Does a super league tournament harm domestic leagues? Evidence from basketball’s Euroleague

Sports leagues are traditionally considered as natural monopolies. Therefore, understanding how different sports competitions interact is a fundamental economic question. In particular, it is unclear how a closed (or semi-closed) elite tournament affects the level of competition in domestic leagues. On the one hand, it facilitates access to more financial resources that can increase the gap between big and small teams at the national level. But, on the other hand, participating in more competitions could also imply more fatigue and lack of concentration on the domestic league, given the greater demand that is placed on playing talent. This paper studies the effect of participating in basketball’s Euroleague tournament on team performance in eight national leagues. We find that Euroleague participation harms national performance, reducing the probability of victory by around 9% in ‘big’ leagues (i.e. those with the strongest teams). However, no significant effect was found for the rest of the league.A potential transmission channel for this effect is the higher reduction in the number of days between matches. Overall, the present paper suggests that a superleague tournament could contribute to reducing the gap between big and small clubs, at least in the strongest national leagues. We discuss the political implications of this result.