The optimal size of a sports league
Faculty of Applied Economics
Antwerp :UA, Faculty of Applied Economics, 2008
Research paper; 2008,17
University of Antwerp
In this contribution, we try to investigate, based on a simple theoretical model, what the optimal number of teams in a league is, taking into account the most important determinants of club revenue and fans utility. The number of teams fixed by a monopoly league representing the interests of the participating clubs is clearly smaller than the number of teams in the competitive free-entry market equilibrium. We have also tested, using European football data, whether the long-term equilibrium number of teams in the national top divisions has been determined by the market or by the insiders of the monopoly leagues.