Competitive balance and revenue sharing when rich clubs have poor teams
In this paper, a distinction is made between two types of competitive imbalances, the good and the bad one. Since it is mainly the bad type of competitive imbalance, which worries us most, i.e. the large market clubs dominating the small market clubs, it can be shown that the competitive balance in a win maximizing league is always worse than in a profit maximizing league. Also, revenue sharing which aims to cure the good type of imbalance, i.e. a small market club dominating the league, might not have the desirable effect if the criterion for sharing is the budget of the clubs.
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