Theory of the Perfect Game: Competitive Balance in Monopoly Sports Leagues

Vrooman, John

doi:10.1007/s11151-009-9202-7

Cited by 75 publications

(90 citation statements)

References 16 publications

(20 reference statements)

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“…Peeters (Peeters, 2015), Vrooman (Vrooman, 2009) and Palomino and Tigotti (Palomino and Tigotti, 2000) make it clear that it is not always the objective of owners to maximize profits, some may be more interested in wins. Consequentely, efforts to achieve competitive balance may have different results across leagues, teams and time.…”

Section: Literaturementioning

confidence: 99%

Competitive Balance and Consumer Demand in the English Football League

Martinez

Willner²

2017

AFA

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Competitive balance in sports leagues is often used to justify revenue sharing agreements. The justification is that competitive balance leads to higher attendance and higher attendance generates more revenues. By sharing revenue, small market teams can afford to pay for high quality talent, assuring more equal distribution of that talent. Unlike US professional leagues, English football operates under a system of relegation and promotion so that at the end of each season the worst performing teams are "relegated" and the top performing teams in the next level down are "promoted". This may serve as an alternative to revenue sharing to maintain competitive balance.Using data from the top English football league (currently the Premiership) from 1888-89 through the 2014-15 season we calculate multiple measures of league competitive balance for each year using both 3-1-0 and 2-1-0 point systems. We then use these measures with available macroeconomic control variables to examine the relationship between competitive balance and match attendance.We find that, counter to related work in US sports leagues, competitive balance in English football is negatively associated with attendance. This is particularly true in the case of the Premiership era, wherein only five teams have won the championship and in the past 10 seasons, the top 4 places of the championship has been dominated by 7 clubs, yet attendance has steadily increased. This result raises questions about the utility of revenue sharing in increasing attendance in English football.

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Section: Literaturementioning

confidence: 99%

Competitive Balance and Consumer Demand in the English Football League

Martinez

Willner²

2017

AFA

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“…Almost all contributions consider static models focusing on one period only (e.g., see Atkinson et al (1988), , Fort and Quirk (1995), Szymanski and Késenne (2004) and Vrooman (1995Vrooman ( , 2008). Static models, however, do not analyze the dynamics leading to convergence or divergence of clubs'playing strengths, and therefore they cannot di¤erentiate between the short and long run e¤ects of revenue sharing on competitive balance.…”

Section: Introductionmentioning

confidence: 99%

Revenue Sharing and Competitive Balance in a Dynamic Contest Model

2009

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This paper presents a dynamic model of talent investments in a team sports league with an infinite time horizon. We show that the clubs' investment decisions and the effects of revenue sharing on competitive balance depend on the following three factors: (i) the cost function of talent investments, (ii) the clubs' market sizes, and (iii) the initial endowments of talent stock. We analyze how these factors interact in the transition to the steady state as well as in the steady state itself. JEL Classification Codes: L83, D92

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“…The authors suggest that for further research the model can be extended to analyse the effect of salary caps and floors on competitive balance, talent investment and club profits in sports leagues with utility-maximising clubs. Vrooman (2009) suggests evidence now points to the four major North American sports leagues club owners as win-maximising sportsmen -the sportsman effect -with internal competition among sportsman owners resulting in players now sharing about 60 per cent of revenues, much of which is generated by broadcast rights (and public venue subsidies).…”

Section: Player Salaries and Salary Capsmentioning

confidence: 99%