Optimal gate revenue sharing in sports leagues

Thomas Peeters

No 1122, Working Papers from International Association of Sports Economists, North American Association of Sports Economists

Abstract: Sports leagues constitute one of the few examples of legally operating cartels. In this paper I examine how gate revenue sharing may serve to coordinate talent investmentswithin these cartels. I show that sharing revenues has the potential to raise cartel profits, because it decreases the incentive to invest in playing talent. Leagues consisting of teams with heterogeneous local markets should share less revenues to maximize profits, whereas homogeneous teams should share more.

Keywords: contests; contest success functions; sports (search for similar items in EconPapers)
JEL-codes: L41 L83 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2011-11
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http://college.holycross.edu/RePEc/spe/Peeters_OptimalRevenueSharing.pdf (application/pdf)

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Working Paper: Optimal gate revenue sharing in sports leagues (2011)
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