The Economic Effect of Discrimination in Sports Franchises

The contemporary sport is rapidly progressing and in the course of its development it evolved from an amateur competition into a perspective industry which can produce a profound impact on the development of economy on the local level as well as on the national level. At the same time, the evolution of sports was accompanied by its growing professionalization and commercialization. In actuality, this means that sports evolved from an ordinary entertainment or hobby into a serious business where there remains little room for non-commercial relations. To put it more precisely, the contemporary sport makes sportsmen employees to earn for their living performing their sports while companies that are involved in the organization of sport competition, functioning of sport clubs, provision of sportsmen with essential equipment, nutrition, etc. are often highly dependent on the economic profits from sports events.

In such a situation, sports franchises play a very important role in the development of sports because nowadays it is the commercial or economic needs that define the development of sports and not the actual needs of sportsmen or sports. In fact, the high results of sportsmen are basically motivated by some financial profits rather than by the competitive nature of sports. At the same time, evolving from a fair, democratic sport available to all people, the contemporary sport became available only for those who could afford the high competition and who could perform perfectly on the professional level while amateur sports is often viewed as secondary to professional sports. In this regard, the discrimination in the contemporary sports is obvious because even such a distinction between amateur and professional sports reveals the enormous gap between these two directions in the development of sports, while the discrimination within both amateur and professional sports are even more serious. Basically, the discrimination in the contemporary sports concerns racial and gender issues which produce a profound economic impact on sports franchises and, in this regard, it is not really important whether it is a professional or amateur sport. The economic effects of discrimination in sports are similar for amateur and professional sports and, as a rule, they lead to the deterioration of the position of the discriminated sportsmen as well as it can undermine the position of the sports franchising in the result of the deterioration of the performance of sportsmen and possible deterioration of relationships with fans and supporters.

Female discrimination

Speaking about the discrimination in sports and its economic effects on sports franchises, it is primarily necessary to point out that psychological or moral effects of discrimination may be as significant as factual and material effects of discrimination because sports and the performance of sports franchises is highly dependent on the performance of sportsmen. The latter, in its turn, is highly dependent on the psychological state of a sportsman or relationships between members of a team. In such a situation, any sort of discrimination can undermine the positive performance of a sportsman and affects the normal functioning of the entire sports franchises.

In this respect, female discrimination is particularly noteworthy because sports seem to be the most conservative field where the attitude to females is extremely biased and prejudiced. At any rate, many fans and supporters as well as sports authorities are extremely skeptical about females in sports, though their attitude to females in sports is based on stereotypes which have practically nothing in common with the actual potential, capabilities and perspectives of females in sports (Lopiano, 2006). It should be said that traditionally the biased attitude to females in sports prevented them from an opportunity to enter and practice their favorite sports.

Moreover, as a rule, even if females managed to enter their favorite sports, they could hardly practice it on the professional scale. In actuality, this means that females could basically practice their sports as amateurs, while on the professional level they could hardly achieve outstanding results in economic terms. Even though their performance could be good and their sport achievements could be really impressing, it was and still is not sufficient to make the female sports economically profitable that means that females cannot become professional sportsmen, in spite of their good or even excellent performance (Camerer, 2003). The reason is quite obvious ”“ the historical discrimination of female sports which make it economically unprofitable and, therefore, females sports does not attract investments and it is not attracting to sports franchises.

Basically, such a position of females is apparently discriminatory and leads to multiple negative economic effects influencing not only sportswomen but also sports franchises. First of all, it should be said that females cannot earn for their living practicing their favorite sports. In this respect, it is necessary to underline that often the wages of females are consistently lower compared to the wages of males. Actually this trend may be observed not only in sports which are traditionally considered to be as male sports, but also in sports where females were traditionally very successful. For instance, tennis, being one of the most successful areas where females managed to achieve prominent successes, was and partially remains affected by the female discrimination because the earnings of female tennis player are lower compared to the earnings of male tennis players, though in recent years the gap has narrowed substantially. At the same time, it is possible to remind about such traditionally male sports as hockey or boxing, for instance, where wages and earnings of females are practically incomparable to those of male sportsmen (Leeds and Von Allmen, 2003). Obviously, such a situation does not stimulate the growth of the female interest to sports and it can produce a significant but negative effect on sports franchises. In fact, the lack of interests of female to sports limits consistently the potential of sports franchises to develop female sports. For the lack of talented and new females in sports does not stimulate the competition and, therefore, the progress of female sports, it is very difficult for sports franchises to promote teams or leagues of females and, as a rule, the significant investments are made only in individual females who have reached significant successes in their sports. In such a situation, the enormous potential of the development of the female sports remains underdeveloped and sports franchises lose not only time but also good perspectives for the increase of their profits from female sports.

Furthermore, it should be pointed out that the female sports may potentially have a large audience which also remains unnoticed by investors and sports franchises. In fact, females constitute about a half of the potential audience of sports events. Consequently, sports franchises could count for this enormous part of potential supporters and fans that would readily pay for a chance to attend or watch a sport event, but often female remain indifferent to sports because it is not promoted effectively since females are not viewed as a target audience of many sports franchises and, in addition, females cannot see sportswomen and this is why they may view sports as another area where they are discriminated (Lopiano, 2006). The latter naturally engenders the rejection of sports at large, while female sports is rather viewed as exotic than a really professional and interesting sports. As a result, sports franchises do not fully use the potential audience and they do not receive those profits this audience can bring them.

It is also necessary to remember about such a serious problem as sexual harassment which also affects dramatically the development of female sports and prevent many female from entering sports and practicing it on the professional level. In fact, the cases of sexual harassment and female discrimination are not rare though such cases a substantially less widely spread nowadays than they used to be in the past. The situation has started to change for better under the impact of the legislative changes that have been implemented within the recent years and in the late 20th century.

For instance, it is possible to name Title IX which guarantees the protection of women against gender discrimination in the process of recruiting and employment (Protect Title IX to protect diversity at work, 2003). This means that the legislation forbids the discrimination of females because of their gender. In other words, this legal act provides females with equal opportunities to get employed compared to men.

However, it should be said that such legislative changes does not always improve the position of females since, in spite of the formal equality, the attitude of employers to females is still quite biased. At any rate, the formally equal opportunities of females still cannot make female sports more attractive for sports franchises until employees remain biased. As a result, this leads to the lack of investments into the development of female sports and its promotion. In such a situation, the interest of the audience to female sports is still low and, therefore, it cannot bring as high profits as male sports.

On the other hand, the problem of female discrimination, including the problem of sexual harassment contributes to the deterioration of the performance of females in sports because such a psychological pressure cannot fail to affect their performance. It proves beyond a doubt that the psychological state of a sportsman is very important for the normal performance while sexual harassment and discrimination makes females feel inferior compared to male sportsmen that naturally undermines their psychological state and they cannot show the best results in sports (Leeds and Von Allmen, 2003).

In such a way, the female discrimination in sports lead to the deprived position of female in sports that results in lower wages and lower interest of females to sports. At the same time, sports franchises cannot maximize their profits in female sports because they cannot use the potential of females in sports and they cannot attract the large audience to the female sports, though, objectively speaking, the lack of the interest of the audience to female sports is basically determined by weak and insufficient promotion of female sports. Consequently, the profits of both females and sports franchises are substantially lower compared to male sports and the reasons is the underestimation of the potential of female sports and the discrimination of females in sports.

Racial discrimination

Racial discrimination is another important problem of the contemporary sports which is not less serious than the problem of female discrimination. It is necessary to underline that this problem affects dramatically the professional growth of sportsmen and, at the same time, produces a profound impact on the development of sports franchises. In actuality, speaking about racial discrimination it is necessary to underline that basically its effects are negative and they can deteriorate consistently the market performance of sports franchises. On the other hand, it is also important to point out that racial discrimination can bring certain benefits to sports franchises but these benefits can hardly outweigh the economic losses resulting from racial discrimination.

On analyzing this problem, it is primarily necessary to underline that racial discrimination is widely spread in the contemporary sport though basic trends are rather positive than negative because gradually the situation starts to improve and the discrimination becomes less and less significant. At any rate, the current situation in sports is absolutely incomparable to the situation in the mid-20th century, when non-white sportsmen were practically deprived of an opportunity to practice sports and benefit from it as much as white sportsmen did (Quirk and Fort, 1992).

At the same time, the development of sports inevitable contributed to the gradual decline of racial discrimination though it is impossible to speak about its total elimination. The reason for such a change is closely related to the economic effects of racial discrimination in sports franchises. One of the major outcomes of the racial discrimination is the lower wages of discriminated sportsmen. At first glance, such an effect of discrimination may be highly profitable for a sport franchise, especially, taking into consideration the current wages of the contemporary sportsmen, which are unprecedentedly high compared to the past. In such a situation, when sportsmen sign contracts for millions of dollars, it is quite natural that the discrimination of a sportsman can save considerable costs for a sports franchise.

However, such a presumably positive effect of racial discrimination, as well as discrimination at large, cannot cover the actual and potential losses from the discrimination of sportsmen, especially sportsmen performing at the top level. It is necessary to underline that the discrimination does not contribute to the improvement of the performance of a sportsman. Obviously, a discriminated sportsman will more likely to deteriorate his performance if he/she realizes the fact that his/her wage is consistently lower than the wage of another sportsman whose performance is equal or even worse than his/her own (Camerer, 2003). As a rule, this makes a sportsman willing to find another employer or improve the contract. In this respect, it is necessary to realize the fact that such a situation can create undesirable tension within the sports franchise because the negotiation with a sportsman may be accompanied by significant complications if he/she is unwilling to remain in inferior position compared to other sportsmen. As a result, the sports franchise is forced either to improve the conditions of contract annihilating the possible benefits from discrimination or keep on discriminating the sportsman that may result in the refusal of the sportsman to prolong the contract or even the strike of sportsmen. Obviously, neither of such complications can produce a positive impact on the development of the sports franchise and its market performance. In fact, the necessity to substitute a sportsman or the negotiations in case of strike will inevitably lead to the additional expenditures of the sports franchises to cover the loss of a sportsman or losses from the strike.

Moreover, the loss of a sportsman in the result of his/her discrimination may deteriorate consistently the relationships of the sports franchise and the fans or supporters. The latter play a very important role in the contemporary sports because it is fans and supporters that are the major source of profits of sports franchises. At any rate, it is fans and supporters that are the target customers of any sports franchise. Obviously, if a popular sportsman has certain problems with a sports franchise, in the result of discrimination, the audience can support their favorite sportsman and force the sports franchise to change the attitude to the sportsman because the potential losses from the negative attitude of the audience to the sports franchise can outweigh possible benefits from the saving costs on discrimination of the sportsman (Leeds and Von Allmen, 2003).

However, it is necessary to realize the fact that there are a lot of sportsmen that are not very popular and that are not super stars, but, instead, they can perform pretty well so that a sports franchise can discriminate them without any pressure from the part of the audience. But even in such a situation the benefits from the discrimination of sportsmen is quite doubtful and economic effects of the discrimination will, in all probability, be negative. In this respect, it should be said that the discrimination of sportsmen inevitably leads to the growing tension in relationships between sportsmen and the sports franchise as well as between sportsmen. In fact, such a situation is particularly dangerous in team sports such as football or baseball, for instance. The intolerance and discrimination from the part of a sports franchises leads to the growing inequality between players. As a result, the discriminated sportsmen feel their inferiority, while the rest of the team feel its superiority compared to discriminated sportsmen (Camerer, 2003). Naturally, this leads to the conflicts between sportsmen and misunderstanding. At the same time, it also contributes to the deterioration of the performance of a team because the privileged sportsmen feel that they are a caste of untouchable and, therefore, they do not need to improve their performance and show better results, while discriminated sportsmen feel that all their efforts to improve their position will be in vain because they are discriminated and even though if their performance may be better it will not increase substantially their profits compared to the rest of the team. As a result, the team cannot improve its performance that threatens to its popularity among fans.

In such a situation, a sports franchise can have substantial financial losses because of the poor performance of sportsmen, decreasing popularity and low interest of fans to the team. Consequently, the profits of the sports franchise decrease substantially because of all these problems which are determined by the discrimination of some sportsmen. This is why it is quite logical to presuppose that the elimination of discrimination could decrease the risk of conflicts within the sports franchise consistently, including conflicts between sportsmen and between discriminated sportsmen and the employer. The lack of conflicts could improve the psychological state of sportsmen, stimulate them to improve their performance that will naturally attract large audience. In such a situation, the sports franchise can benefit consistently from the growing popularity and amply use the popularity of sportsmen to increase its profits from sales and advertisement.




Thus, taking into consideration all above mentioned, it is possible to conclude that the problem of discrimination in the contemporary sports is still relevant, though the substantial improvements concerning the elimination of discrimination in sports have been made in recent years. Nevertheless, the discrimination is still a part of the life of many sportsmen and sports franchises. Basically, the discrimination is based on the biased and prejudiced attitude of sports franchises to sportsmen. At the same time, often discrimination is viewed by sports franchises is viewed as a possibility to save costs on wages paid to sportsmen since discriminated sportsmen, as a rule, receive lower wages. However, the negative economic effects of the discrimination may outweigh all its possible benefits. In this respect, it should be said that the discrimination leads to the deterioration of the relationships between sportsmen and sports franchises, it also deteriorates relationships between sportsmen, and the psychological state of discriminated sportsmen can deteriorate consistently. As a result, the performance of sportsmen is far from perfect that decreases their popularity among the fans as well as the popularity of sports franchise at large. The latter naturally leads to the decrease of profits and deteriorates the market performance of sports franchise.

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