EconPapers    
Economics at your fingertips  
 

A Contest Model of a Professional Sports League with Two-Sided Markets

Helmut Dietl, Tobias Duschl (), Egon Franck () and Markus Lang ()
Additional contact information
Tobias Duschl: Institute for Strategy and Business Economics, University of Zurich

No 31, Working Papers from University of Zurich, Center for Research in Sports Administration (CRSA)

Abstract: This paper develops a model of a professional sports league with network externalities by integrating the theory of two-sided markets into a contest model. In professional team sports, the competition of the clubs functions as a platform that enables sponsors to interact with fans. In these club-mediated interactions, positive network effects operate from the fan market to the sponsor market, while positive or negative network effects operate from the sponsor market to the fan market. Clubs react to these network effects by charging higher (lower) prices to sponsors (fans). The size of these network effects also determines the level of competitive balance within the league. We further show that clubs benefit from stronger combined network effects through higher profits and that network externalities can mitigate the negative effect of revenue sharing on competitive balance. Finally, we derive implications for improving competitive balance by taking advantage of network externalities.

Keywords: Competitive balance; contest; multisided market; network externalities; team sports league (search for similar items in EconPapers)
JEL-codes: L11 L13 L83 M21 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2009-11, Revised 2010-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://repec.business.uzh.ch/RePEc/rsd/CRSA_WPS/31_CRSA_full.pdf (application/pdf)

Related works:
Journal Article: A Contest Model of a Professional Sports League with Two-Sided Markets (2012) Downloads
Working Paper: A Contest Model of a Professional Sports League with Two-Sided Markets (2010) Downloads
Working Paper: A Contest Model of a Professional Sports League with Two-Sided Markets (2009) Downloads
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:rsd:wpaper:0031

Access Statistics for this paper

More papers in Working Papers from University of Zurich, Center for Research in Sports Administration (CRSA) Contact information at EDIRC.
Bibliographic data for series maintained by IBW IT Support ().

 
Page updated 2022-10-05
Handle: RePEc:rsd:wpaper:0031