Research On Non-Market Value Evaluation Of Professional Sports Club

At present,the subsidy from Chinese local government to the professional sports clubs is mainly used to support their development,which is made based on their performance in the league.This is against the principles of the public financial expenditure as well as fair play of the professional sports market,hence,the subsidy is somewhat unreasonable.The American local governments regard professional sports clubs as the“catalyst”of the local economy,therefore offer them fiscal subsidy.However,by doing the empirical research,some scholars who question the economic benefits of professional sports clubs reach the consensus:The economic value created by the professional sports clubs is very limited and sometimes is even negative,the reasonability of governmental subsidy cannot be validated.Since then,the reason for governmental subsidy turns to the positive externalities brought about by the production and consumption of the professional sports,which could meet the public expenditure principle and be supported by the public.Nevertheless,As the positive externalities are non-competitive and nonexclusive,their non-market value can be hardly calculated by the market valuation method.The contingent valuation method(CVM)is introduced into this research to monetize the positive externalities,which makes the non-market value evaluation of the professional sports clubs possible.With the help of American government's experience“changing the reason for subsidy”,in this research,it constructs a theoretical framework of Chinese professional sports clubs'positive externalities from the perspective of the home city and its citizens.Additionally,it studies how the local government subsidizes the professional sports clubs in a reasonable way(which is concerned with the reason and the amount).As a result,this research provides the local government with reasonable reasons for subsidy,and defines the range of it.The non-market valuation based on CVM works as the basis to define the amount of subsidy budget.By utilizing the professional sports clubs'positive externalities as the research object,the theories of public goods,externalities,and public expenditure as the theoretical basis,in this research,a theoretical framework of Chinese professional sports clubs'positive externalities from the perspective of the home city and its citizens has been established.Additionally,Shanghai Greenland Shenhua Football Club is used as the empirical object,the contingent valuation method is used to collect the information of the local citizen's willingness to pay to this club,through which to evaluate its non-market value.In this research,the normative research and empirical research methods like literature research,logical reasoning,questionnaire survey,mathematical statistics,and case study etc.are used,the following conclusion is made:(1)The introduction of contingent valuation(CVM)method makes the non-market value evaluation of the professional sports possible.Although some case studies of the application of CVM in the professional sports abroad can be good experience,they do have limitations.In addition,due to the different development environment and competition system,CVM cannot be applied in Chinese professional sports in exactly the same way as it is applied abroad.Based on the principle of localization,the limitations of the research abroad should be considered to avoid the deviations in CVM,and to ensure the validity and reliability of the evaluation.(2)Analyzing the attribute of professional sports clubs'goods is the premise of non-market value composition analysis,the finding shows the professional sports clubs offer both public and private goods.The public goods like the benefits of the city's brand,the benefits of life quality,and the benefits of psychological income,are non-competitive and can reflect the common social needs,they are the source of a good life and happiness.These positive externalities can validate the reasonability of subsidies from the local government,as well as construct a theoretical framework for the non-market composition analysis from the perspective of the home city and its citizens,and further more define the subsidy range.As the positive externalities are independent of the market mechanism,the clubs cannot receive the value of these benefits from the citizens through the market transactions,they have to suffer this economic loss.The local government is the supplier of public goods and the defender of public welfare,its subsidy to the professional sports clubs is the governmental action to internalize the positive externalities,in order to motivate the clubs to maximize their positive externalities.(3)CV survey plan is designed to avoid the potential deviations,it is the way to ensure the validity and reliability of the survey.The Willingness-To-Pay questionnaire is the key part of the CV survey plan design,its structure,the description of the club's relevant information in the hypothetical scenarios,the construction of the virtual market,the selection of elicitation techniques,the payment way selection,the range and figure of the original bid value,the selection and correction of the WTP variables etc.would affect the validity and reliability of the survey.By doing the pre-survey,some of the deviations have been controlled before the formal survey starts,and the sample capacity meets the requirement of the double-bounded dichotomous discrete elicitation techniques.(4)The annual non-market value(the sum of WTP)of Shanghai Greenland Shenhua Football Club is approximately 37.4×10~8 yuan.To be more specific,the value of the city's brand is 13.8×10~8 yuan,the value of the psychological income is 16.9×10~8yuan,the value of the life quality is 6.7×10~8 yuan.The local government should be concerned with Shanghai Greenland Shenhua Football Club's considerable non-market value,and offer subsidy properly.Based on the public fiscal expenditure principle“overall planning with emphasis”,the amount of subsidy should match the government's function,objective and financial situation.In the premise of guaranteeing the basic public service,the amount of subsidy should be decided according to the non-market value composition.Due to the different national conditions and league environment,some of the variables that can affect WTP are consistent with the variables in the research abroad,while some others are opposed to them.