This paper uses a simple approach to address the issue of how revenue sharing in professional sports leagues can affect the allocation of free agent players to teams. To affect the allocation of free agents, the imposition of revenue sharing must alter the ranking of bidding teams in terms of...

Monopolization of broadcast rights for collective sales is a widespread practice in sports leagues. Proponents of this system claim that it is a necessary tool for the maintenance of competitive balance (tension) in sports. In this empirical paper, I argue that, in European soccer, collective...

Collective sales of media rights are a common practice in sports leagues. Proponents of the system claim that it is a necessary tool for the maintenance of competitive balance. In this empirical paper, I argue that, in European soccer, collective sales do not increase competitive balance as...

We analyze the distribution of broadcasting revenues by sports leagues. We show that when the teams engage in competitive bidding to attract talent in an isolated league, the league’s optimal choice is full revenue sharing (resulting in full competitive balance). In contrast, when the teams of...

Many major sports leagues are characterized by a combination of cross-subsidization mechanisms like revenue-sharing arrangements and payroll restrictions. Up to now, the effects of these policy tools have only been analyzed separately. This article provides a theoretical model of a team sports...

In this paper, we provide an analysis of the principal economic issues in the professional team sports industry. We characterize the major peculiarities of this industry and give an overview of the most important league policy measures that are implemented to provide cross subsidies among teams....

In many countries, the collective sale of TV rights by sports leagues has been challenged by the antitrust authorities. In several cases, however, leagues won in court, on the ground that sport cannot be considered a standard good. In this paper, we investigate the conditions under which the...

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 investments within these cartels. I show that sharing revenues has the potential to raise cartel profits, because it decreases the...

In this paper, we provide an analysis of the principal economic issues in the professional team sports industry. We characterize the major peculiarities of this industry and give an overview of the most important league policy measures that are implemented to provide cross subsidies among teams....

Comparisons between European and North American sports leagues have occurred over the years. In this paper, we attempt to bring these comparisons down to the essential elements -what has come to be called Rottenberg's (1956) invariance principle and theoretical insights into attempts to alter...