Did you ever wonder why professional athletes are paid so much, what salary caps mean, or what the economic impact of building a new stadium could be? This fall, students at the University of Missouri-Rolla will have a chance to learn about these and other sports issues in a new course that will cover the world of sports economics.
Taught by Dr. Michael Davis, assistant professor of economics and finance at UMR, this class is open to any student of any major who has previously taken an economics course. Davis believes the course will appeal to a wide range of students.
"We’ll cover a lot of subjects that are of interest to both economists and sports fans," Davis says. "For example, why are players paid so much? What is the economic impact of building a new stadium? What would be the impact of a salary cap?"
The class will study professional sports franchises as businesses. Davis says that even though professional sports franchises act "a little differently" than other businesses, they are actual businesses, existing as entities created for profit.
"They are different from your average business, though," Davis explains. "While a business like Microsoft may want to put other companies out of business, a baseball team won’t try to do the same. They’ll try to be the best in the league, but you won’t see the New York Yankees attempt to be the only team in Major League Baseball."
The class will research three major areas of business in professional sports franchises: league structure, which will study the competition between teams; labor-market issues, examining the impact of strikes; and public finance, consisting of topics such as the citywide funding of stadium construction.
"Even insight to strategies in games will be covered," Davis says. "One study by an economist said football teams should ‘go for it’ on fourth down more often. You wouldn’t think this is economics, but it is. It’s economics that relates to sports. After all, the outcome of the fourth down affects the outcome of the entire game, which affects everything from future ticket sales to commercial sponsorships for an individual team."