Optimal gate revenue sharing in sports leagues
AbstractSports leagues constitute one of the few examples of legally operating cartels. In this paper I examine how gate revenue sharing may serve to coordinate talent investments within these cartels. I show that sharing revenues has the potential to raise cartelpro?ts, because it decreases the incentive to invest in playing talent. Leagues consisting of teams with heterogeneous local markets should share less revenues to maximize pro?ts, whereas homogeneous teams should share more.
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Bibliographic InfoPaper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2011015.
Length: 23 pages
Date of creation: Oct 2011
Date of revision:
Other versions of this item:
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Recreation; Tourism
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- Amy Farmer & Paul Pecorino, 2010. "Is the Coach Paid too Much?: Coaching Salaries and the NCAA Cartel," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(3), pages 841-862, 09.
- Donald G. Ferguson & J. C. H. Jones & Kenneth G. Stewart, 2000. "Competition Within A Cartel: League Conduct And Team Conduct In The Market For Baseball Player Services," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 422-430, August.
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