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Competition and Cooperation between Professional Sports Franchises: The Impact on Ticket Prices

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  • Pelnar, Gregory

Abstract

An important issue in many antitrust lawsuits involving professional sports leagues and their member teams is the extent to which franchises within the same, and across different, professional sports leagues compete with one another for fans and advertisers. Complicating the issue is the fact that some sports franchises also cooperate with other franchises in the same or different leagues by, for example, participating in a joint venture to build and operate the stadium in which they will play their games or a regional sports network joint venture to televise their games. An extreme form of cooperation is common ownership: some franchises in different sports leagues have common ownership. This study investigates the impact of competition and cooperation among the franchises of the four major professional sports leagues (i.e., the National Football League, National Basketball Association, National Hockey League, and Major League Baseball) on ticket prices for the 2008 season. The regression results suggest that the existence of one or more rival sports franchises in the same metropolitan area does not have a statistically significant impact on ticket prices. On the other hand, there is at best weak evidence that cooperation between sports franchises impacts ticket prices. These findings are consistent with a number of alternative hypotheses.

Suggested Citation

  • Pelnar, Gregory, 2009. "Competition and Cooperation between Professional Sports Franchises: The Impact on Ticket Prices," MPRA Paper 17787, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:17787
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    References listed on IDEAS

    as
    1. David Boyd & Laura Boyd, 1998. "The home field advantage: Implications for the pricing of tickets to professional team sporting events," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 22(2), pages 169-179, June.
    2. Matthew T. Brown & Daniel A. Rascher & Wesley M. Ward, 2006. "The Use of Public Funds for Private Benefit: An Examination of the Relationship Between Public Stadium Funding and Ticket Prices in the National Football League," International Journal of Sport Finance, Fitness Information Technology, vol. 1(2), pages 109-118, May.
    3. Rodney Fort, 2004. "Subsidies as incentive mechanisms in sports," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(2), pages 95-102.
    4. Jason Winfree & Jill McCluskey & Ron Mittelhammer & Rodney Fort, 2004. "Location and attendance in major league baseball," Applied Economics, Taylor & Francis Journals, vol. 36(19), pages 2117-2124.
    5. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    sports leagues; antitrust; National Football League; National Basketball Association; National Hockey League; Major League Baseball;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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