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Fan welfare maximization as a club objective in a professional sports league

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  • Madden, Paul

Abstract

Motivated by aspects of European soccer club governance (members' clubs supporters' trusts), a first formal analysis of fan welfare maximization as a club objective in a sports league is provided, with comparisons to objectives studied previously (profit and win maximization). Positive comparisons focus on team qualities, ticket prices, attendances and the impact of capacity crowds; empirically observed ticket black markets and inelastic pricing are consistent only with fan welfare maximization. Normatively, social welfare (aggregate league surplus) is well-served by a league of fan welfare maximizers, or sometimes win maximizers, but not profit maximizers; leagues should not normally make profits.

Suggested Citation

  • Madden, Paul, 2012. "Fan welfare maximization as a club objective in a professional sports league," European Economic Review, Elsevier, vol. 56(3), pages 560-578.
    • Handle: RePEc:eee:eecrev:v:56:y:2012:i:3:p:560-578
    DOI: 10.1016/j.euroecorev.2011.12.006
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    Citations

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    Cited by:

    1. Paul Madden & Mario Pezzino, 2013. "Sports League Quality, Broadcaster TV Rights Bids and Wholesale Regulation of Sports Channels," Economics Discussion Paper Series 1304, Economics, The University of Manchester.
    2. Paul Madden, 2012. "Welfare Economics of "Financial Fair Play" in a Sports League With Benefactor Owners," Economics Discussion Paper Series 1221, Economics, The University of Manchester.
    3. Lionel Page & Markus Schaffner & Marie Beigelman, 2016. "Striking strikers. A case of player mispricing in Association Football," QuBE Working Papers 043, QUT Business School.
    4. R. Todd Jewell, 2017. "Technical efficiency with multi-output, heterogeneous production: a latent class, distance function model of english football," Journal of Productivity Analysis, Springer, vol. 48(1), pages 37-50, August.
    5. Terry Robinson & Robert Simmons, 2014. "Gate-Sharing and Talent Distribution in the English Football League," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 21(3), pages 413-429, November.
    6. Kato, Kazuhiko, 2023. "Effects of a uniform relative emission standard in a professional team sports league," MPRA Paper 117009, University Library of Munich, Germany.
    7. Peter Sloane, 2014. "Club objectives," Chapters, in: John Goddard & Peter Sloane (ed.), Handbook on the Economics of Professional Football, chapter 1, pages 13-22, Edward Elgar Publishing.
    8. Helmut Dietl & Markus Lang & Cornel Nesseler, 2017. "The Impact of Government Subsidies in Professional Team Sports Leagues," Working Papers 366, University of Zurich, Department of Business Administration (IBW).
    9. 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.
    10. Paul Madden, 2014. "Does Break-Even Regulation of Soccer Clubs Make Sense?," Economics Discussion Paper Series 1405, Economics, The University of Manchester.
    11. Teodor DIMA, 2015. "The Economics Of “Big Five” European Football Leagues," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 7(2a), pages 434-442, September.
    12. Gomez-Gonzalez, Carlos & Dietl, Helmut & Nesseler, Cornel, 2019. "Does performance justify the underrepresentation of women coaches? Evidence from professional women’s soccer," Sport Management Review, Elsevier, vol. 22(5), pages 640-651.
    13. DIMA Teodor & OTOIU Adrian, 2015. "A Composite Index To Assess The Top European Football Clubs In 2014," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 67(2), pages 68-85.
    14. Paul Madden & Terry Robinson, 2012. "Supporter Influence on Club Governance in a Sports League; a “Utility Maximization” Model," Scottish Journal of Political Economy, Scottish Economic Society, vol. 59(4), pages 339-360, September.
    15. Michael Christian Leitner & Frank Daumann & Florian Follert & Fabio Richlan, 2023. "The cauldron has cooled down: a systematic literature review on home advantage in football during the COVID-19 pandemic from a socio-economic and psychological perspective," Management Review Quarterly, Springer, vol. 73(2), pages 605-633, June.
    16. Paul Madden, 2015. "Welfare Economics of “Financial Fair Play†in a Sports League With Benefactor Owners," Journal of Sports Economics, , vol. 16(2), pages 159-184, February.
    17. Rodney Fort, 2015. "Managerial Objectives: A Retrospective on Utility Maximization in Pro Team Sports," Scottish Journal of Political Economy, Scottish Economic Society, vol. 62(1), pages 75-89, February.
    18. Aloys Prinz & Stefan Thiem, 2021. "Value‐maximizing football clubs," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(5), pages 605-622, November.

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    More about this item

    Keywords

    Fan welfare maximization; Aggregate surplus; Sports league;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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