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The Effects of Cross-Ownership and League Policies Across Sports Leagues Within a City

Kevin Mongeon () and Jason Winfree

Review of Industrial Organization, 2013, vol. 43, issue 3, 145-162

Abstract: Since prior research suggests that some economic competition exists between teams in different sports leagues, economic competition and ownership structure can affect an owner’s incentive to invest in talent. This paper uses a theoretical model to examine the differences in owners’ incentives to invest in talent when they are operating as monopolists, as duopolists, or as a cross-owned team. Our model shows that economic competition results in an ambiguous level of investment compared to that of a monopolist. A firm that engages in cross-ownership will invest less in talent compared to a duopolist, but the difference in profits is ambiguous. League policies are studied and are shown to affect the quality of teams in other leagues. Copyright Springer Science+Business Media New York 2013

Keywords: Ownership structures; Sports leagues; Talent investment; L83 (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1007/s11151-013-9374-z

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