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Competitive Balance and Gate Revenue Sharing in Team Sports

In: The Comparative Economics of Sport

Author

Listed:
  • Stefan Szymanski

    (Imperial College)

  • Stefan Késenne

    (University of Antwerp)

Abstract

This chapter shows that under reasonable conditions, increasing gate revenue sharing among teams in a sports league will produce a more uneven contest, i.e. reduce competitive balance. This result has significant implications for antitrust authorities and legislators, who have tended to assume that revenue sharing arrangements will necessarily promote competitive balance.

Suggested Citation

  • Stefan Szymanski & Stefan Késenne, 2010. "Competitive Balance and Gate Revenue Sharing in Team Sports," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 7, pages 229-243, Palgrave Macmillan.
  • Handle: RePEc:pal:palchp:978-0-230-27427-3_7
    DOI: 10.1057/9780230274273_7
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    References listed on IDEAS

    as
    1. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
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    6. Stefan Kesenne, 2000. "Revenue Sharing and Competitive Balance in Professional Team Sports," Journal of Sports Economics, , vol. 1(1), pages 56-65, February.
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    9. Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September.
    10. Frederic Palomino & Jozsef Sakovics, 2000. "Revenue sharing in professional sports leagues: for the sake of competitive balance or as a result of monopsony power?," Edinburgh School of Economics Discussion Paper Series 59, Edinburgh School of Economics, University of Edinburgh.
    11. Dixit, Avinash K, 1986. "Comparative Statics for Oligopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 107-122, February.
    12. Martin B. Schmidt & David J. Berri, 2001. "Competitive Balance and Attendance," Journal of Sports Economics, , vol. 2(2), pages 145-167, May.
    13. Daniel R. Marburger, 1997. "Gate Revenue Sharing And Luxury Taxes In Professional Sports," Contemporary Economic Policy, Western Economic Association International, vol. 15(2), pages 114-123, April.
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    More about this item

    Keywords

    Team Sport; Marginal Revenue; National Football League; Revenue Sharing; Major League Baseball;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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