The concept of competitive balance is a central aspect in the literature of sports economics. A popular argumentation of sport functionaries is that dominance of one or a few teams could lead to unequal incomes for the clubs, restrictions in the clubs’ ability to improve sporting performance and ultimately to a loss of attractiveness and loss of income for the league. Following this line of reasoning and alleging a negative trend in competitive sports functionaries often try to implement regulations in team sport leagues. The aim of this paper is to analyze for eight different leagues if there is such a trend existing. For an empirical test for trends in competitive balance of four European soccer leagues (ENG, ESP, GER, ITA) and four US Major Leagues (MLB, NBA, NFL, NHL), OLS regressions with a constant were carried out. For the entire observation period from 1969/70 to 2003/2004, of 48 trends ascertained, only 12 could be observed as being significantly positive (i.e. growing imbalance) with 19 significantly negative (i.e. growing balance). The remaining 17 trends were insignificantly different from zero.
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Publisher Info
Paper provided by Chair for Economic Policy, University of Hamburg in its series Working Papers with number
0012005.
Length: 13 pages Date of creation: 2005 Date of revision: Publication status: Published in Hamburg Contemporary Economic Discussions, Issue 01/2005 Handle: RePEc:hce:wpaper:200501
Find related papers by JEL classification: L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Recreation; Tourism C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions
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