TV Revenue Sharing as a Coordination Device in Sports Leagues
AbstractAs sports clubs jointly produce contests, they cannot determine contest quality through their private talent investments. Sports leagues therefore try to coordinate talent investments towards the profit-maximizing contest quality. In this paper I analyze how revenue sharing mechanisms may serve this goal when demand comes from hard-core club and neutral sports fans. Performance-based sharing turns out to be an inefficient sharing rule for the cartel, although it is not harmful for social welfare. This inefficient cartel behavior can be rationalized as the result of bargaining with asymmetric outside options. Data from US and European sports leagues illustrate the theoretical findings.
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Bibliographic InfoPaper provided by International Association of Sports Economists & North American Association of Sports Economists in its series Working Papers with number 1109.
Length: 29 pages
Date of creation: Mar 2011
Date of revision:
cartel behavior; revenue sharing; sports leagues; TV rights;
Other versions of this item:
- Peeters, Thomas, 2012. "Media revenue sharing as a coordination device in sports leagues," International Journal of Industrial Organization, Elsevier, vol. 30(2), pages 153-163.
- Peeters Th., 2010. "TV Revenue Sharing as a Coordination Device in Sports," Working Papers 2010005, University of Antwerp, Faculty of Applied Economics.
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Recreation; Tourism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-04-09 (All new papers)
- NEP-COM-2011-04-09 (Industrial Competition)
- NEP-SPO-2011-04-09 (Sports & Economics)
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- Egon Franck & Markus Lang, 2013.
"A Theoretical Analysis of the Influence of Money Injections on Risk Taking in Football Clubs,"
0046, University of Zurich, Center for Research in Sports Administration (CRSA).
- Egon Franck & Markus Lang, 2013. "A Theoretical Analysis of the Influence of Money Injections on Risk Taking in Football Clubs," Working Papers 0160, University of Zurich, Institute for Strategy and Business Economics (ISU).
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