Revenue Sharing and Owner Profits in Professional Team Sports

Stefan Kesenne

Journal of Sports Economics, 2007, vol. 8, issue 5, 519-529

Abstract: In the sports economics literature, little attention has been paid to the impact of revenue sharing on club owners' profits. In particular, it is unclear how the profits of the large-budget clubs are affected. In this article, the relationship between one specific revenue-sharing arrangement and owner profits is investigated for clubs in a profit-maximization league using two different models. In a Walrasian equilibrium model, revenue sharing will lower profits, whatever the value of the share parameter, if the profits of a large-budget club are higher than the average club budget in the league. In a noncooperative Nash equilibrium model, the impact turns out to be theoretically indeterminate.

Keywords: professional team sports; profit maximization; revenue sharing; owner profits; Walras equilibrium; Nash equilibrium (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Revenue Sharing and Owner Profits in Professional Team Sports (2006)
Working Paper: Revenue Sharing and Owner Profits in Professional Team Sports (2005)
Working Paper: Revenue sharing and owner profits in professional team sports (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:jospec:v:8:y:2007:i:5:p:519-529

DOI: 10.1177/1527002506294942

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