Labor Markets in Professional Sports

An Overview Labor Markets Human Capital Monopsony and Free Agency Salary Arbitration Superstars and Winner-take-all When to turn pro?

What would Babe Ruth earn today?

Ruth earned $80,000 for the 1930 New York Yankees

1930 CPI = 16.7 2011 CPI = 224.939

Ruth’s 1930 salary in 2012 dollars is:

(80,000)(224.939/16.7) = $1,077,552

“I know, but I had a better year than Hoover.” - Reported reply when a reporter objected that the salary Ruth was demanding ($80,000) was more than that of President Herbert Hoover's ($75,000)

Average Salaries in Pro Sports (Nominal $)

MLB NFL NHL NBA

1970 29,303 41,000 25,000

1972 34,092 45,000 45,000

1974 40,839 56,000 65,000

1976 51,501 78,000 86,000

1978 99,876 100,000 92,000 139,000

1980 143,756 117,000 108,000 170,000

1982 241,497 157,000 120,000 212,000

1984 329,408 279,000 118,000 275,000

1986 412,520 288,000 144,000 375,000

1988 438,729 307,000 172,000 510,000

1990 597,537 430,000 211,000 750,000

1992 1,082,667 551,000 368,000 1,100,000

1994 1,168,263 674,000 562,000 1,441,000

1996 1,119,981 807,000 892,000 1,979,000

1998 1,398,831 1,000,000 1,167,713 2,818,000

2000 1,895,630 1,116,100 1,642,590 2,901,595

2002 2,295,694 1,300,000 1,790,000 3,893,801

2004 2,486,609 1,333,333 1,830,000 3,748,659

2006 2,866,544 1,947,898 1,751,845 4,176,241

2008 3,154,845 2,205,792 2,234,225 5,365,000

1970 1974 1978 1982 1986 1990 1994 1998 2002 2006$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

$5,000,000

$5,500,000

$6,000,000

Average Salaries in Pro Sports(2008 $)

NBA

MLB

NHL

NFL

Labor Market: Competitive Model

Labor

D1

S1

$

L1

w1

Labor Supply

Income-leisure tradeoff

Wage increase causes:

Labor

$ S

SE > IE

IE > SE

w*

Substitution Effect

Income Effect

Backward-bending labor supply curve

(work effort falls)

(work effort rises)

Labor Demand

Profit-max decision by employers Hiring Rule: hire until MRP = w

MRP

Labor

$

w2

w1

L1 L2

MRP = MP* MR

MP = ∆Q/ ∆L

MR = ∆TR/ ∆Q = P

Reflects DMR

Estimating a Player’s MRP

Scully (1974): two-step model using 1968-69 data

PCTWIN = f(PRODUCTIVITY)

REV = g(PCTWIN)

Scully’s Results

PCTWIN = 37.24 + 0.92 TSA + 0.90 TSW – 38.57 NL + 43.78 CONT – 75.64 OUT

REV = -1,735,890 + 10,330 PCTWIN + 494,585 SMSA + 512 MARGA + 580,913 NL - 762,248 STD – 58,523 BBPCT

TSA = Team Slugging AverageTSW = Team Strikeout – Walk RatioNL = National LeagueCONT = ContenderOUT = Out of contentionSMSA = Market PopulationMARGA = Differences in Fan InterestSTD = Stadium AgeBBPCT = % Black Players

1 point increase in TSA raises PCTWIN by 0.92

1 point increase in PCTWIN raises REV by $10,330

MRP per point = MP x MR = (0.92)(10,300) = $9,504 Avg Hitter: .3401/12 of team’s offense

MRP = ($9,504)(340)(1/12) = $270,000

Results

Scully (1974): Players paid 10-20% of MRP Krautman (1999)

Apprentice: 27% of MRP Journeyman: 85% of MRP Free agents

Alternative Explanation: Low salaries of younger players may reflect general training

Example: The Mark McGwire Show

During McGwire’s record-breaking run at the home run record in 1998, attendance in St. Louis increased by 1.5 million.

Even if McGwire was only half of the reason, just the gate portion of his MRP that year was around $15 million!

McGwire earned $8.9 million that year.

Wins Score Approach: #2 and #3

Human Capital Theory

General Training Increases MP to all employers

Specific Training Increases MP to specific firm

Human Capital Productivity Earnings

Cost

Who Pays for Training?

time

$

MRP1

MRP2

t1

MRP1 = untrained worker

MRP2 = trained worker

MRP1 - T

MRP1 – T = trainee’s net productivity

Hiring Rule: MRP = w

Tr

ww

r

MRPMRP

112

12

1

Benefit

GT: worker pays in form of lower training wage

ST: worker and firm share costs

Training period

Minor Leagues Baseball

First Contract Season: Single A: $1100/month AAA: $2500/month

Open to negotiation after that Meal money: $20 per day

Economics of Superstars Forbes Top 100 Celebrities and CEOs

Economics of Superstars Rank order tournaments: golf, tennis, auto racing

difficult to measure absolute effort (MRP) when many factors are involved

relative productivity matters rather than absolute

Effort

$ MC

E1

MR1

MR2

MR1′

Increasing MC of effort requireslarge difference between first andsecond place for optimal effort.

MC′

E2

Which of the following achievements would please you more?

a) You win fortune without fame: you make enough money through successful business dealings so that you can live very comfortably for the rest of your life.

b) You win fame without fortune: for example you win a medal at the Olympics or you become a respected journalist or scholar.

You are offered a banned performance-enhancing substance that comes with two guarantees:

1. You will not be caught.2. You will win every competition you enter for the next five years, and then you will die from the side effects of the substances.

Would you take it?

a) Yesb) No

Prisoner’s Dilemma?

1 million high-school football players - roughly 150 will make it to the NFL Odds of a high-school player going professional

in football - approximately 1 in 6,000 About 500,000 high-school basketball players -

roughly 50 to the NBA Less than 3% of all college seniors will play one

year in professional basketball Odds of a high-school player going professional

in basketball - approximately 1 in 10,000

When to Turn Pro?

Why would a player choose to leave early? Must compare the marginal cost and marginal benefit of

staying in school versus leaving.

Marginal Benefit of waiting the extra year is:

MB = (1 + g)S0 [where S0 is the pro salary and g is the growth rate in the salary]

Marginal Cost of waiting is the foregone salary plus the sacrifice on the use of that salary:

MC = (1 + r)S0 [where r is the interest rate]

When to Turn Pro?

As usual, the player is best off when MB = MC

Player should stay in school as long as g > r Player should turn pro when r > g

(1 + g)S0 = (1 + r)S0

When to Turn Pro?

Suppose a junior could earn a salary of $750,000 by declaring himself eligible for the draft. If he waits until his senior year he can make $900,000. If the interest rate is 4% should he stay the extra year?

Now consider that the player has a 12% chance of having a career ending injury in his senior year and thus having a median income of $40,000 per year. Would he consider going pro or not?

Sample Problem

Assume the pro league plans to institute a rookie salary cap of $750,000 at the end of the player’s senior year. Should the player play his senior year?

g = (900,000 – 750,000)/750,000 = 0.20 or 20%

g = (750,000 – 750,000)/750,000 = 0.00 or 0%

g = (796,800 – 750,000)/750,000 = 0.062 or 6.2%

Labor Market Imperfections Monopsony Reserve Clause Salary Caps Player Draft Arbitration Unions

Reserve Clause & Free Agency MLB: 1976

After 6 years of service NBA: 1983

After 5 years of service NHL: 1993

After 4 years of service NFL: 1994

After 4 years of service

Restrictions:• Right of First Refusal• Compensation requirements• Salary caps

Final Offer Arbitration MLB 1972 Arbitrator must select either team’s or player’s

final offer—No compromise! must base decisions on info regarding player

performance and salaries of comparable players can not consider financial condition of team

Overpaying a player leads to further overpaying down the road

1974-2012: Owners-291, Players-214

Wage

WT WPWA

Monoposony Sole buyer of labor

Enables employer to exert market power by paying lower wages

Monopsonist hires until MRP = ME and sets wage off S curve Lm < Lc

wm < wc < MRPm

D = MRP

Labor

$

S

ME

Lm Lc

wm

wc

MRPm

Worksheet Example

Player Drafts

Allocation of new players by reverse order finish

NBA: 7 2 rounds NFL: 12 7 rounds

Coase Theorem applies

Labor Unions and Labor Relations

Economics of Labor Unions

Free Market: wN, LN

Union Outcome: wU, LU

Unemployment Inefficiency (DWL)

D

SN

SU

LU LNLabor

wU

wNDWL

unemployment$

Bilateral Monopoly Union behaves as monopolist:

Sets employment where MR = S Sets wage off D curve WU, LU

Employer behaves as monopsonist: Sets employment where D = ME Sets wage off S curve WM, LM

D

S

LU LM Labor

wU

wM

ME

MR

$

WU – WM = Range of Indeterminacy

Bargaining and Strikes Each of major sports had a work stoppage

during 1990s (when overall labor strife was pretty tame)

Why resort to a strike/lockout? Irrational behavior? Excessive optimism? Excessive uncertainty? Political gamesmanship?

Contract Zone

High WagesLow Wages

Acceptable to Union

Acceptable to Employer

Contract

Zone

WE = employer threat point

Union threat point = WU

Strike fundAlternative jobs

Strike insuranceReplacement workers

Baseball’s First Strike

1912 Detroit Tigers Ty Cobb vs Ban Johnson

1972 Baseball Strike Main issue was player pension and health benefits Uncertainty

Owners were over-optimistic (believed players' threat point was lower than it was)

MLBPA was optimistic due to Commissioner’s behavior Strike lasted 13 days (including 9 days at the start of the season)

Owners lost $5m in revenues Players lost salaries but won on pension demands Arbitration was added to CBA

1972-1995: a strike/lockout preceded every CBA

1987 NFL Strike Main issue: free agency Uncertainty: Gene Upshaw and

demise of USFL Strike lasted 4 weeks (weeks 3 – 6)

Replacement players cost $1000 per game; teams profits rose by more than $100k per game

Players lost $80m in salary

1988 NFLPA Decertification

Hockey: The Lost Season 2004-05 Lockout

Whole season canceled Main issues: cost certainty (linking salaries to league revenues) Uncertainty: league losses Outcome: $39m salary cap; salaries at no less than 54% league revenues;

maximum player salary at 20% of cap; salaries rolled back by 24%

Revenue sharing; luxury tax; 5% pay cut

Revenue sharing; luxury tax; 24% pay cut

$52m salary cap linked to league revenues$40m salary cap linked to league revenues

$42.5m salary cap linked to league revenues $49m salary cap linked to league revenues

Gary Bettman

Bob Goodenow

Season Canceled!

1998-99 NBA Lockout Main issue: hard salary cap; revenue sharing Uncertainties: lackluster attendance; turmoil within NBPA;

rising power of agents (stars vs benchers) 191 day lockout Outcome: Individual player salary cap; players guaranteed

55% of BRI; limit on raises for “Larry Bird” free agents

NBA would be paid TV contract money even though games weren’t played.

Arbitrator ruled NBA did not have to pay Players with guaranteed contracts

50 game season

Discriminationin Sports

Jackie Robinson1947 Brooklyn Dodgers

Larry Doby1947 Cleveland Indians

Earl Lloyd1950 Washington Nationals

Willie O’Ree1958 Boston Bruins

Kenny Washington and Woody Strode1946 Los Angeles Rams

Labor Market Discrimination Becker “rational choice” model

Source of prejudice: Employers Employees Customers

Gary BeckerNobel Prize (1992)

Employer Discrimination

Hiring Rule: w = MRP Workers with same MRP will be paid same wage

Assume: MRPB = MRPW

d = discrimination coefficient

Perceived wage of black player: w*B = (1+d)w

“Psychic cost”

Example: w = $20 d = 0.20

w*B = (1.20)(20) = $24

MRPB = MRPW

Players

$

w = $20

w*B = $24

LWLB

wB = $16.67

Employment if blacks are paid same wage as whites: w = $20

Black wage if firm hires same number of black works as white workers

In a picture…

Note:> Owners must pay for the right to discriminate in the form of lower profits.> Competitive markets force discriminators out of the market.

Black wage as perceived bydiscriminating firm

Monopoly Power Baseball has legal cartel

Bill Veeck foiled in 1943 Dodgers/Indians reintegrated in 1947

Integrated teams tended to dominate Dodgers, Giants, Indians, & Braves Red Sox & Phillies last to integrate Great Celtic teams built on integration

Moses “Fleetwood” Walker1880s A.A.

Bill Veeck and Larry Doby1947 contract signing

Jackie Robinson and Branch Rickey1947 contract signing

Employee Discrimination Early whites didn’t want to work

with blacks Feel psychic cost Demand higher pay to work with

blacks What would employer do?

Segregation vs Discrimination Dodgers protested Robinson’s

presence

Bud Fowler 1885

Customer Discrimination Employer punished for tolerance Celtics of the 1980s? George Preston Marshall & NFL’s Redskins

Last NFL team to integrate: 1962 “Burgundy, Gold, and Caucasian”

Southern focus Forced by U.S. government

Facility on government land

Nardinelli and Simon (1990) Examined baseball card prices for black and

white players PB < PW by about 10%

"We'll start signing Negroes when the Harlem Globetrotters start signing whites."

Measuring Discrimination

Slugging Average

$

BlackWageFunction

WhiteWageFunction

SAwSAB

$200 = WB

$500 = Ww

$260 = W*B

Ww – WB = observed wage gap

W*B – WB = explained wage gap

Ww – W*B = unexplained wage gap

= 500 – 200 = 300

= 260 – 200 = 60

= 500 – 260 = 240

Ww = $500

WB = $200

How much of the wage gap, if any, is

due to discrimination?

Statistical Discrimination The use of group averages to judge individual

productivity levels Profit-maximizing strategy to reduce cost of hiring

French-speakingCanadian playersEnglish-speaking

Canadian players

MRPFMRPEproductivity

EF

Economic Findings on Pay Discrimination There is evidence that pay discrimination

existed in pro team sports in the past. But by the mid-1990s, pay discrimination is

pretty much gone. Only a negligible premium for the very best white players in the NBA appears to remain.

Interestingly, in the NHL, there appears to be pay discrimination against French-speaking players.

Role Discrimination?NFL 2009

Position White Black

Quarterback 81% 16%

Wide Receiver 11% 87%

Source: 2010 Racial and Gender Report Card

Racial Composition of Athletes, 2010Race MLB NFL NBA

White 60% 30% 18%

African American 9% 67% 75%

Latino 28% 1% 3%

Asian 2% 2% 1%

Other 0% <1% 1%

Source: 2010 Racial and Gender Report Card

Racial Composition of Head Coaches, 2010Race MLB NFL NBA

White 68% 81% 70%

African American 14% 19% 27%

Latino 17% 0% 3%

Asian <1% 0% 0%

Source: 2010 Racial and Gender Report Card

Racial Composition of Division I Head Coaches (men’s teams), 2007-08Race Basketball Football

White 76% 94%

African American 23% 5%

Latino 0.7% 0.5%

Asian 0.0% 0.0%

Native American 0.3% 0.0%

Source: 2009 Racial and Gender Report Card

Gender Discrimination Harder to measure

Men & Women seldom in same sport/venue Even same sport may vary

Tennis, figure skating, & basketball

Top Money Winners: ATP vs WTAATP Money Leaders WTA Money Leaders

Rank Player Country Earnings Rank Player Country Earnings

1 Novak Djokovic Serbia $ 3,323,881 1 Victoria Azarenka Belarus $ 4,008,080 2 Roger Federer Switzerland $ 2,316,585 2 Maria Sharapova Russia $ 2,083,350 3 Rafael Nadal Spain $ 1,725,465 3 Agnieszka Radwanska Poland $ 1,650,459 4 Andy Murray Scotland $ 1,053,481 4 Caroline Wozniacki Denmark $ 596,188 5 David Ferrer Spain $ 771,998 5 Petra Kvitova Czech Rep $ 533,690 6 Juan Martin del Potro Argentina $ 769,238 6 Kim Clijsters Belgium $ 513,691 7 John Isner US $ 707,701 7 Sara Errani Italy $ 512,265 8 Tomas Berdych Czech Rep $ 521,801 8 Marion Bartoli France $ 509,326 9 Jo-Wilfried Tsonga France $ 516,678 9 Julia Goerges Germany $ 484,670

10 Radek Stepanek Czech Rep $ 516,048 10 Angelique Kerber Germany $ 414,207 11 Nicolas Almagro Spain $ 460,736 11 Ana Ivanovic Serbia $ 411,784 12 Milos Raonic Canada $ 407,883 12 Maria Kirilenko Russia $ 401,903 13 Jurgen Melzer Austria $ 389,313 13 Svetlana Kuznetsova Russia $ 395,038 14 Leander Paes India $ 372,103 14 Vera Zvonareva Russia $ 384,983 15 Kei Nishikori Japan $ 326,245 15 Samantha Stosur Australia $ 376,344

Source: tennis.com. As of April 16, 2012.

Purses in Golf’s Majors (in millions): 2011 for PGA, 2010 for LPGA

Men Women

Masters $7.5 Kraft Nabisco $2.0

US Open 7.5 US Open 3.25

British Open 7.3 British Open 2.5

PGA 7.5 LPGA 2.25

Source: PGATour.com and LPGA.com

Gender Discrimination Harder to measure

Men & Women seldom in same venue Often don’t play same sport Even same sports may vary

Tennis, figure skating, & basketball

Direct competition? Jockeys & auto racing & golf

Are women always victims?

Title IX Part of 1972 Education Amendments to Civil Rights Act Mandated equal access & opportunities for women in

federally funded education programs 3 ways to comply

Funding proportional to enrollment Show history of expansion Interests of students accommodated

Few programs in compliance But NCAA certifies all

2009-10 Marietta College Roster Slots

Male Enrollment 726 51.2% Male Athletic Participation

298 61.3%

Female Enrollment 692 48.8% Female Athletic Participation

188 38.6%

Total 1418 100% 486 100%

Impacts of Title IX Good

Spurred rapid growth in women’s sports Though most of growth early on

Gave grounds to seek remediation Bad

What happened to women coaches? Was ~80% of women’s programs - now ~ 44%

Women’s programs lose money Can meet in many ways –

Cut men’s programs rather than expanding women’s

Amateurism and College Sports

Overview College sports is similar in many economic ways

to pro sports, but the relationship between the athletics department and the university deserves careful attention

Conferences and the NCAA play an important role in limiting competition, negotiating TV broadcasts, and managing competitive balance.

NCAA player rules have dramatic impacts on the economic welfare of college athletes.

Colleges enjoy special tax and antitrust status for much the same reason as pro owners.

Amateurism & the Olympic Ideal Ancient Olympics (776 BC-393 AD)

Even central myth hypocritical Winners well rewarded by home cities

Modern Olympics (1896-present) “mens sana in corpore sano”

Amateurism reflected class snobbery Laborers not considered amateurs

American College Sports Commercialism & Corruption always present

1st competition: 1852 Harvard v. Yale in crew Sponsored at a resort by a railroad company

2nd competition brought first eligibility scandal Harvard’s coxswain had already graduated!

Second sport: Football Rutgers v. Princeton (1869): First academic scandal

4 Rutgers players were flunking math

University of Michigan (1894) 7 of 11 starters were not registered students

NCAA as “Incidental Cartel” Restricts movement

Prevents “tramp athletes” Monopsony power

Players have little mobility Drives down pay

OSU

High Low

UMHigh 50

5020

90

Low 9020

7575

NCAA Recruiting Game

Dominant Strategy?

Competitive Equilibrium?

Cooperative Optimum?

Athletic Scholarships NCAA forbade them until 1956

NCAA rules often ignored “Seven Sinners”

CitadelUVAVMIVPIUMDVillanovaBoston College

The “Student Athlete” “Student athlete” is a legal term

Disavows desire for pay Colleges do not have to provide workmen’s

compensation Stars worth more than tuition (Brown 1993; 1994)

In football >$500k/yr In basketball >$800k/yr

The Value of an Education An athlete who…graduates is overpaid”

Joe Paterno

Do athletes get an education? On average athletes graduate at the same rate

as non-athletes Handout

Long and Caudill (1991)Male college athletes earn more than non-athletes

Why do Some Sports do Worse? Some athletes less prepared

Lower SATs, HS rank, HS GPA True for basketball & football Not so for softball or golf

Is dropping out a rational investment?

Academic Standards Preserve academic integrity

Don’t recruit students who cannot read Creates barrier to entry

Established powers keep out new entrants Competitors cannot pay athletes more Now cannot take weaker students either

History of Standards Nothing uniform until 1965

1.600 Rule To play needed projected 1.600 GPA

1973: Replaced 1.600 with 2.00 rule Ostensibly higher standards Actually needed C+ average in high school

Could take any courses Worst abuses came under this rule The sad case of Chris Washburn

470 out of 1600 on SAT

Proposition 48 (1983)

Provisions Needed SAT=700 & GPA=2.00 in 11 core courses If not: no scholarship in 1st year & cannot play

Was Prop 48 Racist? Disproportionately affected black athletes

SATs for blacks average 200 points lower Are SATs a valid predictor of college performance?

Still – graduation rates rose for whites and blacks A concession: Partial Qualifiers

Could receive aid if pass one criterion

Proposition 42 (1989)

Meant to eliminate partial qualifiers Loophole restored – and then some

Under Prop 48 scholarship “counted” Under 42 doesn’t count against limit

Proposition 16 (1992)

Created sliding scale Lower GPA permitted if SATs higher & vice versa

Clearinghouse evaluated individual courses Allows partial qualifiers to practice Challenged in court

Students claimed disparate racial impact Won initial case

Verdict overturned on technicality NCAA does not disburse federal funds

Latest Revision (2003) Eases initial restrictions

14 core courses (up from 13) Sliding scale

2.0 core GPA requires 1010 SAT 3.55 core GPA requires 400 SAT

No Partial Qualifier status Stiffens progress requirements

Need 40% of degree requirement after 2nd year Need 60% of degree requirement after 3rd year Need 80 % of degree requirement after 4th year

Academic Progress Rates (APR) School scored for student progress

1 point if athlete stays enrolled 1 point for staying academically eligible

Computes % of total possible points Consider Big State U’s basketball team

52 possible points (13 players *2 points*2 semesters) If one player is ineligible in spring – lose 1 point APR=100*(51/52)=981

If its score falls below 925, BSU could lose scholarships

Entry Barrier or Academic Standards? Small schools

May be unable to compete with larger schools Faculty fear

Greater pressure to pass Proliferation of garbage classes

Profitability of Specific Programs at Division I-A Schools

(measured in $1000s)

Sport 1997 1999 2001 2003

All Men’s Sports 3,300 4,000 4,900 6,100

Football 3,200 3,700 4,700 5,920

Men’s Basketball 1,600 1,600 1,600 2,020

Women’s Basketball - 500 - 600 - 700 - 775

All Women’s Sports -2,300 -2,400 -3,200 -3,600

Source: Table 11.8, Leeds and Von Allmen, 2008

NCAA Financial Database

Football Coaches Salary Database

March Madness NCAA has 14-year, $10.8 billion contract: CBS & Turner Sports Tourney revenue now $810 million/year

$770m in TV rights $40m from ticket sales, etc.

~60% goes to Division I conferences & schools $167m distributed according to program size

Number of sports offered Number of athletes on scholarship.

$167m distributed according to performance Conference gets 1 "unit" per member game Each unit worth ~$222,000.

Non-Profit vs Profit Seeking Principle-agent problem Growing payroll costs for sports programs

Clicker Review

A college player should stay in school when:

a) b) c) d)

29%

0%

10%

62%

a) staying in college another year increases his earnings.

b) staying in college another year increases his earnings above the interest rate.

c) staying in college another year increases his earnings below the interest rate.

d) staying in college another year reduces his earnings.

Salaries have risen dramatically in the NBA because of the dramatic rise in

a) b) c) d)

0%

19%

76%

5%

a) the quality of the players b) the opportunity cost faced by

players c) the market value of the product

the players produce d) the strength of the Players’

Association

According to the Coase Theorem, free agency should leave the distribution of talent

a) b) c) d)

10%

76%

10%5%

a) more equal than before b) less equal than before c) exactly equal among all

teams d) the same as it always was

Free agency came to MLB and the NFL in different ways because

a) b) c) d)

14%

33%

10%

43%

a) the football owners practiced collusion while the baseball owners did not

b) the MLBPA had to rely on the courts

c) the NFLPA had to rely on the courts

d) the NFL had a limited exemption from antitrust laws, and baseball did not

In November 1989, the NFL Players Association, the union for NFL players, disbanded. Why?

a) b) c) d)

10%

38%

48%

5%

a) The union was bankrupt due to failed strikes in 1982 and 1987.

b) The players were upset with the union’s lack of ability to gain full free agency for its members and wanted to bring in new leadership.

c) The union wanted to remove the NFL’s non-statutory labor exemption and pursue an antitrust claim against the league. This could only be done by decertifying the union.

d) The court had declared in Powell v. NFL (1987) that the union was guilty of conspiring against the NFL in order to raise wages.

Most mainstream economists view discrimination as

a) b) c) d)

29%

14%

43%

14%

a) a taste. b) overstated.c) a mistake due to the

misperception of people’s true skills.

d) a way for capitalists to keep the working class from uniting.

Integration was much faster in football than in baseball because

a) b) c) d)

48%

14%10%

29%

a) of the competition provided by a rival league

b) the owners in the NFL were less discriminatory than the owners in MLB

c) football fans are far less discriminatory than baseball fans

d) football had to get the approval of liberal-minded colleges and universities

a) women have brought far fewer discrimination suits

b) women seldom compete with men in the same event

c) women aren’t as good at sports as men

d) it is difficult to separate out racial effects from gender effects

It is difficult to determine whether women are victims of discrimination in professional sports because

a) b) c) d)

10%5%

0%

86%

The notion of a “student-athlete” was developed in order to

a) b) c) d)

33%

5%

24%

38%a) assert the primacy of education b) eliminate under-the-table

payments to athletes c) keep athletes from filing for

workman’s compensation d) prevent gambling scandals

The University of Michigan’s Athletic Department cannot break even because

a) b) c) d)

5%0%

48%48%

a) it is very poorly run. b) its costs rise as quickly as its

revenues rises. c) it gives much of what it makes to

the academic side of the university.

d) NCAA rules prohibit Athletic Departments from making a profit.

The shift to “two-platoon football” was a way for

a) b) c) d)

5%

62%

19%14%

a) professional teams to turn profits into losses

b) colleges to exploit “student-athletes”

c) the NFL to exert monopsony power over its players

d) colleges to spend increasing revenues

a) The prisoner’s dilemmab) The winner’s cursec) The outlawing of the reserve

claused) The entry of new schools into the

NCAA

The monopoly power that the NCAA held over TV networks fell apart due to

a) b) c) d)

48%

0%

33%

19%