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The Organization of Professional Sports Leagues: A Comparison of European and North-American Leagues from the Perspective of Platform Organization

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Author Info

  • Helmut Dietl

    ()
    (Institute for Strategy and Business Economics, University of Zurich)

  • Tobias Duschl

    ()
    (Institute for Strategy and Business Economics, University of Zurich)

Abstract

In this paper we compare European and North American sports leagues from the perspective of platform organization. We find that European leagues can be characterized as open, not only in the sense of promotion and relegation, but also in the sense of attenuated/dispersed property rights and free access to all market sides. North American leagues, on the other hand, are organized as closed platforms with exclusive/concentrated property rights and high entry barriers on all market sides. This difference explains why European clubs outperform their North American counterparts in terms of revenue generation, i.e. value creation, and why North American clubs are much more profitable than most European clubs. European leagues are organized as open platforms, which invite and facilitate participation from all relevant market sides. The absence of concentrated property rights and the possibility of free market entry, two aspects existent in North American leagues, limit the opportunities of value appropriation for European clubs.

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File URL: http://repec.business.uzh.ch/RePEc/rsd/CRSA_WPS/34_CRSA_full.pdf
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Bibliographic Info

Paper provided by University of Zurich, Center for Research in Sports Administration (CRSA) in its series Working Papers with number 0034.

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Length: 15 pages
Date of creation: Dec 2009
Date of revision:
Handle: RePEc:rsd:wpaper:0034

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Keywords: Sports leagues; organization; platform; network effects;

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References

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  1. Jean-Charles Rochet & Jean Triole, 2002. "Platform Competition in Two Sided Markets," FMG Discussion Papers dp409, Financial Markets Group.
  2. DeSerpa, Allan C & Faith, Roger L, 1996. " "Bru-u-u-uce": The Simple Economics of Mob Goods," Public Choice, Springer, vol. 89(1-2), pages 77-91, October.
  3. Helmut Dietl & Markus Lang & Alexander Rathke, 2007. "The Effect of Salary Caps in Professional Team Sports on Social Welfare," Working Papers 0016, University of Zurich, Center for Research in Sports Administration (CRSA).
  4. Jeffery Borland, 2003. "Demand for Sport," Oxford Review of Economic Policy, Oxford University Press, vol. 19(4), pages 478-502, Winter.
  5. Helmut Dietl & Egon Franck & Stephan Nüesch, 2005. "Are Voluntary Salary Cap Agreements Self-Enforcing?," Working Papers 0040, University of Zurich, Institute for Strategy and Business Economics (ISU).
  6. Helmut Dietl & Egon FrancK & Markus Lang & Alexander Rathke, 2008. "Welfare Effects of Salary Caps in Sports Leagues with Win-Maximizing Clubs," Working Papers 0825, International Association of Sports Economists & North American Association of Sports Economists.
  7. KÉSENNE, Stefan, . "The impact of salary caps in professional team sports," Working Papers 1999026, University of Antwerp, Faculty of Applied Economics.
  8. Stefan Szymanski & Tommaso M. Valletti, 2005. "Promotion and Relegation in Sporting Contests," Rivista di Politica Economica, SIPI Spa, vol. 95(3), pages 3-39, May-June.
  9. Roger Noll, 2002. "The Economics of Promotion and Relegation in Sports Leagues: The Cases of English Football," Journal of Sports Economics, , vol. 3(2), pages 169-203, May.
  10. Roger G. Noll, 2003. "The Organization of Sports Leagues," Oxford Review of Economic Policy, Oxford University Press, vol. 19(4), pages 530-551, Winter.
  11. Stigler, George J & Becker, Gary S, 1977. "De Gustibus Non Est Disputandum," American Economic Review, American Economic Association, vol. 67(2), pages 76-90, March.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Open platforms versus cartels in professional sports leagues
    by Economic Logician in Economic Logic on 2010-02-08 15:30:00
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Cited by:
  1. Oliver Budzinski & Janina Satzer, 2011. "Sports Business and Multisided Markets: Towards a New Analytical Framework? (Long Version)," Working Papers 109/11, University of Southern Denmark, Department of Environmental and Business Economics.
  2. Christoph Breuer & Helmut Dietl & Christian WeingŠrtner & Pamela Wicker, 2011. "The effect of a sports institutionÕs legal structure on sponsorship income: The case of amateur equestrian sports in Germany," Working Papers 0146, University of Zurich, Institute for Strategy and Business Economics (ISU).

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