Thinking about Competitive Balance

Paper Summary:

The article "Thinking about Competitive Balance" by Allen R. Sanderson and John J. Siegfried compares different concepts of competitiveness, reviews research on competitive balance and the relationship between payrolls and performance, examines the rules and regulations that contribute to playing performances, and evaluates the possible effect of proposals such as payroll and salary caps, luxury taxes, and increased revenue sharing on competitive balance. The author of this paper examines and critiques the original article and presents his own conclusions.

From the Paper:

"The authors note that the league itself also creates some intentional imbalances to level the playing field and the fact that winning conditions create more winning conditions (i.e. the most talented players want to gravitate to the most popular, 'winning-est' teams), These include "reverse-order draft systems, various attempts to constrain players' salaries, revenue sharing" (Sanderson & Siegfried, 2003, p. 268). Some sports leagues have luxury taxes on top heavy teams as well (Sanderson & Siegfried, 2003, p. 268-269). "Lengthening a series reduces the probability that the weaker opponent will win; increasing the number of playoff rounds and the percentage of teams eligible for a championship reduces the chances that the best team will capture the championship" (Sanderson & Siegfried, 2003, p. 272). However, the authors do not include a counterbalance to such arguments--longer seasons also can result in viewer attrition of interest, the competition from other sports beginning while the season sprawls on, and the anger of fans if they feel that their team has been unfairly treated by new rules."

Sample of Sources Used:

• Sanderson, Allen R. & John J. Siegfried. "Thinking about Competitive Balance."
• Journal of Sports Economics. 2003. 4: 255-279

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