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Authors

Ian A. McLin

Abstract

The four major American professional sports leagues—the MLB, NBA, NHL, and NFL—are wildly popular, but the leagues fail to capitalize fully on their success because they are organized in a largely inefficient manner. By organizing as unincorporated non-profits, leagues forgo their ability to raise capital via investors, forcing taxpayers to bear the burden of league investments such as new stadium construction. Further, the current organizational model creates a collective action problem, as self-interested team owners focus their support on actions that benefit their own franchise and leave ineffective commissioners in power.

A solution to these problems is for a professional sports league to incorporate and organize as a publicly traded company. The application of the corporate model to the sports world is not a new concept—several individual franchises have “gone public” over the years. But, because of concerns arising from the fiduciary duties of care and loyalty, the corporate model is much more viable for an entire league rather than an individual team.

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