Ec 1630 Study Guide (Final)-1

Ec 1630 Study Guide (Final)-1 - Ec 1630 Final Study Guide...

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Unformatted text preview: Ec 1630 Final Study Guide Contributors: "Alan Ibrahim" <[email protected]>, "Alex Chang" <[email protected]>, "Chelsea Wen Si Zhu" <[email protected]>, "Colin Morris" <[email protected]>, "Eunji Chung" <[email protected]>, "Frances Yun" <[email protected]>, "Jeff Ye" <[email protected]>, "Jon Mizrahi" <[email protected]>, "Katie Ericksen" <[email protected]>, "Katherine Petti" <[email protected]>, "Kiran Bhat" <[email protected]>, "Kristen Calandrelli" <[email protected]>, "Michael Katzer" <[email protected]>, "Ryan Schell" <[email protected]>, "Stephanie Shing" <[email protected]>, "Sumorwuo Zaza" <[email protected]>, "Tim Walsh" <[email protected]>, "Tommy Li" <[email protected]>, Lecture notes 3/23, 3/25, 3/30, 4/2 (by Kristen Calandrelli) March 23 3 Tier Systems and Franchise Values-Compared to an all free-agent system, reserve clause keeps salaries low. Payroll under an all free agent system would be higher-So a 3 tier system lowers payroll and thus increases franchise value-Franchise valuation-High/Low ratio – measures inequality in distribution of franchise values-Football has low ratio – most equal distribution of revenues-Gate sharing 60/40-Nationwide TV contract split among all teams-“Most sot sport” Parity & New Teams-Why is parity too difficult to maintain when a new team enters?-New teams finish below .500-Existing teams must stock new team – won’t stock them with the best players Statistical Discrimination-Racial profiling-Assuming that when you choose between 2 player, you choose the black for certain functions and the white for others-Evaluating by stereotype, not the individual Salary Discrimination-Unequal pay for equal performance OR equal salaries for unequal performance-Scully’s regressions -Same regression for blacks and whites-Arithmetic – amount of disc. Is a constant dollar amount-Run as log - % of discrimination is constant-Separate regressions for black and white variables-Discrimination depends on level of performance Market Structure-Need a central league-Uniform rules, schedules championships-Teams are independently owned (except soccer)-Can set ticket prices, arrange for their own TV network/contract, reserve right to sell stadiums-How does a league impose its will to ensure parity?-Gate sharing-Salary cap – min and max salary expenditures-Revenue sharing-Luxury taxes-Is the league or team the unit of decisionmaking?-Zimbalist: For some things it makes sense to have league, not others 3/25: Midterm Day I don’t have notes for 3/30, sorry! April 2 93% of football teams are given stadiums-Even with voting, other checks and balances, teams getting subsidies-Quirk and Fort Study-Given city/team contract, the team covers the operating costs (paying shares of concessions, etc)-Stadium subsidy – city doesn’t charge team full amount for stadium. No stadium comes close to covering the cost of building the stadium-Subsidy types:...
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Ec 1630 Study Guide (Final)-1 - Ec 1630 Final Study Guide...

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