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Article
Publication date: 6 July 2020

Justin Andrew Ehrlich, Shankar Ghimire, Maroula Khraiche and Mian Farrukh Raza

The purpose of this paper is to analyze how the coronavirus disease 2019 (COVID-19) countermeasures will affect the financing of the North American leagues. In particular, we…

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Abstract

Purpose

The purpose of this paper is to analyze how the coronavirus disease 2019 (COVID-19) countermeasures will affect the financing of the North American leagues. In particular, we focus on the missed revenue from gate receipts for the Big Four leagues.

Design/methodology/approach

The authors forecast the 2020 revenue for each of the four major leagues under two scenarios: (1) expected revenue under the normal conditions of fans in attendance and (2) expected revenues in the absence of fans due to the countermeasures in place. Then, the authors calculate the loss in gate receipts as a difference in the revenue under fans and no-fans scenarios.

Findings

Based on the current estimates, the combined financial loss of the clubs from NFL, MLB, NBA and NHL is expected to be above 6.8bn dollars in gate receipts alone.

Practical implications

The findings are useful to the league management to prepare for the suboptimal financial situation.

Originality/value

To the best of our knowledge, this is the first study that explores the effect of the COVID-19 pandemic across the major league sports leagues in North America.

Details

Managerial Finance, vol. 47 no. 6
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 25 August 2020

Maroula Khraiche and Abhinav Alakshendra

In the last 50 years, every Olympics has experienced a major cost overrun. This paper explores the reasons for this cost underestimation and looks into the occurrence of the…

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Abstract

Purpose

In the last 50 years, every Olympics has experienced a major cost overrun. This paper explores the reasons for this cost underestimation and looks into the occurrence of the winner's curse. We also forecast the spending pattern of future host cities. Finally, we discuss the role of the International Olympic Committee in making the Olympic Games more efficient and sustainable.

Design/methodology/approach

The review of literature on the topic of constant cost overrun in the Olympic Games is surprisingly very thin. We comprehensively review the existing literature to understand the scholarship in this area. This paper also produces future cost trends for the host cities.

Findings

We argue that cost underestimation is resulting from the outdated bid process which encourages spectacle over efficiency. A no-bid environment is more efficient and allows the host city to negotiate effectively with the International Olympic Committee. The Los Angeles Games of 1984 was profitable and has shown reusing the infrastructure can save a lot of money which could help make the Olympic Games economically sustainable.

Originality/value

This paper adds to the existing knowledge on the cost overrun aspect of Olympics financing. We also forecast the cost trends of hosting future Olympics.

Details

Managerial Finance, vol. 47 no. 6
Type: Research Article
ISSN: 0307-4358

Keywords

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