Sports Analytics: Leagues, Teams, Players, and Fans

League rules that dictate how teams operate, such as salary caps, revenue sharing, and amateur drafts, significantly affect how teams function and compete. League rules are typically negotiated between players’ associations and ownership groups with the goal of equitable distribution of revenues across players and teams. However, league rules combined with team resource differences often create economic incentives that influence competitive balance levels and, therefore, impact the appeal of the sports product to fans. Incentives have an enormous impact on outcomes whether it is at the individual or organizational level.