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Ethical Dilemmas In Professional Sports

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That team is horrible or everyone in the front office needs to be fired, are negative statements made by frustrated fans of professional sports teams. Owners and front office personnel are no strangers to theses comment and have the challenging job of managing a franchise. Pursing the right business opportunities, how to maintain and better spectator league relationship, increase profits, promote attendance, and capture fan desire to return to the event, are just a few of challenges faced by management. A solid working knowledge of economics and constant review of long run model of team decisions will help a franchise accomplish its goals.
Franchise decisions are paramount as one decision can either move a franchise forward or set it back …show more content…
Perhaps the most important objective in the economic theory of profit maximization is acquiring the best talent possible. Regardless of sport or league, the task is daunting and can cause general managers, player operation personnel and coaches to lose their jobs. According to Humphreys (2015), “winning percentage of the team is assumed to be a choice variable – an owner can choose to field a team that wins a large fraction of its games, about half of it games or small fractions of its games”. To a degree this approach may appear to be unethical, however, depending on the franchise and its objective, then the approach can pay huge dividends. The NBA’s Golden State Warriors are a prime example of a franchise that focuses on profit maximization through winning. This past season the Warriors surpassed Michael Jordan’s Chicago Bulls record 72 regular season wins by winning 73 regular season games (Strauss, 2016). The Warriors also fielded a team that included three NBA all-stars, Stephen Curry, Klay Thompson and Draymond Green. The play of each of these players has packed Oracle Arena nearly every home game. The Warriors finished the …show more content…
Humphreys (2015) points out that this “pattern in the relationship between on-field success and revenue is a consequence of assumption of concavity of the revenue function. Fans respond better to on-field performance, but only up to some point, which is motivated by a hypothesis known as the uncertainty of outcome hypothesis (UOH)”. At times fans tire quickly from teams winning every single game and never really being challenged. When fans are unsure of the outcome of the game, they want to attend or watch the game more. The Philadelphia 76ers claimed the worst record in NBA last season, winning only 10 games (Espn, 2016). Despite only winning ten games, fans continued to support the franchise. UOH comes into play because on any given night the 76ers could beat a superior team and fans want to be in attendance if and when it happens. As far teams with top level go, although winning is a great thing, but it comes at a high cost. Humphreys (2015) explains “that “superstars” command extremely high salaries”. In essence the profit that is made from ticket sales, merchandise, advertisement, etc., goes toward paying a “superstar’s” salary. The Cleveland Cavaliers’s Lebron James is perhaps one of the most popular athletes and basketball players on the planet and for all intended purposes, deserves to paid handsomely, especially for what he brings to the

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