Case study 1.3: Equal prize money in tennis A British cabinet minister has now stepped into...

Case study 1.3: Equal prize money in tennis A British cabinet minister has now stepped into the debate regarding equal prize money at Wimbledon, the British Open tennis championships. Patricia Hewitt (no relation to the men’s winner), the Trade and Industry Secretary, announced that it is ‘simply wrong’ that the winner of the men’s singles should collect £525,000, while the women’s winner should receive only £486,000, when they had both worked equally hard. The debate regarding prize money is not new, and has aroused some strong feelings in the last ten years. The 1996 men’s champion, Richard Krajicek, commented in 1992 that most women players were ‘fat, lazy pigs’ who deserved to win less. This attracted a storm of protest from many supporters of women’s tennis, and these supporters and lobbyists have been successful in gradually reducing the differentials in prize money. Tim Henman, the British number one player, attracted criticism in 1999 for accusing female players of being ‘greedy’ in demanding more prize money in ‘Grand Slam’ tournaments. The situation in 2002 was that in the four ‘Grand Slam’ tournaments the prize money was equal for men and women at both the US and Australian Opens, but interestingly the women’s prize money was only half that of the men’s at the French Open. Let us consider some of the main arguments that have been put forward both for and against equal prize money: FOR 1 Women have to train just as long and hard as men. 2 The ball is in play longer in women’s matches, because the game involves more rallies and less ‘serve and volley’ tactics, according to research by the Women’s Tennis Association. 3 Female stars are just as popular with the crowds as male players. 4 Unequal pay is an example of unfair discrimination, which in many countries is illegal. AGAINST 1 Men have to play the best of five sets, while women only play the best of three. Therefore men play longer. Research from Stirling University shows that, on this basis, men earn less. The 1998 men’s singles champion, Pete Sampras, earned £26,270 per hour, compared with £42,011 per hour received by the women’s champion, Jana Novotna. 2 Competition at the top of women’s tennis is less stiff, allowing female stars to compete in the doubles more easily, and win two prizes. The combination of singles and doubles prizes for women would exceed the singles prize for men. 3 Male players attract bigger crowds. 4 Women are not as good as men. The last point has also raised argument, since it is difficult to make any objective evaluation. On a purely objective measure, the top female stars serve nearly as fast as the top male players, but obviously there are many other factors which make a top tennis player apart from a fast serve. In a recent television interview John McEnroe, never one to shy away from controversy, opined that the top female seed at Wimbledon in 2002, Venus Williams, would only rank about number 400 in the world among male players. Adding another dimension to the debate is sponsorship income. Anna Kournikova has never Nature, scope and methods 17 Summary 1 Managerial economics is about the application of economic theory and methods to business decision-making. 2 The term business must be considered in very broad terms, to include any transaction between two or more parties. Only then can we fully appreciate the breadth of application of the discipline. 3 Decision-making involves a number of steps: problem perception, definition of objectives, examination of constraints, identification of strategies, evalua- tion of strategies and determination of criteria for choosing among strategies. 4 Managerial economics is linked to the disciplines of economic theory, deci- sion sciences and business functions. 5 The core elements of the economic theory involved are the theory of the firm, consumer and demand theory, production and cost theory, price the- ory and competition theory. 6 A neoclassical approach involves treating the individual elements in the economy as rational agents with quantitative objectives to be optimized. 7 Positive statements are statements of fact that can be tested empirically or by logic; normative statements express value judgements. 8 The application of economic principles is useful in making both of the above types of statement. 9 A theory is a statement that describes or explains relationships between phenomena that we observe, and which makes testable predictions. won a major tournament; she is currently ranked number 55 in the world. Her career total prize winnings amounted to just under £3 million at the end of 2001. However, it is estimated that she has accumulated around £50 million in sponsorship income, mainly from Adidas, the sportswear supplier. Although sponsorship income tends to be directly related to the talent of the player, as reflected in computer rankings, there are obviously other factors that are relevant. However, one factor that is important here is that sponsorship income is determined much more by the market forces of demand and supply than is the amount of prize money in a tournament. The amount of tournament prize money at Wimbledon is determined by the management committee of the All England Club. What do the public make of all this? In a recent television poll by the BBC the viewers calling in were nearly equally divided: 51 per cent thought the men should receive more, 49 per cent thought prize money should be equal. Questions 1 Do the observations by Patricia Hewitt make any sense in economic terms? 2 How relevant is hard training to determining prize money? 3 How relevant is length of playing time to determining prize money? 4 Why is sponsorship relevant to the prize money debate? Is it a good idea to relate prize money to sponsorship? 5 Can you suggest any way of using economic forces to determine prize money? What about having an ‘open’ championship where men play women, with no distinction between men’s singles and women’s singles?

Homework Answers

Answer #1

1. YES , his observation does make sense as there is more about the sponsorship in the game by the management committee as they show the money initiated by the which company and how much they are paying . And public do think that prize money is less and some thinks that the prize money is equal but it totally dependent over the amount of fund they are having for the match and they sponsors money and taking out some as there profits .

2. For a player to win a match they have to do hard training and hard labor over it and to receive some thing that is not useful for the player in any way is better to get the amount paid to them as a reward for there winning so that they can be able to invest that money on the area of there interest or there need . Yes we can not measure a win with some amount of money by as per rule to offering prize its a better option in respect with others .

3. No , the length of the playing time can not measure the amount of prize its not relevant as every game is tough to play and need lots of energy and dedications and for every players its tough to do get trained daily and work hard for there match . Every game need training and hard work . It the requirement of the game that it takes less time duration but the energy and dedication is equal so , time can not measure the amount of the prize .

4. The sponsorship helps the management committee to get some money initiated to them for the match and by this match will get more and more promotion as which company is doing the sponsorship and attract more and more viewer and help them to get more money for the prize and get more generation of profit with the match which will be divided between the sponsors and the committee as per there percentage of shares in it . I thinks no its not good to relate the prize money to the sponsors as in between the miss the charm of the game and the energy in the crowed and the player for the winning of the match .

5. The prize money should be initiated by the government of the nation or can be done in the way of charity in which the name of the sponsors will not be added to the match . As the game played by the players do represent there nation in competition with the other countries then the government must process the prize or for those players too who plays in the national or state level to motivate them to represent there nation in the international matches . Or in the lower level the amount can be charity by the companies or by any interested person in which they are not allowed to get there names involved in the prize amount . And now a days girls and boys are different as genders but as per there capability and ability to perform they are equal so initiating a match between a single men and women will be best initiative for the women empowerment and motivating women and helping the players to enjoy not format of there match and having new competitor for them .

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