Revenue Sharing, Conjectures, and Scarce Talent in a Model of a Professional Sports League
We develop a model of a representative professional sports club that has the option of adopting one of two different forms of revenue sharing: traditional revenue sharing and central pool type revenue sharing. To adopt either form of revenue sharing, the league requires that a majority of clubs increase profit with adoption of the plan. We derive necessary conditions for either plan to garner enough support for a majority vote. The likelihood of forming a majority on the conjectures on acquiring talent that clubs possess. Competitive conjectures make revenue sharing more likely, while cartel conjectures make revenue sharing less likely. Empirical results provide evidence in favor of the model for four North American professional sports leagues.
|Date of creation:||23 Mar 2003|
|Note:||Type of Document - MSWord/pdf; prepared on IBM PC ; to print on HP; pages: 29 ; figures: included|
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- Daniel Rascher, 1997. "A model of a professional sports league," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 3(3), pages 327-328, August.
- repec:kap:iaecre:v:3:y:1997:i:3:p:327-328 is not listed on IDEAS
- Daniel R. Marburger, 1997. "Gate Revenue Sharing And Luxury Taxes In Professional Sports," Contemporary Economic Policy, Western Economic Association International, vol. 15(2), pages 114-123, 04.
- Stefan Kesenne, 2000. "Revenue Sharing and Competitive Balance in Professional Team Sports," Journal of Sports Economics, , vol. 1(1), pages 56-65, February.
- Frederic Palomino and Luca Rigotti., 2000.
"The Sport League's Dilemma: Competitive Balance versus Incentives to Win,"
Economics Working Papers
E00-292, University of California at Berkeley.
- Palomino, F.A. & Rigotti, L., 2000. "The Sport League's Dilemma : Competitive Balance versus Incentives to Win," Discussion Paper 2000-109, Tilburg University, Center for Economic Research.
- Frederic Palomino & Luca Rigotti, 2001. "The Sport League's Dilemma: Competitive Balance versus Incentives to Win," Industrial Organization 0012003, EconWPA.
- Palomino, Frederic & Rigotti, Luca, 2000. "The Sport League's Dilemma: Competitive Balance versus Incentives to Win," Department of Economics, Working Paper Series qt2w3284jj, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Peter J. Sloane, 2000. "The Regulation of Professional Team Sports," IASE Conference Papers 0003, International Association of Sports Economists. Full references (including those not matched with items on IDEAS)
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