Fans Spending: Relationship Between Monopoly Market and Duopoly Market in Sports

Fans Spending Relationship between Monopoly Market and Duopoly Market in Sports
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Fans Spending Relationship between Monopoly Market and Duopoly Market in Sports
The sports in various cities have different market structures. While some cities’ sports are run in monopolistic environments, others operate in the duopoly markets. Rascher et al., 2019 asserts that in a monopoly sports market, the teams and fans depend on one league or team to make all the sports decision in the city. The lack of rivalry puts all the bargaining power in their hands of the monopolist. Contrary, in the duopoly sports market, the team and fans have two clubs that compete to ensure they are the most preferred in the city (Araz et al., 2020). In such a case, bargaining power is shared amongst fans and the league cartels hence the possibility of more enjoyment and fair prices for the franchise. Che et al. (2017) claim that the duopoly market allows each team to have some monopoly powers with regulations that prevent them from going overboard. As the monopolists increase the prices to maximize profit, the duopoly always competes to increase the enjoyment targeting to attract fans, teams, and players to maximize profits. The paper analyzes the fan spending relationship between the duopoly market and the monopoly market. It uses the Utah Jazz –monopoly and Lakers and Clippers duopoly to clarify the relationship.
The spending relationship of fans in the monopoly market differs from their spending relationship in the duopoly market. The total bargaining power in the hands of the monopolist gives them the right to overprice the tickets and sports franchise to maximize profit. The greed of earning more makes the monopoly cartels take advantage of the fans and overcharge them as they will. According to Rascher et al. (2019), the leagues even become crueler by blackmailing both the local government and the fans to move the club to other cities if they lack cooperation. They use the monopoly power to get tax subsidies to inform of counseling stadium tax payment and lower rent prices. Due to subsidies, the tax ends up to the fans increasing the fans' spending amount in such a market. Moreover, controlling the broadcasting rights by the monopolist also affects the spending relationship of fans in a monopoly market. It controls the rights by imposing high prices on the right to participate in live coverage of the games (Araz et al., 2020). The high costs of broadcasting rights lock out some small media stations find it hard to afford. The small numbers of sports stations that afford to air the sports end up redirecting the subscription charges' costs directly.
Contradictory, the fan spending relationship in the duopoly market is different from the monopoly market. The presence of two dominating teams introduces the competition factor in the games, thus transferring some of the bargaining power to the fans and players (Rascher et al., 2019). The competing teams have the task of placing convincing the fans to prefer them. The shared powers push the teams to allocate ticket prices that favor the fans. The franchise, in such cases, is cheaper, and the broadcasting rights more affordable. The codependency of the two teams pushes them to improve their standard of enjoyment to capture fans continually. In such cases, the fans are not exploited in terms of pricing. They get to watch the teams they love at a fair price.
The comparison between The Salt Lake City Utah Jazz monopoly and Los Angeles Lakers and Clippers duopoly gives an insight into the fan spending relationship. Salt Lake City's monopoly in sports affects the Utah Jazz fans regarding their spending (Che et al., 2017). Despite the support they get from fans, they still take advantage of their loyalty. Monopoly in the team gives the NBA league advantages like subsidies of sports equipment that allow taxpayers to spend more on sports to enable the local city government to break even. Moreover, the NBA Utah Jazz monopoly gives them the greed to maximize the profits at the expense of the fans. The league creates few expensive tickets. The few capable fans get to afford to lock out other fans. They exploit the fans' willingness to pay for their teams to extract money from them.
In contrast, the duopoly in Los Angeles Lakers and Clippers follows an entirely different pricing strategy. The competition between the Lakers and Clippers in Los Angeles gives the fans the chance to choose the team, giving them more excitement (Che et al., 2017). The competition in teams shares the bargaining power with the fans. The fact that people have grown watching both the two teams playing creates a conflict of interest that only the teams can solve. The team that gives the fans a cheaper and more exciting deal attracts more followers than the others. The competition makes the team codependent, pushing them to expand more for the fans' sake.
The data collection table and the graph show the ticket prices in different years. The relationship shows clearly that the increase or reduction of the monopoly prices will always have a corresponded lower duopoly ticket price. The comparison shows that the monopolists will always take advantage and overprice the fans despite the constant variants. The regression gives a prediction that maintains high prices in monopoly and low prices in the duopoly.
In conclusion, the bargaining power of the monopoly market has disadvantaged sports in many ways. Power gives monopolists the right to exploit the fans due to their willingness to support the games at any cost. The monopoly increases the prices at will, thus allowing the fans to spend more than they should. The creation o...