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Competitive balance is highly desired in professional sports leagues, yet measurement of the concept is not well established. The definition of firm/team goals in a professional sports league and its connection with competitive balance has typically been assumed rather than studied. Using fan welfare as the goal of the firm, the current research attempts to link competitive balance with fan welfare through the use of what is termed the "hope" construct. A market survey of 367 individuals in a Major League Baseball market empirically supports the use of the hope construct in competitive balance. Suggestions for future research are presented.

Keywords: sport finance, competitive balance, parity, Major League Baseball, professional sport, hope, shareholder wealth, fan welfare

The success of a professional sport franchise is rooted in its relationship with its fans. A fan wants to see his or her favorite team win. One could even argue that many of these fans will choose not to spend their disposable entertainment dollars on a team that consistently loses. Thus, it is no mystery that top-echelon teams often achieve gate, sponsorship, merchandising, and media revenues in excess of inferior teams (Nadeau & O'Reilly, 2006).

Considerable research has been undertaken to address questions related to competitive balance (CB) in professional team sports. For example, research has been aimed at defining CB (Eckard, 2003; Humphreys, 2002), measuring CB at different points in time in different leagues (Fort & Maxcy, 2003), investigating whether CB is a desirable characteristic of a professional sports league (Sanderson & Siegfriend, 2003), and offering suggestions to either promote or discourage CB (Kesenne, 1999). Metrics used to measure CB have been particularly abundant in the literature. However, such measures have often assumed (rather than studied) the link between the goal of the firm and the need for competitive balance. The purpose of this paper is to explore this linkage. This is accomplished by, first, establishing fan welfare as a goal of the firm. Based on the idea that for many fans welfare is a function of the prospect of their team advancing to postseason play, this paper then introduces "hope" as an important dimension of fan welfare. Whereas increased parity in the league equates to more fans having hope and, in turn, welfare, CB is...

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