Do you question why professional athletes are paid so much money? This lecture delves into labour markets of the professional sports industry, starting with a coverage of both demand and supply in the basic setting, and then considering how the status quo differs in situations that represent common market restrictions in sports, such as 'monopsony power' of firms (teams) leading onto common competitive balance policies, like salary caps and the draft. We also consider some nuances of certain individualistic sports, such as tennis and golf, in which 'rank-order' tournaments are common, and in which 'superstar' effects can arise.

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