ECON 3306-: Economics of Sports

ECON 3306-: Economics of Sports

Fall 2016

Course Syllabus

Instructor(s): Malcolm Kass

Office Number: COBA 326

Office Telephone Number: 817-272-3221

Email Address:

Faculty Profile:

Office Hours: Tuesdays 4pm-6pm or by appointment

Section Information: ECON 3306-001

Time and Place of Class Meetings: Tuesdays and Thursdays 9:30 am to 10:50 am, COBA 154

Description of Course Content:

Basic economics principles applied to the analysis of professional and amateur sports. Topics include fan demand, advertising, team output decisions, league/conference organization, sports rules, and government regulations. The course is designed for both business and economics majors.

Student Learning Objectives:

-Understand how the demand and the supply for team products change with changes in the economic climate.

-To understand the decision making process of the team owners with and without market power. Examples include limiting the number of tickets sold, the number of team in leagues, and the reserve clause. Also will know legal challenges to monopoly power, specifically antitrust laws and the reserve clause

-Have knowledge of the issues of competitive balance for team owners and fans. Specifically the role of Coase Theorem and its role in debunking competitive balance argument for the reserve clause.

-Understanding the reasons for and against public financing of new sports facilities. Coupled with this is handling discounted cash flows and the different methods of financing, especially the role of fairness and efficiency.

-Understand the decision making process of the competitive and the monopolistic labor markets. Tied with this is knowledge of unionization and the economic and legal issues with competitive bargaining.

-Know the history and role of the NCAA and the student-athlete and the different issues with the NCAA’s tie to amateurism and its non-Profit status.

Class Description:

The first part of the class will focus on the industrial organization of sports. Here, we discuss why sports leagues exist, antitrust issues associated with sports and competitive balance. Next we will look at the connection between sports and public finance. In this topic we investigate how cities compete for professional teams and whether it is worth their while to do it. Then we will turn to sports and labor economics where we will discuss issues like why players earn such high wages and why players organize into unions. If have time, while amateur ad collegiate athletics will be discuss at different times during the year, we will delve into a more formal study of the NCAA.

Required Textbooks and Other Course Materials:

Textbook: The Economics of Sports, by Michael Leeds and Peter von Allmen. (5th Edition)

Calculator: A plain calculator will be sufficient, such as the one below.

Blackboard:

I will use Blackboard, an electronic learning software platform, for the distribution of course information. Go to

to log in. Be sure to check our Blackboard site on a regular basis for announcements, exam reviews, and other material related to class. There are detailed instructions on the use of Backboard that can be accessed at

Expectations for Classroom Behavior:

Class participation, questions, discussion are strongly encouraged. Please be respectful of each other, the instructor, and any guest presenters while in class. We are all here to learn! Any disrespectful or disruptive behavior may result in your being dismissed from class and/or an academic penalty.

All cell phones and pagers are to be silenced during class and not to be used. In addition, if you do show up late or leave before class is over, please sit in the back of the class and be as cordial to others as possible.

Failure to adhere to these classroom rules may result in your being dismissed from class and/or an academic penalty.

Prerequisites:

Econ 2306 or approval by advisor.

Grading:

Your final grade will be determined by 4 quizzes and 2 exams. They will be weighted as follows:

4 quizzes based on the class material (book, slides, material on the board, homework problems but not the readings) (36%)

-Lowest grade will be dropped

-worth 12% each

-Scantrons will be necessary for each quiz: Form 882-E

-Will be performed in the last 40 minutes of class

2Exams based on the class material, homework problems, and the readings (64%)

-Worth 32% each

Your letter grade will be determined by the percentage of total points earned as follows:

A 90% or above

B 80 –89.99%

C 70 – 79.99%

D 60 – 69.99%

F Below 60%

Curve: You should not depend on a curve, as there is a reasonable probability that there will not be

one. If there is a curve, it would be small at best.

Grades: I want all of you to get the highest grade you want, but I believe you reap what you sow.

So if you want a certain grade, please visit me during the semester so I can help you get that

grade. The week before the exam may be too late to earn the grade that you want.

Students are expected to keep track of their performance throughout the semester and seek guidance from available sources (including the instructor) if their performance drops below satisfactory levels; see “Student Support Services,” below.

Attendance:

At The University of Texas at Arlington, taking attendance is not required. Rather, each faculty member is free to develop his or her own methods of evaluating students’ academic performance, which includes establishing course-specific policies on attendance. As the instructor of this section, I have decided that attendance at class meetings is not required but strongly encouraged. If you must miss class, you are responsible for obtaining any class notes and homework assignments distributed in class.

Homework:

Throughout the semester on a near weekly basis, I will assign homework. This homework will not be graded nor will I collect this homework, but it is to be used to help prepare for quizzes and exams along with the other material. This does not mean questions on the exams will be exact questions from the homework. Many, but not all of the concepts tested will be concepts from the homework.

Readings:

To be tested on the exams with not the quizzes, I will provide you a series of reading and questions you will need to be able to answer for the exams. These will typically be news articles, sketches, and a journal article or two. You will have about 4 to 8 to read and study for each exam.

Quizzes:

There will be 4 quizzes of which I will drop your lowest grade. Each quiz will consist of 10 to 20 multiple-choice questions. These quizzes will test your understanding of the concepts discussed in class. Therefore your focus should be on the material in the book and the content discussed in class. Missed quizzes will be given a grade of zero unless adequate evidence (official documentation with contact information from a medical/legal professional for example) is presented to indicate that missing the quiz could not be avoided.

Exams:

There will be 2 exams. Each exam consists of short and long answer open ended questions. If you have conflicts with the exam dates contact me immediately (prior to the exam dates). Missed exams will be given a grade of zero unless adequate evidence (official documentation with contact information from a medical/legal professional for example)is presented to indicate that missing the exam could not be avoided.

Allquizzes and exams will be closed book, closed notes, where the only thing you need to provide are pencils/erasers and the proper calculator. You may have something for drinking, but otherwise, you must have a clear desk area, including headwear and mobile devices. There will be other restrictions as well.

Final note on quizzes and exams: Students may not use a programmable calculator for examinations. A simple four function calculator is sufficient for all problems. I recommend the TI-503 which should be available at the book store.

Make-up Quizzes and Exams and Exam policy: Quiz and Exam dates will not be changed unless the university has been closed; I will adjust the material if we get behind. Make up quizzes will not be given for the first missed quiz with an excused absence and they will require documentation and possible follow up by me or the department. For an excused absence, I will compute your quiz as if the missed quiz never existed. I will provide make up for the exams, and even then, only under extenuating circumstances that will require documentation and possible follow up by me or the department.

Expectations for Out-of-Class Study: Beyond the time required to attend each class meeting, students enrolled in this course should expect to spend at least an additional 7 to 8 hours per week of their own time in course-related activities, including reading required materials, completing assignments, preparing for quizzes and exams, etc.

Speakers: We may have time for a speaker. If so and who they are will be announced later.

Assignments & Academic Calendar:

Readings from the textbook are listed for when they are supposed to have been read. Quiz and Exam dates are also listed below. If we get behind, the dates for exams will not change unless the university has been closed. I will change the material covered in exams to accommodate where we are.

I will try supply the material/slides (except for the material from the textbook) a few hours before class.

Aug 25Intro to class. Chapter 1, Econ of Sports. Discussion of Sports place in the greater economy

Aug 30 and Sep 1 Chapter 2, Review of Econ Arsenal. (Graphing Review and Overview of Regression) Review of supply and demand, elasticity, market structure.

Sep 6 and 8Chapter 2 continued. Start Chapter 3: Sports Team Behavior. How teams/leagues use their monopoly power

Sep 8Quiz #1: Chapter 1, and 2

Sep 13 and 15Chapter 3 continued (may skip section 3.5), Start Chapter 4, Consequences of Teams having monopoly power, pricing and antitrust.

Sep 20 and 22Chapter 4: Consequences of Monopolies and pricing.

Sep 27Quiz #2: Chapter 3 and 4 (up to Section 4.3)

Sep 27 and 29Chapter 4: Monopolies as market providers. Antitrust and the Reserve Clause. Section 5.3: Invariance Principle

Oct 4 and 6Finish Antitrust. Exam #1 Review on the 6th.

Oct 11Exam #1 (All material)

Oct 13Start Chapter 6, Public finance of sports, who benefits. The economic benefits of new facilities to fans and communities.

Oct 18 and 20 Finish chapter 6, start Chapter 7, Public finance of sports, who pays. How public funded facilities are paid for and who pays for them. Discussion of bonds.

Oct 25 and 27Finish Chapter 7.

Nov 1Quiz #3: Chapter 6 and 7

Nov 1 and 3Chapter 8, intro to Labor markets. Evaluation of player value to team. Sabremetrics. (only select topics, )

Nov 8 and 10Finish Chapter 8. Chapter 9, Labor market imperfections and monopsony. Unionization.

Nov 15 and 17Chapter 9. Labor market imperfections and Labor unions.

Nov 22Quiz #4 Chapters 8 and 9

Nov 29 Dec 1Start Chapter 11, NCAA: Amateurism, Title IX, and its non-profit status.

Dec 6Review for Exam #2

Dec 15Exam 2 (from 8 to 10:30 am)Chapters 6, 7, 8, 9, 11

As the instructor for this course, I reserve the right to adjust this schedule in any way that serves the educational needs of the students enrolled in this course.

Communication: Check Blackboard frequently. I will communicate exclusively via the email feature in Blackboard, when possible. You are responsible for accessing your email account and blackboard on a daily basis during the week.

Grade Grievances: Any appeal of a grade in this course must follow the procedures and deadlines for grade-related grievances as published in the current University Catalog.

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I pledge, on my honor, to uphold UT Arlington’s tradition of academic integrity, a tradition that values hard work and honest effort in the pursuit of academic excellence.

I promise that I will submit only work that I personally create or contribute to group collaborations, and I will appropriately reference any work from other sources. I will follow the highest standards of integrity and uphold the spirit of the Honor Code.

UT Arlington faculty members may employ the Honor Code in their courses by having students acknowledge the honor code as part of an examination or requiring students to incorporate the honor code into any work submitted. Per UT System Regents’ Rule 50101, §2.2, suspected violations of university’s standards for academic integrity (including the Honor Code) will be referred to the Office of Student Conduct. Violators will be disciplined in accordance with University policy, which may result in the student’s suspension or expulsion from the University. Additional information is available at

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Final Review Week: for semester-long courses, a period of five class days prior to the first day of final examinations in the long sessions shall be designated as Final Review Week. The purpose of this week is to allow students sufficient time to prepare for final examinations. During this week, there shall be no scheduled activities such as required field trips or performances; and no instructor shall assign any themes, research problems or exercises of similar scope that have a completion date during or following this week unless specified in the class syllabus. During Final Review Week, an instructor shall not give any examinations constituting 10% or more of the final grade, except makeup tests and laboratory examinations. In addition, no instructor shall give any portion of the final examination during Final Review Week. During this week, classes are held as scheduled. In addition, instructors are not required to limit content to topics that have been previously covered; they may introduce new concepts as appropriate.