Franchise Relocations, Expansions, and Mergers in Professional Sports Leagues
AbstractAll three sections in this chapter are interrelated. Expansions and relocations, especially in the early years of a league, are often the response to upstart rival leagues. More recently, relocations have occurred because another city offers a better facility lease regardless of whether the league as a whole is better off or not. Relocations, more so than expansions, often end up in court whether as an antitrust case accusing the league of monopolistically restricting business or as an eminent domain suit attempting to prevent a team from relocating. Recent rulings have allowed a league to enforce a relocation fee that is commensurate with the harm caused to the rest of the league because of the move. Rivalries often begin with a few teams in major cities competing head-to-head with the existing dominant league. Inevitably, the sport ends up with one major league providing top level play, begging the question of whether sports leagues are natural monopolies. This occurs either with a merger, a partial merger, an acquisition or, most commonly, a failed rival league. Often the incumbent league emerges from the rivalry a stronger, more stable business, having been forced to address a weakness exploited by the rival (e.g., MLB failing to recognize the western markets). Additionally, the new locations of franchises have often been vetted by the upstart rival to determine which few are most profitable and sustainable.
Download InfoIf 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.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 25809.
Date of creation: 2008
Date of revision:
competition; expansion; relocation; merger; football; baseball; basketball; hockey; sports;
Find related papers by JEL classification:
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lawrence Kahn, 2003. "Sports League Expansion and Economic Efficiency: Monopoly Can Enhance Consumer Welfare," CESifo Working Paper Series 1101, CESifo Group Munich.
- Dennis W. Carlton & Alan S. Frankel & Elisabeth M. Landes, 2004. "The Control of Externalities in Sports Leagues: An Analysis of Restrictions in the National Hockey League," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages S268-S288, February.
- Rodney Fort, 2006. "Value of Major League Baseball Ownership," International Journal of Sport Finance, Fitness Information Technology, vol. 1(1), pages 9-20, February.
- Rascher, Daniel & Rascher, Heather, 2004. "NBA Expansion and Relocation: A Viability Study of Various Cities," MPRA Paper 25740, University Library of Munich, Germany.
- Young Hoon Lee & Rodney Fort, 2005. "Structural Change in MLB Competitive Balance: The Depression, Team Location, and Integration," Economic Inquiry, Western Economic Association International, vol. 43(1), pages 158-169, January.
- Dennis Coates & Brad R. Humphreys, 2003.
"Novelty Effects of New Facilities on Attendance at Professional Sporting Events,"
UMBC Economics Department Working Papers
03-101, UMBC Department of Economics.
- Dennis Coates & Brad R. Humphreys, 2005. "Novelty Effects Of New Facilities On Attendance At Professional Sporting Events," Contemporary Economic Policy, Western Economic Association International, vol. 23(3), pages 436-455, 07.
- Angelo Cocco & J. C. H. Jones, 1997. "On going south: the economics of survival and relocation of small market NHL franchises in Canada," Applied Economics, Taylor & Francis Journals, vol. 29(11), pages 1537-1552.
- Oliver Budzinski, 2011.
"The Institutional Framework for Doing Sports Business: Principles of EU Competition Policy in Sports Markets,"
108/11, University of Southern Denmark, Department of Environmental and Business Economics.
- Oliver Budzinski, 2011. "The Institutional Framework for Doing Sports Business: Principles of EU Competition Policy in Sports Markets," Working Papers 1103, International Association of Sports Economists & North American Association of Sports Economists.
- Budzinski, Oliver, 2012. "The institutional framework for doing sports business: Principles of EU competition policy in sports markets," Ilmenau Economics Discussion Papers 70, Ilmenau University of Technology, Institute of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.