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Inter-league competition for talent vs. competitive balance Author info | Abstract | Publisher info | Download info | Related research | Statistics Frederic Palomino
Jozsef Sakovics ()
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We analyze the distribution of broadcasting revenues by sports leagues. We show that when the teams engage in competitive bidding to attract talent in an isolated league, the league’s optimal choice is full revenue sharing (resulting in full competitive balance). In contrast, when the teams of several leagues bid for talent, in equilibrium the leagues choose a performance-based reward scheme. We thus provide an explanation for the differences in revenue sharing rules for national TV rights used by the U.S. sports leagues (full revenue sharing) and European football leagues (performance-based reward).
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Paper provided by Edinburgh School of Economics, University of Edinburgh in its series ESE Discussion Papers with number
96.
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Length: 23
Date of creation: Mar 2004Date of revision:
Handle: RePEc:edn:esedps:96Contact details of provider: Postal: 50 George Square, EH8 9JY, Edinburgh Phone: +44(0)1316508361 Fax: +44(0)1316504514 Web page: http://www.econ.ed.ac.uk/ More information through EDIRC
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Keywords: Sports league ; revenue sharing ; competitive balance. ; Other versions of this item:
Find related papers by JEL classification: L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Recreation; Tourism
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Palomino, F.A. & Renneboog, L.D.R. & Zhang, C., 2008.
"Information Salience, Investor Sentiment, and Stock Returns: The Case of British Soccer Betting ,"
Discussion Paper
2008-99, Tilburg University, Center for Economic Research.
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Other versions:
Palomino, F.A. & Renneboog, L.D.R. & Zhang, C., 2008.
"Information Salience, Investor Sentiment, and Stock Returns: The Case of British Soccer Betting ,"
Discussion Paper
2008-044, Tilburg University, Tilburg Law and Economic Center.
Palomino, Frederic & Renneboog, Luc & Zhang, Chendi, 2009.
"Information salience, investor sentiment, and stock returns: The case of British soccer betting ,"
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"Stock price reactions to short-lived public information : the case of betting odds ,"
Discussion Paper
16, Tilburg University, Tilburg Law and Economic Center.
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Other versions: Harrie A. A Verbon, 2007.
"Migrating Football Players, Transfer Fees and Migration Controls ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo Group Munich.
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Falconieri, S. & Palomino, F. & Sakovics, J., 2002.
"Collective vs. individual sale of tv rights in league sports ,"
Discussion Paper
106, Tilburg University, Center for Economic Research.
[Downloadable!]
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