In 2007 the National Basketball Association (NBA) endured one of the biggest scandals in the history of professional sports. Tim Donaghy, a referee in the National Basketball Association, pleaded guilty to providing inside information on NBA games to gamblers and receiving money from their winning bets. Through econometric analysis, this paper investigates if the Tim Donaghy gambling scandal of 2007 had an effect on the revenues of NBA franchises. All the statistics and data used in this paper are from the 2002-2003 through the 2011-2012 NBA regular seasons, a total of ten seasons. This paper finds that there is strong evidence to suggest that NBA franchise revenues were positively affected by the Tim Donaghy scandal. Possible reasons for this include a “Restored Confidence” effect and a “Moral Value Exemption” effect.
Major Themes in Economics
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"Were Revenues of National Basketball Association Franchises Affected by the Tim Donaghy Gambling Scandal of 2007?,"
Major Themes in Economics, 16, 51-64.
Available at: https://scholarworks.uni.edu/mtie/vol16/iss1/6