Wednesday 27 November 2019

Sport and competition for the market

Colby Cosh's latest column would be great fodder for grad classes in Industrial Organisation.

We can think about sporting competition in a few ways. The obvious one is competition within the market. Teams compete against each other to be the best within the league's set of rules.

There's also a weak form of competition against other sports in the overall market for attention. Leagues adjust their rules to maximise profits across the set of teams; if the game isn't fun to watch, people will watch something else. So if the competitive balance gets out of whack, the league might use salary caps or entry drafts to make the game more competitive.

But there doesn't seem to be much competition for the market within a sport. If you want to watch professional hockey in North America, there's the NHL and its set of rules. If you want to watch professional basketball, there's the NBA and its set of rules. Canada and the US run different rules for gridiron football: CFL versus NFL, but it isn't like you can choose one over the other if you want to go out and see a game one day. The city you're in says which league you get to watch.

So we get to Colby's rather fun question. All the leagues have evolved to a stable form of the game with about 30 teams in each league and no interesting rule variants. Baseball gets a designated hitter rule in the American league but not the National league, and that's about it. Why isn't there more competition for the market?

Here's Cosh (go read the whole thing!):
In these league structures as we have come to accept them, teams become local monopolies, with little natural incentive to care for or experiment with their sport. Major league baseball was once the senior level of a healthy, commercially successful universe of ballplaying; now, “baseball” exists mostly to serve a televised spectacle that is 30 businesses in large metropolitan areas. All other play of the game above (or even at) the amateur level is defined by its relationship to those businesses. And this is more or less equally true of the other sports.

Which might be fine if it didn’t have other terrible effects. But the One True Business Model makes all the pro sports extremely conservative and incestuous. And each league is wedded to a single, all-prevailing rule set; even the vestigial divide in baseball that gave one “league” the designated hitter would no longer be tolerated.

Any new idea in rules or playing conditions must either be rejected or accepted wholesale after limited experimentation. (The “minor leagues” in the big four sports are suffered to exist partly for the purpose of trying out new rules, but this only emphasizes their status as subject principalities.) This, in turn, leads to endless tinkering inflicted on every fan simultaneously: witness the strife in American football over how to police pass interference, or the torment all sports have suffered over use of instant replay in officiating.

If you are a fan nostalgic for the game of basketball as it was played before the three-point line existed, or for hockey before the shootout, you have nowhere to turn. But it could be worse: you could be a player whose relevant skills are rendered obsolete by some singular, irreversible change in the rules and corresponding strategic imperatives. What are you going to do, go play in the other NFL?

The worst of it is that even as these cartels stagger toward a perceived single optimum of entertainment value, they can struggle, with equal difficulty, to let go of traditional axioms that are dragging them down. Major league baseball’s increasing transformation into a contest of strikeouts and home runs, with roughly 12 relief pitchers appearing in every game, is the obvious example.

I love all four of these games, but watching them is ever more like visiting a nice relative in an intolerable and dangerous neighbourhood. And, actually, I think there is a great long-term commercial reward for the first one of these major leagues to start seriously reconsidering its own monolithic structure. The most obvious candidate is the National Basketball Association, whose brilliant commissioner, Adam Silver, has put forward a proposal to interrupt the 82-game NBA regular season with a winter tournament.

This isn’t the orgy of destruction for which I long; I prefer to imagine a total anarchistic dissolution whose extreme limits even I cannot see. (What if there were no permanent teams, and everyone in baseball or basketball were a free agent every year? What if the L.A. Dodgers-Kings-Chargers-Lakers were one club that had to play all four sports in a calendar year with a strict 50-man roster?) But at least, dear God, Adam Silver is thinking about the future; he is thinking about attacking the unexamined, boring premises of his game/sport/cartel, which include “having a single ‘regular season’ that is a prelude to a single playoff tournament.”
If we contrast to New Zealand, cricket gives us three forms of the game. Some prefer 20/20, some prefer ODI, and the best people prefer a proper Test. International teams face all three forms of the game. Rugby takes a different tack, with different teams playing rugby union and rugby league, and not much player cross-over between forms.

And so the fun fodder for an IO seminar: Why do we get three forms of cricket within the same league where each team needs to be able to play all three; two forms of rugby played by different teams where there are often franchises of both leagues in the same city (Wellington has both the Lions and the Hurricanes); but, only one form of professional-grade sport in the North American leagues? Is it really plausible that the North American professional leagues have really evolved to the best-possible forms of the game?

I like the thought-experiment of the 50-man combined LA Dodgers-Kings-Chargers-Lakers.

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