Advanced Search
MyIDEAS: Login to save this paper or follow this series

Competitive Balance vs. Incentives to Win: A Theoretical Analysis of Revenue Sharing

Contents:

Author Info

  • Frederic Palomino

    (Instituto de Analisis Econimico)

Abstract

We analyze a dynamic model of strategic interaction between the league organizing a professional sport, the teams playing the tournament organized by this league, and broadcasters competing for the rights to televise their matches. Teams and broadcasters maximize expected profits, while the league's objective may be either to maximize the demand for the sport or to maximize the teams' joint profits. Demand depends positively on competitive balance among teams and how intensively they compete to win the tournament. Revenue sharing increases competitive balance but decreases incentives to win. Under demand maximization, a performance-based reward scheme (as used by European top soccer leagues for national TV deals) may be optimal. Under joint profit maximization, full revenue sharing (as used by US team sport leagues for national TV deals) is always optimal.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://fmwww.bc.edu/RePEc/es2000/0930.pdf
File Function: main text
Download Restriction: no

Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society World Congress 2000 Contributed Papers with number 0930.

as in new window
Length:
Date of creation: 01 Aug 2000
Date of revision:
Handle: RePEc:ecm:wc2000:0930

Contact details of provider:
Phone: 1 212 998 3820
Fax: 1 212 995 4487
Email:
Web page: http://www.econometricsociety.org/pastmeetings.asp
More information through EDIRC

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Palomino, Frederic & Sakovics, Jozsef, 2004. "Inter-league competition for talent vs. competitive balance," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 783-797, June.
  2. Barajas, Angel, 2004. "Modelo de valoración de clubes de fútbol basado en los factores clave de su negocio
    [Valuation model for football clubs based on the key factors of their business]
    ," MPRA Paper 13158, University Library of Munich, Germany.
  3. Frederic Palomino & Jozsef Sakovics, 2004. "Revenue sharing in professional sports leagues: for the sake of competitive balance or as a result of monopsony power?," ESE Discussion Papers 59, Edinburgh School of Economics, University of Edinburgh.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:ecm:wc2000:0930. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.