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Governance of professional sports leagues--Cooperatives versus contracts

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  • Dietl, Helmut M.
  • Franck, Egon
  • Hasan, Tariq
  • Lang, Markus

Abstract

Historically, European team sports leagues were run by their respective national and international associations and were legally independent from the professional clubs playing in these leagues. Recently, European leagues have adopted an organizational form similar to their North American counterparts who are organized since their beginning in a cooperative-like manner. Based on a comparative institutional analysis, we explain the advantages of the cooperative form of league organization over contractual governance. With our four-stage game-theoretic model, we show that contractual governance of sports leagues leads to larger investment distortions than cooperative league organization.

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  • Dietl, Helmut M. & Franck, Egon & Hasan, Tariq & Lang, Markus, 2009. "Governance of professional sports leagues--Cooperatives versus contracts," International Review of Law and Economics, Elsevier, vol. 29(2), pages 127-137, June.
    • Handle: RePEc:eee:irlaec:v:29:y:2009:i:2:p:127-137
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    1. Dietl Helmut M & Duschl Tobias & Lang Markus, 2011. "Executive Pay Regulation: What Regulators, Shareholders, and Managers Can Learn from Major Sports Leagues," Business and Politics, De Gruyter, vol. 13(2), pages 1-32, August.
    2. Pamela Wicker & Christian Weingärtner & Christoph Breuer & Helmut Dietl, 2012. "The Effect of a Sports Institution’s Legal Structure on Sponsorship Income: The Case of Amateur Equestrian Sports in Germany," International Journal of Sport Finance, Fitness Information Technology, vol. 7(4), pages 340-357, November.
    3. Helmut M. Dietl & Egon Franck & Markus Lang & Alexander Rathke, 2012. "Salary Cap Regulation In Professional Team Sports," Contemporary Economic Policy, Western Economic Association International, vol. 30(3), pages 307-319, July.
    4. Helmut Dietl & Egon Franck & Markus Lang & Alexander Rathke, 2008. "Revenue Sharing, Reserve Clause and Salary Caps in Professional Team Sports Leagues," Working Papers 0100, University of Zurich, Institute for Strategy and Business Economics (ISU), revised 2009.
    5. Helmut Dietl & Egon Franck & Markus Lang & Alexander Rathke, 2010. "Organizational Differences between U.S. Major Leagues and European Leagues: Implications for Salary Caps," Working Papers 0122, University of Zurich, Institute for Strategy and Business Economics (ISU).
    6. Helmut Dietl & Tobias Duschl & Markus Lang, 2010. "Gehaltsobergrenzen und Luxussteuern: Erkenntnisse aus dem professionellen Mannschaftssport," Working Papers 0039, University of Zurich, Center for Research in Sports Administration (CRSA).
    7. Markus LANG & Alexander RATHKE & Marco RUNKEL, 2010. "The Economic Consequences Of Foreigner Rules In National Sports Leagues," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 31, pages 47-64.
    8. Helmut Dietl & Rodney Fort & Markus Lang, 2011. "International Sports League Comparisons," Working Papers 0042, University of Zurich, Center for Research in Sports Administration (CRSA).
    9. Helmut Dietl & Egon Franck & Martin Grossmann & Markus Lang, 2009. "Contest Theory and its Applications in Sports," Working Papers 0029, University of Zurich, Center for Research in Sports Administration (CRSA).
    10. Barth, Michael & Emrich, Eike & Daumann, Frank, 2017. "Evaluation of sporting success in Austria: An institutional economics analysis," Working Papers of the European Institute for Socioeconomics 20, European Institute for Socioeconomics (EIS), Saarbrücken.

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    More about this item

    Keywords

    Sports leagues Cooperative organization Contractual governance Hold up Bargaining;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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