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Collective Bargaining in a Basic North American Sports League Model

Paul Madden

Economics Discussion Paper Series from Economics, The University of Manchester

Abstract: Earlier general firm/trade union bargaining literature is brought to bear on a specific North American sports league model, where talent supply is fixed and profit-maximizing clubs receive local (gate) revenue plus an equal share of league broadcasting revenue. Club and player representatives negotiate a Collective Bargaining Agreement on the levels of local revenue sharing, salary cap and salary floor. Results, inter alia, show how increases in broadcasting market size affect the Nash bargaining solution for player salaries, competitive balance, player salary share of league revenue, the ratio of salary floor to cap and the extent of local revenue sharing.

Date: 2018
New Economics Papers: this item is included in nep-spo
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