This thesis looks to investigate the effect of player talent distribution on competitive balance in the National Basketball Association (NBA). In the thesis, player talent distribution is measured using the standard deviation of win shares throughout the league and competitive balance is measured using dHHI. This thesis finds the expected result that a larger distribution of player talent amongst the league leads to better competitive balance. Additionally, this thesis concludes that the salary cap is insignificant in its effect on competitive balance in the NBA.
Previous sports studies on competitive balance have used many different economic tools to determine whether a league is balanced or not. In this paper the Herfindahl- Hirschman index is used to measure competitive balance in the National Hockey League. This study was done using the year before the lockout (2003-2004) as well as every year post lockout up to last year (2010-2011) in hopes of seeing whether competitive balance in the National Hockey League has increased since the 2004-2005 lockout. The numbers show that since the lockout competitive balance has increased in the National Hockey League with the major factors being offensive talent, defensive talent, and the lockout.
In the year 2005 the National Basketball Association (NBA) implemented a new policy to its collective bargaining agreement (CBA). This new policy, Article X, said that a player entering the NBA draft must be at least 19 years old and a calendar year has passed since his graduation from high school for him to be eligible to enter the NBA Draft. This new policy forced many talented high school athletes to attend one year of college before entering the professional game, hence the “one and done rule.” This influx of talented freshman into college basketball may have shifted the competitive balance of NCAA Division I men’s basketball. A cross sectional time series analysis is used to investigate this claim, that the introduction of Article X affected the competitive balance of college basketball. The deviation of the Herfindahl-Hirschman Index of average conference winning percentage is used as the dependent measure of competitive balance in the regression equation. The main purpose of this study is to discover whether competitive balance in collegiate sports is affected by policies of their professional counterparts.
In 2000, three seasons after the institution of a revenue sharing plan, Major League Baseball commissioned the Blue Ribbon Panel to assess competitive balance within the league. Their report found that small market teams are at a considerable disadvantage due to the larger revenue bases of teams located in more heavily populated areas. However, these results have often been challenged. This thesis builds upon existing models in an attempt to determine the extent to which market size and local revenue independently affect competitive balance. Additionally, it seeks to analyze any effects of baseball's revenue sharing plan on competitive balance. While the findings support the claim that revenue sharing enhances competitive balance, they fail to establish market size as a positive determinant of local revenue.