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Revenue Sharing and Competitive Balance in Professional Team Sports

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  • Stefan Kesenne

    (UFSIA, University of Antwerp)

Abstract

The aim of this article is to clarify the apparent confusion in the literature about the impact of a revenue sharing arrangement on the competitive balance in a sports league. A crucial factor in the discussion seems to be the impact of the absolute rather than the relative quality of the teams on the clubs' revenues. The analysis shows that revenue sharing improves the competitive balance under both the profit- and the utility-maximizing hypotheses.

Suggested Citation

  • Stefan Kesenne, 2000. "Revenue Sharing and Competitive Balance in Professional Team Sports," Journal of Sports Economics, , vol. 1(1), pages 56-65, February.
    • Handle: RePEc:sae:jospec:v:1:y:2000:i:1:p:56-65
    DOI: 10.1177/152700250000100105
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    1. Scott E. Atkinson & Linda R. Stanley & John Tschirhart, 1988. "Revenue Sharing as an Incentive in an Agency Problem: An example from the National Football League," RAND Journal of Economics, The RAND Corporation, vol. 19(1), pages 27-43, Spring.
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    7. Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September.
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