BUSINESS OF SPORTS -Arjun J chaudhuri

BUSINESS OF SPORTS –Arjun J chaudhuri

The previous edition of SportsKreeda highlighted the OPPORTUNITY COST of Professional Sport in INDIA because of Sports Federations inability to resolve disagreements AND take timely decisions. Protracted Negotiations BROKERED by the International Hockey Federation [FIH] between Hockey India [HI] AND Indian Hockey Federation [IHF] could resolve such disagreements AND reach an AGREEMENT through Discussion AND Compromise. The BUSINESS MODEL of IPL is referred to as a viable commercial alternative where players are engaged in the sport as a paid job in an occupation rather than as a Hobby AND conform to the Standards of Skill, Competence or Character, normally expected of a properly Qualified AND Experienced person in a WORK ENVIRONMENT of the PROFESSIONAL LEAGUE.

Perhaps the CASE STUDY of MAJOR LEAGUE BASEBALL [MLB] could guide us to towards resolving SUCH disagreements, wherein, erstwhile rival leagues of Baseball [1876-1903], namely, the National League [NL] AND the American League [AL] agreed to recognize each other, and ORGANIZED Professional Baseball that TODAY includes the REGULAR SEASON, the PLAYOFFS, and the WORLD SERIES. To understand the full implications of this rationale, let us go back in time where FINANCIAL RISK in the sport of Professional Baseball was retarding its growth AND development but for the administrative initiatives of WILLIAM HULBERT who in 1876 took over the management of the National Association as it was then called AND renamed it as NATIONAL LEAGUE OF PROFESSIONAL BASEBALL PLAYERS.

Development of MLB [1876-1903]

In 1876 representatives of eight baseball clubs, led by Chicago White Stockings officials William Hulbert AND Albert Spalding, sought to replace the National Association with a more STRUCTURED ORGANIZATION. They created the National League of Professional Base Ball Clubs, known as the NATIONAL LEAGUE [NL], which consisted of teams from Boston, Massachusetts; Chicago, Illinois; Cincinnati, Ohio; Hartford, Connecticut; Louisville, Kentucky; Philadelphia, Pennsylvania; New York City; and St. Louis, Missouri. They ADOPTED a CONSTITUTION that regulated club activities, required players to honor their contracts, AND banned gambling completely.

A rival league, the American Association, was founded in 1882. American Association clubs charged lower admission prices and, unlike National League teams, played on Sundays and allowed the sale of liquor. Tension between the two leagues increased as they competed for the best players. In 1883 the leagues formed an AGREEMENT that established exhibition games between the leagues’ best teams following the regular season. In addition, the American Association agreed to adopt the NL’s reserve clause, which required players to obtain permission from their club’s owner before joining another club.

Attendance at baseball games grew during the late 1880s, as clubs built larger BALLPARKS AND the quality of play improved. The leagues added new RULES, AND John Montgomery Ward, captain of the New York Giants, founded the first PLAYERS’ UNION, the Brotherhood of Professional Base Ball Players, in 1885. The American Association folded after the 1891 season and its four best teams joined the National League, which remained the only major league through the end of the 1800s. Public interest in baseball decreased during this period, and many clubs experienced financial difficulty. Baseball entered a new era in 1901, however, when the AMERICAN LEAGUE [AL] opened its first season. It was founded by Ban Johnson, president of the Western League, a successful minor league organization that he renamed the American League.

In 1903 the NATIONAL LEAGUE agreed to recognize the AMERICAN LEAGUE, and championship teams from each league met in the first WORLD SERIES.

ORGANIZED Baseball [1903-Till Date]

Professional Baseball TODAY includes the Major Leagues AND the Minor Leagues. Amateur Baseball, in which players are not paid, includes most other leagues, such as Little League, High School, AND University Competition as well as various Community Leagues.

MLB represents the highest level of baseball competition AND includes teams from the United States of America [USA] AND Canada. It is divided into the National League [NL] AND the American League [AL]. The teams of each league are grouped into three DIVISIONS within their league. In both the NL and AL, the divisions are called the East Division, the Central Division, AND the West Division.

 The MLB season lasts from April [or late March] to October and includes the REGULAR SEASON, the PLAYOFFS, and the WORLD SERIES. Teams play 162 games during the Regular Season. The team with the most victories in each division becomes the division winner and earns the right to compete in the playoffs. The team with the best record in each league after the division winners also is included in the playoffs as a wild-card team.

Each league holds a separate Playoff, featuring their three Division Winners AND the Wild-Card Team. These teams are paired and face each other in a series of games. The teams that win the most games in a series earn the right to move on to the next round of playoffs. The final series in the league playoffs determines which team wins the pennant, or championship, of their league. The NL and AL pennant winners meet in the World Series, and the winner of this series becomes the major league world champion.

The Major Leagues also hold an annual competition called the ALL-STAR GAME, which matches a team of NL players against a team of AL players. Baseball fans select the starting players in the game. It takes place during the All-Star break, a period in the middle of the regular season during which teams temporarily rest from competition.

Forbes MARKET VALUATION [2012]

According to FORBES, the average Major League Baseball [MLB] TEAM rose 16% in Value during the past year, to an all-time high of $605 million BECAUSE of Rights Fee AND Live Baseball Programming by CABLE TV CHANNELS. In 2011, REVENUE [net of payments to cover STADIUM DEBT] for the league’s 30 teams climbed to an average of $212 million, a 3.4% gain over the previous season. There was a 5.1% increase in PLAYER COSTS that included Payment of Benefits AND Signing Bonuses for Amateurs in 2011. AGGREGATE CABLE TV REVENUE for MLB’s 30 teams has increased to $923 million from $328 million over the past 10 years.

Cable TV Revenue has had an impact on the prices that are being paid for MLB Teams. JIM CRANE paid $610 million USD for the HOUSTON ASTROS in November 2011. The Regional Sports Network [RSN] will begin televising the Houston Astros in 2013 AND pay the team an average of $80 million in RIGHTS FEE over twenty years that is more than three times what the Houston Astros received from Fox Sports Houston in 2011 last season.