This article studies sports league expansion and consumer welfare. The author assumes that as a sports league expands, the average quality of playing talent falls, and each fan sees superstars fewer times per season. Expansion thus imposes a negative externality on existing fans. If all revenues...

This article presents a model of talent investments where two clubs compete for prizes. Our model is based on a general class of cost functions with a constant elasticity of marginal costs with respect to investments. The analysis finds that reduced revenue sharing improves competitive balance....

Because sports clubs jointly produce sports competitions, the quality of these competitions is determined by the talent investments of all clubs involved in them. Operating as legal cartels, sports leagues may try to coordinate talent investments in order to maximize profitability. In this paper...

As sports clubs jointly produce contests, they cannot determine contest quality through their private talent investments. Sports leagues therefore try to coordinate talent investments to- wards the pro.t-maximizing contest quality. In this paper I analyze how revenue sharing mech- anisms may...

This article contends that a new research avenue is open to comparative economics which is the economic comparison between American (closed) and European (open) professional team sports leagues. It starts with sketching the major institutional differences between the two leagues systems. Then it...

As sports clubs jointly produce contests, they cannot determine contest quality through their private talent investments. Sports leagues therefore try to coordinate talent investments towards the profit-maximizing contest quality. In this paper I analyze how revenue sharing mechanisms may serve...

Professional sports leagues have witnessed the appearance of so-called "sugar daddies" - people who invest enormous amounts of money into clubs and become their owners. This paper presents a contest model of a professional sports league that incorporates this phenomenon. We analyze how the...

This paper outlines and compares the organizational structure of major sports leagues, explores the reasoning behind their formation, and derives implications for salary caps in European football. To understand why sports leagues have developed a specific organizational structure, one must take...

The authors extend the theory of optimal competitive balance to leagues where single-game ticket sales dominate revenues. Whether a planner that maximizes the sum of fan and owner surpluses prefers more balance or less in such a league depends on the relative magnitude of marginal consumers'...

Although many sports leagues are viewed as monopolies, research suggests that some economic competition exists between teams in dierent sports leagues. If fans make consumption choices based on the quality of all teams that are present in their region, then economic competition and ownership...