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Club objectives and ticket pricing in professional team sports

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  • KÉSENNE, Stefan

Abstract

In this paper the simultaneous decision of a professional sports club on gate ticket prices and talent demand is analysed for a profit and a win maximizing sports club. Although the pricing rule is the same in both scenario’s, the ticket price and the talent demand turn out to be higher in a win maximizing club. Somewhat unexpected is the result that an increase of salary level lowers the optimal ticket price, which complicates the impact of a salary cap on the ticket price. One of the consequences of the identical pricing rule is that all tests based on the pricing rule cannot be conclusive w.r.t. the objective of a club. Also the value of the estimated price elasticity of the demand for tickets can hardly reveal anything about the objective of a sports club. More reliable tests could be based on the comparison of the marginal productivity and the salary level, or on the different impact of revenue sharing.

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File URL: https://www.uantwerpen.be/images/uantwerpen/container1244/files/TEW%20-%20Onderzoek/Working%20Papers/RPS/2002/RPS-2002-018.pdf
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Bibliographic Info

Paper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2002018.

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Length: 22 pages
Date of creation: Aug 2002
Date of revision:
Handle: RePEc:ant:wpaper:2002018

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Postal: Prinsstraat 13, B-2000 Antwerpen
Web page: https://www.uantwerp.be/en/faculties/applied-economic-sciences/
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  1. Stefan Szymanski & Stefan KÈsenne, 2004. "Competitive balance and gate revenue sharing in team sports," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 52(1), pages 165-177, 03.
  2. J. C. H. Jones, 1969. "The Economics of the National Hockey League," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 2(1), pages 1-20, February.
  3. Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 41(4), pages 1137-1187, December.
  4. Sloane, Peter J, 1971. "The Economics of Professional Football: The Football Club as a Utility Maximiser," Scottish Journal of Political Economy, Scottish Economic Society, Scottish Economic Society, vol. 18(2), pages 121-46, June.
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Cited by:
  1. Daniel, Rascher & John Paul, Solmes, 2007. "Do Fans Want Close Contests? A Test of the Uncertainty of Outcome Hypothesis in the National Basketball Association," MPRA Paper 25829, University Library of Munich, Germany.
  2. Madden, Paul, 2012. "Fan welfare maximization as a club objective in a professional sports league," European Economic Review, Elsevier, Elsevier, vol. 56(3), pages 560-578.

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