The Business of Hockey (EBSH-641) takes a detailed look at how professional sports teams make decisions in the short run and the long run. In the short run, teams make profit-maximizing decisions about how to price tickets and attract fans. In the long run, teams make profit-maximizing decisions about how much playing talent to acquire and how much on-ice success they should seek. The course then examines the role played by sports leagues and the way that teams interact in sports leagues, paying special attention to the zero-sum nature of team success in sports leagues—not all teams in a league can have a winning record in a given season. Finally, the course turns to team decisions about the two main inputs to production: players and facilities. Students will also have an opportunity to undertake a quantitative analysis of outcomes in the NHL to understand how competitive balance has changed in the league and how changes like the opening of a new arena relate to team success.
Outline
The course is divided into eight parts, as follows:
Week 1: The Professional Sports Industry
Week 2: Ticket Pricing and Attendance
Week 3: Long-Run Team Decisions
Week 4: Sports League Roles
Week 5: Outcomes in Sports Leagues
Week 6: Measuring and Analyzing Competitive Balance
Week 7: Economic Basis for Player Compensation
Week 8: Economic Implications of Professional Sports Teams and Facilities
Objectives
By the end of this course, students should be able to do the following:
identify trends shaping the business of hockey at team, league, and international levels
apply economic principles and models to better understand key forces and dynamics impacting the businessof hockey
analyze the revenue sources and expenses of a hockey franchise, and the forces that affect them
articulate the constraints placed on hockey teams by short-run consumer demand for attendance at games, and explain how consumer demand affects team pricing decisions, revenues, and profits
assess the trade-offs required between team success and franchise profitability
identify and explain the forces driving league expansion and team relocation decisions
define competitive balance and outcome uncertainty and explain their influence on team and league profitability
explain how player salaries are determined in professional team sports, the relationship between salaries and team revenues, and the economic issues associated with compensation and contract length
identify current trends and issues in arena financing, outline the role of government subsidies in new facilityconstruction, and the articulate the relationship between local governments and teams seeking new orrenovated facilities
Evaluation
To receive a passing grade in this course, students must meet these minimum standards:
receive a minimum of 60 percent on the participation component (i.e., the Weekly Discussion application)
receive an average grade of 60% over all course components.
Marks for this course will be distributed as follows:
Activity
Weight
Weekly Discussion participation
33%
Applied problems with discussion component (weeks 1–8)
67%
Total
100%
Materials
Humphreys, B. (2017). The economics of professional hockey. BRH Publishing. (Online)
Additional readings are provided in the course’s Digital Reading Room.
Athabasca University reserves the right to amend course outlines occasionally and without notice. Courses offered by other delivery methods may vary from their individualized study counterparts.