Cross-ownership, league policies and player investment across sports leagues
AbstractAlthough many sports leagues are viewed as monopolies, research suggests that some economic competition exists between teams in dierent sports leagues. If fans make consumption choices based on the quality of all teams that are present in their region, then economic competition and ownership structure can impact an owner's incentive to invest in talent. This article examines dierences between monopolists, duopolists and cross-ownership. Consumer preferences and fan loyalty are allowed to vary across sports, and the winning percentages of teams in other leagues aects demand. Our model shows that economic competition results in an ambiguous level of investment compared to a monopolist. A rm that engages in cross-ownership will invest less in talent compared to a duopolist, but the dierence in prots is ambiguous. League policies are studied and are shown to aect the quality of teams in other leagues.
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 39218.
Date of creation: 21 Jan 2012
Date of revision:
Sports Leagues; Talent Investment; Ownership Structures;
Find related papers by JEL classification:
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-06-13 (All new papers)
- NEP-COM-2012-06-13 (Industrial Competition)
- NEP-SPO-2012-06-13 (Sports & Economics)
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.:
- Késenne Stefan & Szymanski S., 2003.
"Competitive balance and gate revenue sharing in team sports,"
2003003, University of Antwerp, Faculty of Applied Economics.
- Stefan Szymanski & Stefan KÈsenne, 2004. "Competitive balance and gate revenue sharing in team sports," Journal of Industrial Economics, Wiley Blackwell, vol. 52(1), pages 165-177, 03.
- Salant, Stephen W & Switzer, Sheldon & Reynolds, Robert J, 1983. "Losses from Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 185-99, May.
- Phillip Miller, 2006. "Major League Duopolists: When Baseball Clubs Play in Two-Team Cities," Working Papers 0628, International Association of Sports Economists & North American Association of Sports Economists.
- Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, January.
- Rodney J. Paul, 2003. "Variations in NHL Attendance," American Journal of Economics and Sociology, Wiley Blackwell, vol. 62(2), pages 345-364, 04.
- Daniel, Rascher & Matt, Brown & Mark, Nagel & Chad, McEvoy, 2009. "Where did National Hockey League Fans go During the 2004-2005 Lockout?: An Analysis of Economic Competition Between Leagues," MPRA Paper 25804, University Library of Munich, Germany.
- Craig A. Depken, II, 2001. "Fan Loyalty in Professional Sports: An Extension to the National Football League," Journal of Sports Economics, , vol. 2(3), pages 275-284, August.
- Jason Winfree, 2009. "Owners incentives during the 2004-05 National Hockey League lockout," Applied Economics, Taylor & Francis Journals, vol. 41(25), pages 3275-3285.
- El-Hodiri, Mohamed & Quirk, James, 1971. "An Economic Model of a Professional Sports League," Journal of Political Economy, University of Chicago Press, vol. 79(6), pages 1302-19, Nov.-Dec..
- Craig A. Depken, II, 2000. "Fan Loyalty and Stadium Funding in Professional Baseball," Journal of Sports Economics, , vol. 1(2), pages 124-138, May.
- Skaperdas, Stergios, 1996.
"Contest Success Functions,"
Springer, vol. 7(2), pages 283-90, February.
- Scott Tainsky, 2010. "Television Broadcast Demand for National Football League Contests," Journal of Sports Economics, , vol. 11(6), pages 629-640, December.
- Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1137-1187, December.
- Jason Winfree & Jill McCluskey & Ron Mittelhammer & Rodney Fort, 2004. "Location and attendance in major league baseball," Applied Economics, Taylor & Francis Journals, vol. 36(19), pages 2117-2124.
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.