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Sportsman Leagues

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  • John Vrooman

Abstract

type="main" xml:id="sjpe12066-abs-0001"> This paper compares duopsony profit-maximization and sportsman leagues and analyzes the effects of revenue sharing in both leagues. This involves formulation of a duopsony model that compares game-theoretic approaches and price-taking models. This duopsony game is played in open and closed talent markets with a supply function that approaches perfect inelasticity in the limit. The analysis explores welfare optimality of competitive balance, fan preference and revenue sharing. Revenue sharing minimizes payrolls and reduces overall talent in profit-max leagues. This leads to the conclusion that a sportsman league with optimal revenue sharing is welfare superior.

Suggested Citation

  • John Vrooman, 2015. "Sportsman Leagues," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(1), pages 90-115, February.
    • Handle: RePEc:bla:scotjp:v:62:y:2015:i:1:p:90-115
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    File URL: http://hdl.handle.net/10.1111/sjpe.2015.62.issue-1
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    References listed on IDEAS

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    1. Helmut M. Dietl & Markus Lang & Stephan Werner, 2009. "Social Welfare in Sports Leagues with Profit‐Maximizing and/or Win‐Maximizing Clubs," Southern Economic Journal, John Wiley & Sons, vol. 76(2), pages 375-396, October.
    2. Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September.
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    5. repec:bla:scotjp:v:47:y:2000:i:4:p:364-98 is not listed on IDEAS
    6. Stefan Szymanski & Stefan Késenne, 2010. "Competitive Balance and Gate Revenue Sharing in Team Sports," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 7, pages 229-243, Palgrave Macmillan.
    7. Sonia Falconieri & Frédéric Palomino & József Sákovics, 2004. "Collective Versus Individual Sale of Television Rights in League Sports," Journal of the European Economic Association, MIT Press, vol. 2(5), pages 833-862, September.
    8. John Vrooman, 2000. "The Economics of American Sports Leagues," Scottish Journal of Political Economy, Scottish Economic Society, vol. 47(4), pages 364-398, September.
    9. Stefan Szymanski, 2004. "Professional Team Sports Are Only a Game," Journal of Sports Economics, , vol. 5(2), pages 111-126, May.
    10. Sloane, Peter J, 1971. "The Economics of Professional Football: The Football Club as a Utility Maximiser," Scottish Journal of Political Economy, Scottish Economic Society, vol. 18(2), pages 121-146, June.
    11. Paul Madden, 2011. "Game Theoretic Analysis of Basic Team Sports Leagues," Journal of Sports Economics, , vol. 12(4), pages 407-431, August.
    12. Robert Driskill & John Vrooman, 2016. "It’s Not Over ‘til the Fat Lady Sings," Journal of Sports Economics, , vol. 17(4), pages 354-376, May.
    13. Stefan Szymanski, 2006. "Reply: "Professional Team Sports Are Only a Game: The Walrasian Fixed-Supply Conjecture Model, Contest-Nash Equilibrium, and the Invariance Principle"," Journal of Sports Economics, , vol. 7(2), pages 240-243, May.
    14. John Vrooman, 2009. "Theory of the Perfect Game: Competitive Balance in Monopoly Sports Leagues," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 34(1), pages 5-44, February.
    15. John Vrooman, 2007. "Theory Of The Beautiful Game: The Unification Of European Football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 314-354, July.
    16. Helmut M. Dietl & Markus Lang & Stephan Werner, 2009. "Social Welfare in Sports Leagues with Profit-Maximizing and/or Win-Maximizing Clubs," Southern Economic Journal, John Wiley & Sons, vol. 76(2), pages 375-396, October.
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    Cited by:

    1. Dejan Trifunovi? & Vito Pipitone, 0000. "Welfare Maximizing Competitive Balance: the Evidence from Top European Football leagues," Proceedings of International Academic Conferences 11113139, International Institute of Social and Economic Sciences.
    2. Richard C.K. Burdekin & Michael Franklin, 2015. "Transfer Spending in the English Premier League: The Haves and the Have Nots," National Institute Economic Review, National Institute of Economic and Social Research, vol. 232(1), pages 4-17, May.
    3. Duane W. Rockerbie & Stephen T. Easton, 2019. "Of Bricks and Bats: New Stadiums, Talent Supply, and Team Performance in Major League Baseball," Journal of Sports Economics, , vol. 20(1), pages 3-24, January.
    4. Daniel Plumley & Rob Wilson & Robbie Millar & Simon Shibli, 2019. "Howzat? The Financial Health of English Cricket: Not Out, Yet," IJFS, MDPI, vol. 7(1), pages 1-17, February.
    5. Burdekin, Richard C.K. & Franklin, Michael, 2015. "Transfer spending in the English premier league: the haves and the have nots," National Institute Economic Review, National Institute of Economic and Social Research, vol. 232, pages 4-17, May.
    6. Peter J. Sloane, 2015. "The Economics of Professional Football Revisited," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(1), pages 1-7, February.

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