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The Stadium Game

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  • Jeffrey G. Owen

Abstract

The intangible benefits of sports teams are a source of social value that cannot be captured completely by teams through ticket sales and other revenues. A model is developed in which teams attempt to capture social value through stadium subsidies. The number of teams in the league, determined endogenously, increases when subsidies to teams are permitted. The size of the subsidy paid by a city depends on the threat point of teams based on the social value of a team to the largest city without one. Larger cities pay smaller subsidies and may not pay anything. Cartelized leagues substantially increase subsidies by reducing the number of teams, but subsidies are not eliminated in the case of free entry.

Suggested Citation

  • Jeffrey G. Owen, 2003. "The Stadium Game," Journal of Sports Economics, , vol. 4(3), pages 183-202, August.
    • Handle: RePEc:sae:jospec:v:4:y:2003:i:3:p:183-202
    DOI: 10.1177/1527002503251710
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    References listed on IDEAS

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    Cited by:

    1. Sepulveda, Cristian F., 2023. "Cost–Benefit Analysis of an “Average” Professional Sports Team or Stadium in the United States," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 14(3), pages 451-477, October.
    2. Humphreys, Brad R. & Zhou, Li, 2015. "Reference-dependent preferences, team relocations, and major league expansion," Journal of Economic Behavior & Organization, Elsevier, vol. 109(C), pages 10-25.
    3. Duane W. Rockerbie & Stephen T. Easton, 2019. "Of Bricks and Bats: New Stadiums, Talent Supply, and Team Performance in Major League Baseball," Journal of Sports Economics, , vol. 20(1), pages 3-24, January.
    4. Christopher M. Clapp & Jahn K. Hakes, 2005. "How Long a Honeymoon? The Effect of New Stadiums on Attendance in Major League Baseball," Journal of Sports Economics, , vol. 6(3), pages 237-263, August.

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