Economics of the NBA Finals - Collin Olsen

Economics of The NBA Finals

This past weekend marked the start of the 2016 playoffs which will continue until the middle of June. Incredible matchups between teams will be happening constantly until only two teams remain, and many think these two teams will be a rematch of last year between the Cleveland Cavaliers and the Golden State Warriors. Considering the Warriors broke the record for most wins in the regular season and the Cavaliers are still dominating the eastern conference this matchup wouldn’t be much of a surprise, but it would still have a major economic impact on both teams and players.

Last year before the NBA Finals the Warriors team value was about $1.3 billion, but now it is currently evaluated at $1.9 billion (Forbes). This nearly 50% increase in value can do a lot for a team, and more importantly the area around it. Many people forget that any professional sports team is a major part of a city’s identity both socially and economically. For example businesses around the arena will most likely increase their profits because of the increase in attention to the area. In addition to this more businesses will realize this and want to make investments for their businesses in that area to take advantage of these profitable opportunities. This trend will likely continue if the warriors can continue their playoff success and get put into the conversation for ones of the best teams in NBA history.

The Finals also had a large impact the players of these two teams. None more so than Stephen Curry. According to Repucom, a large social analytics firm, Steph became the top ranked NBA player on appeal, and was ranked third on people recognizing his name behind only Lebron James and Kobe Bryant. With his astonishing regular season this year these stats most have increased even more, which would in hand increase demand. This would also increase the price level for his products because of the rising popularity of his name.

One last major impact of the NBA Finals is on the TV station. For the last few years ABC (which is owned by Disney) has bought out the rights for the NBA finals and many other playoff series. This is a pretty safe investment for them considering the magnitude of the event, but last year it really paid off for them with the best ratings for the finals since Michael Jordan played. As the supply of basketball begins to fall more viewers typically funnel into the biggest series of the year, in fact last year there was an average of 19.2 million viewers per game throughout the 6 game series, which was an increase of about 25% from the year before (Forbes). If the series does end up being between Golden State and Cleveland ABC could undoubtedly advertise it as one of the greatest series of all time. With the phenomenal regular season accomplishments of the Warriors as they are seeking a repeat championship they are faced against a revenge hungry Cavaliers team led by Lebron James, which was also plagued by injuries during their playoff run last year.

Overall no matter what teams play in the Finals this year there will be a great financial impact for the teams, players, and the companies behind the scenes. However if it does come down to a rematch of last year then these impacts will become even larger, and might even break some records for TV ratings. Without this large championship at the end of the season there would be far less profits in the NBA, which shows how everything put into it can financially change the outcome of the league.

Works Cited

Badenhausen, Kurt. "2015 NBA Finals: Winners And Losers." Forbes. Forbes Magazine, 17 June

2015. Web. 19 Apr. 2016.

Economic Impact of the NBA Finals - Robert Wagner

Robert Wagner

Mrs. Straub

AP Econ

16 April, 2016

Economic Impact of the NBA Finals

Very recently, the NBA playoffs kicked off with a few stellar and a few not so stellar games for the public eye. After a season filled with so much drama such as the retirement of Kobe and the Golden State Warriors finishing the season with the best record of all time, an exciting playoffs would be a great way to cap off a memorable season. On a personal note, the fact that the Bucks have been snubbed once again from making the playoffs really grinds my gears, but the predictions for next year's finals are fairly simple: Bucks in 6. A championship team’s local economy is seriously affected by a team's finals run, so when the bucks win it all next year we can know what to expect from the local economy.

In 2013 when LeBron James and the Miami Heat faced off against a talented San Antonio Spurs team, Becky Bridges, San Antonio’s Chamber of Commerce Spokeswomen said “the economic impact from a Heat-Spurs game could generate $3 million to $4 million a game in total revenue” (Degollado). San Antonio hosted a minimum of two games in 2013, with a maximum of three, and because the series was so tight a game 6 was played in San Antonio. This means that San Antonio generated nearly $12 million, which “does not include T-shirts or souvenir sales. Also print shops making signs and banners are not factored in” (Degollado). When you put these stats in perspective, the Bucks will obviously be winning in 6 meaning that they will have 3 high intensity games at home in Milwaukee. The people of Milwaukee and the surrounding communities have been waiting agonizingly long for a Bucks championship run, and with the thrill of seeing the Bucks final games in the Bradley Center being at an all time high, ticket prices will skyrocket because the demand for tickets will be so great. Along with seeing the final games at the Bradley Center, Bucks fans will be treated to some of the best players in the game today. The Milwaukee squad is led by none other than the Greek Freak, Giannis Antetokounmpo, a top 50 NBA player in his own right. A chance to witness his basketball wizardry is sure to bring fans to the great city of Milwaukee from all over the country. While all the crazed fans flock like geese to the shores of lake Michigan, local monopolistically competitive small businesses will be putting up advertisements all over the suburbs to buy the fairly priced Bucks merchandise. This competition for all things Bucks will lower the prices so that each chain can keep up with its competitors, which in turn will increase the quantity sold.

Despite the Bucks firepower at all positions, they are surprisingly the 29th most valuable franchise in the NBA (Forbes). That’s just one spot better than the New Orleans Pelicans, a newer team that is said to move up a few spots on the list in the coming years. For a complete list of the top franchises click here. That means that by 2020, the Bucks could have the most unvalued franchise in all of basketball. The key word in that sentence was “could.” Because the Bucks are going to win it in 6 next year, there is no need to worry about being the smallest franchise. At the beginning of the 2011 season, for example, the Dallas Mavericks were in the bottom half of the most powerful clubs. It was estimated that “the value of the Mavericks could rise between $30-45 million in the next year alone” (Garcia). Patrick Rishe, a professor of economics at Webster University said that along with the Mavericks championship trophy, “They'll see ticket prices go up next year, and expect those to be higher over the next few years than they would have been without a championship...They'll be able to negotiate better local media deals, but that may only last one negotiating cycle. They'll see merchandise increase…” (Garcia). When the Mavericks won it all in 2011, no one saw it coming. No one outside of Wisconsin is going to see the Bucks coming until it is too late, and much like the Mavericks, the Bucks organization is going to see higher ticket prices, due to an increase in demand for consumers to watch games. The media will want to talk about the Bucks and advertise with the Bucks which will just bring in more revenue. The amount of merchandise sold will skyrocket, especially with the popularity of the new logo being so high. A championship will see the demand for Bucks tickets, Bucks gear and Bucks advertisements increase, bringing in massive revenues in the years to follow. The Bucks will no longer be the laughing stock franchise of the NBA after next year's championship. Instead, Milwaukee will be on top. Watch out. The Bucks are coming. #Bucksin6

For a video showing other ways the Bucks are growing Milwaukee’s economy, click here

For a video proving the Bucks are destined to win in 6 click here

Works Cited

Badenhausen, Kurt. "The Business of Basketball." Forbes. Forbes Magazine, 20 Jan. 2016. Web. 19 Apr. 2016.

Degollado, Jessie. "NBA Finals Economic Impact in the Millions." KSAT. N.p., 11 June 2013. Web. 19 Apr. 2016.

Garcia, Art. "What an NBA Championships Means to the Dallas Mavericks." ESPN. ESPN Internet Ventures, 24 June 2011. Web. 19 Apr. 2016.

Blue Zones - Hannah Breese

Hannah Breese

AP Econ

Mrs. Straub

19 April 2016

Blue Zones

A blue zone in it’s simplest form is where “people live the longest and more specifically, areas where we have a demographically confirmed, geographically defined, area where people are either reaching age 100 at extraordinary rates, have the highest life expectancy, or the lowest rate of middle age mortality” (Worrall). According to a Danish Twin Study, only about “10% of how long the average person lives is dictated by genes, and the other 90% is dictated by our lifestyle” (TEDEducation). The premise of blue zones is to find the optimal lifestyle of longevity and then come up with a formula for longevity.

In 2012, Dan Buettner a National Geographic Fellow and New York Times bestselling author, producer, public speaker, educator, and explorer set off on a journey to answer a question that has had the world wondering for years (Worrall). That question is why do some people live longer than others? In order to answer this question, Dan was lead to places all around the world. As seen on the map below, places Dan visited included Nicoya-Costa Rica, Sardinia- Italy, Kara- Greece, Okinawa-Japan and Loma Linda-California. His goal was to bring back this new information to the United States in order to promote a healthier lifestyle and ultimately give people the resources to increase their life expectancy. If people in the United States were to adhere to these standards, there would be an economic revolution altering the agriculture industry with an increase in aggregate supply, decreasing aggregate demand in the automobile industry, and medical field as well ultimately resulting in a decrease in per capita income because people would be living longer.

Ultimately, Dan researched, interviewed and condensed all of this information into 9 life lessons. Something he likes to call the “power 9”. Each of these factors was present or being practiced in the countries he studied with a high centenarian population. Below is a listing and description of the common-denominators among centenarians (“Power 9”).

If people were to move naturally, that means more walking less driving. Increased use of public transportation and more biking. People wouldn’t need to invest money into a car when it is way cheaper to buy a bike or use public transportation. Similarly, again hypothetically speaking, if people were to adapt to a primarily plant based diet, and also grow their own food in gardens, the agriculture industry would have an increase in supply and demand.

Moving forward, implementing these strategies, lifestyle changes, whatever they are considered to each one of us, would cause an increase in productivity because a world with less cancer, less heart disease, and less obesity would keep everyone functioning easier and longer. Doctors offices wouldn’t be booked full with unhealthy people and instead people would be succeeding in the world, not immersed and consumed with technology but rather embracing and making the most out their life. The time is now, and the resources are available, make the changes and live a longer life. It will pay off later.

Fast Food Turning Healthy - Annie Collins

Annie Collins

Mrs. Straub

AP Economics

10 April 2016

Fast Food Turning Healthy

As the new year has recently come and gone resolutions are quickly starting to fade.  One of the most popular resolutions is to be healthier which includes eating healthier.  One of the hardest times to eat healthy is when you are on the run and it is so easy just to stop and McDonalds and grab a quick burger to subside your hunger.  More recently different fast food restaurants are beginning to put more healthy alternative options on the menu.  Prior to this, many people who were eating healthy would have to look for a plain side salad to not eat all of the greasy fried foods there were all over the menu (“The Healthiest”).   One con to eating healthy is the rise in nominal prices.  It is widely known that when something has more veggies the price of the item will go up for a few reasons; one, being that it is more expensive for restaurants to use more green ingredients because they often need to import them and two, many people have different lifestyles that require only veggies or no gluten etc.  

Not only are there many healthier options at fast food restaurants but they also have to display the calories count on their menus.  Since this is a new FDA requirement many restaurants have decided to put together different meal types that vary in calories (“U.S.”).  For example Panera Bread has an under 500 cal menu, which utilizes the pick two menu.  A customer can choose from a few different types of soups, sandwiches, salads and broth bowls.  A popular combination is broccoli cheddar soup with a BBQ chicken salad along with a french baguette for only 450 calories.  Also on their website they have a pairing portion for the pick two and when you click “choose for you” random pairings come together that are all under 500 calories (“Our”).  While making their menu cleaner and healthier Panera went through menu costs since prices on their menu increased and customers are beginning to get tired of the prices continuing to increase at Panera.  Although, Panera is not the only company that is changing their menus to have healthier combinations.  

Also, many trainers post different healthy food combinations at fast food restaurants to help their clients.  One of their biggest tips is to get rid of different sauces like mayo on sandwiches.  As well as if you are getting a sandwich eat it open face with only one piece of bread and add extra veggies.  One of the most important concepts of eating “healthier’ fast food is to get the chicken grilled, not fried or crispy.  Getting crispy chicken has a lot of extra fats and oils that are not needed for the sandwich to taste good (“The Healthiest”).   

Eating healthy is a very important way of living and one of the most important ideas of being healthy is eating right.  With restaurants creating healthy portions of their menu, it makes it a little easier to eat healthy all the time.  Also with the FDA requiring restaurants to put the calories counts on their menus it allows customers to really know how much they are eating and what percentage their meal will be of their daily calories.  Eating healthy should not fade away like most New Year’s resolutions, many fast food restaurants are helping people have those options to eat healthier all the time.    

Works Cited

"Our Clean Pairings Menu, All 500 Calories or Less." Clean Pairings Menu. Panera Bread. Web. 10 Apr. 2016.

"The Healthiest Options at Fast-Food Restaurants." Health.com. Health Media Ventures INC. Web. 10 Apr. 2016.

"U.S. Food and Drug Administration." Overview of FDA Labeling Requirements for Restaurants, Similar Retail Food Establishments and Vending Machines. June-July 2015. Web. 10 Apr. 2016.

The Ineffectiveness of Raising Minimum Wage - Evan Ritchie

The Ineffectiveness of Raising Minimum Wage

By: Evan Ritchie

For several years now, a large population of workers in the US have been fighting for an increase in the minimum wage. The general consensus of low wage workers is that they would like to see a rise to $15 per hour. Currently, some states are beginning to take action. California has made the boldest move thus far as the first to officially approve a plan to increase minimum wage to $15 by 2022. New York is following these actions fast by requiring large food franchises to pay workers at least $15 per hour. Many people believe that an increase in minimum wage will help bring a large amount of citizens out of poverty. This type of increase would indeed be extremely significant as “40% of all [US] workers earn less than $15 an hour,” reports Ahiza Garcia of CNN. That is a huge percentage which means immediate impacts will be very extreme. When we look at the short run the impacts are very positive and promote growth of the economy. Due to the greatly increased incomes of such a large portion of the country there will be a major increase or positive shift in aggregate demand. People have more money and are now willing and able to buy more of the goods and services they want and need. This will also result in an increases in the Real Gross Domestic Product because the quantity being sold is increasing but price level is staying the same. However, basic economics tells us that a change in the consumer's income also affects how businesses change their prices. This being said, it can be expected that all prices of goods and services, in the states with increased wages, will also increase at the same rate. Another action business will be prone to take is cutting jobs. If cost of employing low wage workers goes up by 60%, it can be expected that roughly 60% of those workers may lose their jobs. This bears the question of whether or not it is an effective strategy to increase wage as a means to bring people out of poverty.

In conclusion, it is important to think in terms of both the long and short run when making impactful economic changes. There are clear positives and negatives to increasing the minimum wage -- some come right away and others occur over time.

Works Cited

Garcia, Ahiza, and Jeanne Sahai. "What You Need to Know about the Minimum Wage." CNNMoney. Cable News Network, 1 Apr. 2016. Web. 12 Apr. 2016.

Sahadi, Jeanne, Jackie Wattles, and Chris Isidore. "California Is First State to Approve $15 Minimum Wage." CNNMoney. Cable News Network, 1 Apr. 2016. Web. 12 Apr. 2016.

Sahadi, Jeanne. "New York Seals Deal on $15 Minimum Fast-food Wage." CNNMoney. Cable News Network, 11 Sept. 2015. Web. 12 Apr. 2016.

Disney's Monopoly over Entertainment

Gabe Hall

Mrs. Straub

AP Economics

12 April 2016

Disney’s Monopoly Over Entertainment

How often do you think of Mickey Mouse when you’re watching ESPN? How often do you think of Elsa or Olaf when watching a Harry Potter Weekend Event on ABC Family (now Freeform)? Did you ever think of Cinderella’s Castle when watching the epic lightsaber battle between Rey and Kylo Ren in “The Force Awakens”?  Well, after reading this, you may never be able to perceive your favorite cinematic universes and television shows the same way again. With Marvel’s “Captain America: Civil War” coming to theaters on May 6th of this year, and “Rogue One” coming later in 2016, I have decided to delve into the empire of Disney Entertainment, and make the argument that they truly have a monopoly over the world of entertainment.

The Walt Disney Company started in 1923 in the rear of a small office in Los Angeles. It was there that Walt Disney, and his brother Roy, produced a series of short live-action/animated films collectively called the Alice Comedies. The rent was a mere $10 a month. In 1937, Disney’s innovative first full length animated feature, Snow White and the Seven Dwarfs, was released to critical acclaim and worldwide success, and the rest was history. A little less than a century later, the Walt Disney Company is currently worth north of $75 billion. How did this miniscule company rise to become one of the top companies in the world? Some may argue that it is because of their parks and resorts. Granted, attractions such as Disney World and Disney Cruises are the second most profitable aspect of The Walt Disney Company. However, this is not what sets them apart. Companies such as Universal and Carnival are in competition with Disney, thus this sector of Disney’s business exists within an oligopoly - a state of very limited competition. What sets them apart is their true dominance in entertainment.

The Walt Disney Company began as animators, creating feature films such as the Hunchback of Notre Dame, The Little Mermaid, and Aladdin, but have since grown to dominate both the television and silver screen markets. In 1984, ABC acquired ESPN. When the Walt Disney Company acquired the American Broadcast Company’s parent company Capital Cities Communications in 1995, both ABC and ESPN became a subsidiary of Disney. This move by Disney allowed them to not only control ABC and its subchannels, but also to control the cornerstone of sports broadcasting, thus beginning their monopoly over entertainment. The television market may seem like a monopolistic competition, but as Disney continues to acquire more and more production companies - such as A&E Networks - their dominance over the entire market will continue to grow as well. Disney, while continuing to diversify itself in television, turned to movies to expand its portfolio. In 2006, Disney made its first big move, by acquiring Steve Jobs’ Pixar at a valuation of $7.4 billion. Although this may seem like a large, and risky investment, with many potential opportunity costs. Disney Pixar has since created many Academy Award winning animated films such as Up and Inside Out, with every film being a raging success at the box office.  The Walt Disney Company furthered its reach and control on the entertainment market, by making one of the most lucrative deals in the history of the company, by purchasing Marvel Entertainment in 2009 for $4 billion. Since then, the Marvel Comic based films - including the highly successful Marvel Cinematic Universe -  have generated an incredible $8.5 billion. Disney and Marvel have found a way to make even the most obscure heroes have critical and financial success at the box office (i.e. Guardians of the Galaxy). Finally, Disney’s latest move may prove to be the final nail in their monopoly over the world entertainment market. In 2012, Disney purchased Lucasfilm, the company with the rights to Star Wars, for $4.05 billion. Already, Disney is seeing a return on their investment, as “Star Wars: The Force Awakens” has made over two billion dollars at the box office - with more films to come. Although companies such as Fox, Sony, and Warner Bros are also in the market, they do not have the entertainment ‘forces’ that Disney has. Thus, through the acquisitions of companies such as ABC, ESPN, Pixar, Marvel, and Lucasfilm, and the creation of others (such as the Disney Channel), have established Disney’s monopoly over entertainment.

The monopoly that the Walt Disney Company has over the market of entertainment is astounding. Entertainment alone contributes to over half of its yearly revenue - roughly $28 billion. Sure, Disney entertainment does not necessarily have a monopoly in the true sense of the word -

it is not a single producer in the market - but with their increased presence and increased success, their control of the market will only become stronger. If they keep creating films at the level of “Star Wars”, and more than likely of “Captain America: Civil War”, the demand for these movies will continue to increase at an indeterminable rate with the supply of the movies, and the monopoly (I honestly wouldn’t be surprised if they one day acquire Hasbro, and actually own Monopoly) that Disney has over entertainment will grow in power and in profitability. Thus, I contend that the conglomerate of Walt Disney Company has a monopoly over the entertainment business.

Works Cited

"DISNEY's $4 Billion Marvel Buy: Was It Worth It?" Newsarama.com. Web. 12 Apr. 2016.

Nudelman, Mike. "Here's Where Disney Really Makes Money." Business Insider. Business Insider, Inc, 14 Jan. 2015. Web. 12 Apr. 2016.

"The Walt Disney Studios - History." The Walt Disney Studios - History. Web. 12 Apr. 2016.

The Launch of the Tesla Model 3 - Brennan Zimmer

Brennan Zimmer

Mr. Kramer

AP Economics - Insight

8 April 2016

The Launch of the Tesla Model 3

It’s very likely that you’ve heard of the company Tesla and their all electric cars, but you probably don’t see too many of them on the roads. This may have to do with the fact that Tesla is a relatively young company and that its vehicles are more expensive than many other cars. Tesla’s have usually started in at about $80,000; until just two weeks ago. With this being said, many people in the past couldn’t afford such a car, but with the newly release Model 3, Tesla has made a more affordable car to the masses. To be put into more detail, below will discuss what a potential car buyer should expect from the Model 3 in its performance, costs of each Tesla model, and the effects of the Model 3’s sales has on the United States economy.

With the MSRP of $35,000, what should customers expect from Tesla’s Model 3? Likely one would expect features close to other previous models as a respected electric luxury vehicle manufacturer. In response to customer desires, this is exactly what Tesla accomplished. According to Teslamotors.com, it states that the Model 3 will have “215 miles to the charge, go from zero to sixty in less than six seconds, seat five adults, and have autopilot hardware”. Other models such as the Model S and X have very close features, though slightly upgraded over the Model 3 due their higher prices. In a nutshell, Tesla is providing its Model 3 customers with everything the average consumer would want, and more when comparing to other automobile manufacturers.

Next, when it comes purchasing a car, price is generally one of the most important details that needs to be kept into consideration. If a car buyer was looking to purchase a Tesla, they would need about $35,000 which would put them in the category of the new Tesla Model 3 as Tesla’s cheapest car option. After the Tesla Model 3 comes Tesla’s Model S, with a starting price just under $80,000 that can cost as much as $108,000. The last and final model that will be mentioned is the Model X which also starts at about $80,000 and goes up to approximately $115,500 says autoguide.com. Thanks to the Model 3, more Tesla enthusiasts will now be able to own a Tesla.

With the Model 3 being released about two weeks ago, there has already been thousands of reservation orders on the car. To be more exact, there has so far been about “350,000” ordered and the demand is growing (Barnes). These sales are equivalent to “14 billion” in gross sales (Moscaritolo). In order to fulfill these orders, Tesla has over 13,000 employees within the United States states rgj.com. Addionally rgj.com also shows, Telsa economic impact could be almost two billion dollars. This is made up of “6,500 direct factory employees, and 3,000 construction jobs” (Damon). Without doubt, Tesla and the Model 3 are helping the economy while keeping its workers within its United States factories.

In the end, Tesla's Model 3 has become more affordable, while meeting/exceeding its customer's demands and having a positive economic role by ultimately increasing the United States GDP. Tesla has started to build a very good reputation within the automobile industry which was once only covered will traditional gas run vehicles. In Tesla’s small amount of time in business, it has almost made a monopoly in electric automobiles. From the results of the Model 3, it is safe to say that Tesla will be here to stay in the automobile industry and if Tesla numbers continue to grow, it's sure to have a bright future ahead of itself.

Works Cited

Barnes, Noah. “Tesla (TSLA) Model 3 Achieves 325K Reservations in a Week.” Quadrangle Online. Quadrangle Online. 10 Apr. 2016. Web. 10 Apr. 2016.

“2016 Tesla Cars.” AutoGuide.com. VerticalScope Inc. n.d. Web. 8 Apr. 2016.

Moscaritolo, Angela.”Tesla Model 3 Sales: Not Too Shabby.” PC. PC Mag Digital Group, 8 Apr. 2016. Web. 8 Apr. 2016.

Damon, Anjeanette. “Tesla's economic impact for Nevada could be $1.9 billion.” Reno Ganzette-Journal. USA Today Network. 5 Sep. 2014. Web. 8 Apr. 2016.

“Model 3.” Tesla. Tesla Motors. N.d. Web. 8 Apr. 2016.

“Model S.” Tesla. Tesla Motors. N.d. Web. 8 Apr. 2016.

“Model X.” Tesla. Tesla Motors. N.d. Web. 8 Apr. 2016.