Revenue sharing in european football leagues: A theoretical analysis

Bodil Olai Hansen, Mich Tvede

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

In the present chapter, a general model of competition between clubs in sports leagues with flexible supply of inputs is studied. There are externalities between clubs because it takes more than one club to produce games and tournaments. It is assumed that the externalities take the form of complementarities. Firstly, it is shown that revenue sharing leads to lower overall quality of sports leagues. Secondly, it is shown that the optimal quality for the league is lower (higher) than the quality in a league without revenue sharing in case of negative (positive) externalities between clubs. Thirdly an example is used to illustrate the findings.

Original languageEnglish (US)
Title of host publicationTrends in Mathematical Economics
Subtitle of host publicationDialogues Between Southern Europe and Latin America
PublisherSpringer International Publishing
Pages245-262
Number of pages18
ISBN (Electronic)9783319325439
ISBN (Print)9783319325415
DOIs
StatePublished - Jul 30 2016

Keywords

  • Competition in sports leagues
  • Complementarity
  • European vs. American sports leagues
  • Level of talent
  • Profit maximization
  • Revenue sharing
  • Sports leagues
  • Supermodularity

ASJC Scopus subject areas

  • Mathematics(all)

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