The field of sports economics is one that can be traced back to very definite origins. Just as the discipline of economics can be attributed to Adam Smith's An Inquiry into the Causes of the Wealth and Poverty of Nations, the first application of economic methods to sport dates back almost seven decades, to 1956. The same year that the New York Yankees’ Don Larsen pitched a perfect game in the World Series against the Brooklyn Dodgers, which remains the only perfect game in World Series history, University of Chicago economist Simon Rottenberg published “The baseball players’ labor market” in the Journal of Political Economy. Economics and sport were then introduced, and subsequently they have spawned a plethora of research.

Of course, one can legitimately ask: why sport? In 2015 three well-known sports economists, Alex Bryson, Bernd Frick and Rob Simmons, tried to answer this question in “Sports economics: it may be fun but what's the point?”. The authors argue that there are four reasons why sport and economics are a great fit. First, sport is big business and it is growing rapidly. Second, it is an industry that contributes significant employment in most developed economies today. The third reason is that sport actually matters to people. Although the connection with sports teams and events can be irrational, this bond is real and affects peoples’ lives. It can help both physical and mental well-being and is actively promoted by most governments as having a positive impact on life satisfaction. Finally, sport can shed light on fundamental economic questions. The data that professional sports generate, which are largely unparalleled in any other industry, provide a wealth of information, to which economists can bring their analytic toolkit to understand various aspects of different sports and sporting events. This extends to issues such as competition, productivity, decision-making, labour markets and discrimination.

Back in 1956, Rottenberg was drawn to baseball as a subject for investigation because of “a number of market problems which are interesting because of some unusual characteristics of the baseball labor market and the organization of the baseball industry” (Rottenberg 1956: 242). He identified a number of key issues in the labour market for baseball players that were economic in nature.