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Back to Basics: A New Look at Gate-revenue Sharing and Competitive Balance

Author

Listed:
  • Robert Sandy

    (Indiana University Purdue University Indianapolis (IUPUI))

  • Peter Sloane

    (University of Swansea)

  • John Treble

    (University of Swansea)

Abstract

Most models with profit maximizing teams conclude that competitive balance is unchanged or reduced in response to gate sharing. We critique these models and then develop three alternatives: adding unshared post-season revenue; modelling the largest market team as a dominant firm with a rising marginal cost of talent; and a new general model that incorporates both a consumer demand for athletic talent and close competition. All three approaches can cause gate sharing to increase competitive balance.

Suggested Citation

  • Robert Sandy & Peter Sloane & John Treble, 2006. "Back to Basics: A New Look at Gate-revenue Sharing and Competitive Balance," Working Papers 0607, International Association of Sports Economists;North American Association of Sports Economists.
    • Handle: RePEc:spe:wpaper:0607
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    File URL: http://web.holycross.edu/RePEc/spe/Sloane_Basics.pdf
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    Cited by:

    1. Michel Cavagnac, 2009. "Revenue Sharing and Competitive Balance When Teams are not Wage Takers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(3), pages 299-313, November.

    More about this item

    Keywords

    Sport; Monopsony; Monopoly Power;
    All these keywords.

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • L0 - Industrial Organization - - General
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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