Basic Baseball Economics

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It’s spring. Time for baseball. Time for a lesson in economics.

As part of an economics lesson, ask students whether they think baseball teams make money, for instance, or whether players are overpaid. You’re likely to get some interesting responses. Then, have them work in groups to figure out how they would determine the answer, using the 21st century skills of critical thinking, collaboration, and initiative. In the process, encourage students to apply the economics vocabulary and concepts they have learned. Students will be exploring “production, distribution, and consumption,” one of ten social studies themes identified by the National Council for the Social Studies.

 

“In exploring this theme, students confront such questions as:

What factors influence decision-making on issues of the production, distribution and consumption of goods?”—National Council for the Social Studies.

Tailoring to the Needs of Students

Advanced students may need no more information before getting to work researching whether teams are profitable. If scaffolding is needed, ask students to research how many seats there are in the stadium of their favorite team. Then have them look online to figure out the average ticket price and use this information to calculate how much revenue a team makes from ticket sales on a typical evening when the team is playing. For instance, 42,741 people can sit in Detroit’s Comerica Park. If the average ticket sells for $30, the Tigers would earn $1,282,230 for a sold-out game. Have students estimate how much money an average fan spends on food and souvenirs to calculate the total earnings, and multiply this times the number of games that are played.

At this point savvy students should recognize that baseball teams have other revenue streams. For example, television and cable networks pay for the right to televise games. Companies buy advertising placed around the stadium. Stores sell licensed jerseys and other gear. Ask students to calculate how much they think teams make from these licensing agreements. Then, encourage them to research the answer.

The Other Side of the Ledger

Right about now, kids might be thinking owners have it made. In addition to getting the best seats in the stadium, you would make a bundle, right? Owning a team might be even better than being the star pitcher.

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At this point you’ll want to remind students to think about the expenses of a team. In addition to those exorbitant salaries of the players themselves, there are a lot of people who need to be paid. Managers, trainers, ball boys. And what about the groundskeepers?Security? Ticket takers? Ushers? All of these people need to be paid from the money that the sports teams earn. Challenge students to identify the various groups of people who need to be paid.

There are also expenses related to the upkeep of the baseball stadium, training facilities, and offices. See if students can think of other expenses that a baseball team might have. Again, challenge teams to see who can come up with the best estimate of how much their favorite team makes.

One of the best learning opportunities might be in exploring differences in the assumptions of different groups. For instance, how have different groups factored in concessions? Does the team make money from concessions? How much? Have groups taken into account changes in attendance? Crunching the numbers is the easy part. It’s figuring out what factors to include that makes economics interesting.

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2018-06-18T20:04:49-05:00 April 28th, 2016|Economics, Social Studies|0 Comments

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