Revenue Sharing in European Football Leagues: A Theoretical Analysis

Bodil Olai Hansen, Mich Tvede

Research output: Chapter in Book/Report/Conference proceedingBook chapterResearchpeer-review

Abstract

In the present chapter, a general model of competition between clubs in sports leagues with flexible supply of inputs is studied. There are externalities between clubs because it takes more than one club to produce games and tournaments. It is assumed that the externalities take the form of complementarities. Firstly, it is shown that revenue sharing leads to lower overall quality of sports leagues. Secondly, it is shown that the optimal quality for the league is lower (higher) than the quality in a league without revenue sharing in case of negative (positive) externalities between clubs. Thirdly an example is used to illustrate the findings.
Original languageEnglish
Title of host publicationTrends in Mathematical Economics : Dialogues Between Southern Europe and Latin America
EditorsAlberto A. Pinto, Elvio Accinelli Gamba, Athanasios N. Yannacopoulos, Carlos Hervés-Beloso
Number of pages18
Place of PublicationCham
PublisherSpringer Science+Business Media
Publication date2016
Pages245-262
Chapter12
ISBN (Print)9783319325415
ISBN (Electronic)9783319325439
DOIs
Publication statusPublished - 2016

Keywords

  • Complementarity
  • Revenue sharing
  • Sports leagues
  • Supermodularity
  • Competition in sports leagues
  • European vs. American sports leagues
  • Level of talent
  • Profit maximization

Cite this

Olai Hansen, B., & Tvede, M. (2016). Revenue Sharing in European Football Leagues: A Theoretical Analysis. In A. A. Pinto, E. A. Gamba, A. N. Yannacopoulos, & C. Hervés-Beloso (Eds.), Trends in Mathematical Economics: Dialogues Between Southern Europe and Latin America (pp. 245-262). Springer Science+Business Media. https://doi.org/10.1007/978-3-319-32543-9_12