By Steven H. Salaga
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EMPIRICAL ESSAYS IN SPORT MANAGEMENT by Steven H. Salaga A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy (Kinesiology) in The University of Michigan 2012 Doctoral Committee: Professor Rodney D. Fort, Chair Professor Charles C. Brown Associate Professor Jason A. Winfree Assistant Professor Dae Hee Kwak ACKNOWLEDGEMENTS I would like to thank my entire doctoral dissertation committee for offering to provide to their time and expertise in assisting me through the dissertation process. I truly appreciate all the support you have given over the course of my years at Michigan. ii TABLE OF CONTENTS ACKNOWLEDGEMENTS .................................................................................................................. ii LIST OF TABLES .............................................................................................................................. v LIST OF FIGURES .......................................................................................................................... vii ABSTRACT ...................................................................................................................................... ix CHAPTER 1: Introduction .............................................................................................................. 1 CHAPTER 2: Personal Seat Licenses, Season Ticket Rights and National Football League Demand ........................................................................................................................................... 4 2.1 Introduction ...................................................................................................................... 4 2.2 Background ...................................................................................................................... 6 2.3 Literature on NFL Demand ............................................................................................ 11 2.4 Theoretical Model .......................................................................................................... 15 2.5 Functional Form of Demand .......................................................................................... 18 2.6 Empirical Models ........................................................................................................... 19 2.7 Data Description ............................................................................................................ 20 2.8 Results ............................................................................................................................ 24 2.9 Comparing PSL and STR Markets................................................................................. 31 2.10 Team Quality and Sale Prices in PSL and STR Markets ............................................... 37 2.11 PSLs as Depreciable Assets ........................................................................................... 39 2.12 Directions for Future Research ...................................................................................... 40 2.13 Summary and Conclusions ............................................................................................ 42 2.13 References ...................................................................................................................... 45 CHAPTER 3: Training and the Major League Baseball Draft .................................................. 77 3.1 Introduction .................................................................................................................... 77 3.2 The MLB Draft .............................................................................................................. 81 3.3 Theory ............................................................................................................................ 82 iii 3.4 Literature Review ........................................................................................................... 86 3.5 Labor Market Outcome 1: Entry into Major League Baseball (Data/Methods) ............ 91 3.6 Labor Market Outcome 1: Entry into Major League Baseball (Results) ....................... 99 3.7 Labor Market Outcome 2: Major League Baseball Career Duration (Data/Methods) 107 3.8 Labor Market Outcome 2: Major League Baseball Career Duration (Results) ........... 113 3.9 Selection into the Labor Market – Data ....................................................................... 118 3.10 Selection into the Labor Market – Results ................................................................... 119 3.11 Discussion .................................................................................................................... 120 3.12 Conclusions .................................................................................................................. 125 3.13 References .................................................................................................................... 128 CHAPTER 4: Competitive Balance in College Football ........................................................... 161 4.1 Introduction .................................................................................................................. 161 4.2 Literature Review and Background ............................................................................. 167 4.2.1 Episode 1: The G.I. Bill, the Sanity Code, 12-Point Code, and Grants-in-Aid .. 169 4.2.2 Episode 2: The Demise of the CFA ..................................................................... 174 4.3 Competitive Balance Concepts .................................................................................... 181 4.4 Competitive Balance Measures .................................................................................... 182 4.5 The Data and Other Background ................................................................................. 185 4.6 Methodology ................................................................................................................ 187 4.7 Results: Historical Competitive Balance in College Football ...................................... 191 4.8 Results: Stationarity and Break Points ........................................................................ 199 4.9 Results: The Invariance Proposition ........................................................................... 204 4.10 Conclusions and Suggestions for Future Research ...................................................... 212 4.11 References .................................................................................................................... 216 CHAPTER 5: Conclusion ............................................................................................................. 289 iv LIST OF TABLES Table 2.1 Timeline of NFL PSL Programs ..................................................................................56 2.2 Variable Descriptions...................................................................................................57 2.3 Summary Statistics.......................................................................................................58 2.4 Random and Fixed Effects Models (Pooled PSL and STR Observations) ..................59 2.5 Random and Fixed Effects Models (PSL Observations Only) ....................................60 2.6 Random and Fixed Effects Models (STR Observations Only) ....................................61 2.7 Average Secondary Market PSL and STR Sale Prices (‘05-‘09) ................................62 2.8 Average Secondary Market PSL Sale Prices (‘05-‘09) ...............................................63 2.9 Average Secondary Market STR Sale Prices (‘05-‘09) ...............................................64 2.10 Secondary Market PSL Sale Prices by Franchise (‘05-‘09) ......................................65 2.11 Secondary Market PSL Sale Prices by Franchise - Seat Quality 1 (‘05-‘09) ............66 2.12 Secondary Market STR Sale Prices by Franchise (‘05-‘09) ......................................67 2.13 Secondary Market STR Sale Prices by Franchise - Seat Quality 1 (‘05-‘09) ............68 2.14 Example of Consumer PSL and Season Ticket Expenditure over Ten Years ...........69 2.15 Example of Consumer STR and Season Ticket Expenditure over Ten Years ...........70 2.16 Population and Income Data for PSL Markets (‘05-‘09) ...........................................71 2.17 Population and Income Data for STR Markets (‘05-‘09) ..........................................72 2.18 Secondary Market PSL Sale Prices and 3-Year Team Winning Percentage .............73 2.19 Secondary Market STR Sale Prices and 3-Year Team Winning Percentage.............74 2.20 Average PSL Sale Price by Team and Year - Seat Quality 1 ....................................75 2.21 Average PSL Sale Price by Team and Year - Seat Quality 3 ....................................76 3.1 Variable Descriptions: Logistic Regression Models..................................................131 3.2 Variable Descriptions: Cox Proportional Hazard Models .........................................132 3.3 Summary Statistics: 1966-2005 Data for Logistic Regression Models .....................133 3.4 Summary Statistics: 1966-1997 Data for Cox Proportional Hazard Models .............134 3.5 Prob. of a Drafted Player Reaching MLB by Position (‘66-‘05) ...............................135 3.6 Prob. of a Drafted Player Reaching MLB by Position and Class. (‘66-‘05) .............136