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The Effects of Cross-Ownership and League Policies Across Sports Leagues Within a City

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  • Kevin Mongeon
  • Jason Winfree

Abstract

Since prior research suggests that some economic competition exists between teams in different sports leagues, economic competition and ownership structure can affect an owner’s incentive to invest in talent. This paper uses a theoretical model to examine the differences in owners’ incentives to invest in talent when they are operating as monopolists, as duopolists, or as a cross-owned team. Our model shows that economic competition results in an ambiguous level of investment compared to that of a monopolist. A firm that engages in cross-ownership will invest less in talent compared to a duopolist, but the difference in profits is ambiguous. League policies are studied and are shown to affect the quality of teams in other leagues. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Kevin Mongeon & Jason Winfree, 2013. "The Effects of Cross-Ownership and League Policies Across Sports Leagues Within a City," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 43(3), pages 145-162, November.
    • Handle: RePEc:kap:revind:v:43:y:2013:i:3:p:145-162
    DOI: 10.1007/s11151-013-9374-z
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    Cited by:

    1. Tim Wallrafen & Georgios Nalbantis & Tim Pawlowski, 2022. "Competition and Fan Substitution Between Professional Sports Leagues," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 61(1), pages 21-43, August.
    2. Tim Wallrafen & Tim Pawlowski & Christian Deutscher, 2019. "Substitution in Sports: The Case of Lower Division Football Attendance," Journal of Sports Economics, , vol. 20(3), pages 319-343, April.
    3. Brian M. Mills & Michael Mondello & Scott Tainsky, 2016. "Competition in shared markets and Major League Baseball broadcast viewership," Applied Economics, Taylor & Francis Journals, vol. 48(32), pages 3020-3032, July.
    4. Brian M. Mills & Jason A. Winfree & Mark S. Rosentraub & Ekaterina Sorokina, 2015. "Fan substitution between North American professional sports leagues," Applied Economics Letters, Taylor & Francis Journals, vol. 22(7), pages 563-566, May.

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    More about this item

    Keywords

    Ownership structures; Sports leagues; Talent investment; L83;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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