IDEAS home Printed from https://ideas.repec.org/p/tut/cremwp/201509.html
   My bibliography  Save this paper

Competition among national football leagues. Does it exist ? Should we regulate ?

Author

Listed:
  • Yvon Rocaboy

    (CREM, UMR CNRS 6211, University of Rennes 1, France)

Abstract

It is often supposed that the stakeholders of a national football league draw more satisfaction from their sport if the league is balanced. This is the so-called Competitive balance hypothesis. If there exists an international competition like the European champions league, this hypothesis can be challenged however. The utility of national leagues’ stakeholders could be higher, the higher the probability of winning of their representative club at the international level. If it is correct, a league’s governing body intending to maximise the quality of the national league by making use of redistributive schemes would face a tradeoff between national competitive balance and international performance of the national representative club. We propose a simple microeconomic framework to model this tradeoff. If there exists a non-cooperative game among the national league governing bodies, whether it is a Nash or a Stackelberg one, this game would result in inefficient redistributive policies. We find "soft" empirical evidences suggesting that such a competition occurs among the big 5 football leagues in Europe. This result supports the idea of the creation of an international regulatory body. We derive the conditions under which the international regulatory body should ensure that the leagues’ governing bodies implement redistributive schemes guaranteeing the respect of the national competitive balance. We also emphasize the risk of experiencing a drop in the quality of leagues if one of them becomes too big relatively to the others, what we call the tragedy of the wealthy.

Suggested Citation

  • Yvon Rocaboy, 2015. "Competition among national football leagues. Does it exist ? Should we regulate ?," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201509, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  • Handle: RePEc:tut:cremwp:201509
    as

    Download full text from publisher

    File URL: https://crem-doc.univ-rennes1.fr/wp/2015/201509.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Le Maux, Benoit & Rocaboy, Yvon, 2012. "A simple microfoundation for the utilization of fragmentation indexes to measure the performance of a team," Economics Letters, Elsevier, vol. 116(3), pages 491-493.
    2. Helmut M. Dietl & Martin Grossmann & Markus Lang, 2011. "Competitive Balance and Revenue Sharing in Sports Leagues With Utility-Maximizing Teams," Journal of Sports Economics, , vol. 12(3), pages 284-308, June.
    3. Peeters, Thomas, 2012. "Media revenue sharing as a coordination device in sports leagues," International Journal of Industrial Organization, Elsevier, vol. 30(2), pages 153-163.
    4. Stefan Szymanski & Stefan KÈsenne, 2004. "Competitive balance and gate revenue sharing in team sports," Journal of Industrial Economics, Wiley Blackwell, vol. 52(1), pages 165-177, March.
    5. John Vrooman, 2007. "Theory Of The Beautiful Game: The Unification Of European Football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 314-354, July.
    6. 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.
    7. Paul Madden & Terry Robinson, 2012. "Supporter Influence on Club Governance in a Sports League; a “Utility Maximization” Model," Scottish Journal of Political Economy, Scottish Economic Society, vol. 59(4), pages 339-360, September.
    8. Rodney Fort & James Quirk, 1995. "Cross-subsidization, Incentives, and Outcomes in Professional Team Sports Leagues," Journal of Economic Literature, American Economic Association, vol. 33(3), pages 1265-1299, September.
    9. Rodney Fort & James Quirk, 2011. "Optimal Competitive Balance In A Season Ticket League," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 464-473, April.
    10. Thomas Hoehn & Stefan Szymanski, 1999. "The Americanization of European football," Economic Policy, CEPR;CES;MSH, vol. 14(28), pages 203-240, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Sports economics; National football leagues; International football league; Interleague competition; Competitive balance; Regulation of sports; European football champions league;

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • D3 - Microeconomics - - Distribution
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tut:cremwp:201509. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CODA-POIREY Hélène). General contact details of provider: http://edirc.repec.org/data/crmrefr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.