Making profits is a key aspect of any business venture. This understanding has created interest in finding out the real effect of decisions made by club owners and franchise on the structure and regulation of leagues around the world. In order to get better sales in sports, a high level of competition is required unlike in business where monopoly is the ultimate goal. If there are championships or leagues, the participation of more than two clubs will be necessary to ensure better products to the fans. If one club is far better than the rest and keeps on winning all games with ease, the products become so predictable and therefore less marketable to the fans (Wladimir Stefan, 2006:27). Fans will get bored in watching a team that wins with big margins repeatedly and so need some degree of uncertainty for them to enjoy watching the game. This phenomenon of the professional sports as an industry has led to the development of cooperation among clubs and the adoption of governing bodies charged with ensuring that the industry attains its optimal production capacity by way of organising championships and leagues. These leagues are highly competitive and as such have become some of the most profitable enterprises around the globe. For instance, the European champions’ league, the Barclays premier league in England and the La-Liga of Spain are some examples among many leagues in football that are leading income earners for the respective clubs and contribute a considerable amount of the countries’ GDP. Baseball, basketball, indoor sports, golf, athletics, and Olympics, in general, all form a multibillion-dollar economy (Masteralexis and Hums, 2002:295). The graph below shows how revenue from sporting activities has increased over the years. According to some economists, this feature of professional sport is quite favourable as it eradicates monopolies, which are responsible for the poor quality of products or services offered and high non-commensurate prices. In the end, the whole arena of professional sports forms a model of free-market where the competitiveness of the product offered carries the largest share. This competition, however, is not always healthy especially with respect to the labour market (Stefan, 2007:47). Here, the free relocation and transfer of players from one club to the other based on the wages has made the wealthier clubs maintain a grip of the top leagues and championships over the less wealthy clubs. Therefore, wealthy club owners can get all the best talent there is in the market and thereby in a way kill competition, which is the very phenomenon on which the industry thrives (Rodney, 2004:25). This has resulted to the creation of oligopolistic cartels where the higher level of the game is exclusive to the rich clubs whereas the less wealthy clubs play in the lower divisions that are less competitive and less famous among the fans ((Wladimir and Stefan, 2006:64). This means that fans will be flocking the gates only when big teams are playing. This obviously means very high revenues for them whereas the poorer clubs will only have a small number of fans in attendance and will in most cases charge less fee for their matches. Although the leagues as the governing entities have some restriction on the transfer of players from one club to the other, they can only achieve little since the clubs are free to determine the prices for prayers, as well as their buying and disposing of regimes.
Professional Team Sports as the Product Offered to the Fans