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The Economic Consequences Of Foreigner Rules In National Sports Leagues

Author

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  • Markus LANG

    (Institute of Strategy and Business Economics, University of Zurich)

  • Alexander RATHKE

    (Institute for Empirical Research in Economics, University of Zurich)

  • Marco RUNKEL

    (Faculty of Economics and Management, University of Magdeburg)

Abstract

Profitable and balanced domestic league sports are among the central prerequisites for attracting the right to host a mega-event like the soccer world cup as well as for the overall economic success of such events. This paper provides a contest model of a professional team sports league and analyzes the impact of a restriction on foreign players. It shows that a league with binding restrictions on foreign talent for all clubs is more balanced than a league without binding restrictions on foreign talent. Moreover, the wage level of domestic (foreign) talent is higher (lower) in a league with a binding restriction on foreign players. Finally, a tighter restriction on foreign players increases profits of all clubs.

Suggested Citation

  • 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.
    • Handle: RePEc:tou:journl:v:31:y:2010:p:47-64
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    Cited by:

    1. 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).
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    More about this item

    Keywords

    TEAM SPORTS LEAGUES; COMPETITIVE BALANCE; PLAYER SALARIES;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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