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The optimal size of a sports league

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  • KÉSENNE, Stefan

Abstract

In this contribution, we try to investigate, based on a simple theoretical model, what the optimal number of teams in a league is, taking into account the most important determinants of club revenue and fans’ utility. The number of teams fixed by a monopoly league representing the interests of the participating clubs is clearly smaller than the number of teams in the competitive free-entry market equilibrium. We have also tested, using European football data, whether the long-term equilibrium number of teams in the national top divisions has been determined by the market or by the insiders of the monopoly leagues.

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  • KÉSENNE, Stefan, 2008. "The optimal size of a sports league," Working Papers 2008017, University of Antwerp, Faculty of Business and Economics.
    • Handle: RePEc:ant:wpaper:2008017
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    1. Sonia Falconieri & Frédéric Palomino & József Sákovics, 2004. "Collective Versus Individual Sale of Television Rights in League Sports," Journal of the European Economic Association, MIT Press, vol. 2(5), pages 833-862, September.
    2. Stefan Szymanski, 2010. "The Economic Design of Sporting Contests," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 1, pages 1-78, Palgrave Macmillan.
    3. Roger G. Noll, 2003. "The Economics of Baseball Contraction," Journal of Sports Economics, , vol. 4(4), pages 367-388, November.
    4. Lawrence M. Kahn, 2007. "Sports League Expansion and Consumer Welfare," Journal of Sports Economics, , vol. 8(2), pages 115-138, May.
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    JEL classification:

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

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