Abstract
Before game-fixing scandal of the professional baseball in Taiwan was revealed, professional baseball enjoyed a remarkable success among this island. The gambling scandal with involvement of organized crime, plus the inter-league competition, led to the rapidly decline in attendance number and destroy of game integrity. Such negative incidents raised public discussions consistently. To analyze the governance structure and management strategy of the professional team sports, the first part of this study was to investigate the developmental policy and governance structure of professional team sports in the United States, which results of this investigation is used a model to build a well organized professional sports league in Taiwan. Many academic scholars studied managerial issues of professional sports from economic perspectives since 1960. management of professional sports was viewed as a normal business. One of the rising topics is the market structure of the professional team sports. A study indicates that market structure of the professional sports league was classified as oligoploy. More researches show that the professional sports league was seen as a cartel. This particular market structure differs from most of other industries so that the management model is unique. Regulations and operations of professional sports leagues are closely related to a cartel organization. Additionally, agency relationship is used to explain relationship between league and sports franchises and mechanism of distributing financial resources to sports franchises. As far, not many researches discuss the application of these theories to management of professional team sports. Therefore, the second part of the study was to provide proper recommendations for developing a sound structure of the professional sports league by examining the application of cartel theory and agency theory. In comparing with governance structure of four major sports leagues in U.S., this study provided several suggestions related to managerial strategy and governance structure: (1)regulation of amateur draft, (2)locations of franchise's territory, (3)centralization of sales of broadcasting rights, (4)controlling mechanisms of player costs, (5)restrictions of franchise expansion, (6)proper rules of resource allocation, and (7)decision making based on merits of the league, rather than any individual sports franchise.