Sports Economics: Resource Market. By: Matt Goldstein. Employment of Players. Each of the major professional leagues (MLB, NFL, NBA, and NHL) have strict methods by which teams hire and fire players All of the leagues have basically two ways to hire a professional athlete. The Draft
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By: Matt Goldstein
New draftees who wish to play are required to sign contracts that bind them to a team for a specific time period
Players never have chance to sell services to highest bidder.
New players become locked in to the team that drafted him.
Because they are locked in the employing club becomes the only potential buyer of the players talents
The highly specialized athletic talents and skills possessed by the players
Most athletes specialize in one sport and train just for that sport.
Skills are very specific and not transferable to other employment
Athletes face limited opportunities for employment.
Therefore they must accept sub par contract offers by there standards.Two major factors that create Monopsony power for pro sport teams
NOTE: All wages and costs are 1000’s. So when wage reads 300 its really 300,000
Free Agency was just starting in 1976. Most players were still ran by a monopsony power.
A strike is a work stoppage initiated by labor (the players).
Ex. In 1994, the players union in MLB called a strike that forced the cancellation of hundreds of games.
A lockout is a work stoppage initiated by management.
Ex. In 1994, NHL owners canceled half the season forbidding the players from returning.Strikes and Lockouts
In both cases the major points of disagreement concerned the mechanics of how players would be paid and the conditions necessary for players to become free agents.