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Owners incentives during the 2004-05 National Hockey League lockout

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  • Jason Winfree

Abstract

This study shows that firm owners can indirectly benefit from work stoppages if they own other firms in substitute industries and gain market power for those other firms. The incentives of the owners are examined with a model of cross-ownership cartels and data from professional sports. Assuming that various professional sport events are substitutes, owners may increase profits by eliminating competition, even if they own the competition. This study shows that the recent National Hockey League (NHL) lockout caused a statistically significant increase in attendance for the National Basketball Association and junior hockey leagues. Given that many NHL owners own teams in these substitutable leagues, this could be construed as anti-competitive behaviour and may have prolonged the NHL lockout and helped NHL owners in collective bargaining. Given the public investment in sports facilities and market power in professional sports, this analysis calls for cross-ownership across professional sports to be questioned.

Suggested Citation

  • Jason Winfree, 2009. "Owners incentives during the 2004-05 National Hockey League lockout," Applied Economics, Taylor & Francis Journals, vol. 41(25), pages 3275-3285.
  • Handle: RePEc:taf:applec:v:41:y:2009:i:25:p:3275-3285
    DOI: 10.1080/00036840701765395
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    References listed on IDEAS

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    Cited by:

    1. Mongeon, Kevin & Winfree, Jason, 2012. "Cross-ownership, league policies and player investment across sports leagues," MPRA Paper 39218, University Library of Munich, Germany.
    2. 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.
    3. 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.
    4. Mongeon, Kevin & Winfree, Jason, 2012. "Comparison of television and gate demand in the National Basketball Association," Sport Management Review, Elsevier, vol. 15(1), pages 72-79.

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