Do the Peculiar Economics of Professional Team Sports Apply to Esports? Sequential Snowballing Literature Reviews and Implications
Abstract
:1. Introduction
2. Materials and Methods: Review and Assessment of the Peculiar Economics of Professional Team Sports
2.1. Review Process and 50 Peculiar Economics Identified
2.2. Assessment Process and 12 Main Peculiar Economics Identified
3. Results: Do the Main Peculiar Economics of Professional Team Sports Apply to Esports?
3.1. The Need for Two Competitors to Produce a Multiplayer Game
3.2. The Need for Rules of the Game
3.3. The Need for Officials to Enforce the Rules during Games
3.4. The Need for Uncertainty of Outcome and Competitive Balance
3.5. The Sources of Finance
3.6. The Possibility to Sell Several Times the Same Product
3.7. The Organisation of a National League
3.8. The Organisation of Only One Major National League as a Natural Monopoly
3.9. The League Standing Effect
3.10. The Need for Regulation
3.11. The Payment of Transfer Fees for Players
3.12. A Professional Sport Club Is Not Necessarily Profit Maximiser
4. Discussion, Implications, Limitations and Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Acknowledgments
Conflicts of Interest
References
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Number | Peculiar Economics | Explanation | Source(s) | Score |
---|---|---|---|---|
1 | Players performing in public as a means of attracting an audience | Players do not only produce the end product (the game) but are also part of it | Stayton (1910) | 0 |
2 | Audience attracted by the players’ level of sporting specialisation | Players are sought for their peculiar and particular fitness | 0 | |
3 | Interdependency between players | One player’s action automatically affects that of the other players | 0 | |
4 | Need for two competitors to produce a game (conjoint product) | A competitor cannot produce alone, it needs a rival to produce the game, as opposed to products technologically resulting from a single process in other sectors | Neale (1964) | 3 |
5 | Uncertainty of the product | Games are not alike, and the conditions of the game are constantly changing during its progress | Stayton (1910) | 0 |
6 | Need to agree on the time and venue of the game between teams | Two competitors have to agree when and where they will produce the game | Noll (2003) | 0 |
7 | Need for rules of the game | Two competitors have to agree to follow the same rules to produce the game, as opposed to different organisations not having to agree to follow the same rules to produce the product in other sectors | Caillois (1961), Spalding (1911), Szymanski and Zimbalist (2005) | 2 |
8 | Need for a common set of rules for all games | All competitors have to agree to follow the same rules to produce games for the best development of the sport | Spalding (1911), Szymanski and Zimbalist (2005) | 0 |
9 | Need for a national governing body to establish rules | When a sport is developed enough at the national level, there is a need for a national organisation with the legitimacy to establish uniform rules | M. L. C. (1946), Spalding (1911), Szymanski and Zimbalist (2005) | 0 |
10 | Need for officials to enforce rules during games | Increased competitiveness and stakes make necessary the presence of officials enforcing the rules and keeping the score, as opposed to organisations in other sectors not needing the presence of officials when producing | FIFA (n.d.), Noll (2003) | 2 |
11 | Need for rules of the game equalising chances between teams | The playing field is laid out and players are distributed so as to give teams equal chances | Caillois (1961), Evers and Fullerton (1910) | 0 |
12 | Incentive to produce maximal effort for players | Equal chances between teams means that they have an incentive to play their best | 0 | |
13 | Uncertainty of outcome | Equal chances between teams means that the audience does not know in advance who is going to win the game | Neale (1964), Organized Baseball and the Law (1937), Rottenberg (1956) | 3 |
14 | Competitive balance | Need for sporting equilibrium between teams to generate outcome uncertainty attracting fan demand and, as such, revenues | Neale (1964), Rottenberg (1956), Topkis (1949) | 2 |
15 | Satisfaction of spectators’ emotional and spiritual needs | “Quest for excitement” understood as the need for pleasurable excitement and its pleasurable resolution | Bromberger (2005), Elias and Dunning (1986), Szymanski and Zimbalist (2005) | 0 |
16 | Spectators’ identification to teams | Emotions optimised with partisanship | Bromberger (1995, 2005), Spalding (1911), Szymanski and Zimbalist (2005), Yonnet (2004) | 0 |
17 | Possibility to express collective antagonisms due to rivalry | Game as a forum for the expression of collective local or regional antagonisms | Bromberger (1995, 2005), Spalding (1911), Szymanski and Zimbalist (2005) | 0 |
18 | Presence of crowd violence | Antagonisms leading to crowd violence and hooliganism | Carnibella et al. (1996), Spaaij (2014), Szymanski and Zimbalist (2005) | 0 |
19 | Availability of statistical information on workers | Way to detect talent and information sought by fans | Kahn (2000), Szymanski and Zimbalist (2005), The Business Side of Baseball (1912) | 0 |
20 | Possibility of scouting | Access to competitors’ employees at work | Organized Baseball and the Law (1937), The Business Side of Baseball (1912) | 0 |
21 | Possibility to observe rival clubs | Access to competitors’ production process | Stayton (1910) | 0 |
22 | Diminishing quality returns | Additional fans attracted will have lower quality game seats, meaning lower revenue (returns) per seat | Neale (1964) | 0 |
23 | Input–enthusiasm effect | Regionalisation of public attention and private concentration increases the quality of inputs (and revenue per seat) in the area | 0 | |
24 | Roger Maris cobweb | Demand in t+1 responds to supply in t, instead of supply in t+1 responding to demand in t | 0 | |
25 | Bobby Layne rigidity and Archie Moore indivisibility | One good player cannot be replaced by two weaker players on the pitch | 0 | |
26 | Interest of the media | TV and radio rights but also interest of the newspapers | Neale (1964), Rottenberg (1956), Szymanski and Zimbalist (2005) | 1 |
27 | Possibility to sell several times the same product | Game sold to fans attending in the stadium or arena but also watching on TV | Neale (1964) | 2 |
28 | Game enables gambling | Possibility to bet on game outcome | Szymanski and Zimbalist (2005) | 1 |
29 | Match fixing | Increasing bets at stake leads to match fixing | 0 | |
30 | Opportunity for merchandised products | Products using club brand and players | Andreff and Staudohar (2000), Szymanski and Zimbalist (2005) | 1 |
31 | Interest of the public sector | Use of public funding and avoidance of expenditure allowed by public organisations (e.g., stadium rent) | 0 | |
32 | Interest of patrons | Funding to be able then to bet on game outcome, benefits for personal image and activities to employees | 0 | |
33 | Opportunity for sponsorship | Audience, image, notoriety and sales | 2 | |
34 | Organisation of championship series | Way to provide more importance to games | Spalding (1911), Szymanski and Zimbalist (2005) | 0 |
35 | Attractiveness of the quest for a championship | Fans and actors enjoy the contest for a championship | Noll (2003), Szymanski and Zimbalist (2005) | 0 |
36 | Organisation of a national championship | Competition at a national level with a series of games between teams, although they are free to fix their own schedules | Szymanski and Zimbalist (2005) | 0 |
37 | Organisation of a national league | Competition at a national level with regular games between teams, based on a schedule fixed by a central organisation | 2 | |
38 | Existence of a regular schedule establishing when and where games will be played over one season | Schedule established by the league and agreed by clubs | Noll (2003), Szymanski and Zimbalist (2005) | 1 |
39 | Reduction of transaction costs | League enables clubs to coordinate scheduling, rather than relying on a series of bilateral agreements | Noll (2003) | 1 |
40 | Sporting firms as multifirm plants | Plant encompassing playing fields and league, with sporting firms selling an indivisible product and contributing exactly the same inputs | Neale (1964) | 0 |
41 | Organisation of only one major national league (monopoly) | History shows that competitor national leagues do not survive or merge/cooperate with the existing league | M. L. C. (1946), Szymanski and Zimbalist (2005) | 2 |
42 | A major national league as a natural monopoly | Only one annual national champion can be crowned, and the championship must be open to all major league teams | Neale (1964), Noll (2003) | 1 |
43 | League standing effect | Excitement derived by fans from the changes or possibilities of changes in the league table | Neale (1964) | 2 |
44 | Existence of a national “organised sport” | Discipline organised at the national level through a series of agreements or an all-encompassing governing body | M. L. C. (1946), Szymanski (2003), Topkis (1949) | 0 |
45 | Need for regulation | Need to prevent corruption, match-fixing, the practice of clubs “poaching” each other’s players and clubs forced out of existence | M. L. C. (1946), Rottenberg (1956), Sloane (1969) | 2 |
46 | Restriction on the mobility of players (monopoly for the club over players) | Players cannot leave their current club whenever they want | Sloane (1969), Stayton (1910) | 0 |
47 | Most players accept restriction on their mobility | Players are well paid compared to what they would earn in another sector | Organized Baseball and the Law (1937), Sloane (1969) | 0 |
48 | Payment of transfer fees for players | A club interested in a player under contract in another club has to pay a transfer fee to the latter | Sloane (1969), The Business Side of Baseball (1912) | 2 |
49 | Players as assets | Players have a value for their club due to their contribution to its revenue through their activity and the potential to sell them | Chester et al. (1968), Sloane (1969) | 0 |
50 | A professional sport club is not necessarily profit maximiser | If a company usually looks for profit, a professional sport club may be primarily interested in winning on the pitch | Sloane (1969, 1971) | 3 |
Number | Peculiar Economics | Application to Esports? | Source(s) | Score |
---|---|---|---|---|
1 | Need for two competitors to produce a multiplayer game (conjoint product) | Yes, esports as a way to attract an audience relies on a “multiplayer game” | Abanazir (2019), Boyden (2011), Taylor (2012) | 1 |
2 | Need for rules of the game | Yes, the video game consists of rules, i.e., the code | Abanazir (2019), Burk (2013), Ducheneaut (2010), Lessig (2006) | 1 |
3 | Need for officials to enforce rules during games | The code enforces rules, but officials are still needed to ensure players stick to them | British Esports Association (2020a) | 0.5 |
4 | Uncertainty of outcome/competitive balance | Yes, in esports in general according to Blizzard Entertainment (2002), no in elite esports according to Mangeloja (2019) but findings questionable | Blizzard Entertainment (2002), Mangeloja (2019) | - |
5 | Sources of finance | Some similarities in the sources but also some differences in their weights | Mangeloja (2019), Newzoo (2020) | 0.5 |
6 | Possibility to sell several times the same product | Yes, but fewer opportunities | Scelles et al. (2020), Ströh (2017) | 0.5 |
7 | Organisation of a national league | Organisation of leagues, but international rather than national | Jalonen (2019) | 0.5 |
8 | Organisation of only one major national league as a natural monopoly | No natural monopoly at a (sub)genre level, e.g., competition between FIFA and Pro Evolution Soccer in football games | Blum (2016), Noll (2003) | 0 |
9 | League standing effect | Not tested yet | Andreff and Scelles (2015), Humphreys and Zhou (2015), Neale (1964) | - |
10 | Need for regulation | Yes, with similar issues as in sports, e.g., doping, corruption, match-fixing, “poaching” and financial difficulties | Ashton (2020), ESA (2019), Holden et al. (2017), Mitchell (2014), Naweed et al. (2020), Stronka (2020), Valentine (2019) | 1 |
11 | Payment of transfer fees for players | Yes, amounts still very far from what exists in men’s football, but the latter is a specific case in professional team sports | Ashton (2020), Hancock (2018), Rockerbie (2020) | 1 |
12 | A professional sport club is not necessarily profit maximiser | Yes, well-known esports organisations only consider the resulting revenue of a transfer in how they will buy other players, improve performance, etc., i.e., maximise wins | Ashton (2020), Sloane (1969, 1971), Terrien et al. (2017) | 1 |
Overall score in terms of similarities between professional team sports and esports (out of 10) | 7 |
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Scelles, N.; Peng, Q.; Valenti, M. Do the Peculiar Economics of Professional Team Sports Apply to Esports? Sequential Snowballing Literature Reviews and Implications. Economies 2021, 9, 31. https://doi.org/10.3390/economies9010031
Scelles N, Peng Q, Valenti M. Do the Peculiar Economics of Professional Team Sports Apply to Esports? Sequential Snowballing Literature Reviews and Implications. Economies. 2021; 9(1):31. https://doi.org/10.3390/economies9010031
Chicago/Turabian StyleScelles, Nicolas, Qi Peng, and Maurizio Valenti. 2021. "Do the Peculiar Economics of Professional Team Sports Apply to Esports? Sequential Snowballing Literature Reviews and Implications" Economies 9, no. 1: 31. https://doi.org/10.3390/economies9010031
APA StyleScelles, N., Peng, Q., & Valenti, M. (2021). Do the Peculiar Economics of Professional Team Sports Apply to Esports? Sequential Snowballing Literature Reviews and Implications. Economies, 9(1), 31. https://doi.org/10.3390/economies9010031