STRUCTURAL CHANGE, COMPETITIVE BALANCE, AND THE REST OF THE MAJOR LEAGUES

Abstract

Analyzing North American major sports leagues other than baseball, we find no break points in competitive balance time series corresponding to rule changes, the draft, free agency, salary caps, or labor disputes except for the 1998 basketball lockout. Some expansion and team relocation correspond with break points. Mergers that do correspond with break points all enhance competitive balance. But not all expansions, moves, and mergers correspond with break points. Remaining explanatory challenges include a general negative trend in competitive balance in basketball and the occurrence of a break point in football, 1976–1977. ( JEL C32, L83)