The Story of Sports and Money

Futterman, M. (2016). Players: The Story of Sports and Money, and the Visionaries Who Fought to Create a Revolution. International Journal of Sport Communication, 538-539.
Futterman, a Wall Street Journal sports writer and a renowned prize-winning reporter, explains how sports have gradually evolved into a big business in this opinionated and insightful article. He explains how outlandish professional sports salaries have become. Athletes today make absurd sums of money, but this has not always been the case. In Players: The Story of Sports and Money, and the Visionaries Who Fought to Create a Revolution, Mathew Futterman recounts how the sports industry came to this point. The entire book is relevant to my paper as it describes how this change has slowly but surely ruined the sports sector.
Futterman points out that the path to immense wealth and corporate sponsorship was initially paved with good intentions. Mark McCormack essentially created the idea of the sports agent when he launched Arnold Palmer as a brand rather than a corporation’s lackey, and star tennis players pulled out of 1973 Wimbledon so they could be in control of their timetables. Futterman explains how the motivations driving this developing professionalism gradually changed from murky to simply materialistic; for instance, Michael Jordan and Nike created the possibility of the competitor as a superhero, which made sports more about individuals, and the sports team in turn, through cable networks, started ‘milking’ passion from their fans (and their dollars) through link systems. Unmistakably, the historical backdrop of professional sports and the mission for money is not over, but Futterman has given an account of what has happened up until this point.
As enjoyable as the journey that Futterman takes us through is, the article’s merit and credibility, as well as to a degree, the problem with its accuracy is evident in its title “Players” as it focuses on the players. Even though they are the most reliable information source as the business involves their lives, they are only one level of a multilayered and complex industry whose financial matters are not fundamentally determined by competitor's pay. It is simply impossible to give "the story of sports and money" without widening the narrative. Nonetheless, the article gives us insight into the negative impact that money has had on the sports industry.
Gurney, G., Lopiano, D. A., & Zimbalist, A. (2017). Unwinding Madness: What Went Wrong with College Sports—and How to Fix It. New York: Brookings Institution Press.
Unwinding Madness is a comprehensive analysis of how the NCAA and college institutions have failed when it comes to the governance of intercollegiate games, and why the NCAA is unequipped to achieve change and should be supplanted. The book explains how colleges and the NCAA have put financial success above their obligations to safeguard the academic primacy, well-being, and prosperity of college competitors and fallen into an economic, ethical, and educational crisis. The book is relevant because it shows the history of intercollegiate sports and how money has negatively affected it.
The authors point out that since intercollegiate sports reside in the environment of higher education, and as such, the associated programs have to be academically compatible with their institutions. Despite of the pretentions of collegiate games being educationally oriented and entirely amateur activities, the book shows that the business part of school games programs has increasingly infringed on the educational landscape and even worse, have subverted it at the upper ranges of Division I. What started as activity that was run by students to pass time and provide relief from their demanding academic studies was quickly seized by school presidents as a method of promoting their colleges, raising funds, and drawing in understudies. The book explains how the NCAA and college presidents alike developed the view that schools with teams that are successful afford major promotion opportunities and that success in top-level contests brings about commercial advantages for the establishment. The authors conclude that due to the business aspect of college sports, they are no longer about recreation and developing talent as everything has become commercialized.
The authors recognize that there is no simple solution for the issues facing school games, but they offer sound judgment, feasible solutions that regard the privileges of competitors, protects their well-being and prosperity while guaranteeing a bona fide educational program.
Rehnstrom, K. (2009, October 22). Racial Discrimination in the NBA: 2009-2009. Major Themes in Economics, pp. 1-15.
In this article, Rehnstrom seeks to examine the national Basketball Association’s racial salary differences. Racial salary discrimination in different sports is one of the issues that money in sports has caused.
It is quite difficult to determine racial salary discrimination due to the challenge of measuring worker’s productivity but Rehnstrom uses performance statistics in the form of available salary information as a measure of productivity. His data includes variables such as career-based performance statistics (rather than one season performances), personal characteristics and productivity characteristics from the official NBA website. His results determine that in the 2008-2009 season, non-white players earned about 24.6% more than their white counterparts. The results shade light on the approximately $83,000 salary difference between white and non-white players in the NBA in the 2008-2009 season despite their comparable performances. Also, the entire NBA top 14 highest paid players list comprised solely of African-Americans showing that the NBA is not a racially equal market. The article was relevant by showing that the influx of money in the sport sector has caused racial salary discrimination.
Rehnstrom’s research is credible because he examines the racial disparity by making use of other previous credible research from the 1980’s and early 1990’s that found that there was no substantial salary differential between races in the NBA. His work seeks to update these previous studies by making use of current data. He uses Kahn and Sharer’s models which proved successful in determining racial salary discrimination in 1988. Other previous studies utilized include Brown et al (1991), Dey (1997), Hill (2004), and Kahn and Shah (2005).
Scully, G. W. (1974). Pay and Perfomance in Major League Baseball. The American Economic Review, 915-930.
Scully analyses the relationship between pay and performance in Major League Baseball. He examines, through calculated estimates, the connection between a player’s marginal revenue product and his predicted salary. He also evaluates the role that the reserve clause in MLB player contracts plays in determining player salaries but the relevant part to my paper establishing the negative impact of high wages on team and player performance, and the overall quality of MLB.
Scully begins by explaining the history of monetary issues that have affected MLB players, mainly minimum salaries, player benefits, maximum salary cuts, and the reserve clause. The solution was increased wages for players which did not translate to better performance on the pitch. He determines that salaries should be based on performance but contrary to this, performance is often based on the amount salary. Higher wages lead to increased ticket prices and a rising cost of team merchandise. He also concludes that the star players demand salaries that exceed their relative team contribution.
The information that Scully presents is reliable. His equations to analyze team performance are as accurate as can be expected incorporating team revenue, ticket prices, team revenue, number of tickets sold, and other relevant variables. Equations used to evaluate player performance are also as accurate as can be incorporating pitching or hitting performance, contribution to team performance, and several other factors. He also admits that the data presented may not be entirely accurate as some factors are not taken into consideration, such as the quality of managers, and some estimates could not be done accurately due to data limitations.
Zimmer, T. E. (2016). The Impact of NFL Salary Cap Concentration on Team Success. Sports Management international Journal, 53-66.
In this paper, Zimmer empirically examines the National Football League’s team data for ten years, between 2000 and 2009. Through this empirical tests, he aims to ascertain the factors affecting team performance. His particular concern is the effect that payroll distribution has on NFL team performance. His results show that salary concentration’s influence on team performance is non-linear. He finds that for a team to be successful in the NFL, there has to be a low or high salary concentration. The article is relevant because it shows that money in sports has made it so that teams with high salary concentrations and expenditures are the ones that are successful. Teams with low expenditures can no longer make it in the NFL.
The paper is credible because its results are consistent with past research done on the subject, such as Rose (1981), and Lazear and Rosen (1981). The paper makes use of historical football data to formulate a fixed effects model which Zimmer uses to assess the performance implications of various variables such as team salary concentration. He analyzed performance measures against independent variables which provided insight into the connection between team performance and salary distribution. Teams with high expenditures recorded significantly better performance. Also teams that spent the maximum salary cap allowed had a greater chance of success. Teams that spent significantly less than the allowed salary cap were less likely to experience success. Also, teams that increased their salary concentration initially had lower short-term performance results but further salary concentration increased team performance. Through these results, Zimmer determines that a sports’ team success is based on its expenditure and salary concentration.

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