Monday, December 7, 2009

Why L.A. has no NFL team

[Vanderbilt sports economist John] Vrooman points out that the [NFL] likes to leave one prominent city without a football franchise, “like an empty seat in musical chairs”, so that teams in other cities can threaten to move if they do not get their way. This invariably prompts state and local governments to contribute public money to help teams that replace old stadiums with new ones. Los Angeles residents have been scratching their heads about why the country's second-largest city has had no football team since 1994. But the NFL has made far more money from new stadiums that have been built using Los Angeles as a threat, says Mr Vrooman, than it could have made by actually putting a team there.
--The Economist on the musical chairs bargaining strategy, a manifestation of monopolistic supply restriction

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