IDEAS home Printed from https://ideas.repec.org/a/sae/jospec/v8y2007i1p62-82.html
   My bibliography  Save this article

Revenue Sharing in Sports Leagues

Author

Listed:
  • Phillip A. Miller

    (Minnesota State University, Mankato)

Abstract

This article uses a three-stage model of noncooperative and cooperative bargaining in a free agent market to analyze the effect of revenue sharing on the decision of teams to sign a free agent. The authors argue that in all subgame perfect Nash equilibria, the team with the highest reservation price will get the player, that revenue sharing will not alter the outcome of the game unless the proportion taken from high revenue teams is sufficiently high, that a revenue-sharing system that rewards quality low-revenue teams can alter the outcome of the game while requiring a lower proportion to be taken from high-revenue teams, and that the revenue-sharing systems can improve competitive balance by redistributing pivotal marginal players among teams.

Suggested Citation

  • Phillip A. Miller, 2007. "Revenue Sharing in Sports Leagues," Journal of Sports Economics, , vol. 8(1), pages 62-82, February.
  • Handle: RePEc:sae:jospec:v:8:y:2007:i:1:p:62-82
    DOI: 10.1177/1527002505279346
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1527002505279346
    Download Restriction: no

    File URL: https://libkey.io/10.1177/1527002505279346?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Simon Rottenberg, 1956. "The Baseball Players' Labor Market," Journal of Political Economy, University of Chicago Press, vol. 64(3), pages 242-242.
    2. 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.
    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.
    6. El-Hodiri, Mohamed & Quirk, James, 1971. "An Economic Model of a Professional Sports League," Journal of Political Economy, University of Chicago Press, vol. 79(6), pages 1302-1319, Nov.-Dec..
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Masaki Fujimoto, 2023. "A Dynamic Analysis of Equal Revenue Sharing and Endogenous Salary Caps in the N-Team Leagues," Journal of Sports Economics, , vol. 24(5), pages 624-638, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Markus LANG & Alexander RATHKE & Marco RUNKEL, 2010. "The Economic Consequences Of Foreigner Rules In National Sports Leagues," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 31, pages 47-64.
    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. Stefan Kesenne, 2000. "Revenue Sharing and Competitive Balance in Professional Team Sports," Journal of Sports Economics, , vol. 1(1), pages 56-65, February.
    4. Stephen T. Easton & Duane W. Rockerbie, 2005. "Revenue Sharing, Conjectures, and Scarce Talent in a Sports League Model," Journal of Sports Economics, , vol. 6(4), pages 359-378, November.
    5. Stefan Szymanski & Stefan Késenne, 2010. "Competitive Balance and Gate Revenue Sharing in Team Sports," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 7, pages 229-243, Palgrave Macmillan.
    6. Helmut M. Dietl & Markus Lang, 2008. "The Effect Of Gate Revenue Sharing On Social Welfare," Contemporary Economic Policy, Western Economic Association International, vol. 26(3), pages 448-459, July.
    7. Helmut Dietl & Egon Franck & Markus Lang & Alexander Rathke, 2008. "Revenue Sharing, Reserve Clause and Salary Caps in Professional Team Sports Leagues," Working Papers 0026, University of Zurich, Center for Research in Sports Administration (CRSA), revised 2009.
    8. Dietl, Helmut M. & Duschl, Tobias & Lang, Markus, 2011. "Executive Pay Regulation: What Regulators, Shareholders, and Managers Can Learn from Major Sports Leagues," Business and Politics, Cambridge University Press, vol. 13(2), pages 1-30, August.
    9. Rodríguez Guerrero, Plácido, 2012. "La economía del deporte/The Economics of Sport," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 30, pages 387-418, Agosto.
    10. Rodney Fort & James Quirk, 2007. "Rational Expectations And Pro Sports Leagues," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 374-387, July.
    11. Joel Maxcy, 2009. "Progressive Revenue Sharing in Major League Baseball: The Effect on Player Transfers and Talent Distribution," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 35(3), pages 275-297, November.
    12. Joel G. Maxcy, 2007. "Progressive Revenue Sharing in MLB: The Effect on Player Transfers," Working Papers 0728, International Association of Sports Economists;North American Association of Sports Economists.
    13. Helmut Dietl & Egon Franck & Martin Grossmann & Markus Lang, 2009. "Contest Theory and its Applications in Sports," Working Papers 0105, University of Zurich, Institute for Strategy and Business Economics (ISU).
    14. Rodney Fort & James Quirk, 2010. "Optimal Competitive Balance in Single-Game Ticket Sports Leagues," Journal of Sports Economics, , vol. 11(6), pages 587-601, December.
    15. Allen R. Sanderson & John J. Siegfried, 2003. "Thinking about Competitive Balance," Journal of Sports Economics, , vol. 4(4), pages 255-279, November.
    16. Stefan Szymanski, 2004. "Professional Team Sports Are Only a Game," Journal of Sports Economics, , vol. 5(2), pages 111-126, May.
    17. 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.
    18. Andrew Zimbalist, 2003. "Sport as Business," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 19(4), pages 503-511, Winter.
    19. Joel G. Maxcy, 2006. "Revenue Sharing in MLB: The Effect on Player Transfers," IASE Conference Papers 0634, International Association of Sports Economists.
    20. Martin Grossmann & Helmut Dietl & Markus Lang, 2010. "Revenue Sharing and Competitive Balance in a Dynamic Contest Model," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 36(1), pages 17-36, February.

    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:sae:jospec:v:8:y:2007:i:1:p:62-82. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.