Organizational Differences between U.S. Major Leagues and European Leagues: Implications for Salary Caps

Helmut Dietl, Egon Franck, Markus Lang and Alexander Rathke

No 122, Working Papers from University of Zurich, Institute for Strategy and Business Economics (ISU)

Abstract: This paper outlines and compares the organizational structure of major sports leagues, explores the reasoning behind their formation, and derives implications for salary caps in European football. To understand why sports leagues have developed a specific organizational structure, one must take the economic peculiarities of team sports leagues into consideration. For this purpose, we analyze the production process and illuminate its major peculiarities. For example, we present the difference between economic competition and competition on the pitch and discuss the consequences of this distinction for an attractive final product. Furthermore, we show that a hold-up problem exists between the two stages of the production process and demonstrate how these problems are overcome by the organizational structure chosen by sports leagues. We also outline the differences between the U.S. major leagues and European leagues and document recent developments in that context. Finally, based on this comparative institutional analysis, we derive implications for the introduction of salary caps into European football.

Keywords: Sports leagues; organization; salary cap; hold-up problem (search for similar items in EconPapers)
JEL-codes: L83 (search for similar items in EconPapers)
Date: 2010-03
New Economics Papers: this item is included in nep-spo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://repec.business.uzh.ch/RePEc/iso/ISU_WPS/122_ISU_full.pdf (application/pdf)

Related works:
Working Paper: Organizational Differences between U.S. Major Leagues and European Leagues: Implications for Salary Caps (2011)
Working Paper: Organizational Differences between U.S. Major Leagues and European Leagues: Implications for Salary Caps (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iso:wpaper:0122

Access Statistics for this paper

More papers in Working Papers from University of Zurich, Institute for Strategy and Business Economics (ISU) Contact information at EDIRC.
Bibliographic data for series maintained by IBW IT ().