The business of professional team sports provides an example of imperfect market structures. A unique characteristic of professional sports is the interdependence of teams. Aprofessional team can be successful only if its competitors are successful. Each team must have rivals to play games and attract fans. To ensure their mutual success, ball clubs are organized into professional leagues. These leagues have important economic implications in both the product and resource markets.
        Professional sports leagues are economic cartels. Through the leagues, teams formally agree to behave as if they were one firm—a shared monopoly. By forming cartels, sports clubs can increase the joint profits for all members of the league by restricting output and increasing price relative to a competitive market. By sharing the joint profits from the sale of their output, leagues can ensure the long-term survival of member teams.
        In the resource market, professional sports leagues enforce employment rules that grant member clubs exclusive rights to player contracts. When a club holds the exclusive rights to contract with an athlete, the club is a monopsony—the single buyer of labor in the market. A monopsony is able to employ workers at wages below what would be observed in a competitive market. In recent years, professional athletes have won the right to free agency, which reduces the monopsony power of the clubs. In response to free agency, the average salaries of professional athletes have dramatically increased. The size of a professional athlete's paycheck reflects the player's contribution to his club's revenue.