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The Business of Baseball Syllabus -- Fall 2010

CLASS TITLE: The Business of Baseball

Class Number: MSBM 5014

Term: Fall 2010

Classroom: Brownson 217

Instructor Name:  Vince Gennaro

Email Address: gennarov@mville.edu

Required Text:

Gennaro, Vince (2007). Diamond Dollars: The Economics of Winning in Baseball:  Maple Street Press.

Course Description:

Explores all aspects of the $6.5 billion industry of Major League Baseball (MLB). Discusses MLB's business model and compares it to that of other professional sports. Examines the economic value associated with winning and losing teams and its implication on the dollar value of players. Discusses the implications of free agency, the amateur draft, sourcing of international players, and the player development system, on a team's business operations and finances. Examines the marketing of a baseball team, from promotional strategies to put fans in seats, to longer-term brand building initiatives. Explores contemporary issues such as, the internet resale of tickets and team-owned regional sports networks and their impact on the sport.

 Course Objectives:

Upon successful completion of this course, students will be able to:

  1. Understand the evolution of baseball as a business.
  2. Develop an understanding of the underlying economics of an MLB team, including the economics of winning and losing.
  3. Understand the various methods to place a dollar value on a player's services.
  4. Understand the role of the player development system for an MLB team.
  5. Develop an understanding of the various aspects of marketing of a baseball team, including the role of corporate sponsorships.
  6. Understand the importance and key levers that enable a team to deliver a positive fan experience at the ballpark.
  7. Understand the key strategic issues facing a MLB team and the leadership qualities necessary to be successful in a professional sports organization.
  8. Identify current and future trends in sports business.

Instructional Methods  

The Conflicting Opinion:  Opposing viewpoints are used throughout the professor's discussion of content to encourage critical thinking.

The Open-Ended Story:  A scenario is presented to the graduate students with the expectation that they will create a suitable ending.

The Guest Speaker:  An individual with expertise in a specific content area is requested to address the class.

The Debate: Graduate Students follow a set of basic guidelines to render their opposing standpoints.

Brainstorming:  The graduate students are challenged to contribute a variety of solutions to one of a series of concerns.  All replies are recorded.

Problem Solving: Students identify several solutions to a problem, and use a simple process of elimination to determine if one answer is more effective for the particular predicament.  The trial and error approach is a common system of elimination.

Round Table Discussion:  A supportive interaction in which graduate students are encouraged to offer explanations without fear of being criticized.

Panel Discussion:  Three or more students are selected to serve on a panel.  Each participant is given the same allotted time to present his or her standpoint before the larger group contributes additional facts or points of view.

The Case Study:  Individuals are provided with specific content related to people or events.  The information is used as a basis or rationale for class discussion.

Major Topics to be covered in this course:

  1. The History of Baseball as a sport.
    1. "How we got to this point"
  2. MLB Economics
    1. The financial framework within which teams operate.
    2. Revenue and cost factors.
  3. The Stadium Debate
    1. Public vs. Private funding
    2. Economic impact of stadiums
  4. The Economics of Winning
    1. Balancing the tension between winning and financial returns
    2. The reason fans and sponsors "pay" for winning
    3. Measuring the revenue and costs of winning
  5. The Dollar Value of Players
    1. Measuring value-the concept of marginal revenue product
    2. Incorporating risk factors into the valuation
    3. The "situational" nature of player value
  6. The Player Development System
    1. The origins of the minor league system
    2. Evaluating the cost of developing Major League talent
    3. Various "sources" of player

                      i.      The draft

                      ii.      Free agency

                      iii.      International

  1. Pay and Performance
    1. The impact of the Reserve Clause
    2. The arbitration process
    3. Free agency
  2. Stadium Operations
    1. The production of a MLB game
    2. Measuring the fan experience
    3. Promotional events-their cost and effectiveness
  3. Marketing the Team as a Brand
    1. Key attributes of a strong team brand
    2. Players as brand assets

10.  Corporate Sponsorships

a.  The value proposition for sponsors-what are they buying?

b.   The demographics and psychographics of the MLB consumer

11.  Valuing Fan Loyalty

                  a.   Establishing an emotional connection to fans

                  b.   The financial benefits of high fan loyalty

12.  Leadership of a Baseball Organization

a.       A strategic view of managing the business

b.      Emerging trends in managing an MLB team

13.   Contemporary Issues facing Major League Baseball

 Class Attendance: Attendance at class meetings is a fundamental requirement of this course. The courtesy of prior notification of an unavoidable absence is expected. Failure to comply with this policy will be reflected in the class participation component of the final grade.

Grades: Assignment due dates are expected to be honored. Failure to meet deadlines will result in a grade reduction. Letter grades may include a plus or minus. Final course grades will be determined on the following basis:

Final Exam                              30%

Mid-term Examination               25%

Class Participation                    20%

Other Assignments/Projects      25% 

 

Week or Date

 

      TOPIC/ACTIVITIES

 

ASSIGNMENTS-READINGS

Week One (8/30)

Overview, Introduction and Requirements

Purchase Textbook

Week Two (9/6)

NO CLASS-Labor Day

----------

Week Three (9/13)

MLB Team Economics

Ch. 1 & 2

Week Four (9/20)

Economics of Winning

Ch. 3

Week Five (9/27)

The Dollar Value of Players

Ch. 4, 5 & 6

Week Six (10/4)

Case Study-Derek Jeter Case

 

Week Seven (10/11)   

Guest Speaker (Columbus Day)

 

Week  Eight (10/18)

Midterm Exam

 

Week Nine (10/25)

The Player Development System

Ch. 7 & 8

Week Ten (11/1)

Sabermetrics-Strategic Roster-Moneyball

 

Week Eleven (11/8)

Case Study-Cliff Lee Case

 

Week Twelve (11/15)

Marketing the Team as a Brand

Ch. 9

Week Thirteen (11/22)

Marketing-Promotional Activities

Ch. 10

Week Fourteen (11/29)

Emerging/Future Issues in MLB

Ch. 11

Week Fifteen (12/6)

Final Exam

 

Guest speaker(s) to be added as available

 

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