THE PLAYING FIELD IN PRO SPORTS LEAGUES IS OFTEN FAR FROM LEVEL FOR TEAMS

OTTAWA, May 24, 2011 /CNW/ - The success of teams in North America's major professional sports leagues are often determined by underlying competitive conditions that are not always level among member franchises.

The latest publication in The Conference Board of Canada's series, Playing in the Big Leagues, analyzes the concept of a level-playing field as it applies to leagues such as the National Hockey League, National Football League, National Basketball Association and Major League Baseball. Previous briefings in the series covered the market conditions for franchises, including those of Winnipeg and Quebec City.

"When looking at a given league, we want to know whether it pays more than just lip service to creating the conditions for a level playing field, competitively and financially, among its franchises," said co-author Glen Hodgson, Senior Vice-President and Chief Economist. "Sports fans who eagerly hand over their money—and their hearts—to their favourite team should keep in mind the fact that the underlying competitive conditions are not always equal."

The Conference Board's fourth briefing in its series, Competitive Conditions in Pro Sports Leagues, identifies four elements of a 'level-playing field':

  • Salary caps - A salary cap is usually implemented in response to unequal financial and market power among the league's franchises.
  • Revenue sharing - A league's approach to sharing of revenue says a great deal about its underlying business philosophy.
  • Access to talent - The four major North American pro sports leagues have largely similar operating models—a common draft for new players and free agency for veterans who have reached a certain level of seniority.
  • Special factors - Leagues may choose to act when changes in the exchange rate, differences in taxation levels from one jurisdiction to another, or other conditions affect the ability of some franchises to compete.

"In general, the "level playing field" concept is applied by most leagues when it comes to access to player talent, resulting in entry drafts, free agency, and the creation of salary caps," said Hodgson. "But the concept is much less likely to be applied by owners when it comes to revenue sharing."

This is the fourth briefing in the Playing in the Big Leagues: What Makes a Professional Sports Team Successful in Canada?, which will continue throughout 2011. The next briefing will look more closely at competitive conditions in the North American leagues.

SOURCE CONFERENCE BOARD OF CANADA

For further information:

Brent Dowdall, Media Relations, Tel.: 613- 526-3090 ext.  448
E-mail: corpcomm@conferenceboard.ca

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