Team Sports Economis Assignment

Topics: Premier League, Promotion and relegation, North America Pages: 5 (2137 words) Published: November 27, 2012
Name: James Sumner

Student ID: 33255189

Question: Critically evaluate the approaches and policies to achieve competitive balance in North American Sports and European sports through an examination of competitive balance philosophy and policy in North American and European professional sports organisations. Illustrate your analysis with examples from both the European and North American professional sports leagues.

Tutor: John Embery

Statement of Authenticity: I confirm that this submission is all my own work. Any quotations are properly referenced using the Harvard referencing method. All errors and omission are my responsibility alone.

Word Count: 1744

There is a lot of distinction today between the North American and the European model for sport in order to achieve what each seems to perceive as the right competitive balance. This can be defined as ‘the actual performance of a league to the performance that would have occurred if the league had the maximum degree of competitive balance in the sense that all teams were equal in playing strengths. The less the deviation of actual league performance from that ideal league, the greater is the degree of competitive balance’ (1). This essay will outline what policies and approaches both the American and European sports models have in order to achieve competitive balance by looking at each continents system of competition, the extensive system of team and player restraints in America such as salary caps compared to the relaxed system Europe has and also amateur and professional sports in both models. It is important to note that not all sports adhere to their so called ‘model’. Sports in America such as football, baseball, hockey and basketball are very diversified in terms of rules, scheduling, commercialization etc. The European model is largely based on one sport, football/soccer which we know is not what other sports follow. In North America there is a closed system of competition meaning no promotion or relegation from a league. This means that the same teams compete in the same league every year. From this we can conclude that the North American model supports equality and fairness not competitiveness, which could then be perceived as good for achieving competitive balance in the sense that teams do not have to worry about being relegated to a lower division. This would also mean that teams get to know their counterparts very well which would also add to the competitive balance aspect of sport. However no promotion or relegation may also be deemed as uncompetitive and unbalanced because teams know each year they will still be competing in the same league the season after. This could lead to clubs getting complacent and happy to be in mid-table of their respective leagues as the amount of money all teams earn is astronomical. In NFL the Dallas Cowboys were valued in 2012 at $2.1 billion (2.) yet didn’t even finish in the top 6 of their respected league (3). In Europe teams can fluctuate up and down divisions therefore making our sports more based on competitiveness and the will to win which could also be interpreted as competitively balanced or unbalanced. It could achieve higher competitive balance because it allows better teams to move up and play against other better teams but it could also be unbalanced because teams moving up may not have the same resources as other teams in that league. For example Barnsley does not have the same amount of resources Manchester United has if they were promoted.

An extensive system of team and player restraints in America certainly improves the goal of competitive balance. There is a salary cap on not just players but also clubs as well. Since most leagues compute their caps on the basis of revenues for the preceding season, the cap is actually a fixed sum. In North America the NBA, NFL, NHL and Canadian football league have all installed salary caps (4). For example in 2006 the NFL had a salary cap of...
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