In this article, a distinction is made between two types of competitive imbalances, the good and the bad ones. Because it is mainly the bad type of competitive imbalance that worries us most, that is, the large-market clubs dominating the small-market clubs, it can be shown that the competitive balance in a win-maximizing league is always worse than in a profit-maximizing league. Also, revenue sharing that aims to cure the good type of imbalance, that is, a small-market club dominating the league, might not have the desirable effect if the criterion for sharing is the budget of the clubs.
Get full access to this article
View all access options for this article.
References
1.
Atkinson, S., Stanley, L.,& Tschirhart, J. (1988). Revenue sharing as an incentive agency problem. Rand Journal of Economics, 19(1), 27-43.
2.
Fort, R., & Quirk, J. (1995). Cross-subsidization, incentives and outcomes in professional team sports leagues. Journal of Economic Literature, XXXIII, 1265-1299.
3.
Fort, R., & Quirk, J. (2000). Sports team behavior and sports policy: The winning percent maximizing league[Discussion paper]. Pullman: Washington State University.
4.
Késenne, S. (1996). League management in professional team sports with win maximizing clubs. European Journal for Sport Management, 2(2), 14-22.
5.
Késenne, S. (1999). Player market regulation and competitive balance in a win maximizing scenario. In C. Jeanrenaud & S. Késenne (Eds.), Competition policy in professional sports, Europe after the Bosman case (pp. 117-131). Antwerp, Belgium: CIES, Standard Editions.
6.
Késenne, S. (2000). Revenue sharing and competitive balance in professional team sports. Journal of Sports Economics, 1(1), 56-65.
7.
Késenne, S. (2001). The different impact of different revenue sharing systems on the competitive balance in professional team sports. European Sport Management Quarterly, 1(3), 210-218.
8.
Marburger, D. R. (1997). Gate revenue sharing and luxury taxes in professional sports. Contemporary Economic Policy, XV, 114-123.
9.
Quirk, J.,& El Hodiri, M. (1974). The economic theory model of a professional league. In R. Noll (Ed.), Government and the sports business (pp. 33-80). Washington, DC: Brookings Institution.
10.
Quirk, J.,& Fort, R. D. (1992). Pay dirt, the business of professional team sports. Princeton, NJ: Princeton University Press.
11.
Szymanski, S.,& Késenne, S. (in press). Competitive balance and revenue sharing in team sports. Journal of Industrial Economics.
12.
Szymanski, S., & Smith, R. (1997). The English football industry profit, performance and industrial structure. International Review of Applied Economics, 11(1), 135-153.
