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JCH Joness article The Economics of the National Hockey League 1969 purpose is to explain through simple micro economics that the prime motive of professional hockey team owners is profit maximization The owners argue that their main interest is for the love of the game not the financial benefits of owning a professional sports franchise and to avoid government regulations such as the Combines Act note 1 An article written in 1982 by JA Schofield entitled The Development of First Class Cricket in England states the behavior of sport cartels Three hypothesises are used to explain the behavior described by Schofield number two being developed by JCH Jones 1969 1 The profit maximization hypothesis 2The joint profit maximization hypothesis that the entire cartel league strives for This hypothesis does not incorporate non profit objectives that influence group behavior 3 The utility maximization model that allow for many possibilities usually compromising arguments such as the success of the team at a given year and paid attendance for the teams venue By explaining the frame work of a professional sports league Jones introduces us to factors that make an organized league function which seems quite familiar to any other monopolistic markets Since no team can create any revenue by themselves they must form a coalition with another club to produce a profit generating output namely a hockey game Other clubs enter this coalition thus creating a formal league which we call the National Hockey League Jones then states how revenue is generated in the NHL and how it is affected by certain factors A theoretical model of the NHL is created by Jones with all things being equal creating an equilibrium amongst all clubs The model is then adjusted to real life variables that turns his theoretical model into what we know as the NHL Jones variables includes the incentive for teams to win this being the Stanely Cup different quality of players the
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