B8535-001: The Management and Economics of Professional Sports
W - Full Term, 04:00PM to 07:15PM
Instructor: Sunil Gulati; Bernard IchniowskiDownload Syllabus
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This course is designed to offer students a working knowledge of the markets, institutions, and economic forces that shape the management decisions of professional sports organizations. The class sessions in the course will be informed by a combination of lectures, readings, case studies, guest speakers and student presentations.
All professional sports teams and leagues are confronted by a number of critical challenges. The decisions that teams and leagues make in response to those challenges will determine both on-field and financial success. The course considers distinctive features of sports at both the league and team levels that impact the success of professional sports and their franchises including: the nature of leagues, the demand for different sports by both fans and corporate sponsors, legal institutions including anti-trust case law and bargaining arrangements, and the personnel decisions involved in constructing the team itself.
There are three broad sections to the course concerning: the demand for sports and the determinants of sports revenues; league-level organization; and team-level decisions about players, rosters and coaches. The course considers how and why sports teams earn the revenues they do and reviews the key features of a league and team that serve to increase or decrease a team’s earning potential. The important roles of league-wide collective bargaining agreements in determining the cost structures of teams and the competitive balance across teams are reviewed in the section on professional sports leagues. Other league-level decisions considered are the decisions to expand existing leagues, to start rival leagues, or to start brand new leagues for a new professional sport. Given the importance of winning to increased financial success, the class considers team-level decisions about how franchises try to build winning teams. The determinants of free agent player compensation, the use of drafts to select new professionals athletes, team composition, and role of coaches and general managers in leading teams are topics in the section of the course devoted to team-level decisions.