International Journal of Financial Studies

Research

123 KiB

Open AccessArticle

The NBA’s Maximum Player Salary and the Distribution of Player Rents

by Kelly M. Hastings and Frank Stephenson

Int. J. Financial Stud. 2015, 3(2), 75-83; https://doi.org/10.3390/ijfs3020075 - 25 Mar 2015

Viewed by 7324

The NBA’s 1999 Collective Bargaining Agreement (CBA) included provisions capping individual player pay in addition to team payrolls. This study examines the effect the NBA’s maximum player salary on player rents by comparing player pay from the 1997–1998 and 2003–2004 seasons while controlling [...] Read more.

The NBA’s 1999 Collective Bargaining Agreement (CBA) included provisions capping individual player pay in addition to team payrolls. This study examines the effect the NBA’s maximum player salary on player rents by comparing player pay from the 1997–1998 and 2003–2004 seasons while controlling for player productivity and other factors related to player pay. The results indicate a large increase in the pay received by teams’ second highest and, to a lesser extent, third highest paid players. We interpret this result as evidence that the adoption of the maximum player salary shifted rents from stars to complementary players. We also show that the 1999 CBA’s rookie contract provisions reduced salaries of early career players. Full article

(This article belongs to the Special Issue Sports Finance)

166 KiB

Open AccessArticle

How the Economic and Financial Situation of the Community Affects Sport Clubs’ Resources: Evidence from Multi-Level Models

by Pamela Wicker and Christoph Breuer

Int. J. Financial Stud. 2015, 3(1), 31-48; https://doi.org/10.3390/ijfs3010031 - 13 Feb 2015

Cited by 16 | Viewed by 8129

Abstract

In many Western countries, local community sport clubs are important providers of leisure, sport, and social programs. These sport clubs are nonprofit organizations, which operate in an increasingly challenging environment. This study considers a club’s direct local environment, i.e., the community the [...] Read more.

In many Western countries, local community sport clubs are important providers of leisure, sport, and social programs. These sport clubs are nonprofit organizations, which operate in an increasingly challenging environment. This study considers a club’s direct local environment, i.e., the community the club is located in. The open systems model and the resource dependence represent the theoretical framework. The purpose of this research is to examine the effect of the financial and economic environment in the community on the resource situation of sport clubs (human, infrastructure, and financial resources). The empirical evaluation is undertaken using data from a nationwide survey of non-profit sport clubs in Germany (organizational level; n = 19,345), which are combined with secondary data on community characteristics (community level; n = 3153). Given the hierarchical data structure, multi-level analyses are applied. The results show that volunteer problems are smaller among clubs in communities with high unemployment. Facility and financial problems are greater in large communities. Sport clubs located in communities that could break even were also more likely to break even themselves. The findings show that resource problems are not necessarily due to poor club management, since higher-level (community) factors significantly affect the resource situation of sport clubs too. Full article

(This article belongs to the Special Issue Sports Finance)

230 KiB

Open AccessArticle

“Hot Hand” in the National Basketball Association Point Spread Betting Market: A 34-Year Analysis

by Benjamin Waggoner, Daniel Wines, Brian P. Soebbing, Chad S. Seifried and Jean Michael Martinez

Int. J. Financial Stud. 2014, 2(4), 359-370; https://doi.org/10.3390/ijfs2040359 - 25 Nov 2014

Cited by 4 | Viewed by 6337

Abstract

Several articles have looked at factors that affect the adjustments of point spreads, based on hot hands or streaks, for smaller durations of time. This study examines these effects for 34 regular seasons in the National Basketball Association (NBA). Estimating a Seemingly Unrelated [...] Read more.

Several articles have looked at factors that affect the adjustments of point spreads, based on hot hands or streaks, for smaller durations of time. This study examines these effects for 34 regular seasons in the National Basketball Association (NBA). Estimating a Seemingly Unrelated Regression model using all 34 seasons, all streaks significantly impacted point spreads and difference in actual points. When estimating each season individually, differences emerged particularly examining winning and losing streaks of six games or more. The results indicate both the presence of momentum effects and the gambler’s fallacy. Full article

(This article belongs to the Special Issue Sports Finance)

271 KiB

Open AccessArticle

Market Efficiency and Behavioral Biases in the WNBA Betting Market

by Rodney J. Paul and Andrew P. Weinbach

Int. J. Financial Stud. 2014, 2(2), 193-202; https://doi.org/10.3390/ijfs2020193 - 24 Apr 2014

Cited by 6 | Viewed by 6820

Abstract

The betting market for the Women’s National Basketball Association (WNBA) is a thin financial market, which does not attract much interest from sports bettors. Given these characteristics, it is possible that profitable wagering strategies could exist for informed bettors of the WNBA. Using [...] Read more.

The betting market for the Women’s National Basketball Association (WNBA) is a thin financial market, which does not attract much interest from sports bettors. Given these characteristics, it is possible that profitable wagering strategies could exist for informed bettors of the WNBA. Using betting data on the WNBA from 2007–2012, we find that simple betting strategies do not earn statistically significant returns. WNBA bettors are like NBA bettors; however, in that they strongly prefer the best teams, particularly when they are on the road. Despite this clear bias, betting against the most popular public wagers is not found to earn statistically significant profits. Full article

(This article belongs to the Special Issue Sports Finance)

237 KiB

Open AccessArticle

The Effects of the Clock and Kickoff Rule Changes on Actual and Market-Based Expected Scoring in NCAA Football

by Kenneth Linna, Evan Moore, Rodney Paul and Andrew Weinbach

Int. J. Financial Stud. 2014, 2(2), 179-192; https://doi.org/10.3390/ijfs2020179 - 16 Apr 2014

Cited by 3 | Viewed by 6303

Abstract

Clock rule changes were introduced in the 2006 season with the goal of reducing the average duration of the game; these changes were reversed in 2007. In addition, in 2007 the kickoff rule was changed to create more excitement and potentially more scoring. [...] Read more.

Clock rule changes were introduced in the 2006 season with the goal of reducing the average duration of the game; these changes were reversed in 2007. In addition, in 2007 the kickoff rule was changed to create more excitement and potentially more scoring. We examine what happened to actual and expected scoring during these National Collegiate Athletic Association (NCAA) football seasons. The clock rule change in 2006 led to lower scoring which was not fully encompassed in the betting market, leading to significant returns to betting the under. Multiple rule changes in 2007 led to volatility in the betting market that subsided by season’s end. Full article

(This article belongs to the Special Issue Sports Finance)

256 KiB

Open AccessArticle

The Long-Term Game: An Analysis of the Life Expectancy of National Football League Players

by Ruud Koning, Victor Matheson, Anil Nathan and James Pantano

Int. J. Financial Stud. 2014, 2(1), 168-178; https://doi.org/10.3390/ijfs2010168 - 18 Mar 2014

Cited by 5 | Viewed by 9245

Abstract

The National Football League (NFL) has recently received significant negative media attention surrounding the safety of its players, revolving largely around the long term health risks of playing the sport. Recent premature deaths and instances of suicide associated with chronic traumatic encephalopathy and [...] Read more.

The National Football League (NFL) has recently received significant negative media attention surrounding the safety of its players, revolving largely around the long term health risks of playing the sport. Recent premature deaths and instances of suicide associated with chronic traumatic encephalopathy and other football related injuries have brought the sport under increased scrutiny. By comparing mortality rates of the general population to mortality rates of players using publically available data from the 1970 and 1994 NFL seasons, we test whether participation in football is significantly harmful to the longevity of the players. We conclude that, in total, players in the NFL have lower mortality rates than the general population. However, there is evidence that line players have higher mortality rates than other players and that those who played more games have higher mortality rates than those who played fewer games. Full article

(This article belongs to the Special Issue Sports Finance)

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219 KiB

Open AccessArticle

Systematic Positive Expected Returns in the UK Fixed Odds Betting Market: An Analysis of the Fink Tank Predictions

by Babatunde Buraimo, David Peel and Rob Simmons

Int. J. Financial Stud. 2013, 1(4), 168-182; https://doi.org/10.3390/ijfs1040168 - 4 Dec 2013

Cited by 4 | Viewed by 7742

Abstract

We report striking evidence of semi-strong inefficiency in the UK fixed-odds football betting market using a reputable newspaper tipster which offers probabilities of match outcomes rather than simple result indicators. Betting on the Fink Tank probabilities of home wins across 10 bookmakers, when [...] Read more.

We report striking evidence of semi-strong inefficiency in the UK fixed-odds football betting market using a reputable newspaper tipster which offers probabilities of match outcomes rather than simple result indicators. Betting on the Fink Tank probabilities of home wins across 10 bookmakers, when there are positive expected returns, would have generated positive returns in each of the seasons from 2006–07 to 2011–12 for a variety of different betting strategies. These returns could have been enhanced by employing the best odds from a greater number of bookmakers. However, the fact that pure arbitrage bets have existed for years and appear to last for several hours or days suggest they are in practice not exploitable to a magnitude that poses any threat to bookmakers. Full article

(This article belongs to the Special Issue Sports Finance)

226 KiB

Open AccessArticle

Organizational Mission and Revenue Diversification among Non-profit Sports Clubs

by Pamela Wicker, Svenja Feiler and Christoph Breuer

Int. J. Financial Stud. 2013, 1(4), 119-136; https://doi.org/10.3390/ijfs1040119 - 8 Nov 2013

Cited by 18 | Viewed by 9740

Abstract

The beneficial effects of diversified income portfolios are well documented in previous research on non-profit organizations. This study examines how different types of organizational missions affect the level of revenue diversification of organizations in one industry, a question that was neglected in previous [...] Read more.

The beneficial effects of diversified income portfolios are well documented in previous research on non-profit organizations. This study examines how different types of organizational missions affect the level of revenue diversification of organizations in one industry, a question that was neglected in previous research. Based on contingency theory, it is assumed that different missions are associated with different funding sources. Since missions can be complementary or conflicting, specific attention needs to be paid to the combination of missions. The sport sector is chosen as an empirical setting because non-profit sports clubs can have various missions while their overall purpose is promoting sport. Panel data from a nationwide survey of non-profit sports clubs in Germany are used for the analysis. The regression results show that revenue diversification is significantly determined by organizational mission. Historically, typical mission statements like promoting elite sport, tradition, conviviality, non-sport programs, and youth sport have a positive effect on revenue diversification, while clubs with a commercial orientation and a focus on leisure and health sport have more concentrated revenues. The findings have implications for club management in the sense that some missions are associated with higher financial risk and that the combination of missions should be chosen carefully. Full article

(This article belongs to the Special Issue Sports Finance)

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