Tuesday, July 14, 2009

Book Review: Playbooks and Checkbooks

Aside from one post commenting on a post of maxims by college basketball blogger Ken Pomeroy, the focus here has been pretty monomaniacally oriented toward the gridiron game. I've put a rare non-strictly football item in a links post, and there's one other exception: sports economics. This has been mostly about how stupid it is for municipalities to spend their tax dollars on building stadiums for pro sports teams, but the field is larger than that, as a perusal of Stefan Szymanski's Playbooks and Checkbooks: An Introduction to the Economics of Modern Sports would indicate.

Playbooks and Checkbooks is Szymanski's approach to give a general overview of sports economics, unsurprisingly. Sports and the public purse is merely one chapter (out of six-this is a fairly slime volume), with the others being on sports as a business, organizing competition, antitrust issues, incentives, and broadcasting. Szymanski is a Professor of Economics at City University London, and so provides more of an international flavor than an American scholar probably would-one thing I hadn't thought about is sports leagues were very much a bottom-up creation in the UK and also relatedly the US, where they were one of a number of other voluntary associations, while most of the continental countries they were much more of a top-down creation of a goal-oriented state. Szymanski dates this to the 18th century, but the same sort of threads are present a half a millennium before that, as a perusal of The Origins of English Individualism by Alan Macfarlane would indicate.

Getting back to the topic of sports, it is interesting to see how the development of sports leagues proceeded differently in the US v. Britain, but Szymanski seems to tell a half-story. The British Football Association, governing body for soccer, forbade a professional club from paying profits to its owner or a salary to its director, whereas clubs in the National League (baseball) had no barriers to be profit-oriented. As an early 21st century American, it seems quite curious that 19th century Brits would accede to rules of that sort, but the Brits have always been funny people. Still, those sorts of restrictions explain why a system of promotion and relegation is possible. So, American soccer fans, that's how we'll get promotion and relegation-ban profits and payments of any stripe to people who own teams, make them have prestige as their only option.

Of course, if you're having these competitions, you need to figure out how much you want to limit competition, and what victorious competitors should receive. Sometimes, you want to reward a single competitor triumphant over its foes (e.g., Super Bowl), sometimes you want to give increasing rewards for the top competitors (e.g., Olympic medals), and Szymanski, drawing heavily on Gordon Tullock, cogently explains why and when you might want to do each.

But, of course, sports leagues are these weird hybrids of competitors who are working together, which when done by normal businesses draws antitrust scrutiny. As the recent American Needle case indicates, though, when a sports league is a single entity competing in the marketplace against other entities and when a sports league is a group of competitors acting together in restraint of trade can be a tricky issue. I, uh, didn't get much out of this chapter other than Szymanski hasn't read The Fifty-Year Seduction on the aftermath of the 1984 NCAA v. Board of Regents. There's a great deal more college football on television now than there was before then, but it's not quite so unambiguously clear that sports leagues are better off (yes, illegal antitrust cabals can be revenue enhancing for the conspirators).

The chapter on incentives seems a lot like Micro 101 applied to sports-when shirking is attractive, whether or not to use performance enhancing drugs, and free agency as improving the relationship between player quality and player compensation (duh).

The sports broadcasting chapter is kind of lame-the most interesting issue is the antitrust one IMO, and that was more or less settled in the US by the Sports Broadcasting Act of 1961, though it's still more of an open and contentious issue in Europe. There's also some discussion of the effect of television and other media on attendance, but Szymanski cites the NFL's greatly increased attendance during the 1950's and doesn't note (i) the tremendous negative effect teams like the Rams suffered when they first began televising their games (leading to the blackout rule), or (ii) Major League Baseball's average per-team attendance reached a peak in 1948 and didn't surpass that level until 1977.

The last chapter, as noted before, is on sports and the public purse. Alas, Szymanski's discussion of the advisability of this concentrates more on its Keynesian effects and less on the supporters' arguments of economic gain to the region. This seems rather odd, because the argument is never made by its supporters on Keynesian terms, but as being actually growth-enhancing. That this claim is generally bad to the point of fatuousness doesn't mean you should ignore it and look at what would be a better argument.

Actually, the Keynesian argument in the last chapter does a good job of summing up my basic issues with Playbooks and Checkbooks as a whole. It's on point, but is a bit off on emphasis. Keynesianism also generally isn't the sort of thing you talk about in regular conversation-it's the sort of thing only people who took a couple Econ classes in college would nod knowingly about, and too much of the book is like that. You can write a popular economics book in the US, and have people who didn't take econ classes in college read it-see books like Freakonomics, or Discover Your Inner Economist, or The Armchair Economist-but those have been popular because they've been accessible, and interesting to read. Irrespective of any of the content, I never actually enjoyed Playbooks and Checkbooks-no fun, and felt way too much like a textbook with an air of breeziness combined with authorial superiority. I can't really recommend a book like that, though I'm not sure there's a decent alternative.

For a more complimentary review, see this post by Dave Berri, one of the people who blurbed the book on the back.


joe football said...

A work on economics is boring and useless, shocking

I am kind of interested on how the genesis of pro sports in the UK and US are supposed to be more similar then the UK and the rest of europe, because european football authorities look a lot more then the FA then the NFL or NBA ever did. Maybe the NL in 1870 or something

It is legitimate to be interested in this because it concerns history rather then the disreputable field of economics

Tom said...

France, Germany, and other European countries copied the British model of the FA instead of copying the US model of the National League. The US/UK distinctiveness is they developed and adapted their own model rather than imposing one.

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