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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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    References listed on IDEAS

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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," The School of 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," The School of Economics Discussion Paper Series 1221, Economics, The University of Manchester.
    3. Paul Madden, 2014. "Does Break-Even Regulation of Soccer Clubs Make Sense?," The School of Economics Discussion Paper Series 1405, Economics, The University of Manchester.
    4. repec:kap:jproda:v:48:y:2017:i:1:d:10.1007_s11123-017-0508-4 is not listed on IDEAS
    5. 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.
    6. 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.
    7. Peter Sloane, 2014. "Club objectives," Chapters,in: Handbook on the Economics of Professional Football, chapter 1, pages 13-22 Edward Elgar Publishing.

    More about this item

    Keywords

    Fan welfare maximization; Aggregate surplus; Sports league;

    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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