Collective vs. Individual Sale of TV Rights in League Sports
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.
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