Abstract
This special issue of the Journal of Sports Economics is composed of four articles presented at the IX Conference of Sports Economics, held in Gijon (Spain), in May 2014, coinciding with the 50th anniversary of the publication of the article by Walter C. Neale, “The Peculiar Economics of Professional Sports,” in the Quarterly Journal of Economics in 1964 (Neale, 1964). The issue is complemented by a biographical introduction, written by Leo Kahane.
The impact of Neale’s article in the field of sports economics is substantial. Together with the seminal article by Simon Rottenberg (1956), it is one of the most cited articles in the sports economics discipline. One of the central ideas in Neale’s article is the “single entity concept”—the idea that the sports League as a whole is the firm not the individual clubs. This single entity concept is fundamental and has been considered by the U.S. Supreme Court in key cases such as American Needle, Inc. versus NFL (2010). In Stefan Kesenne’s contribution to this special issue, he argues that a single entity league not only creates a monopsonistic player labor market, but it also creates local monopolies in product and media markets.
Another noteworthy aspect of Neale’s article is the positive relationship between competitive balance and gate receipts, the so-called League Standing Effect. In the article by Wladimir Andreff and Nicolas Scelles, the authors test this effect for the French football league (Ligue 1).
The Louis-Schmelling Paradox is probably the most famous topic of Neale’s article in which he refers to the, “peculiar economics of professional sports.” Brad Humphreys and Li Zhou examine how models of consumer choice under uncertainty provide insights about the impact of outcome uncertainty on game attendance.
In the subtitle of his article, Neale points out that the objective of his article is “a contribution to the theory of the firm … in market competition” (p. 1). Yuong Hoon Lee, Hayley Jang, and Sun Ho Hwang analyze market competition with respect to efficiency and efficiency distribution. They suggest the “efficiency bound” as a new measure of market competition.
The Conference was organized by Jaume García (Universitat Pompeu Fabra), Stefan Késenne (University of Antwerp and Leuven), and Plácido Rodríguez (University of Oviedo). The organizers thank Cajastur; the Tourism Society of the Gijon municipal government; the Department of Economy and Employment of the government of the Principality of Asturias; the University of Oviedo; the Department of Economics of the University of Oviedo; the Faculty of Trade, Tourism and Social Sciences Jovellanos of the University of Oviedo; and the Sport Economics Observatory Foundation, for financial support given for the conference.