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Competitive Balance and Revenue Sharing

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  • Stefan KÉsenne

Abstract

In this article, a distinction is made between two types of competitive imbalances, the good and the bad ones. Because it is mainly the bad type of competitive imbalance that worries us most, that is, the large-market clubs dominating the small-market clubs, it can be shown that the competitive balance in a win-maximizing league is always worse than in a profit-maximizing league. Also, revenue sharing that aims to cure the good type of imbalance, that is, a small-market club dominating the league, might not have the desirable effect if the criterion for sharing is the budget of the clubs.

Suggested Citation

  • Stefan KÉsenne, 2004. "Competitive Balance and Revenue Sharing," Journal of Sports Economics, , vol. 5(2), pages 206-212, May.
    • Handle: RePEc:sae:jospec:v:5:y:2004:i:2:p:206-212
    DOI: 10.1177/1527002503257209
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    References listed on IDEAS

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    1. Scott E. Atkinson & Linda R. Stanley & John Tschirhart, 1988. "Revenue Sharing as an Incentive in an Agency Problem: An example from the National Football League," RAND Journal of Economics, The RAND Corporation, vol. 19(1), pages 27-43, Spring.
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    3. 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, April.
    4. Stefan Kesenne, 2000. "Revenue Sharing and Competitive Balance in Professional Team Sports," Journal of Sports Economics, , vol. 1(1), pages 56-65, February.
    5. 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.
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    Cited by:

    1. Lahvicka, Jiri, 2013. "Impact of playoffs on seasonal uncertainty in Czech ice hockey Extraliga," MPRA Paper 44608, University Library of Munich, Germany.
    2. Helmut M. Dietl & Markus Lang & Stephan Werner, 2009. "Social Welfare in Sports Leagues with Profit‐Maximizing and/or Win‐Maximizing Clubs," Southern Economic Journal, John Wiley & Sons, vol. 76(2), pages 375-396, October.
    3. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
    4. Nicola Giocoli, 2007. "Competitive balance in football leagues when teams have different goals," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 54(3), pages 345-370, September.
    5. Sittl, Roman & Warnke, Arne Jonas, 2016. "Competitive balance and assortative matching in the German Bundesliga," ZEW Discussion Papers 16-058, ZEW - Leibniz Centre for European Economic Research.
    6. Stefan Szymanski, 2010. "The Economic Design of Sporting Contests," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 1, pages 1-78, Palgrave Macmillan.
    7. Justin Doran & Declan Jordan, 2018. "The effect of geographical proximity and rivalry on performance: evidence from the English Football League," Regional Studies, Taylor & Francis Journals, vol. 52(11), pages 1559-1569, November.
    8. Stefan Késenne, 2006. "The Win Maximization Model Reconsidered," Journal of Sports Economics, , vol. 7(4), pages 416-427, November.
    9. Stefan Szymanski, 2010. "Teaching Competition in Professional Sports Leagues," The Journal of Economic Education, Taylor & Francis Journals, vol. 41(2), pages 150-168, March.
    10. Pedro Garcia-del-Barrio & Stefan Szymanski, 2006. "Goal! Profit maximization and win maximization in football leagues," Working Papers 0621, International Association of Sports Economists;North American Association of Sports Economists.
    11. Rockerbie, Duane W, 2012. "Exploring inter-league parity in North America: the NBA anomaly," MPRA Paper 43088, University Library of Munich, Germany.
    12. Stefan Szymanski & Stephanie Leach, 2006. "Tilting the Playing Field (Why a sports league planner would choose less, not more, competitive balance): The case of English Football," Working Papers 0619, International Association of Sports Economists;North American Association of Sports Economists.
    13. William A. Hamlen Jr., 2007. "Deviations From Equity and Parity in the National Football League," Journal of Sports Economics, , vol. 8(6), pages 596-615, December.
    14. Stefan Szymanski, 2010. "The Champions League and the Coase Theorem," Palgrave Macmillan Books, in: Football Economics and Policy, chapter 10, pages 202-225, Palgrave Macmillan.
    15. Aloys Prinz & Stefan Thiem, 2021. "Value‐maximizing football clubs," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(5), pages 605-622, November.
    16. GOOSSENS, Kelly, 2006. "National dominance in European football leagues," Working Papers 2006028, University of Antwerp, Faculty of Business and Economics.
    17. Rockerbie, Duane, 2011. "The Invariance Proposition in Baseball: New Evidence," MPRA Paper 55020, University Library of Munich, Germany.
    18. Stefan Szymanski, 2006. "Tilting the Playing Field: Why a sports league planner would choose less, not more, competitive balance," Working Papers 0620, International Association of Sports Economists;North American Association of Sports Economists.

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