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Article
Publication date: 12 September 2016

Yang-Ming Chang, Thomas R. Sadler and Shane Sanders

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Managerial Finance, vol. 42 no. 9
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 3 June 2021

Rodney J. Paul and Shane Sanders

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Managerial Finance, vol. 47 no. 6
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 12 November 2019

Shane Sanders

Abstract

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Managerial Finance, vol. 45 no. 10/11
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 14 October 2020

Justin Ehrlich, Shankar Ghimire and Shane Sanders

Revenue sharing is ubiquitous among North American professional sports leagues. Under pool revenue sharing, above-average revenue teams of a league effectively transfer…

Abstract

Purpose

Revenue sharing is ubiquitous among North American professional sports leagues. Under pool revenue sharing, above-average revenue teams of a league effectively transfer revenues to below-average revenue teams. Herein, the authors find and prove that a league will vote into policy a pool revenue sharing arrangement if and only if mean team revenue is greater than presharing median revenue, where this condition is equivalent to the presence of positive nonparametric skewness in a league’s distribution of team revenues. This represents a median voter theorem for league revenue sharing.

Design/methodology/approach

The authors consider the case of revenue sharing for the National Football League (NFL), a league that pools and equally shares national revenues among member teams.

Findings

The authors find evidence of positive and significant nonparametric skewness in NFL team revenue distributions for the 2004–2016 seasons. This distribution is observed amid annual majority rule votes of League owners in favor of maintaining the incumbent pool revenue sharing model (as opposed to no team revenue sharing). Distribution of revenues – namely the existence of outlying large market NFL teams – appears to consistently explain the historical popularity of NFL revenue sharing.

Originality/value

The median voter theorem uncovered in the case of NFL applies to all professional sports leagues and can be used predictively as well as descriptively.

Details

Managerial Finance, vol. 47 no. 4
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 12 September 2016

Thomas R. Sadler and Shane Sanders

The purpose of this paper is to analyze the 2011 National Basketball Association (NBA) lockout and collective bargaining agreement (CBA).

Abstract

Purpose

The purpose of this paper is to analyze the 2011 National Basketball Association (NBA) lockout and collective bargaining agreement (CBA).

Design/methodology/approach

Using a bargaining game model, the authors show that asymmetric information via owner revenue shifting and financial non-disclosure caused the conflict between owners and players (growth of player salaries) to result in a lockout.

Findings

The bargaining game also demonstrates the lockout to be a rational response to asymmetric information: by restricting the growth of player salaries, owners improved their competitive position. Other factors motivating the lockout include the indirect benefit to the median owner of repressing player salaries (i.e. greater expected competitive balance) and a principal agency problem within the players’ union. The lockout concluded with a ten-year CBA, a mutual opt-out in 2017, and revenue sharing between 49 and 51 percent of basketball-related income. The league salvaged a shortened 2011-2012 season, but created an economic framework more favorable to owners.

Originality/value

This paper is novel in its analysis of the bargaining aspects of the current NBA collective bargaining agreement.

Details

Managerial Finance, vol. 42 no. 9
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 22 September 2020

Justin Ehrlich, Justin Perline, Joel Potter and Shane Sanders

In baseball, a run scored on offense carries the same on-field (win) value as does a run prevented on defense. Both outcomes bear the same score margin implication. This…

Abstract

Purpose

In baseball, a run scored on offense carries the same on-field (win) value as does a run prevented on defense. Both outcomes bear the same score margin implication. This presumption of unit equality is implicit in the Wins Above Replacement (WAR) measure, which treats units of offensive WAR (oWAR) and units of defensive WAR (dWAR) as perfectly substitutable toward win production. The purpose of this paper is to ask whether the salaries of Major League Baseball (MLB) players reveal such an equal valuation among MLB teams.

Design/methodology/approach

The authors examine the relationship between offensive output, defensive output and subsequent salary from free agency in MLB using a set of log-linear OLS, fixed effects regression specifications.

Findings

In general, estimated annual salary from free agency increases significantly and substantially with unit increases in a player's (prior season) wins above replacement WAR. Across specifications, the authors estimate a 42.5–43.4% increase in salary for year t for each additional unit of WAR in year t−1. The authors disaggregate WAR into offensive and defensive components (oWAR and dWAR) and estimate a 52.4–53.3 (4.8–7.2)% increase in salary for each additional unit of oWAR (dWAR).

Originality/value

The efficiency of the baseball labor market has been studied previously with mixed results. The novelty of the present study is its treatment of inputs not as positions or individual players but as the underlying offensive and defensive win production of players. The authors estimate free agency salary returns to (contract season) oWAR and dWAR in MLB to establish whether (to what extent) a salary premium for offensive output exists within MLB.

Details

Managerial Finance, vol. 47 no. 3
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 12 September 2016

Yang-Ming Chang, Joel M. Potter and Shane Sanders

A standard result of firm theory is that a monopoly maximizes profit somewhere along the elastic portion of its demand curve. However, empirical studies of sports ticket…

Abstract

Purpose

A standard result of firm theory is that a monopoly maximizes profit somewhere along the elastic portion of its demand curve. However, empirical studies of sports ticket pricing routinely find that (home) teams price along the inelastic portion of demand. Despite compelling theoretical explanations of this finding, at least one important factor remains unconsidered. A profit-maximizing team considers not only direct marginal revenue and direct marginal cost when setting a ticket price but also deferred, strategic benefit (revenue) from present game success. The paper aims to discuss these issues.

Design/methodology/approach

Prior literature finds that a given win is valued in that it generates additional future revenue and likelihood of home victory rises, ceteris paribus, in crowd density. The authors construct a firm profit maximization problem in which a sports team considers both present and future revenue when pricing home games in the present period.

Findings

If the deferred benefit is sufficiently large, a forward-looking, profit-maximizing team prices along the inelastic portion of its static demand curve. Importantly, this same price falls along the elastic portion of the firm’s (empirically unobserved) dynamic demand curve.

Originality/value

This is the first model of sports ticket pricing to recognize the intertemporal nature of demand for a sports match.

Details

Managerial Finance, vol. 42 no. 9
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 1 April 2006

Patricia Friedrich, Luiz Mesquita and Andrés Hatum

Drawing from our current original research on cultural trends in Latin America‐based multinational firms, this paper challenges the stereotypical perception of Latin…

Abstract

Drawing from our current original research on cultural trends in Latin America‐based multinational firms, this paper challenges the stereotypical perception of Latin America as a homogeneous region and explores the cultural distances among groups of multinational employees. After collecting surveys from 733 employees across eight multinationals in Argentina, Brazil, Chile, Colombia, and Mexico, we establish that, much like it happens in other lumped‐together regions of the globe, such as “East Asia” and “Africa”, Latin American countries present significant differences in the way firm employees respond to situations where cultural traits are at stake. By researching these countries, we recorded significant variation in aspects such as the treatment and place of women in the workplace, attachment or detachment to formal rules, formal organizational hierarchies, and structured business planning, in addition to varying levels of tolerance to invasion of privacy. Implications of the study include the need to develop methodologies that adequately capture cultural differences within large geographic blocs and business practices that prepare the expatriate, the international manager, and the policy maker for the different realities they are bound to encounter in different countries.

Details

Management Research: Journal of the Iberoamerican Academy of Management, vol. 4 no. 1
Type: Research Article
ISSN: 1536-5433

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Book part
Publication date: 17 June 2019

Oswald Jones

Teamwork has become increasingly prevalent both in undertaking research projects and in preparing papers for publication. While there are some reflections on the process…

Abstract

Teamwork has become increasingly prevalent both in undertaking research projects and in preparing papers for publication. While there are some reflections on the process of teamworking in the organisational studies literature, there is little published work in the area of entrepreneurship. Most existing studies distinguish between problems associated with task-based conflict and relationship-based conflict. In this chapter, the author provides an ethnographic account of a team involved with preparing a proposal and, subsequently, undertaking a small firm research project. The Evolution of Business Knowledge (EBK) was a major Economic and Social Research Council (ESRC) initiative which funded 13 distinct projects. During the nine-month period of preparing and refining the research proposal, the team worked together extremely effectively. There were periods of intense knowledge sharing, which enabled the team to develop an impressive and successful bid to study the ‘EBK in 90 small firms’. A major dispute between team members, during the early stages of the fieldwork, led to a period of both task-based and relationship-based conflicts, which threatened to undermine the project. As a result of my first-hand experiences with the EBK project, the author suggests that accounts such as this will help those who find themselves operating in dysfunctional teams make sense of the underlying tensions associated with ‘academic knowledge creation’.

Details

Creating Entrepreneurial Space: Talking Through Multi-Voices, Reflections on Emerging Debates
Type: Book
ISBN: 978-1-78769-577-1

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Book part
Publication date: 19 September 2014

Cheng-Wei Wu and Jeffrey J. Reuer

In M&A markets, acquirers face a hold-up problem of losing the value of investments they make in due diligence, negotiations, and post-acquisition planning if targets…

Abstract

In M&A markets, acquirers face a hold-up problem of losing the value of investments they make in due diligence, negotiations, and post-acquisition planning if targets would pursue the options of waiting for better offers or selling to an alternative bidder. This chapter extends information economics to the literature on M&A contracting by arguing that such contracting problems are more likely to occur for targets with better outside options created by the information available on their resources and prospects. We also argue that acquirers address these contracting problems by using termination payment provisions to safeguard their investments. While previous research in corporate strategy and finance has suggested that certain factors can facilitate an acquisition by reducing a focal acquirer’s risk of adverse selection (e.g., signals, certifications), we note that these same factors can make the target attractive to other potential bidders and can exacerbate the risk of hold-up, thereby leading acquirers to use termination payment provisions as contractual safeguards.

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