Harry Arne Solberg

Attracting Major Sporting Events: The Role of Local Residents

Abstract The decision where to host major sports events is the result of a political process, involving local and national politicians as well as national and international sport governing bodies. Politicians and local/national sport governing bodies decide whether to apply for an event, while international sports governing bodies select the host cities (nations). Local and national residents play an important role in this process as their opinion will influence whether the political system supports the application and is willing to fund the event. Many event impacts have characteristics of public goods and externalities. This represents a potential welfare economic rationale for the public sector to fund them. Empirical data from 117 polls of urban and national residents that either have hosted or applied for events reveal that three out of four residents supported hosting the event. Statistical analyses show the strongest support to be in low-income nations. This raises doubts whether such events should be regarded as luxury goods, which is a typical characteristic for sports goods. The major reason for this can be that people are aware that the events will influence the production of other goods and services in society. In particular people in nations where the public sector has had a financial deficit in the years before the poll were more sceptical than others. This pattern does not occur in heavily populated nations where event-related costs represent only a “drop in the ocean” on a macroeconomic level. The surveys also indicate that economic growth resulted in people voting more positively in favour of the events.

Doping in elite sport - do the fans care? Public opinion on the consequences of doping scandals

There are indications that commercial stakeholders are reluctant to associate with sports involved in doping scandals. A survey of 925 Norwegian sports consumers supports this reluctance, showing no tolerance for pure doping substances. The majority were in favour of tough responses to athletes and sports involved in doping. Older respondents were more negative towards doping. Those who were strongly interested in sport were more willing than others to accept doping.

TV Sports Programs—Who is Willing to Pay to Watch?

This article investigates the factors that influence the willingness of TV viewers to pay for watching sports programs. An empirical survey of Norwegian TV viewers revealed that individual winter sports, such as biathlon and cross-country skiing, headed the popularity list, with soccer coming third. However, it also showed that soccer fans were significantly more motivated to pay than were fans of other sports. These results provide some explanations to soccers revenue dominance in European sports rights markets.

An exploration of the direct economic impacts from business travelers at world championships

Business travelers visiting events have received limited attention from researchers compared with the attention paid to leisure travelers. In this study, economic impacts from various categories of visitors at various sporting events are compared with a specific focus on differences between business travelers and leisure travelers in terms of numbers and economic impacts. The article is based on empirical data from four different world championships in Nordic Ski, Ice Hockey, Judo, and Indoor Climbing. In terms of numbers, leisure travelers clearly outnumber business travelers whereas in terms of economic impacts business travelers are often equally important. These results indicate that particular efforts to describe business travelers may be needed in economic impact studies.

European club football: why enormous revenues are not enough?

This essay discusses why many European football clubs have experienced financial problems, despite earning high revenues. The fact that European football clubs are win maximizers make them more aggressive when competing for talented players than professional teams on other continents. So-called eyes of a needle, such as promotion, (avoiding) relegation and qualifying for international tournaments strengthen the cost push effects. Due to the free movement of labour, any regulations have to be implemented simultaneously across the whole of Europe. Achieving such unilateral agreement in 52 national leagues is difficult. European football has a history of powerful clubs that are not favourable to regulations that can reduce their advantages. A game-theory approach illustrates the mechanisms that lead European clubs to spend more resources than they can afford. Additionally, this part offers a new and hopefully interesting explanation, besides objective function differences, when it comes to understanding micro differences between US and European sports.

Hosting major sports events: the challenge of taming white elephants

While the literature on the economic impacts of major sports events has grown considerably over the years, the question of utilisation of venues built for these events after the party is over has received little attention. This article fills some of the gaps in the literature. By means of a Stadium Utilisation Index, it measures the post-event utilisation of venues that were constructed of significantly refurbished to host major sports events in the period from 1996 to 2010. It reveals some of the challenges facing the utilisation of the venues once ‘the circus has left town’. The regressions identify that private owned stadiums have a higher rate of utilisation than publicly built venues. The stadiums with the highest capacity tend to have higher utilisation. Last, but not least in terms of importance, stadiums in nations with a high degree of corruption had the lowest utilisation.

TV Sports Viewers - Who Are They?

Abstract This article reports on empirical data from Norway which indicates that popular sports contests are also popular TV programmes. Individual sports, such as biathlon and cross-country skiing headed the popularity list, while football and ski-jumping came joint third. However, although football (only) came third, a higher proportion of football fans were willing to pay for watching it on TV than fans of other sports. This can explain why football has been the most successful sport pay-TV in Europe. Those interested in football were more interested in cultivating their favourite teams/athletes than fans of other sports. The analysis also indicates that the uncertainty of outcome is not as important for peoples’ interest in sport as the literature in sport economics has argued.

COMMENTARY: Sports Broadcasting: Is it a Job for Public Service Broadcasters?-A Welfare Economic Perspective

The current policy of European public service broadcasters (PSBs) of acquiring expensive sports rights does not correspond with welfare economic principles. The Listed Events regulation prevents sports events of major importance for society from migrating to pay-TV broadcasters. Handing over expensive sports programs to commercial rivals will release resources that can be used on other activities, including programs that have characteristics of externalities and merit goods. Such a policy has been adopted by Australian PSBs.

The financial crisis in European football - a game theoretic approach.

Abstract This paper proposes an alternative view of classical sports economic labour market theory. Through simple direct game theory, we are able to show explanations other than the traditional marginal or average revenue equality equilibrium models of Quirk and El-Hodiri (1971). For instance, the choice of objective is important, however not vital. We build our approach directly on preliminary research by Solberg and Haugen (2010) and extend their relatively simple modelling and conclusions. Particularly, we focus on the claimed economic crisis of European football and propose more complex explanatory patterns than objective function choice for observed financial differences between US sports and European football.

Would European soccer clubs benefit from playing in a Super League

This article analyses whether European soccer clubs would benefit from joining a ‘Super League’. Based on revenue figures, it argues that for the richest clubs from the top soccer nations, the current combination of domestic and international leagues may well be the optimal economic solution, for it is not clear that a single European Super League would replace the revenue that the clubs would loose from ceasing to play in the current domestic and international tournaments. For clubs from some of the smaller soccer nations, a multinational league may well prove economically optimal, since the income they would loose from ceasing to play in their domestic tournaments would be moderate. However, due to their moderate commercial value to a Super League, it seems unlikely that these would be invited to join. A mini Super League, for example the proposed ‘Atlantic league’, could still prove to be a profitable and suitable alternative.