Title
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TV revenue sharing as a coordination device in sports
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Author
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Abstract
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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 serve this goal when demand comes from hard-core club and neutral sports fans. Performance-based sharing turns out to be an ine¢ cient sharing rule for the cartel, although it is not harmful for social welfare. This ine¢ cient cartel behavior can be rationalized as the re- sult of bargaining with asymmetric outside options. Data from US and European sports leagues illustrate the theoretical
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Language
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English
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Source (series)
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Research paper / UA, Faculty of Applied Economics ; 2010:5
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Publication
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Antwerp
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UA
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2010
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Volume/pages
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26 p.
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Full text (open access)
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