Media revenue sharing as a coordination device in sports leagues

Thomas Peeters

International Journal of Industrial Organization, 2012, vol. 30, issue 2, 153-163

Abstract: Because sports clubs jointly produce sports competitions, the quality of these competitions is determined by the talent investments of all clubs involved in them. Operating as legal cartels, sports leagues may try to coordinate talent investments in order to maximize profitability. In this paper I analyze the ways in which sharing mechanisms for collective media revenues may serve this goal when demand comes from differentiated consumers. Performance-based sharing turns out to be an inefficient sharing mechanism for the league. Such inefficient cartel behavior may be rationalized as the result of bargaining with asymmetric outside options.

Keywords: Cartel behavior; Revenue sharing; Sports leagues; Media rights (search for similar items in EconPapers)
JEL-codes: L41 L83 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (25)

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Related works:
Working Paper: TV Revenue Sharing as a Coordination Device in Sports Leagues (2011)
Working Paper: TV revenue sharing as a coordination device in sports (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:30:y:2012:i:2:p:153-163

DOI: 10.1016/j.ijindorg.2011.07.004

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