IJSF Issue 7:4

Contents for IJSF Issue 7:4

Entire issue of IJSF 7:4
Authors: Robert Simmons, Panagiotis E. Dimitropoulos, Athanasios Tsagkanos, Nicholas M. Watanabe, Allan Maymin, Philip Maymin, Eugene Shen, Pamela Wicker, Christian Weingärtner, Christoph Breuer, Helmut Dietl, Stefan Kesenne
Abstract:This is the entire issue in PDF format that you can download

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Editor’s Note, pp. 279
Authors: Robert Simmons
Abstract:The International Journal of Sport Finance (IJSF) is delighted to announce that it has become the official partner and journal of the European Sport Economics Association (ESEA). This partnership will provide electronic access to the journal as part of the ESEA membership benefits. It also guarantees the continuation of the annual special issue of papers from the ESEA conference.

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Financial Performance and Corporate Governance in the European Football Industry, pp. 280-308
Authors: Panagiotis E. Dimitropoulos and Athanasios Tsagkanos
Abstract:The aim of this paper is to analyze the impact of corporate governance quality (namely board size, board independence, managerial ownership, institutional ownership, and CEO duality) on the profitability and viability of European Union’s football clubs over the period 2005-2009. Empirical results documented that corporate governance quality (higher managerial and institutional ownership, increased board size and independence, and the separation of the CEO and chairman roles) leads to greater levels of profitability and viability. Further analysis based on clubs’ profitability and viability indicates that sound governance mechanisms are also important for those clubs with intense problems of insolvency and low financial performance. The results of this study dictate the necessity of corporate governance principles for protecting the interests of shareholders and various stakeholders and for maximizing the clubs’ economic results and social return. The empirical findings are robust to several sensitivity tests concerning the specification of the models and the measures of financial performance.

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Japanese Professional Soccer Attendance and the Effects of Regions, Competitive Balance, and Rival Franchises, pp. 309-323
Authors: Nicholas M. Watanabe
Abstract:While much of the focus on professional sport is divided between North America and Europe, there is a growing need to analyze sport leagues and organizations outside of these two regions. In this paper, the J-League, Japan’s top flight professional soccer league, is the focus of examination through a seasonal attendance model which seeks to test the importance of region and competitive balance in determining demand for attendance. The results of this model indicate that fans are sensitive to competitive balance, confirming the uncertainty of outcome hypothesis. Furthermore, this paper attempts to look at the differences which occur in the demand for sport from one regional type to another.

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How Much Trouble Is Early Foul Trouble? Strategically Idling Resources in the NBA, pp. 324-339
Authors: Allan Maymin, Philip Maymin, and Eugene Shen
Abstract:We analyze a large and comprehensive play-by-play dataset of professional games in the National Basketball Association using tools from financial economics to explore the optimality of strategically idling resources in the face of uncertain future demand. We find that starters ought to be idled by the coach on a “Q+1” basis, meaning that a starter has one more foul than the current quarter, when the future option value is high or the value of the replacement player is high. We use a novel win-probability approach that can be easily extended to other applications.

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The Effect of a Sports Institution’s Legal Structure on Sponsorship Income: The Case of Amateur Equestrian Sports in Germany, pp. 340-357
Authors: Pamela Wicker, Christian Weingärtner, Christoph Breuer, and Helmut Dietl
Abstract:Choosing the legal structure of a sports institution is one of the key decisions that sports managers must make. Using platform theory and property rights theory, this paper shows that the choice of legal structure influences the revenue composition of sports institutions. We hypothesized that member associations should receive higher sponsorship revenues than private firms because their legal structure offers better protection against hold-up for sponsors and also for customers/members, which in turn leads to increased attention for the sponsor. We tested this prediction using quantitative data from a nationwide online survey of equestrian sports institutions in Germany. In 2009, n=574 private firms and n=1,165 member associations completed the same questionnaire. Regression analyses were run to determine whether the legal structure has an impact on sponsorship income. The results confirmed the hypothesis that the legal structure has a significant impact on sponsorship income.

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Can Advertising Make Free-to-Air Broadcasting More Profitable Than Pay-TV?, pp. 358-364
Authors: Stefan Kesenne
Abstract:In this paper, we derive, based on a simple microeconomic model, under what conditions free-TV can more profitable than pay-TV in sports broadcasting. The most important factors here are the level, not the elasticity, of the demand for televised sports, as well as the advertisers’ willingness to pay. Also the spectators’ aversion to interruptions for advertising can play a role.

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