TV revenue sharing as a coordination device in sports

Thomas Peeters

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

Abstract: As sports clubs jointly produce contests, they cannot determine contest quality through their private talent investments. Sports leagues therefore try to coordinate talent investments to- wards the pro.t-maximizing contest quality. In this paper I analyze how revenue sharing mechanisms may serve this goal when demand comes from hard-core club and neutral sports fans. Performance-based sharing turns out to be an inefficient sharing rule for the cartel, although it is not harmful for social welfare. This inefficient cartel behavior can be rationalized as the result of bargaining with asymmetric outside options. Data from US and European sports leagues illustrate the theoretical findings.

Keywords: Cartel behavior; Revenue sharing; Sports leagues; TV rights (search for similar items in EconPapers)
JEL-codes: L41 L83 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2010-04
New Economics Papers: this item is included in nep-spo
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https://repository.uantwerpen.be/docman/irua/32d838/31f6b939.pdf (application/pdf)

Related works:
Journal Article: Media revenue sharing as a coordination device in sports leagues (2012)
Working Paper: TV Revenue Sharing as a Coordination Device in Sports Leagues (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ant:wpaper:2010005

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