Final answer:
This question combines elements of economics and business, focusing on the loss reported by a sports league, considering shutting down, and the wider economic impacts of professional sports versus other forms of local entertainment.
Step-by-step explanation:
The decision whether a major sports league with a report of a loss should continue operations involves analyzing various economic factors. In situations where the sports league reports significant losses, such as a loss of $510 million with fixed costs of $600 million, decisions must be considered carefully. For example, a center earning revenues of $10,000 with variable costs of $15,000 would be operating at a loss and could potentially decide to shut down to minimize further losses.
Moreover, considering the local economic impact, money spent on professional sports has different repercussions than money spent on other forms of entertainment. For instance, local entertainment has a higher chance of recycling income back into the local area than professional sports, which can have a considerable amount spent outside the local area. This factor must be considered, especially in light of arguments put forth by Siegfried and Zimbalist that within fixed household entertainment budgets, spending on professional sports could lead to a shrinkage of the local economy due to a lower multiplier effect compared to other local entertainment options.