This internet-based strategy game, initially developed in the Fall of 2009, models three of the strategic challenges facing General Managers in a professional sports league:

• How much talent should I hire and at what cost?

• What should ticket prices be?

• How large an arena should I be renting?

The Sports League Challenge highlights the tension between the league’s pursuit of competitive balance, which better positions it in the entertainment market in which it competes, and each team’s separate pursuit of competitive and financial success. This tension is driven in large part by the simple fact that teams are located in metropolitan areas featuring very different demographics, most notably significantly different local populations.

Each Challenge is a repeated play game, played over the internet and running for as many seasons as desired. General Managers compete against one another, bidding for player and coaching talent. All strategic decisions are made prior to the start of each season, at which point the Challenge allocates player and coaching talent (according to the bids submitted by the General Managers) and then simulates a season of competition, with accompanying wins and losses, ticket sales, revenues, costs, profits and champions. The goal for each team in the Challenge, at least initially, is to maximize profits over the full time period. (Of course, win maximizers can also participate in the Challenge.)

The Challenge had been featured in several courses at Boston College, including MD609: The Business of Sports, at the Carroll School of Management, and EC308: Sports Economics and EC370: Game Theory in Economics, at the College of Arts and Sciences. The numbers of teams is completely variable (some challenges have featured more than 40 competitors)... as is the length of each season (some challenges have had seasons as short as three minutes in length).

The Challenge is loosely modeled after the NBA, which provides us with lots of data that is used to calibrate the model. (In the Challenge, teams in NBA-average sized metro areas, featuring NBA-average quality teams, charging NBA-average ticket prices, and renting NBA-averaged sized arenas, will achieve NBA-average competitive and financial success.)

A highlight of the Challenge, is the ability to introduce different initiatives designed to promote competitive balance (either individually or in combination). At the moment, those initiatives include:

• Revenue Sharing (with equal or unequal sharing)

• Salary Caps

• Reverse-order-of-finish Draft (with or without lottery picks, and with or without draft pick trades)

• Luxury/Competitive Balance Taxes (with equal or unequal sharing of proceeds)

Accordingly, the Challenge facilitates experiential learning about the efficacy of these initiatives, and provides insight into the likely impact of these different policies on team revenues, salaries and other costs, and profits, as well as league-wide competitive balance.