TV Revenue Sharing as a Coordination Device in Sports
AbstractAs sports clubs jointly produce contests, they cannot determine contest quality through their private talent investments. Sports leagues therefore try to coordinate talent investments towards the pro?t-maximizing contest quality. In this paper I analyze how revenue sharing mechanisms may serve this goal when demand comes from hard-core club and neutral sports fans.Performance-based sharing turns out to be an ine¢ cient sharing rule for the cartel, although it is not harmful for social welfare. This ine¢ cient cartel behavior can be rationalized as the result of bargaining with asymmetric outside options. Data from US and European sports leagues illustrate the theoretical fi?ndings.
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Bibliographic InfoPaper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2010005.
Length: 28 pages
Date of creation: Apr 2010
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Other versions of this item:
- Peeters, Thomas, 2012. "Media revenue sharing as a coordination device in sports leagues," International Journal of Industrial Organization, Elsevier, vol. 30(2), pages 153-163.
- Thomas Peeters, 2011. "TV Revenue Sharing as a Coordination Device in Sports Leagues," Working Papers 1109, International Association of Sports Economists & North American Association of Sports Economists.
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
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