IJSF Issue 13:4

Abstract:International Journal of Sport Finance, Volume 13, No. 4, November 2018.

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The Effect of Foreign Players on Pay and Performance in Major League Soccer
Authors: Simon Medcalfe and Rebecca Smith
Abstract:Over the last ten years, Major League Soccer (MLS) has attracted many overseas players. This study examines the role country of birth plays in salary determination, team performance on the pitch, and fan attendance in Major League Soccer for the 2007 through 2014 seasons. Players born in the U.S. earn less than equally productive foreign-born players. However, there is much heterogeneity amongst these foreign-born players. Players born in France, Gambia, Argentina, Brazil, Columbia, and Costa Rica earn salary premiums relative to their productivity. Players born in Trinidad and Tobago earn less than their productivity would suggest. There is little evidence that foreign born players impact team performance on the pitch but may have a positive effect on attendance.

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Information Precision in Online Communities: Player Valuations on www.Transfermarkt.De
Authors: Franziska Prockl and Bernd Frick
Abstract:The benefits of crowd wisdom/swarm intelligence in the form of superior decision-making and problem-solving skills have recently been analyzed and discussed by researchers from various fields. The goal of this paper is to identify the relevance of crowd wisdom for professional team sports leagues by analyzing, first, the emergence of crowd wisdom on a particular online platform (www.transfermarkt.de (link is external)) and, second, by documenting the precision of the collectively gathered information. The authors evaluate the emergence and diffusion of information on that platform over ten consecutive years and find a pattern similar to the one proposed by Bass (1969) in a now seminal study. Moreover, using player values as well as player salaries from Major League Soccer for the seasons 2006 through 2015, it appears that values are excellent proxies for salaries that are not disclosed, but remain private and confidential in most leagues. These findings encourage researchers to use information from sources like transfermarkt.de in their empirical studies.

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Family Connections in Motorsports: The Case of Formula One
Authors: Craig A. Depken II, Peter A. Groothuis & Kurt W. Rotthoff
Abstract:Within-family career following is common in many occupations, including law, politics, business, agriculture, medicine, entertainment, and professional sports. For children who enter the same career as their parents there are several potential benefits: physical-capital transfer, human-capital transfer, brand-name-loyalty transfer, or nepotism. In Formula One (F1) auto racing, career following is also common; many drivers follow their father or brother into racing. Using a panel describing F1 drivers from 1950–2017, we find that brothers of drivers appear to benefit from human capital transfer and nepotism, and that sons gain little from human capital transfer and do not enjoy nepotism. We do find that only the best drivers have sons who follow them into racing, suggesting that sons can extend the brand name-loyalty perhaps long after their fathers have retired.

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Home-Team Response to the Three-Point Victory Rule: New Evidence Using Double and Triple Differences
Authors: Carlos Varela-Quintana, Julio del Corra and Juan Prieto-Rodriguez
Abstract:Recent findings in sports economics have provided both theoretical and empirical support for the hypothesis that the three-point victory rule leads home teams to choose a more defensive playing style. The main aim of this paper is to test this hypothesis by analyzing line-ups, as well as yellow and red cards. To do so, we used a difference-in-differences approach in which the Italian and French leagues were the treatment group, and the German and Spanish leagues were the control group. In addition, we used a triple-difference model to analyze whether home teams responded differently from visiting teams to the three-point victory rule. Unlike previous results, we provide evidence supporting that home teams increased their aggressiveness. We found that both home and away teams increased the forwards/defenders ratio in the starting lineups, with no indication of significant differences between them. Moreover, home teams increased the actions penalized via red and yellow cards more than did the away teams.

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NCAA College Basketball Television Viewership: Does Preference for Outcome Uncertainty Change Throughout the Season?
Authors: Byungju Kang, Steven Salaga, Scott Tainsky, Matthew Juravich
Abstract:This paper estimates the relationship between outcome uncertainty and television viewership in NCAA Division I men’s college basketball. The results demonstrate mixed support for the uncertainty of outcome hypothesis. Viewers prefer contests anticipated to be more certain, but also respond favorably to contests which have higher levels of within-game outcome uncertainty. The results also indicate that these preferences are not static across the season calendar. During postseason play, the preference for anticipated contest certainty is reduced, while the preference for within-game uncertainty is heightened. Given that consumers respond favorably to lower levels of anticipated contest uncertainty, from a policy perspective, there is little evidence that the current NCAA structure—which allows competition between programs with sizeable differences in both revenue and team quality—negatively impacts television viewership or associated revenues.

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