Property Rights and Unilateral Player Transfers in a Multiconference Sports League
AbstractAccording to the invariance hypothesis, the allocation of players in sports leagues is the same, regardless of who owns their property rights. However, when a player moves to a new team, the absolute quality of the new team increases while the absolute quality of the former team decreases. This implies that intraconference teams will be willing to bid more for players than interconference teams. However, the asking price for player sales to intraconference teams will be higher than for interconference clubs. If clubs own player property rights, the intraconference effects are built into the ask/bid price. When players own property rights, however, the effect of the transfer on the former club's revenue stream is ignored. This suggests that free agency should result in a higher percentage of intraconference player transfers than player sales. Player sale data from 1964-1975 and free agency data between 1976-1992 reveal evidence consistent with theory.
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Bibliographic InfoArticle provided by in its journal Journal of Sports Economics.
Volume (Year): 3 (2002)
Issue (Month): 2 (May)
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Find related papers by JEL classification:
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations
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