Playbooks and Checkbooks: An Introduction to the Economics of Modern Sports

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Overview

"A deft mix of sports, history, and accessible economic ideas. Read it and enjoy."—Tim Harford, author of The Logic of Life and The Undercover Economist

"I can think of no better introduction to the economics of sports than Stefan Szymanski's Playbooks and Checkbooks. With wonderfully accessible writing, Szymanski takes the reader through the organization of professional leagues, as well as the role both the government and media play in creating what we see on the field. This book should prove to be indispensable reading to anyone who wishes to truly understand the nature of modern sports."—David J. Berri, coauthor of The Wages of Wins: Taking Measure of the Many Myths in Modern Sport

"In Playbooks and Checkbooks, Stefan Szymanski has provided an excellent introduction to the major issues in sports economics. His treatment is lively, literate, lucid, and edifying. He does a marvelous job of explaining the dynamic of the sports industry in the United States and Europe, as well as presenting the underlying economic theory that helps us interpret how sports leagues, teams, and athletes behave."—Andrew Zimbalist, author of May the Best Team Win: Baseball Economics and Public Policy

"Szymanski artfully introduces the principles of sports economics for those new to the subject. This is an engaging, compelling, and very important book."—Leo H. Kahane, cofounder and editor of the Journal of Sports Economics

"This terrific book explains numerous sophisticated ideas in the economics of sports in plain English. It relates differences in modern sporting structure in the United States and the United Kingdom to differences in the evolution of technological, cultural, legal, and social developments across the northern Atlantic Ocean."—John Siegfried, Vanderbilt University

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Editorial Reviews

The Browser
Playbooks and Checkbooks is not a snoozer but a sleeper; equal parts eminently readable and wholly fascinating. . . . Szymanski's non-elaborated notion places his book with the best art history, for art also is a creature of its time.
— David M. Gordon
Nordic Sport Studies Forum
Szymanski covers most relevant topics in modern sports economic theory in a very elegant and in my opinion comprehensible fashion. Personally, I really enjoyed his explanation of wage formation in sports labour markets, and his (sociological/historical) views on the development of sport as business. . . . It is well written, well structured and sometimes even funny.
— Kjetil K. Haugen
New York Times - Harry Hurt III
Mr. Szymanski, an economics professor at the Cass Business School at City University in London, tackles the apparent paradoxes of the sports business in the head-on style of an N.F.L. linebacker. . . . He displays an impressive global knowledge of sports ranging from basketball and cricket to tennis and rugby, and provides a wealth of revealing financial information as well as entertaining sports trivia.
The Browser - David M. Gordon
Playbooks and Checkbooks is not a snoozer but a sleeper; equal parts eminently readable and wholly fascinating. . . . Szymanski's non-elaborated notion places his book with the best art history, for art also is a creature of its time.
Nordic Sport Studies Forum - Kjetil K. Haugen
Szymanski covers most relevant topics in modern sports economic theory in a very elegant and in my opinion comprehensible fashion. Personally, I really enjoyed his explanation of wage formation in sports labour markets, and his (sociological/historical) views on the development of sport as business. . . . It is well written, well structured and sometimes even funny.
From the Publisher
"Mr. Szymanski, an economics professor at the Cass Business School at City University in London, tackles the apparent paradoxes of the sports business in the head-on style of an N.F.L. linebacker. . . . He displays an impressive global knowledge of sports ranging from basketball and cricket to tennis and rugby, and provides a wealth of revealing financial information as well as entertaining sports trivia."—Harry Hurt III, New York Times

"Playbooks and Checkbooks is not a snoozer but a sleeper; equal parts eminently readable and wholly fascinating. . . . Szymanski's non-elaborated notion places his book with the best art history, for art also is a creature of its time."—David M. Gordon, The Browser

"Szymanski covers most relevant topics in modern sports economic theory in a very elegant and in my opinion comprehensible fashion. Personally, I really enjoyed his explanation of wage formation in sports labour markets, and his (sociological/historical) views on the development of sport as business. . . . It is well written, well structured and sometimes even funny."—Kjetil K. Haugen, Nordic Sport Studies Forum

New York Times
Mr. Szymanski, an economics professor at the Cass Business School at City University in London, tackles the apparent paradoxes of the sports business in the head-on style of an N.F.L. linebacker. . . . He displays an impressive global knowledge of sports ranging from basketball and cricket to tennis and rugby, and provides a wealth of revealing financial information as well as entertaining sports trivia.
— Harry Hurt III
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Product Details

  • ISBN-13: 9780691127507
  • Publisher: Princeton University Press
  • Publication date: 3/16/2009
  • Pages: 248
  • Sales rank: 819,427
  • Product dimensions: 5.70 (w) x 8.50 (h) x 0.80 (d)

Meet the Author


Stefan Szymanski is professor of economics and the MBA Dean at the Cass Business School, City University London. He is the coauthor of "Fans of the World, Unite!: A (Capitalist) Manifesto for Sports Consumers"; "National Pastime: How Americans Play Baseball and the Rest of the World Plays Soccer"; and "Winners and Losers: The Business Strategy of Football".
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Read an Excerpt

PLAYBOOKS and CHECKBOOKS

An Introduction to the Economics of Modern Sports
By Stefan Szymanski

PRINCETON UNIVERSITY PRESS

Copyright © 2009 PRINCETON UNIVERSITY PRESS
All right reserved.

ISBN: 978-0-691-12750-7


Chapter One

SPORTS AND BUSINESS

On February 27, 1874, a game of baseball was played at Lord's Cricket Ground in London, between teams led by two men who shaped the destiny of sports across the globe. On one side was a young Al Spalding, founder of the sporting goods company and a man who helped create modern professional baseball. On the other was Charles Alcock, secretary of the prestigious Surrey Cricket Club and of the recently formed Football Association.

Spalding had been sent to London by his team manager to see whether it would be possible to organize a tour of Great Britain to exhibit the brash new American game of baseball. Spalding was to play a prominent role in the creation of the National League two years later, and to steer the professional game through its early years. By the time he wrote America's National Game in 1911 it was not only that, but also a significant business enterprise. Alcock, who acted as the London agent for Spalding's 1874 tour and the more famous world tour of 1888-89, instigated international competition in both cricket and soccer and created the first important competition in soccer, the Football Association (FA) Cup. Perhaps even more importantly, he ensured that there was no parting of the ways between amateur and professionals in soccer.

The split between amateur and professional happened early in baseball. The rules of baseball were first written down by Alexander Cartwright of the Knickerbocker Club of New York in 1845. Their game was one for gentlemen amateurs, a sociable excuse for an evening's eating and drinking. As the game became popular, enthusiastic crowds came to watch the amateurs play; commercially minded players saw an opportunity to sell tickets, and once the game was an entertainment, teams saw that they could bring in even more money by fielding the best players. Pretty soon there was a market for baseball talent and the modern business of baseball was born. In 1871, however, the amateurs declared that they wanted nothing to do with commercialism, and baseball divided into amateur and professional camps. Ever since, the professional game has shown almost no interest in the development of the sport at amateur and grassroots levels. Men like Spalding caught the spirit of the age, and the business of baseball flourished, while the amateur game mostly languished and is today preserved largely through the support of schools and colleges.

Although they had a good rapport, Spalding and Alcock were quite different sorts of men. Alcock was nothing if not a good sport and was the pitcher in his first (and possibly last) game of baseball. Alcock's team won 17-5 after only six innings, giving him a lifetime winning percentage of 1.000 with an earned run average of 7.50. Unlike Spalding, who was a great player in his time, Alcock made up for a lack of athletic talent with his enthusiasm for sport and his skills as an administrator. In the snobbish and class-divided world of Victorian Britain, he didn't quite fit in. His family was wealthy but recently had risen from humble origins, while he showed little interest in or aptitude for the family shipping business. The aristocrats who played cricket were happy for him to run the business side of the game, but he was not quite one of them. The businessmen who organized soccer teams were more like Spalding in outlook, and Alcock's family money created a distance between him and the ordinary players of the game.

In 1885 a crisis almost identical to that of baseball's threatened to split the amateur and professional game of association football (that is, soccer). Commercially oriented teams wanted to pay players so they could win championships, but the gentlemen and aristocrats wanted nothing to do with pay for play. Alcock was appointed by the Football Association to find a solution, and he put together a compromise that left both amateurs and professionals thinking they had won, while both agreed to accept the jurisdiction of the FA. The global governance of soccer today, whereby the revenues from professional competition subsidize the development of the game at the amateur level, is a direct consequence of this compromise.

Sporting competition seems to be a universal characteristic of human societies. Play, as a form of preparation for "real life," is in fact known to many more species than merely human beings, and is clearly a valuable step in the development of adolescents. A predisposition to enjoy play is advantageous because it promotes a more rapid development to maturity, and this advantage no doubt explains its prevalence in the animal world. But play is for children, play is informal, play is unstructured, play is only for fun. Adults show how seriously play is to be treated when they organize it into "sport." The meaning of the word sport is much debated, but one thing is obvious: the meaning of sport to different peoples in different times depends on the purpose that sport serves.

Sports, in a sense that we readily recognize today, were played in all the great ancient civilizations-Sumerians, Egyptians, Chinese, and Incas all had their sports, including wrestling, running, chariot races, boat races, and ball games. The rules of these games are not well understood today, but their social functions can still be grasped from art and ancient texts. The ancient sports had two purposes that stand out-one is military and the other is religious. Most sports prepared young men for war, and therefore early sports were reserved almost exclusively for men. Sporting competition helped establish social standing, without resort to deadly conflict. Those who were stronger displayed their supremacy over the weaker, and hence their fitness for leadership. In ancient legends the heroes often prove themselves in sporting contexts. In Homer's Iliad, games are held at the funeral of Patroclus, and the principal leaders of the Greek army hold a chariot race, with a slave woman as first prize. Such examples draw a stark picture of the purpose of sports in ancient society.

Perhaps more difficult to understand for the modern mind is their religious function. However, if we see ancient sports as a way to establish social standing and responsibilities, we see why these events required the sanction of the religious caste. Sport symbolized war, and even if a sporting contest was only a dress rehearsal, it was useful to rehearse a victory. "With God on our side" is no doubt the most effective battle cry in history, and therefore it makes sense to involve the gods in the preparation of warriors. This is nowhere clearer than in the Inca ball game, which bears similarities to both basketball and soccer. According to descriptions left by Spanish conquistadors, the winners had the right to ask for any possession belonging to the spectators, while the losers were sacrificed to the gods.

The most enduring tradition of the ancient sports is the Olympic Games, founded by the Greeks in 776 BCE. The ancient Olympics involved 200-meter and 400-meter sprints, the pentathlon, long jump, discus and javelin throwing, forms of athletic competition that have more immediacy for us than any other ancient sports. Ancient Greece was a patchwork of independent city-states and overseas colonies, frequently at war with each other. Each city would organize their own games, but festivals such as the Olympics were "Panhellenic"-open to all Greeks. Games were held in honor of specific gods (the Olympics for Zeus, the Pythian Games for Apollo, the Isthmian Games for Poseidon), and the sanctity of the Olympics was indicated by the requirement that all military engagements cease during the games so that soldiers could attend. Here also, the games played a role in identifying military prowess, but the records of individual achievement and the stories associated with athletes give the games a modern feel. Great athletes came to be seen on a par with the heroes of myth. At first songs were written in their honor, soon statues were erected, and before long came the ticker-tape parade. Exaenetus of Agrigentum, winner of the Olympic footrace in 412 BCE, was driven through the streets of the city in a four-horse chariot followed by the city's three hundred most prominent citizens.

Twenty-five hundred years later, Greek sporting excesses have a thoroughly modern ring. Professional athletes traveled the circuit in pursuit of prizes paid for by the city they would represent (forget laurel wreaths, money and payments in kind were the norm), cities would bribe top athletes to switch allegiance, and athletes would bribe their rivals to lose (the route into the Olympic stadium was lined with statues paid for by athletes found guilty of cheating). Professional athletes became a race apart from the ordinary citizen who would only watch the games. There are stories of sexual excesses involving athletes in their postvictory celebrations. However, the identification of the success of the athlete with the status and well-being of the city is the most strikingly modern trait.

Roman games borrowed from the Greeks and other conquered nations, but also embodied "Roman virtues." The Romans developed spectator sport as a leisure activity to a degree that is breathtakingly modern-the Roman Coliseum, built in AD 72, could hold over fifty thousand spectators. The spectacles staged at the Coliseum involving fighting of one sort or another-gladiatorial contests, mock battles, and animal hunts. Strip away the fact that some of the contestants died, and you have a show that has much in common with professional wrestling today. Religious connections ceased to play a significant role, and the fights no longer had much to do with preparing citizens for a military career.

Gladiatorial contests were typically paid for by the wealthier citizens, and not least the emperor himself, as a way of buying public support. They were hugely expensive events and highly organized. Gladiators, as slaves, were traded in the market at prices that resemble those of a top baseball or soccer star today, and inscriptions survive bemoaning the inflation in prices for the top performers. Roman chariot racing also had a modern flavor; races in the Circus Maximus involved competition between four professional stables, each team sporting its own colors and attracting support from among all classes of society, from the emperor down. The drivers were the unquestioned superstars of the age, paid huge sums of money, frequently acting as if they were above the law, and mourned as heroes when they died. In one case, a distraught fan actually threw himself on the funeral pyre of a dead driver. In the later empire retired drivers sometimes pursued successful political careers.

Modernity in sport, it has been argued, consists of several elements-secularism, equality, bureaucratization, specialization, rationalization, quantification, and the obsession with records. But when we examine the ancient Roman chariot races, all of these elements seem present. And if this is true of an ancient civilization for which we have significant documentary records, who is to say that similar structures did not exist in ancient China or Mesoamerica, where the records are much sparser?

The Romans, of course, did not have stopwatches. A gulf separates the ancient world from our own. Almost all of the sports that we would call modern have been formalized over the last 250 years-soccer, football, baseball, golf, tennis, basketball, cricket, hockey, and modern track and field. Moreover, the formalization of these sports occurred almost entirely in one of two countries-Great Britain and the United States. The rules of the modern game of soccer derive from the rules of the Football Association (FA) created by eleven football (soccer) clubs in London in 1863, while the rules of baseball derive from the rules of the Knickerbocker Club of New York, written by Alexander Cartwright in 1845. Lawn tennis was invented and patented in England by Major Walter Wingfield in 1874, and basketball was invented in Springfield, Massachusetts, by James Naismith in 1891. The British in particular seemed to have been obsessed with the writing of rules and the creation of associations. For example, while both archery and boxing have been practiced since time immemorial throughout the world, the oldest known rules and associations for these sports came from Britain (the rules of boxing were written and published in London in 1743, and the Royal Toxophilite Society for the promotion of archery was founded in 1790, also in London).

Competition today is dominated by a select group of the sports that were formalized between 1750 and 1900. In particular, the modern obsession with sport focuses primarily on team sports-soccer, football, baseball, basketball, and cricket (beloved of one billion Indians). These sports, combined with the individual sports of tennis, golf, motor racing, and cycling, probably account for more than 80 percent of sports journalism around the world. All of these games had their first known rules and associations created in either Britain or the United States. Why should this be? Sociologists have advanced a number of theories, which tend to revolve around either industrialization or imperialism.

The industrialization theory argues that the rationalization of sport through rules and its organization into competitive units reflected the restructuring of Victorian society around industrial production in cities following the Industrial Revolution, which first flowered in Britain at the beginning of the nineteenth century and spread to the United States soon after. According to this view, regimentation of sport followed regimentation of work. The application of time-keeping, written records, mass production, and transportation all brought benefits to the organization of sport as much as it did to trade and commerce.

The imperialist theory argues that British sporting practice spread through the British Empire, on which the sun never set (at least in the nineteenth century). This happened not so much by forcing anyone to play British sports (indeed, the British frequently refused to play sport with their supposed inferiors) but through imitation. Along with military and economic power, accordingly, came dominance of culture and through influence British sporting practice spread. When the British Empire was supplanted by American economic power in the twentieth century, America's sporting practices also started to spread. The imperialist theory therefore focuses primarily on the means of diffusion rather than the origin of sports; implicitly, had another nation such as France or Germany been the dominant power in this era, it would have been their sporting practices that would have spread, rather than the British and American ones.

Both of these theories miss out on some interesting and important historical facts about the development of sport. They are essentially theories of the nineteenth century, when the most important steps in the development of modern sport may have taken place in the eighteenth century. Four modern sports, golf, cricket, horseracing, and boxing, set up rules and organizational structures in the mid-eighteenth century-before industrialization started, before Britain became the dominant power, before the United States was even born. Moreover, the two theories I've mentioned are silent on the institution that did most to create the revolution in sport, namely, the club.

(Continues...)



Excerpted from PLAYBOOKS and CHECKBOOKS by Stefan Szymanski Copyright © 2009 by PRINCETON UNIVERSITY PRESS. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Preface vii
Chapter One: Sports and Business 1
Chapter Two: Organizing Competition 27
Chapter Three: Sports and Antitrust 59
Chapter Four: Sporting Incentives 92
Chapter Five: Sports and Broadcasting 125
Chapter Six: Sports and the Public Purse 155
Epilogue 180
A Beginner's Guide to the Sports
Economics Literature 185
Acknowledgments 197
Index 199

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