Fanalytics U Class 9: Competitive Balance and League Design


Introduction


We conclude the first iteration of the Fanalytics University course on sports and fandom analytics with a class on league design. League design is a topic of critical importance that receives little attention. It receives little attention because it is a topic for unions, lawyers, and maybe economists.


As a starting point, we consider the combat sports industry. My definition of this industry is a little loose and ranges from professional boxing to professional wrestling. While fans may believe that the primary difference in these sports is how they vary in terms of the realness of competition, I believe that the critical difference is in the level of control these organizations exert over how competitive matches are determined.



The Core


The core of the class is a discussion of how leagues manage competition. The discussion starts with the role of collective bargaining agreements (CBAs) between leagues and players. These agreements, increasingly, dictate how teams choose to operate and compete. Of course, how teams choose to compete ultimately creates the product that attracts (or repels) fans. Within this discussion, we consider the role of amateur drafts, free agency, salary caps, and revenue sharing.



Perhaps, "competitive balances" most high profile moment occurred about 20 years ago. In the period from 1996 to 2001 the NY Yankees dominated MLB. In response to this large market dominance, MLB formed a Blue Ribbon Panel of economists and politicians to come up with potential solutions. This story provides a nice backdrop for considering how free agency and revenue sharing create "interesting" incentives for teams.


Example: Rivalries


We finish the discussion with the topics of rivalry and parity. Fans usually love their teams. But fans don’t go out and pay money to watch practice and scrimmages. Our teams need opponents. How does the opponent influence our love of sport? We conclude the class with a conversation about rivalries.


End


The Fanalytics Journey began with a framework of a fan focused vision for the business of sports. We began with the importance of shared narratives and the psychology of fandom. We then dug into the world of sports analytics and the reality of how sports executives make decisions. We concluded with big picture topics related to how team brands are built and, today, we get to the level of league design.


Fandom and sports analytics are great topics because we care about the product and we are fans, ourselves. I hope this has been a rewarding journey. And there will be more to come. We have already started a series that focuses on advanced statistics in sports. Much more to come.


Listen to the full class here:


Also streaming on Apple Podcasts, Spotify, and Stitcher.


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