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Sports Players Income Analysis Coursework


Introduction

There has been a lot of literature generated over the years on the management of sports. This is in regard to the efficient management of sports revenues where the value of the individual player or a sports team is identified to be crucial in growing the sport.

Most authors have outlined the need to manage value in the sports fraternity so as to minimize the unfair reimbursement of players as well as to increase the player’s benefits throughout their careers. The measurement of the particular value of a player has been in contention with teams deciding to pay their players depending on the number of fans that a particular player attracts (Scully, 1974).

On the other hand, sports activists have identified that there is a need to introduce some level of equality in the sports fraternity where players in one team should be paid uniformly. While this debate has been brewing on one side of sports scholars and stakeholders, others have raised the issue of motivation and sustainability.

They have identified that the most efficient form of motivation in the sports fraternity has always been money and a situation where the incomes of a particular player are pegged on the same scale as another who performs dismally, may lead to demoralization.

This would then negate the particular advances that have been made in the sports fraternity in terms of the development of quality and competitiveness as well as the full monetization of the industry (Sommers & Quinton, 1982). This paper seeks to evaluate a number of texts so as to establish the particular economic principles that authors identify in their evaluation of the management of sports revenues in the sporting fraternity.

Authors have mainly based their debates on a liberal situation where market forces are allowed to take their course. In this case, they identify that the performance of a player or that of a team should be equivalent to the particular revenue that is enjoyed.

They identify that while most sports teams are identified to source their incomes from the gate fees that are collected during matches, there is still a lot of money that is made through sports endorsements and sponsorships (Sommers, 1993).

These are not always limited to the particular teams as they are sometimes enjoyed by individual players. The issue of equality between races especially in the basket ball leagues is also identified.

Theoretical premise

The authors have mainly concentrated their evaluation of the sports fraternity on the particular discipline of sports economics, but they have borrowed a number of principles from other fields of study (MacDonald & Reynolds, 1994). This is meant to give a complete picture of the situation that they are highlighting and evaluating.

The proposal of alternative ways of managing sports revenues has to be supported by a number of realistic principles that cannot be fully explained through the application of principles drawn from the sports economics field alone (Marburger & Scoggins, 1996).

It is identified that their use of real data that has been derived from the field is quite phenomenal in portraying the real picture of the inefficiencies that exist in the sports fraternity that they are seeking to correct. To evaluate the particular data collected from the field they have has to adopt a number of statistical principles that give them as well as their readers an easier understanding of their literature (Staudohar, 1998).

They have also had to employ a number of general economic principles where they have identified that the full employment of the resources that sports men and women are exposed to, has to be done through a number of efficient managerial techniques that will maximize their revenues as well as lengthen their careers.

They have also applied a number of finance principles where they have identified the need to secure incomes through the external investment of revenues that are gained from sporting activities.

They have also identified that the lack of proper management of team resources often leads to borrowing to cover operating deficits as well as the purchasing of players during the transfer window. This often leads to reduced incomes in the future (Kahane & Shmanske, 1997).

They identify that proper financial management should ensure that teams as well as individuals have a sustainable income even after retirement. The relationship between value and monetary benefits in the free market is defined by the economic effectiveness of a player throughout his or her career.

This means that the authors have had to apply economic principles to effectively explain the particular forces that are in play in the management of sports revenues (Kesenne, 2000).

It is also identified that the authors have applied a number of ethical principles in outlining the inefficiencies as well as the inequalities that are experienced in some sports.

They have specifically identified that the use of popularity as well as the number of fans that a player has in the basket ball leagues, has ensured that a number of black players who have been identified to perform better than some white players still end up earning less than their white counterparts (Marburger & Scoggins, 1996).

This is identified as unethical and they have highlighted a number of managerial principles that have to be applied to ensure that there is equality in the sports fraternity. They have also applied a number of legal principles in conjunction with managerial principles in outlining the particular features of sports contracts and contract negotiation.

They identify that sports managers should be in a position to maneuver through legal restrictions in the negotiation of sports contracts as well as endorsement deals so as to increase the incomes of their teams as well as individual players.

The particular field of sports economics has often been identified to depend on a number of fields and more so the fields of general economics and finance. This means that authors have had to increase their knowledge in alternative fields that are related to their topics of study so as to increase the quality of their literature (Sommers & Quinton, 1982).

Critique

The authors identify that there are a number of inefficiencies that are suffered by both sports personalities and their respective teams. The fact that the current revenue management mechanisms are mainly meant to ensure the financial well-being of the teams and not that of the players means that there is a lot of conflict in the management of sports revenues.

On one hand, players are seeking to increase the amount of revenues that they are paid irrespective of their performance while on the other hand, the team managers are identifying their cost effectiveness as their main financial obligation (Sommers, 1993).

This has been identified by most of the authors as one of their main challenges in an environment where sustainability and monetary value are identified as two conflicting principles.

The need to introduce a new platform that will cover the inefficiencies involved with the valuing of players according to their performance has led to the suggestion of a number of management mechanisms that may not be identified as conventional in a highly rigid and conservative industry (Eckard, 2001).

The fact that there is a lot of greed in the management of sports means that there can be no charity cases or rather situations where socialist ideologies such as the uniform payment of athletes irrespective of their performance and amount of business that they bring into the team or club. Most of the authors have concentrated in the management of baseball as well as basketball teams.

Strengths

The literature provided by the authors is identified to be quite rich in real values that have been collected from the field. These are identified to be quite important in the identification of the prevailing conditions in the sports fraternity where the arguments as well as recommendations made are tailored for the real situation as it is experienced in the sports market (Idson & Kahane, 2000).

This means that these texts are rich in managerial information that has been carefully evaluated to suit the particular sport that has been highlighted by the individual author (Maxcy, 2004). The authors have also evaluated a number of previous texts that enhance their understanding of the sports as well as its management in regard to the final aspect of sports.

The need to understand general economic principles as well as financial principles that are often applied in the management of sports revenues has also led the authors to evaluate a number of texts that are outside the particular sports domain that they are studying (Scully, 1974).

These ensure that they make a superior argument of the real factors that are experiences on the field as well as the board rooms. They identify that the use of popularity rating is at times flawed especially where racial forces are at play.

They also identify that the valuing of sports people according to the number of fans that they attract is valued by sports managers who are mainly motivated by monetary gains instead of their love for the sport (Staudohar, 1998).

These are real factors that are experienced every day in the sports fraternity where players who attract more fans, who then end up paying gate fees, are identified as good assets for a particular team while other talented players who do not enjoy a similar amount of popularity are identified as liabilities for the team.

The authors base most of their arguments or comparative observations where they note that the application of particular sports management principle leads to a number of inefficiencies that can be avoided through the application of other principles.

While they may be identified to differ on the particular principle that should be adopted in the development of sports as well as its management, they all seem to agree on the particular inefficiencies that are posed by the current management system.

Their identification of ethical issues that may arise in situations where payment packages are determined according to racial backgrounds seems to be a deviation from the usual financial debate that authors and more so economists have been indulging in the past.

This has ensured that a number of previously ignored ethical issues are brought to light and solved before they blow up in a situation where losses may be quite phenomenal (Idson & Kahane, 2000). They have also identified a number of contractual aspects that should be applied in the negotiation process to ensure that sports personalities reap the maximum amount of revenues during their sporting careers.

The authors note that there is a particular aspect of uniformity in the management of sports where the financial management principles are adopted by almost all managers in the sports fraternity (MacDonald & Reynolds, 1994). This is identified as an advantage as well as a disadvantage. It is identified as a disadvantage due to the spreading of inferior management techniques across a number of sports as well as regions.

On the other hand, it is identified as an advantage by optimists who state that the rectifying of the particular inefficiencies that are identified in the market will be easy in a situation where uniformity and the sharing of management information are prevalent (Kahane & Shmanske, 1997).

They identify that the adoption of superior revenue management techniques will spread quickly, which will then ensure the efficiency of the new principles in reforming the sports industry.

Weaknesses

It is identified that most of the authors have concentrated on team sports while there are also a huge number of independent sports people who do not participate in team sports. It is worrying to identify that even these individual sports personalities are affected negatively by the particular sports revenue management principles that are adopted by sports managers all over the world.

Their evaluation of racial inequality seems to be one-sided as they only highlight the plight of black basketball players without identifying other players in other types of sports (Eckard, 2001). The fact that some of the authors use information derived from historical performances as well as payment patterns, may also be identified as a weakness where their applicability in the current sports environment is found to be impossible.

The authors have based most of their arguments on the direct monetary revenues that are gained by sports personalities and other stakeholders. While most of the authors are quick to criticize the inefficiencies posed by the current financial management principles that are applied in the sports fraternity, they have not identified the few advantages that those principles have presented in the industry.

Conclusion

It is identified that some of the best performing players enjoy multiple incomes from a number of endorsements as well as their basic pay from their teams. A number of authors have also raised the issue of retirement where sports people are identified to suffer financially once their careers start to plummet (Kesenne, 2000).

The quality of a player is often pegged on his or her performance and this particular rating is also used in determining his or her monetary value (Maxcy, 2004). Where a player’s performance seems to reduce, he or she then suffers from reduced revenues even if he or she may still be young.

The need to secure the incomes of sports people so as to ensure that they have a good retirement package has led to the identification of alternative forms of payment as well as player valuation. The available texts on the management of sports revenues seem to quite phenomenal in identifying the future position of the sports industry.

References

Eckard, E., W. (2001). Free agency, competitive balance and diminishing returns to pennant contention. Economic Inquiry. Vol. 39(3). Pp 430-433.

Idson, T., L, & Kahane, L., H. (2000). Team effects on compensation: an application to salary determination in the national hokey league. Economic Inquiry. Vol. 38(2). Pp 345-357.

Kahane, L, & Shmanske, S. (1997). Team roster turnover and attendance in major league baseball. Applied Economics. Vol. 29. Pp 425-431.

Kesenne, S. (2000). Impact of salary caps in professional team sports. Scottish Journal of Political Economy. Vol. 47(4). Pp 422-430.

MacDonald, D., N, & Reynolds, M. (1994). Are Baseball Players Paid their Marginal Products? Managerial and decision economics. Vol. 15. Pp 443-457

Marburger, D., R, & Scoggins, J., F. (1996). Risk and Final Offer Arbitration Usage Rates: Evidence from Major League Baseball. Journal of Labor Research. Vol. XVII(4). Pp 735-746.

Maxcy, J. (2004). Motivating Long-term Employment Contracts: Risk Management in Major League Baseball. Managerial and Decision Economics. Vol. 25. Pp 109- 120

Scully, G., W. (1974). Pay and Performance in Major League Baseball. The American Economic Review. Vol. 64(6). Pp 915-930.

Sommers, P, & Quinton, N. (1982). Pay and Performance in Major League Baseball: The Case of the First Family of Free Agents. The Journal of Human Resources. Vol. 17(3). Pp 426-436.

Sommers, P., M. (1993). The Influence of Salary Arbitration on Player Performance. Social Science Quarterly. Vol. 74(2). Pp 439-443.

Staudohar, P., D. (1998).Salary Caps in Professional Team Sports. Compensation and Working Conditions. Vol. 2(4). Pp 3-11.

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IvyPanda. (2019, October 7). Sports Players Income Analysis. Retrieved from https://ivypanda.com/essays/sports-players-income-analysis/

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"Sports Players Income Analysis." IvyPanda, 7 Oct. 2019, ivypanda.com/essays/sports-players-income-analysis/.

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IvyPanda. "Sports Players Income Analysis." October 7, 2019. https://ivypanda.com/essays/sports-players-income-analysis/.

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IvyPanda. 2019. "Sports Players Income Analysis." October 7, 2019. https://ivypanda.com/essays/sports-players-income-analysis/.

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IvyPanda. (2019) 'Sports Players Income Analysis'. 7 October.

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