John’s Sports Talk: The profitability of Playoffs

Professional sports are entertainment. Entertainment is driven by money. Therefore, it doesn’t take a math major applying the transitive property to figure out that professional sports are ultimately dictated by money.

In American sports, one of the biggest money generators are playoff systems. Playoffs bring excitement and intrigue to sports as the best teams are pitted against each other in a “win-or-go-home” scenario.

Playoffs can be great for fan interest and are an excellent way to reveal a champion from a selection of the best teams in any given year.  Playoffs are not perfect, however, as they can devalue the regular season by letting lesser teams sneak in only to get hot at the right time (see Ravens in Super Bowl run last year, and the Giants before that, and the Packers…).

[pullquote align=”right”]While playoffs may work just fine for the NFL, MLB, NBA, and NHL, some sports try too hard to get a piece of the playoff money-making pie and end up with disasters.[/pullquote]

While playoffs may work for the NFL, MLB, NBA and NHL, some sports try too hard to get a piece of the playoff money-making pie and end up with disasters. The most egregious offenders of this are the PGA Tour and NASCAR.

For those of you who don’t follow golf, Henrik Stenson won the PGA Tour’s “playoffs,” called the FedEx Cup, this past weekend with a record payout of $11 million. I wouldn’t expect you to know that, of course, because it got overshadowed by a relatively normal slate of NFL games. Golf is and always has been about winning majors; a player’s lasting legacy will not be remembered for how many FedEx Cups he won, even if it leaves a lasting impression on his bank account.

The most ludicrous “playoff” system is NASCAR’s Sprint Cup Chase.  In this system, the first 26 races are the “regular season” in which drivers try to position themselves in “the Chase”. Only 12 drivers enter the Chase, and compete for the championship over the last 10 races after the points reset. To me this is a horrible way to determine who the best driver is for any given year.  In the nine years of the Chase’s existence, the driver who had the most points if all races are taken into account evenly has won only four times. This means the best and most consistent driver over the course of the year wins less than half of the time. It got even worse this year as teams fighting for Chase spots tried to cheat by having teammates artificially alter the course of a race due to increased pressure from sponsors. The scandal has left a black eye on NASCAR and its Chase and it may take awhile for them to recover.

Maybe I am being too much of a sports purist when I wish championships were determined fairly with the best possible system in place for each sport to determine the best team.  Though I must admit, I watch sports because I am entertained — it would be hard to care if I were bored. Obviously there are enough people who care about the FedEx Cup and the Chase to make them profitable. Until that fact changes, these playoff systems are here to stay; it doesn’t take a finance major to figure that out.