Optimal gate revenue sharing in sports leagues
AbstractSports leagues constitute one of the few examples of legally operating cartels. In this paper I examine how gate revenue sharing may serve to coordinate talent investmentswithin these cartels. I show that sharing revenues has the potential to raise cartel profits, because it decreases the incentive to invest in playing talent. Leagues consisting of teams with heterogeneous local markets should share less revenues to maximize profits, whereas homogeneous teams should share more.
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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 1122.
Length: 21 pages
Date of creation: Nov 2011
Date of revision:
contests; contest success functions; sports;
Other versions of this item:
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
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