North American Professional Sport: Exploring Competition Time and its Effect on Valuation, Revenue and Profitability

Abstract

This thesis examines if there is a relationship between competition time and team valuation, revenue and profitability in North American professional sport. The leagues examined were the major four in North America and include the National Basketball Association, Major League Baseball, the National Hockey League and the National Football League. Using the Balanced Scorecard (BSC) as a guide, appropriate literature of the four BSC categories was reviewed. The four categories of the BSC include Financial, Customer, Internal Business Processes and Learning and Growth. Conceptual models for team valuation, revenue and profitability were constructed using the BSC as a framework. In order to construct the three conceptual models 51 professional sport research variables were identified as useful to this framework. The data was collected over a ten-year period for the seasons 2003/2004-2012/2013. A series of statistical analyses were examined with regression analyses revealed three distinct models for the three dependent variables. It was found that competition time has a significant impact on all three dependent variables. The results from this study will help league executives in creating new strategies for revenue growth and other financial gains. Future research will work towards creating more competition time variables that will aid in determining the proper amount of competition time that needs to be played by each league to maximize league finances.