Section 2 - Leagues

Section 2 - Leagues - Part2LeagueStructureandConduct

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The Business of Sports Part 2 – League Structure and Conduct Leagues provide the basic structure for competition in  team sports Without leagues, organized competition on the field of  play could not occur Even something informal like senior baseball Operating as a league enable owners to pursue  economic goals they cannot reach by acting as  individuals Single entity cooperation makes league play happen Joint venture cooperation involves individual owners  letting the league operate on their behalf
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League Structure There are two basic forms of league  structure in terms of who owns the league  and the organizations that make up the  league Single entity ownership The league is owned by a single group Distributed ownership The teams in the league are owned by individuals
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Single Entity Ownership League is owned by a single group Often a format for a new league such as WNBA,  WUSA Advantages Control team locations Assign players to teams Promote fan enthusiasm – players with local ties Control player costs Create competitive parity  Centralized player assignment League-imposed salary structure Disadvantage Limited economic incentive for individual teams
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Distributed Ownership Model for most leagues Agree to by-laws Cooperation among franchises Individual ownership of clubs League acts as a vehicle for Negotiating contracts Collecting revenues Distributing revenues to individual teams
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Distributed Ownership The league is a Section 501 tax-exempt  organization Exempt from taxation as a league – “not  organized for profit” Individual clubs can make profits and are subject  to business taxes Can be conflicts between and among individual  owners Related primarily to income disparities between small  and large market clubs
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Single Entity Cooperation Cooperative action required for league play  to occur Setting schedules Length (number of games, calendar time frame) of the  season Balanced vs. unbalanced schedules Interleague play Structures of championships Number of playoff participants More teams, more extensive fan interest, but chance of team  with highest regular season winning percentage winning the  championship is reduced
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Single Entity Cooperation Rules changes to enhance quality of the game  and to achieve a  balance between offense and  defense Coming out of the lockout, the NHL opened up play,  favoring the offense to create more excitement Baseball tinkers with height of the pitcher’s mound,  interpretation of the strike zone; American League 
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Section 2 - Leagues - Part2LeagueStructureandConduct

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