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Collective Bargaining in a Basic North American Sports League Model

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  • Paul Madden

Abstract

Earlier general firm/trade union bargaining literature is brought to bear on a specific North American sports league model, where talent supply is fixed and profit-maximizing clubs receive local (gate) revenue plus an equal share of league broadcasting revenue. Club and player representatives negotiate a Collective Bargaining Agreement on the levels of local revenue sharing, salary cap and salary floor. Results, inter alia, show how increases in broadcasting market size affect the Nash bargaining solution for player salaries, competitive balance, player salary share of league revenue, the ratio of salary floor to cap and the extent of local revenue sharing.

Suggested Citation

  • Paul Madden, 2018. "Collective Bargaining in a Basic North American Sports League Model," Economics Discussion Paper Series 1812, Economics, The University of Manchester.
    • Handle: RePEc:man:sespap:1812
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    File URL: http://hummedia.manchester.ac.uk/schools/soss/economics/discussionpapers/EDP-1812.pdf
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    References listed on IDEAS

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