Competitive Balance in North American Sports and European Sports - Essay Example

Topic “I confirm that this is all my own work. Any quotations are properly cited using the Harvard referencing method. All errors and omission are my responsibility alone.” Name Dated The approaches and policies used to achieve competitive balance in North American sports and European sports is usually based by an examination of competitive balance philosophy and policy in North American and European professional sports organisations. To begin with,competitive balance is directly linked to the balance in sport capabilities of a team (Michie et al., 2004). However in football results, they are investigated using various methods, but according to Szymanski (2003), he identified the three kinds of uncertainty, one of then being the match of uncertainty which directs to the uncertainty of the result of a special match that is between two. Secondly, there is championship uncertainty that refers to the dominance of a reduced number of teams over the league in continuous seasons. Finally, there is team season uncertainty that means uncertainty regarding the matches of the seasons(Szymansky, 2003). A research wascarried out on European leagues in countries like Germany, Belgium,Portugaland England among others. According to(Goossens, 2006), studies revealed that Germany and France had not adopted a very clear and straight forwardway to the competitive balance of their leagues. It further revealed that Belgium and England showed an immense relative linear increase where there was a reduced competitive balance. The importance of competitive balance in this situations is vital due to the fact that, if there is any evidence whatsoever, of similarity, the uncertainty regarding the results will drastically increase the fans interest and the urge to watch games more and more. If a certain league is not of equal measure, then it cannot earn revenues from the viewers and from the audience, who are the spectators. This methodology will build more fans and will create room for a competitive nature of balance. Therefore, it is essential to note the areas of weaknesses in order toimprove and maintain competitive balance, and in return, it will maximize and improve demand for the clubs, the leagues together with their products. This is a vitalbusiness reason why the sport leagues should adopt the disciplined regulations that are setso as to distribute revenues evenly and increase the balance. Imbalance of leagues are prone to face threats like bankruptcy, others even go to the extent of administering threats of fellow competing leagues, and a big gap in the intra and inter-league revenues from the selected teams that are chosen for champions league. Several economists argue that the in the NFL, if it is something to go by, is, too balanced and there is need to interpret the results as one’s preference.  However, having looked repeatedly at the exercises using NBA data, it was found that the ‘unbalanced schedule’ on the adjustments has no great difference. It can therefore be concluded that for comparative purposes, the accounting differences in the strength of schedules is a vital element in using the empirical main league evidence on the competitive balance policies.  According to Vrooman,the study was theoretical. However, Dave Berri and Martin Schmidt conducted a research in 2001. Their study of their analysis revealed that the competitive balance of using a traditional measure of equality, together with the Gini Coefficient in the measure the relationship between attendance and wins in baseball, showed that they found that during the 1990s, there was the most competitively balanced in baseball history for decades.It also revealed that there had been a constant trend in the same direction for decades.However, the Gini Coefficient has its limitations and problems, but is also not the only way to conclude. Bradbury used the Noll-Scully Measure in his books of competitive balance.In his books, he termed the relationships among the average number of wins in each team, together with the number of teams in a league and the games each team plays in response to the measure of the MLBs historic competitive balance. He found out in this case that very similar results compared to the ones of Schmidt and Berri, it stated that the competitive balance in our world today, is all about what it was in the 1980s, and therefore it is in the best of what has been in the leagues entire history that was ever known in that time. However, recent attempts reveals the improvement in competitive balance with the policies that were put in place to be implemented such as the one that was on revenue sharing and a luxury tax that does not appear in any way to have had much effect on the league. The competitive balance here does not affect in any way the league policies in any way substantially. Since the abolishment of the Reserve Clause in 1976, the league of competitive balance have improved dramatically. This is so because of the competitive balance was improved through the facilitation of improving the mediocre clubs. The ‘Free Agency’ promoted these competitive balance as a way of improving their clubs rather than hindering their potentials. The result was exaggerated in North America unlike Europe simply because of the wholesome cash sales of players that are uncommon there. Prior to the Reserve Clause of the 1976, the inferior teams could improve through the nurturing of young players. This was very vital to quickly improve and generate the quality of players, who are traded to acquire other players. This is logic in that aless common team is less likely to have an excess of one than a more common team in terms of quality in one position. Moreover, in the case as in European football where the practice of cash sales are very common, there is need to induce an out-of-contract player who is to change teams and to arrange through arbitration or an agreement on the basis of a transfer fee tohike the cost of acquiring new talent in the teams. In most cases, the inferior teams are the in the greatest need of new talent where in a labor market that is free, there is likely to assist inferior teams improve quickly on their teams to their competitive advantage. The main limitation in regard to the thesis of the teams is that players are highly regarded by their inferior teams to be all of the same league, meaning that that all teams are not regarded equal in most cases. The presence of free markets will not supposedly, in most cases lead to the optimum league in balance. The different clubs may face different responses according to their favorite teams by the fans in regards to the success of the teams. If an extra win attracts 10,000 more fans in team A fore example and an additional 1,000 paying customers for Team B, then Team A is less likely to be outbid. Moreover, a transaction that could harmsthe effectiveness of the quality of the overall league product could cause a sub-optimum extent level of competitive balance, which is, in most cases not likely to be validated by individual clubs respectively. If the teams of the respective clubs are seeking to improve their profits, then the mode of revenue sharing may be more complex a little bit that they thought. If there is probable chance of not competing, then it could be due to the lack of money and again theforms of revenue sharing will have to suffice In the U.S. More often it is claimed that imbalance of sharing of the revenue is because of the static factors that concerns the amount of the market which the fans are attracted. However, various economist who have analyzed this suggest that the revenue sharing will be ineffective in promoting competitive balance of their teams. The same economic models that support the intuitive proposition in that a great significant lump-sum payment to a small club will not actually lead to the clubs profit by maximizing management specifically to increase the payroll. The profit-maximizing strategy of a club would be easy to pocket the subsidy amountto maintain the on-field mediocrity, more less intuitively is said is that the system of revenue sharing, as it is said to be a "winning elastic," where the subsidy grows drastically when on-field performance is improved and increased. This however will be unlikely in this case to increase profit-maximizing of the small-market club to improve their roster by increasing their payroll. Work cited: Michie, J., & Oughton, C. (2004). Competitive balance in football: trends and effects. Montanari, F., Silvestri, G., & BOF, F. (2008). Performance and Individual Characteristics as Predictors of Pay Levels: The Case of the Italian Serie A. European Sport Management Quarterly. 8, 27-44. Quirk, J. P., & Fort, R. D. (1992). Pay dirt: the business of professional team sports. Princeton, N.J., Princeton University Press. Utt J., & Fort, R. (2002). Pitfalls to Measuring Competitive Balance with Gini Coefficients. Journal of Sports Economics. 3, 367-373. Read More