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Back to Basics: A New Look at Gate-revenue Sharing and Competitive Balance


  • Robert Sandy

    (Indiana University Purdue University Indianapolis (IUPUI))

  • Peter Sloane

    () (University of Swansea)

  • John Treble

    (University of Swansea)


Most models with profit maximizing teams conclude that competitive balance is unchanged or reduced in response to gate sharing. We critique these models and then develop three alternatives: adding unshared post-season revenue; modelling the largest market team as a dominant firm with a rising marginal cost of talent; and a new general model that incorporates both a consumer demand for athletic talent and close competition. All three approaches can cause gate sharing to increase competitive balance.

Suggested Citation

  • Robert Sandy & Peter Sloane & John Treble, 2006. "Back to Basics: A New Look at Gate-revenue Sharing and Competitive Balance," Working Papers 0607, International Association of Sports Economists;North American Association of Sports Economists.
  • Handle: RePEc:spe:wpaper:0607

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    References listed on IDEAS

    1. Victor A. Matheson, 2005. "Contrary Evidence on the Economic Effect of the Super Bowl on the Victorious City," Journal of Sports Economics, , vol. 6(4), pages 420-428, November.
    2. Dennis Coates, 2006. "The Tax Benefits of Hosting the Super Bowl and the MLB All-Star Game: The Houston Experience," International Journal of Sport Finance, Fitness Information Technology, vol. 1(4), pages 239-252, November.
    3. Victor Matheson & Robert Baade, 2004. "Padding Required: Assessing the Economic Impact of the Super Bowl," Working Papers 0403, College of the Holy Cross, Department of Economics.
    4. Victor Matheson & Robert Baade, 2005. "A Fall Classic? Assessing the Economic Impact of the World Series," Working Papers 0501, College of the Holy Cross, Department of Economics.
    5. Robert Baade & Robert Baumann & Victor Matheson, 2006. "The Economic Consequences of Professional Sports Strikes and Lockouts: Revisited," Working Papers 0604, College of the Holy Cross, Department of Economics.
    6. Dennis Coates & Brad R. Humphreys, 2002. "The Economic Impact of Postseason Play in Professional Sports," Journal of Sports Economics, , vol. 3(3), pages 291-299, August.
    7. Robert A. Baade & Victor A. Matheson, 2001. "Home Run or Wild Pitch?," Journal of Sports Economics, , vol. 2(4), pages 307-327, November.
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    Cited by:

    1. Michel Cavagnac, 2009. "Revenue Sharing and Competitive Balance When Teams are not Wage Takers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(3), pages 299-313, November.

    More about this item


    Sport; Monopsony; Monopoly Power;

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • L0 - Industrial Organization - - General
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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