The Sugar Daddy's Game: How Wealthy Investors Change Competition in Professional Team Sports

Markus Lang, Martin Grossmann and Philipp Theiler

No 1107, Working Papers from International Association of Sports Economists, North American Association of Sports Economists

Abstract: Professional sports leagues have witnessed the appearance of so-called "sugar daddies" - people who invest enormous amounts of money into clubs and become their owners. This paper presents a contest model of a professional sports league that incorporates this phenomenon. We analyze how the appearance of a sugar daddy alters competitive balance and social welfare compared to a league with purely profit-maximizing club owners. We further show that the welfare effect of revenue sharing in a sugar daddy league is ambiguous and depends on the degree of redistribution and on whether the sugar daddy invests in a small or large club.

Keywords: Competitive balance; contest model; social welfare; sports leagues; sugar daddy (search for similar items in EconPapers)
JEL-codes: C72 D43 L2 L83 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2011-03, Revised 2011-03
New Economics Papers: this item is included in nep-com, nep-mic and nep-spo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
http://college.holycross.edu/RePEc/spe/LangGrossmannTheiler_SugarDaddy.pdf (application/pdf)

Related works:
Journal Article: The Sugar Daddy Game: How Wealthy Investors Change Competition in Professional Team Sports (2011)
Working Paper: The Sugar Daddy's Game: How Wealthy Investors Change Competition in Professional Team Sports (2010)
Working Paper: The Sugar Daddy's Game: How Wealthy Investors Change Competition in Professional Team Sports (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spe:wpaper:1107

Access Statistics for this paper

More papers in Working Papers from International Association of Sports Economists Contact information at EDIRC., North American Association of Sports Economists Contact information at EDIRC.
Bibliographic data for series maintained by Victor Matheson ().