Competitive balance in team sports and the impact of revenue sharing. A survey of the economic theory

Stefan Kesenne

Working Papers from University of Antwerp, Faculty of Business and Economics

Abstract: In this paper, we present a survey of the main results from economic theory regarding the variables that affect the competitive balance in a professional sports league and the impact of revenue sharing. The generally accepted proposition that revenue sharing does not affect the competitive balance in a profit maximizing league has been challenged by many. It is shown that the competitive balance and the impact of revenue sharing do not only depend on the relative size of the market of the clubs, but that they are also affected by the objectives of the club owners and the importance to spectators of absolute team quality and uncertainty of outcome. Also the clubs' hiring strategies, including the talent supply conditions, turn out to be important elements affecting competitive balance and the impact of revenue sharing.

Pages: 27 pages
New Economics Papers: this item is included in nep-spo
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ant:wpaper:2005019

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