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Sports Economics Chapter 3.

1 Suppose that you are the owner of a professional baseball team in

a major city, and MLB allows a second team to locate in your city. Describe and show using a graph the potential impact on your attendance.

2 Draw a graph that shows the demand for attendance at a given game at an NFL stadium. Show how this demand would be affected if:

a. The prices of parking and food at the games increase.

b. Televised games switch from free TV to pay-per-view only.

c. A new league forms with a team that plays nearby.

d. The quality of the team decreases dramatically.

e. The length of the season is increased.

3 True or false; explain your answer: "If all teams are of equal quality, it doesn't matter whether they share gate receipts—revenue will remain unchanged."

4 Some researchers argue that revenue sharing is like socialism in that it removes the incentive to outperform rivals. Do you agree with this statement? Why or why not?

7 How can it be that the weakest teams in the National League from a wins/losses perspective are among the most profitable?

9 Why might a league favor a single-entity ownership model? Explain the differences in the risks and rewards of such a system compared to a franchise

owner system.

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