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Who Should Own the League? Transaction Costs and the Structure of NBA Ownership

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  • Tomas Nonnenmacher
  • David Gerard

Abstract

Like many professional sports leagues worldwide, the National Basketball Association is organized as a cooperative of team owners. We argue that league ownership structures must balance two types of transaction costs: the costs to league owners of collective decision-making and the costs of contracting with stakeholders of the league, importantly players, owners, and potential investors. We compare the transaction costs of the current team owned league with the alternatives of investor and player owned leagues, finding that each ownership structure reduces some transaction costs while raising others.

Suggested Citation

  • Tomas Nonnenmacher & David Gerard, 2022. "Who Should Own the League? Transaction Costs and the Structure of NBA Ownership," Journal of Sports Economics, , vol. 23(1), pages 76-94, January.
    • Handle: RePEc:sae:jospec:v:23:y:2022:i:1:p:76-94
    DOI: 10.1177/15270025211031474
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    References listed on IDEAS

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    1. Dietl, Helmut M. & Franck, Egon & Hasan, Tariq & Lang, Markus, 2009. "Governance of professional sports leagues--Cooperatives versus contracts," International Review of Law and Economics, Elsevier, vol. 29(2), pages 127-137, June.
    2. David Forrest & Rob Simmons & Stefan Szymanski, 2010. "Broadcasting, Attendance and the Inefficiency of Cartels," Palgrave Macmillan Books, in: Football Economics and Policy, chapter 5, pages 112-135, Palgrave Macmillan.
    3. J. Richard Hill & Peter A. Groothuis, 2001. "The New NBA Collective Bargaining Agreement, the Median Voter Model, and a Robin Hood Rent Redistribution," Journal of Sports Economics, , vol. 2(2), pages 131-144, May.
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