness
    • technology savvy
    • professional and, where relevant, fully accredited
    • forward thinking and well informed
    • tested and validated by work based experiences
    2
    Intercultural and ethical competency
    • adept at operating in other cultures
    • comfortable with different nationalities and social contexts
    • Able to determine and contribute to desirable social outcomes
    • demonstrated by study abroad or with an understanding of indigenous knowledges
    3, 4
    Self-awareness and emotional intelligence
    • a capacity for self-reflection and a willingness to engage in self-appraisal
    • open to objective and constructive feedback from supervisors and peers
    • able to negotiate difficult social situations, defuse conflict and engage positively in purposeful debate
    2, 3, 4
  • Learning Resources
    Required Resources
    We will draw mainly on two textbooks:

    Brad Humphreys: The Economics of Professional Sports: An e-Textbook
    You can buy Humphreys’ text as a self-published book on Amazon for around $35.

    John Wilson and Richard Pomfret: Public Policy and Professional Sports: International and Australian Experiences (Edward Elgar, 2014).
    This is available online to students in the course with a 30% discount. The discount code can be reached via the link: http://www.e-elgar.com/Public-Policy-and-Professional-Sports-Discount-Offer

    Other readings are available from the Barr-Smith Library electronically or in hard copy. If you are uncertain about how to access online articles, e-books or other materials read the MyUni Blurb for Economics Students posted on MyUni. If a book is on loan from the library, you can recall it http://www.adelaide.edu.au/library/tutorials/tut08/demo8.html , and it should be available within a week. This is important for Barr-Smith Library staff to judge demand; if there are multiple requests for a book, the library will take action to increase availability.

    Students are also recommended to purchase:
    Stefan Szymanski: Playbooks and Checkbooks: An Introduction to the Economics of Modern Sports (Princeton UP, 2009).
    It is available in paperback, is easy to read, and covers many of the topics in this course.

    Readings marked * are in a Subject Reader available from the Image and Copy Centre.

    Students are expected to read assignments before tutorials. Be prepared to summarize the articles and/or critically evaluate them. Class participation will be evaluated and will count five per cent toward the overall marks for the subject.

    Recommended Resources
    In addition to the listed readings, you should refer to the following collections, which are available from the Barr-Smith Library:
    Wladimir Andreff and Stefan Szymanski: Handbook on the Economics of Sport (Edward Elgar, 2009).
    Wolfgang Maennig and Andrew Zimbalist: International Handbook of the Economics of Mega Sporting Events (Edward Elgar, 2012) – BSL e-resource

    Additional readings may be posted on MyUni.

    The final exam consists of essay questions; the more widely you read (and think about the readings), the more likely you are to write better essays.
    Online Learning
    The overheads from the lectures and selected reading materials will be available on MyUni.
  • Learning & Teaching Activities
    Learning & Teaching Modes
    Each topic is divided into a lecture component and a tutorial component. The lecture covers the key concepts of a particular topic to complement the text. Tutorials will consolidate your understanding of course material by working through problems and expand your understanding of course material through group discussion.
    Workload

    The information below is provided as a guide to assist students in engaging appropriately with the course requirements.

    The University expects full-time students (i.e. those taking 12 units per semester) to devote a total of 48 hours per week to their studies. This translates to 12 hours per week for a semester course. 
    Learning Activities Summary
    Teaching & Learning Activities Related Learning Outcomes
    Lectures 1
    Tutorials 3

    Lecture Schedule
    Lectures & Seminars Topics Readings
    Monday 3 July 11.00 - 12.00 Introduction (RP)
    12:00 - 13:00 thinking like an economist (JS)

    No tutorial
    The sports industry [RP]
    a) from playing games to big business
    • Pomfret, The Evolution of Professional Team Sports, in Pomfret & Wilson Sport through the Lens of Economic History (Elgar 2016), 6-28.
    • Szymanski, Playbooks and Checkbooks, (2009) Preface and Ch. 1-2.
    • *Szymanski, “The Economic Evolution of Sport and Broadcasting,” Australian Economic Review (2006), pp. 428-34.
    b) industrial organization of team sports
    • Wilson & Pomfret, Public Policy and Professional Sports:
    • International and Australian Experiences, Chap. 2
    • Sloane, “The European Model of Sport,” Chap. 28 in Andreff & Szymanski
    • Szymanski, “The Anglo-American Model of Sport,” Chap. 29 in Andreff & Szymanski
    c) public policy towards professional sports
    • *Pomfret and Wilson, “The Peculiar Economics of Public Policy towards Sport,” Agenda (2011), pp. 85-98
    Thinking like an economist [JS]
    • Humphreys, The Economics of Professional Sports, Chap. 1-3
    Tuesday 4 July 11.00 - 13.00 Economic importance of sports, Demand for sports (JS)

    Tutorial: general economics questions
    Economic importance of sports; demand for sports [JS]
    • Humphreys, The Economics of Professional Sports, Chap. 2, 3
    • *Borland and MacDonald, “Demand for Sport,” Oxford Review of Economic Policy (2003), pp. 478-502.
    • *Siegfried & Eisenberg, “Measuring and Forecasting Demand: A Case Study of Baseball Attendance,” Business, Vol. 30 (Jan.–Feb. 1980), 34-41.
    • Feehan, “Attendance at Sports Events,” Chap. 9 in Andreff & Szymanski
    • *Fort and Winfree, Chap. 10, “Player Salary Demands Increase Ticket Prices,” in 15 Sports Myths and Why They’re Wrong (2013, Stanford University Press)
    Wednesday 5 July 11.00 - 13.00 Maximization, inelastic demand (JS)

    Tutorial: the economic importance of sports, demand 
    Demand (continued); maximization; inelastic demand [JS]
    • *Salant, Stephen, “Price Setting in Professional Team Sports,” chap. 5 in Paul Sommers, ed., Diamonds are Forever (1992), pp. 63-76.
    • Fort, “Inelastic Sports Pricing at the Gate? A Survey," Chap. 77 in Andreff & Szymanski
    Thursday 6 July 11.00 - 13.00 More maximization; broadcasting (JS)

    Tutorial: competiton, market power, inelastic demand
    Maximization (continued) and broadcasting [JS]
    • Humphreys, The Economics of Professional Sports, Chap. 4
    • Szymanski, Playbooks and Checkbooks, Chap. 3, pp. 59-91
    • *Szymanski, “The Economic Evolution of Sport and Broadcasting,” Australian Economic Review (2006), pp. 428-34.
    Friday 7 July 11.00 - 13.00 Price discrimination (JS)

    Tutorial: maximization; broadcasting
    Price discrimination [JS]
    • *Clarkson and Miller, Industrial Organization, Chap. 10, “Price Discrimination.”
    • *Rascher and Schwarz, “Illustrations of Price Discrimination in Baseball, Chap. 21 in Kahane and Schmanski, eds. Oxford Handbook on the Economics of Sports (2011).
    • *Howard and Crompton, “Tactics Used by Sports Organizations in the United States to Increase Ticket Sales,” Managing Leisure (April 2004), pp. 87-95.
    Written Assignment 1 Due: based on classes 3-6 July
    Monday 10 July 11.00 - 13.00 Scalping (JS)

    Tutorial: price discrimination
    Scalping and catch up to schedule [JS]
    • *Courty, “Some Economics of Ticket Resale,” Journal of Economic Perspectives (Spring 2003), pp. 85-97
    • *DeSerpa, “To Err is Rational: A Theory of Excess Demand for Tickets,” Managerial and Decision Economics (1994), pp. 511 -518.
    • *Williams, “Do Anti-Ticket Scalping Laws Make a Difference?” Managerial and Decision Economics (1994), pp. 503-509.
    Tuesday 11 July 11.00 - 13.00 Team and league behaviour (JS)

    Tutorial: scalping and league behaviour
    Team and league behaviour; competitive balance [JS]
    • Humphreys, The Economics of Professional Sports, Chaps. 5 and 7, pp. 103-131 and 147-177.
    • *Siegfried, “Sports Player Drafts and Reserve Systems”, Cato Journal (Winter 1995).
    • *Siegfried & Sanderson, “Thinking about Competitive Balance,” Journal of Sports Economics (November 2003), pp. 255-279
    • Booth, “The Ecoomic Development of the Australian Football League,” Chap. 58 in Andreff & Szymanski
    • McMillan, “Rugby: Strategy & Structure,” Ch. 59 in Andreff & Szymanski
    • Preston, “The Economics of Cricket,” Chap. 61 in Andreff & Szymanski
    Written Assignment 2 Due: (price discrimination and scalping)
    Wednesday 12 July 11.00 - 12.30 Mid-course exam
    No tutorial
    Thursday 13 July 11.00 - 12.00 Sources of economic growth; impact analysis (JS)

    12:00 - 13:00 Subsidies for stadia (RP)

    Tutorial: review of mid-course exam
    Economic Impact Analysis [JS]
    • Szymanski, Playbooks and Checkbooks, Chap. 5, pp. 125-154
    • Humphreys, The Economics of Professional Sports, Chap. 8
    • *Siegfried and Zimbalist, “The Economics of Sports Facilities and Their Communities,” Journal of Economic Perspectives (Summer 2000), pp. 95-114.
    • Matheson, “Economic Impact analysis” (Chap. 12) and Humphreys, “The Economic Impact of Sporting Facilities” (Chap. 19) in Andreff & Szymanski
    Subsidies for stadia [RP]
    • Wilson and Pomfret, Public Policy towards Professional Sports, Ch. 4
    • Szymanski, Playbooks and Checkbooks, Chap. 6
    • *Coates and Humphreys, “Do Economists Reach a Conclusion on Subsidies for Sports Franchises, Stadiums, and Mega-Events?” Econ Journal Watch (2008), pp. 294- 315
    • John Oliver on US sports stadium funding at https://www.youtube.com/watch?v=xcwJt4bcnXs
     Friday 14 July 11.00 - 13.00 Mega-events: what are they worth? Why bid? (RP)

    Tutorial: impact analysis
    Mega-events [RP]
    • Wilson & Pomfret, Public Policy towards Professional Sports, Ch. 5-6
    • *Giesecke and Madden, “Game Over for the Bonanza Story? Economic Papers (2011), pp. 218-232.
    • *Baade & Matheson: Going for Gold: The Economics of the Olympics, Journal of Economic Perspectives 30(2), spring 2016, 201-18.
    Monday 17 July 11.00 -13.00 Labour markets (RP)

    Tutorial: mega-events
    Labour markets [RP]
    • Wilson & Pomfret, Public Policy towards Professional Sports, Chap. 3
    • Humphreys, The Economics of Professional Sports, Chap. 10
    • Szymanski, Playbooks and Checkbooks, Chap. 4
    • *Rosen, “The Economics of Superstars,” American Economic Review (1981), pp. 845 – 858.
    Tuesday 18 July 11.00 - 13.00 Policy exemptions (RP)

    Tutorial: labour markets
    Policy exemptions [RP]
    • Forbes: Is the AFL obeying our corporations and tax laws? at http://davidforbes.com.au/blogs/12
    • Carabetta: In sports violence legal cases, we still don’t know what’s ‘normal’,The Conversation, 1 June 2015,
    Written Assignment 3 Due: (analysis of economic impact report)
    Wednesday 19 July 11.00 - 13.00 Unethical behaviour: gambling, corruption, doping (RP)

    Tutorial: assessment of Adelaide Oval
    Unethical Behaviour [RP]
    • Wilson & Pomfret, Public Policy towards Professional Sports, Ch. 7-8
    Thursday 20 July 11.00 - 13.00 overview
    Tutorial: revision
    Friday 21 July 11.00 – 13.00 FINAL EXAM
    No Tutorial
  • Assessment

    The University's policy on Assessment for Coursework Programs is based on the following four principles:

    1. Assessment must encourage and reinforce learning.
    2. Assessment must enable robust and fair judgements about student performance.
    3. Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
    4. Assessment must maintain academic standards.

    Assessment Summary
    Assessment Task Due Date/ Week Weight Length (Word,Time) Learning Outcomes
    3 assignments End week 1;
    Tuesday week 2;
    Tuesday week 3
    3 x 5%
    (total 15%)
    TBA
    Discussion participation in tutorials in tutorial classes 5%
    Mid-course Exam Wednesday week 2 30% 90 minutes 1
    Final Exam Friday week 3 50% 2 hours 1
    Total 100%
    Assessment Detail

    Students are expected to hand in three sets of assignments, each worth 5%, and to prepare and participate in tutorial discussion of assigned key articles (worth 5%).

    The mid-semester exam, whose format and content will be announced in class and posted on MyUni, is intended to provide feedback on students’ progress over the first half of the course.

    The final examination requires students to write extended essay-style answers to two questions. Sample exam questions will be posted on MyUni. The final exam will cover the entire course. All material from the classes and required readings is examinable; wider reading and deeper thinking are likely to be rewarded by higher grades. Students’ work will be assessed on the logical quality of the arguments presented and on the ability to determine which arguments better explain the facts. Legible hand-writing and the quality of English expression are integral parts of the assessment process; marks may be deducted in the final examination because of poor hand-writing.

    Students may NOT take a DICTIONARY (English or English-Foreign) or a CALCULATOR into the examination.

    Submission
    No late submission of assignments will be accepted.
    Course Grading

    Grades for your performance in this course will be awarded in accordance with the following scheme:

    M10 (Coursework Mark Scheme)
    Grade Mark Description
    FNS   Fail No Submission
    F 1-49 Fail
    P 50-64 Pass
    C 65-74 Credit
    D 75-84 Distinction
    HD 85-100 High Distinction
    CN   Continuing
    NFE   No Formal Examination
    RP   Result Pending

    Further details of the grades/results can be obtained from Examinations.

    Grade Descriptors are available which provide a general guide to the standard of work that is expected at each grade level. More information at Assessment for Coursework Programs.

    Final results for this course will be made available through Access Adelaide.

    Additional Assessment

    If a student receives 45-49 for their final mark for the course they will automatically be granted an additional assessment. This will most likely be in the form of a new exam (Additional Assessment) and will have the same weight as the original exam unless an alternative requirement (for example a hurdle requirement) is stated in this semester’s Course Outline. If, after replacing the original exam mark with the new exam mark, it is calculated that the student has passed the course, they will receive 50 Pass as their final result for the course (no higher) but if the calculation totals less than 50, their grade will be Fail and the higher of the original mark or the mark following the Additional Assessment will be recorded as the final result.
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    SELTs are an important source of information to inform individual teaching practice, decisions about teaching duties, and course and program curriculum design. They enable the University to assess how effectively its learning environments and teaching practices facilitate student engagement and learning outcomes. Under the current SELT Policy (http://www.adelaide.edu.au/policies/101/) course SELTs are mandated and must be conducted at the conclusion of each term/semester/trimester for every course offering. Feedback on issues raised through course SELT surveys is made available to enrolled students through various resources (e.g. MyUni). In addition aggregated course SELT data is available.

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