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Collective vs. Individual Sale of TV Rights in League Sports

Author

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  • Sonia Falconieri
  • Frederic Palomino
  • Jozsef Sakovics

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Abstract

In many countries, the collective sale of TV rights by sports leagues has been challenged by the antitrust authorities. In several cases, however, leagues won in court, on the ground that sport cannot be considered a standard good. In this paper, we investigate the conditions under which the sale of TV rights collectively by sports leagues, rather than individually by teams, is preferred from a social welfare viewpoint. We find that collective sale is socially preferable when leagues are small, relatively homogeneous in terms of clout and where teams get little performance-related revenues.

Suggested Citation

  • Sonia Falconieri & Frederic Palomino & Jozsef Sakovics, 2002. "Collective vs. Individual Sale of TV Rights in League Sports," ESE Discussion Papers 85, Edinburgh School of Economics, University of Edinburgh.
  • Handle: RePEc:edn:esedps:85
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    References listed on IDEAS

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    1. d'Aspremont, Claude & Jacquemin, Alexis, 1988. "Cooperative and Noncooperative R&D in Duopoly with Spillovers," American Economic Review, American Economic Association, vol. 78(5), pages 1133-1137, December.
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    4. Suzumura, Kotaro, 1992. "Cooperative and Noncooperative R&D in an Oligopoly with Spillovers," American Economic Review, American Economic Association, vol. 82(5), pages 1307-1320, December.
    5. Legros, Patrick & Matsushima, Hitoshi, 1991. "Efficiency in partnerships," Journal of Economic Theory, Elsevier, vol. 55(2), pages 296-322, December.
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    7. Author One David Harbord & Author Two Marco Ottaviani, 2002. "Contracts and Competition in the Pay-TV Market," Industrial Organization 0203005, EconWPA.
    8. Kamien, Morton I & Muller, Eitan & Zang, Israel, 1992. "Research Joint Ventures and R&D Cartels," American Economic Review, American Economic Association, vol. 82(5), pages 1293-1306, December.
    9. Palomino, Frederic & Sakovics, Jozsef, 2004. "Inter-league competition for talent vs. competitive balance," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 783-797, June.
    10. Flynn, Michael A & Gilbert, Richard J, 2001. "The Analysis of Professional Sports Leagues as Joint Ventures," Economic Journal, Royal Economic Society, vol. 111(469), pages 27-46, February.
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    Cited by:

    1. Oliver Gürtler, 2007. "A Rationale for the Coexistence of Central and Decentral Marketing in Team Sports," German Economic Review, Verein für Socialpolitik, vol. 8, pages 89-106, February.
    2. Palomino, F.A. & Renneboog, L.D.R. & Zhang, C., 2005. "Stock Price Reactions to Short-Lived Public Information : The Case of Betting Odds," Discussion Paper 2005-016, Tilburg University, Tilburg Law and Economic Center.
    3. Oliver Gürtler, 2005. "A rationale for the coexistence of central and decentral marketing in team sports," Bonn Econ Discussion Papers bgse4_2005, University of Bonn, Germany.
    4. Palomino, Frederic & Renneboog, Luc & Zhang, Chendi, 2009. "Information salience, investor sentiment, and stock returns: The case of British soccer betting," Journal of Corporate Finance, Elsevier, vol. 15(3), pages 368-387, June.

    More about this item

    Keywords

    talent; competitive balance; revenue sharing; broadcasting rights;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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