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Sports Business and Multisided Markets: Towards a New Analytical Framework? (Long Version)

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  • Oliver Budzinski

    ()
    (Department of Environmental and Business Economics, University of Southern Denmark)

  • Janina Satzer

    ()
    (Department of Environmental and Business Economics, University of Southern Denmark)

Abstract

Despite still being younger than a decade, the theory of multisided markets has offered numerous valuable insights for the analysis of industries in which a supplier serves two distinct customer groups that are indirectly interrelated through externalities. Examples include payment systems, matching agencies, commercial media, and software platforms. However, professional sports mar-kets have largely been neglected so far in this kind of research although they possess the characteristics of multisided markets. This conceptual paper con-tributes to filling this gap by describing the platform elements of professional suppliers of sports events and conceptually outlining issues where an applica-tion of this theoretical framework is likely to provide valuable insights and to add to the existing knowledge. Among these problems are integrative pricing strategies of sports clubs towards such different customer groups like attendees, broadcasters, sponsors, etc., including their welfare and antitrust implications, design decisions of sports associations in order to promote positive feedback loops among the customer groups as well as management strategies to reinforce positive externalities among customer groups and alleviate negative ones. The authors would like to thank Anna Lund Jepsen and Nadine Lindstädt for valuable comments on earlier versions of this paper as well as Barbara Güldenring and Liz Patti for editorial assistance. A substantially shorter version of this paper will be published in Sports, Business, Management: An International Journal in 2011.

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Bibliographic Info

Paper provided by University of Southern Denmark, Department of Environmental and Business Economics in its series Working Papers with number 109/11.

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Length: 48 pages
Date of creation: May 2011
Date of revision:
Handle: RePEc:sdk:wpaper:109

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Related research

Keywords: sports economics; sports management; two-sided markets; multisided platforms; professional sports business; pricing strategies; broadcasting rights;

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References

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  1. Helmut Dietl & Tobias Duschl, 2009. "The Organization of Professional Sports Leagues: A Comparison of European and North-American Leagues from the Perspective of Platform Organization," Working Papers 0034, University of Zurich, Center for Research in Sports Administration (CRSA).
  2. Andrew S. Zimbalist, 2002. "Competitive Balance in Sports Leagues: An Introduction," Journal of Sports Economics, , vol. 3(2), pages 111-121, May.
  3. Roger G. Noll, 2007. "Broadcasting and Team Sports," Discussion Papers 06-016, Stanford Institute for Economic Policy Research.
  4. Sloane, Peter J., 2006. "Rottenberg and the Economics of Sport after 50 Years: An Evaluation," IZA Discussion Papers 2175, Institute for the Study of Labor (IZA).
  5. 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.
  6. repec:rje:randje:v:37:y:2006:3:p:645-667 is not listed on IDEAS
  7. Anderson, Simon P. & Gabszewicz, Jean J., 2006. "The Media and Advertising: A Tale of Two-Sided Markets," Handbook of the Economics of Art and Culture, Elsevier.
  8. Dewenter, Ralf & Haucap, Justus, 2008. "Wettbewerb als Aufgabe und Problem auf Medienmaerkten: Fallstudien aus Sicht der "Theorie zweiseitiger Maerkte"," Working Paper 78/2008, Helmut Schmidt University, Hamburg.
  9. Simon P. Anderson & Stephen Coate, 2003. "Market Provision of Broadcasting: A Welfare Analysis," Virginia Economics Online Papers 358, University of Virginia, Department of Economics.
  10. Schmalensee, Richard, 2002. "Payment Systems and Interchange Fees," Journal of Industrial Economics, Wiley Blackwell, vol. 50(2), pages 103-22, June.
  11. Kaiser, Ulrich & Wright, Julian, 2006. "Price structure in two-sided markets: Evidence from the magazine industry," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 1-28, January.
  12. David S. Evans & Richard Schmalensee, 2005. "The Industrial Organization of Markets with Two-Sided Platforms," NBER Working Papers 11603, National Bureau of Economic Research, Inc.
  13. Grant Allan & Graeme Roy, 2008. "Does Television Crowd Out Spectators?," Journal of Sports Economics, , vol. 9(6), pages 592-605, December.
  14. Hans Jarle Kind & Tore Nilssen & Lars Sørgard, 2006. "Competition for Viewers and Advertisers in a TV Oligopoly," CESifo Working Paper Series 1862, CESifo Group Munich.
  15. Caillaud, Bernard & Jullien, Bruno, 2003. " Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-28, Summer.
  16. Jean-Charles Rochet & Jean Tirole, 2002. "Cooperation Among Competitors: Some Economics Of Payment Card Associations," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 549-570, Winter.
  17. Reinhard Grohs & Udo Wagner & Sabine Vsetecka, 2004. "Assessing The Effectiveness Of Sport Sponsorships – An Empirical Examination," Schmalenbach Business Review (sbr), LMU Munich School of Management, vol. 56(2), pages 119-138, April.
  18. Helmut Dietl & Tobias Duschl & Egon Franck & Markus Lang, 2009. "A Contest Model of a Professional Sports League with Two-Sided Markets," Working Papers 0114, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Nov 2010.
  19. Roson Roberto, 2005. "Two-Sided Markets: A Tentative Survey," Review of Network Economics, De Gruyter, vol. 4(2), pages 1-19, June.
  20. Thomas Hoehn & Stefan Szymanski, 1999. "The Americanization of European football," Economic Policy, CEPR & CES & MSH, vol. 14(28), pages 203-240, 04.
  21. repec:rje:randje:v:37:y:2006:3:p:668-691 is not listed on IDEAS
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Citations

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Cited by:
  1. Budzinski, Oliver & Müller, Anika, 2013. "Finanzregulierung und internationale Wettbewerbsfähigkeit: Der Fall Deutsche Bundesliga," Ilmenau Economics Discussion Papers 82, Ilmenau University of Technology, Institute of Economics.
  2. 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.

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