| Playbooks and Checkbooks: An introduction to the Econo-mics of Modern Sports |
| Stefan Szymanski, Princeton University Press, 2009, 225 pages, £17.95. |
| Diehard sports fans may feel anguish at their passion being treated as a business, but, if it’s any consolation, Stefan Szymanski’s new book shows that the extinction of the Corinthian flame began over a century ago, long before the Glazer brothers or Kerry Packer or Stanford saw national pursuits as a way to line their pockets. Since the Victorian age sport has wrestled with commercialism and some of the fundamental concepts of economics such as equity and fairness, whilst necessarily admitting winners and losers. The book is an excellent primer on the principles of sports economics and leaves the reader with the capacity to interpret a wide range of sporting structures and systems and their effects on behaviour. |
| Szymanski begins with the origins of sport in the classical era and shows how the honour and celebrity bestowed upon chariot racers differs little from that enjoyed by today’s superstars. But it was during the nineteenth century that organised sport as a pastime took off. In the UK and the US its origins lay in social and political factors allowing individual congress and thus represented autonomy from the state. The codification of rules at this time in a range of sports – football, baseball, rugby and cricket – are testament to the view of sport as a state within a state. |
| Amateurism was of course the defining feature in this era. Indeed, having the time to afford the leisurely extravagance of cricket was a status symbol. But it was also at this time that the first schism between the gentlemen and players emerged. For instance, the US baseball league embraced an early form of professionalism whilst their soccer-playing counterparts in the UK took a different approach. Keen to maintain control of the game at a higher level, the Football Association brokered a compromise whereby amateur and professional clubs would co-exist in the same league; the FA controlled the rules for both, and a system of relegation and promotion ensured fairness. In fact, the promotion/relegation system has affected the nature of competition and the commercial operations of football in a manner that contrasts with the closed shop of baseball. |
| From this early history Szymanski explores a range of issues including tournament and competition design, antitrust, broadcasting and Government involvement. The latter chapter is of particular interest to anyone interested in knowing whether hosting national sports events has any net beneficial effect. |
| The book is held together throughout by two paradoxes that emerge when sport and business combine. Firstly, in ‘regular’ business, a company would do almost anything legal to eliminate a rival, yet in sport intense rivalry is essential to commercial survival; no matter how intense the competition on the pitch, off it the clubs’ cosy and collusive relationship has only increased in strength as commercial pressures have intensified. The joint sale of broadcast rights by the Premiership is a good example. |
| Secondly and more familiarly, is the anguish over the loss of something intangible from the amateur era and the associated rise in unsportsmanlike behaviour including outright cheating; yet this is a consequence of consumer demand that attaches a high value to sporting success over mere participation. |
| These two paradoxes allow Szymanski to explore and puncture some commonly held myths. For example, sport clubs argue that various forms of anti-competitive behaviour are required to maintain what the fans want, namely an ‘uncertainty of outcome’ (i.e. excitement). The logic is that this state can only be bought about by a centrally allocated distribution of resources as opposed to a pure competitive distribution. Not only is there limited empirical support for the premise that fans prefer uncertainty, but evidence for the second proposition is also ambiguous. How much competition on the field responds to inputs (i.e. spending on players) depends crucially on how the market for players in a particular sport operates. In the free-agency world of soccer, prices paid tend to reflect value on the pitch, but in the more closed world of baseball the relationship is less clear. |
| Szymanski’s evident expertise and enthusiasm for the subject makes Playbooks and Checkbooks a lively read. The writing is fluid and non-academic yet there is an excellent guide to further reading for those with greater appetite. The index is exhaustive, making it invaluable as a reference work. |
| There are curious omissions, the neglect of rugby union in particular, which has only recently admitted professionalism. And yet it was a country of amateur players – Argentina – that defeated the hosts and favourites in the 2006 world cup. Likewise the introduction of the IPL and its potential rival structures, and their relationship to cricket’s governing bodies would have surely made for juicy reading. Perhaps their absence is a reflection of the clear US-focus of the book. In any case, this shouldn’t distract from what is an enjoyable and informative book. |
| Nooman Haque |
| Investment Banker at Gatehouse |