SPORTS ORGANIZATIONS ARE DIFFERENT 1. Synopsis of the category from Fort00

Comparatively, NAL fans are different in one of two ways. On the one hand, their sense of fairness may require lower-seeded teams to prove they deserve a championship slot. On the other hand, NAL fans may implicitly believe that teams with higher regular season winning percentages are deserving of their deserved regular season success and higher seeding. The point of relating the anecdote is to point out that fan preferences are a many-splendored thing, beyond just outcome uncertainty.

All in all, one still can continue to wonder about the relationship between fan preferences and the organizational forms that pro sports have taken across the ocean. But subsequent work clearly points out that fan demand is different in fundamental preferences toward outcome uncertainty, both across sports and across nations.

III. SPORTS ORGANIZATIONS ARE DIFFERENT

of the four major NALs is organized precisely along the same lines–world governing body (under Global Association of International Sports Federations, or GSIAF, e.g., FIFA), intercontinental governing body (if needed, e.g., Confederation of North, Central American and Caribbean Association Football, or CONCACAF), national affiliates (e.g., U.S. Soccer), and on down to club sports. A current, rising example is eSports, currently working its way toward this precise model of world governance under the World eSports Association (WESA).

On P&R, Fort00 suggested that some of the history of NALs and the process crowning a national champion in college football mimicked this feature of ELs.

Fort00 also suggested that the presence or absence of P&R probably didn’t matter anyway. Both NALs and ELs put the highest quality level of competition in front of those willing to pay the most to see it.

Which brings us to the absence of training money trickle down in NALs.

Fort00 observed that the minor leagues feeding MLB and the NHL were either vertically integrated via ownership, or via player development contracts, so the trickle down for talent development in those two NALS would be similar that in ELs. The NBA and NFL, on the other hand, were different. The value of play at the college level was so large for these sports there was no need for the major NALs to cover any sort of development cost. Fort00 also noted that the trickle down of big post-season money occurred from stronger to weaker teams in college conferences.

2. Retrospective

I stick to my guns on the first issue and the reason is similar to my earlier stand on “fans are different.” The difference in organizations is just an artifact of the different needs of the team owners. In the major NALs, without any avenue at all to an international level of play, there is no need for a world governing body. And all of the other sports are, in fact, organized just like the rest of the sports in the world.

On the other hand, I would take back my earlier claims on P&R. Ross (1989); Szymanski and Ross (2001); Ross and Szymanski (2002, 2008); and Szymanski and Valletti, (2010) have made two things abundantly clear. First, P&R leagues make different talent decisions. Second, P&R could bring fan value to leagues that adopt it.

Despite these strong arguments, and despite fan-voiced demand for it in the popular press, NALs have devoutly ignored P&R. Indeed, even Major League

Soccer (MLS) shuns P&R. That league has had the chance to embrace P&R since there are second division possibilities like the United Soccer League (USL) and the North American Soccer League (NASL). While MLS has actually been the subject of a law suit to just determine which of the two is the official second division, it has officially rejected P&R.

Noll (2002) listed the reasons why P&R will not be a feature of NALs. First, speaking generally beyond MLS, a second division would have to be identified and granted access to the major league. In essence, if a team in the highest level of minor league baseball finished with a better winning percentage than the worst MLB team, it would join MLB. Second, player pay rises with the implementation of P&R. Finally, quoting Noll directly (p. 199), “On the negative side, teams that are relegated do worse financially than they would if they finished in the bottom group of teams in the higher league.”

Current members of a major NAL would never agree to P&R. Despite the overall improvement that might occur from the fan perspective, the original value placed on membership by the owners joining the league was predicated on it remaining closed. If the league were then later “opened” via P&R, the subsequent value of ownership would be below their entering estimate.

Fort00 noted that the distribution of talent should be similar in NALs and ELs if, indeed, both organizational forms put the highest quality of play in front of those willing to pay the most to see it. But this claim is undone by my own empirical work. The distribution of talent is dramatically different in NALs and ELs (Lee and Fort, 2005, 2012; Fort and Lee, 2007). This is especially telling in our most recent analysis of the higher moments of the talent distribution which shows significantly different skew and kurtosis for NALs, compared to ELs (Jang, Lee and Fort, 2018). We go so far as to suggest that organizational and revenue sharing differences are behind this variation.

Another Fort00 claim was that if talent were being distributed similarly, then Rottenberg’s (1956) other “invariance principle” (IP) should be as powerful in ELs as in NALs (excluding labor mobility and location preferences of players, to which I turn in the conclusion). The IP simply states that the distribution of talent is invariant with respect to whether owners/clubs or players keep the value produced by the latter. However, Fort, Maxcy and Diehl (2016) review the IP literature and find that sometimes the IP holds, and sometimes it doesn’t, regardless of whether NALs or ELs were under analysis.

Finally, on revenue trickle down, intervening events have further muddied the water. At the outset, it is the case that the revenues of the strongest teams have grown faster than the rest, both in NALs and ELs. The same is true in

college football and men’s basketball. Both continue to be dominated mainly by the same Power conferences. A similar result occurs in ELs with the rise of the value of post-season tournaments like Champion’s League.

But the question originally posed in Fort00 had to do with trickle down for training, a very controversial topic at the time. It is unclear whether larger amounts are also trickling down to the training level. In one NAL, MLB, a lawsuit by minor league players seeking higher pay were heard and rejected by the courts. But that was about an increase in spending, not its level. And in the college-supplied leagues, the money is bigger than ever but appears to be managed to benefit of a few conferences rather than all in general.

IV. TEAM OBJECTIVES ARE DIFFERENT