Professional Team Sports Essay Example | Topics and Well Written Essays - 2000 words

Professional Team Sports - Essay Example Making profits is a key aspect in any business venture (Wladimir and Stefan, 2006:617). This understanding has created interest in finding out the real effect of decisions made by club owners and franchise on the structure and regulation of leagues around the world. This paper therefore seeks to interrogate the different ways in which the objectives and decisions of club owners in professional sports affect the overall sporting arena. In order to get better sales in sports, high level of competition is required unlike in business where monopoly is the ultimate goal. If there are championships or leagues, the participation of more than two clubs will be necessary to ensure better products to the fans. If one club is far better than the rest and keeps on winning all games with ease, the products become so predictable and therefore less marketable to the fans (Wladimir & Stefan, 2006:27). Fans will get bored in watching a team that wins with big margins repeatedly and so need some degre e of uncertainty for them to enjoy watching the game. This phenomenon of the professional sports as an industry has led to the development of cooperation among clubs and the adoption of governing bodies charged with ensuring that the industry attains its optimal production capacity by way of organising championships and leagues. These leagues are highly competitive and as such have become some of the most profitable enterprises around the globe. For instance, the European champions’ league, the Barclays premier league in England and the La-liga of Spain are some examples among many leagues in football that are leading income earners for the respective clubs and contribute a considerable amount of the countries’ GDP. Baseball, basketball, indoor sports, golf, athletics, and Olympics in general all form a multibillion-dollar economy (Masteralexis and Hums, 2002:295). The graph below shows how revenue from sporting activities has increased over the years. Figure 1: graphi c illustration of increase in revenue in the sports sector associated with increasing commercialization Retrieved from http://www.econweb.com/MacroWelcome/sandd/D-Shift_New_Equilibrium.gif According to some economists, this feature of professional sport is quite favourable as it eradicates monopolies, which are responsible for poor quality of products or services offered and high non-commensurate prices. In the end, the whole arena of professional sports forms a model of free market where competitiveness of the product offered carries the largest share. This competition however is not always healthy especially with respect to the labour market (Stefan, 2007:47). Here, the free relocation and transfer of players from one club to the other based on the wages has made the wealthier clubs maintain a grip of the top leagues and championships over the less wealthy clubs. Therefore, wealthy club owners can get all the best talent there is in the market and thereby in a way kill competition , which is the very phenomenon on which the industry thrives (Rodney, 2004:25). This has resulted to creation of oligopolistic cartels where the higher level of game is exclusive to the rich clubs where as the less wealthy clubs play in the lower divisions that are less competitive and less famous among the fans ((Wladimir and Stefan, 2006:64). This means that fans will be flocking the gates only when big teams are playing. This obviously means very high revenues for them where as the poorer clubs will only have small number of fans in