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Homework 4 (solutions)

Homework 4 (solutions) - Homework 4(solutions 1 What is the...

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Homework 4 (solutions) 1. What is the biggest cost that sports franchises face? Player salary is the biggest cost that franchise face. 2. Which sport has the largest variation of team payrolls? Why? MLB has the largest variation in payrolls compared to the NBA and NFL. This is due to the structure of the collective bargaining agreement which sets salary floors and salary caps in the NBA and the NFL. The salary cap in MLB is a “soft” cap. 3. Of the three major sports leagues, which has the lowest median salary for coaches? MLB 4. What influence did Bill Veeck have on saving owners money? (Noted as his most significant contribution to the sports industry) He convinced the IRS that players can be counted as depreciable capital. Depreciable capital is tax exempt and has provided significant savings to team franchises over the years. 5. How has the third era of stadiums differed from the second era? The third era of stadiums have gone from multipurpose stadiums to sport specific stadiums. i.e. Astrodome is a second era stadium and Minute Maid Park and Reliant
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