While the theory of economics can be studied in its raw form, there are applications of it that prevail beyond the fundamental notion of “economics.” A principal theory in economic models is that firms maximize profits in competitive markets. Similarly, in the sports world, such maximization may be accomplished through a coach maximizing his team’s probability of winning through sports trades. “A trade in sports is most commonly an exchange of ‘goods’ between two teams.” An example of a trade in sports is during the NFL Draft, where it is typical for teams to conduct trades with one another in exchange for rights to draft picks. “By definition, trade is supposed to be creating value by moving goods (draft picks) to the people (teams) that value them the most.” There is another form of trade in sports, however, that we do not see quite as often as the annual NFL draft pick. A fan, for example, who receives or catches a ball that is a token of an athlete’s milestone epiphany in his or her career, can be in an advantageous position to initiate the trade of that memorabilia in exchange for a substantial, monetary demand.
This post was originally published on the Cardozo Arts & Entertainment Law Journal website on November 17, 2021. The original post can be accessed via the Archived Link button above.
Leon, Courtney, "Tom Brady Just Threw His 600th Touchdown Pass: What’s the Catch?" (2021). AELJ Blog. 303.