Date of Graduation

5-2012

Document Type

Thesis

Degree Name

Bachelor of Science in Business Administration

Degree Level

Undergraduate

Department

Economics

Advisor

Stapp, Robert B

Reader

Bristow, Susan

Abstract

What kind of significance do sports serve? This research project will investigate further into one of the many different answers to this broad question, specifically in the economic sense. Exactly what kind of impact can a single sports team have on a single city’s economy? I will investigate just what a sports team can mean for a city’s financial status as a result of its sports-stimulated economy. What is the best way to analyze this impact? For the purpose of this research project, I will take into account the economic state before and after the National Basketball Association’s incorporation into nearby Oklahoma City, Oklahoma. The city did not have any major sports team (NBA, NFL, MLS, MLB, etc) until 2008, a mere 4 years ago. How does our current economic crisis affect the sport’s overall effect? Using the induction of the NBA’s Thunder to Oklahoma City is significant because it measures the abovementioned economic impact in a homogeneous economic environment - one that is characterized as a recession. In addition, the fact that the city does not have any other major sports team will allow for the uncovered results to serve as a better representation of a sports team’s impact on a city’s economy. When a major sports franchise arrives to an area’s city limits, the effects can be measured in a multitude of ways. The professional basketball season, in its entirety, will span 82 regular season games with an additional amount reflected through a city hosting one or several rounds of the playoffs. Those additional games can range anywhere from 7 to 28; prolonging the season to an impressive 110 games. Wherever the number of games played in a season falls, it does not change the fact that the NBA is a multi-billion dollar industry that spans across the globe. With the current NBA schedule, each NBA city can host 41 regular season games and somewhere between 2 and 16 extra home playoff games. It should be noted that we will be focusing on the games played at home. Although the season can range between 82 and 110 games, each NBA city will only play host to between 41 to 57 games. Furthermore, the numbers found for this study will be representing a market in which there is a successful playoff-caliber team with one of the league’s most popular superstars in Kevin Durant. So, since there are 16 teams out of 30 that make the playoffs, this research will be accounting for a market that qualifies in the upper 50%. Oklahoma City is also considered by the NBA to be a “small market economy”, meaning it does not operate on a large, exorbitant budget had by the likes of the Los Angeles Lakers or New York Knicks. So, this research will not feature a struggling team or a franchise that is rich in history and awards. Taking factors such as success, history, budget, and star-power into account show that Oklahoma City’s basketball organization is a good choice as a middle of the pack franchise. As such, it can serve as a nice study to extrapolate to the other NBA-cities to arrive at a conservative figure for finding the greater macroeconomic impact of the National Basketball Association on the American economy should more interest in this subject lead to further research.

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