12. Player Drafts and Revenue Sharing Will Improve Competitive Balance

2020 ◽  
pp. 211-225
Keyword(s):  
Revenue Sharing ◽  
Competitive Balance

scholarly journals Revenue Sharing, Competitive Balance and the Contest Success Function

2011 ◽  
Vol 12 (3) ◽  
pp. 256-273 ◽  
Author(s):  
Marco Runkel
Keyword(s):  
Revenue Sharing ◽  
Competitive Balance ◽  
Contest Success Function ◽  
Success Function

Abstract This paper investigates revenue sharing in an asymmetric two-teams contest model of a sports league with Nash behavior of team owners. The innovation of the analysis is that it focuses on the role of the contest success function (CSF). In case of an inelastic talent supply, revenue sharing turns out to worsen competitive balance regardless of the shape of the CSF. For the case of an elastic talent supply, in contrast, the effect of revenue sharing on competitive balance depends on the specification of the CSF. We fully characterize the class of CSFs for which revenue sharing leaves unaltered competitive balance and identify CSFs ensuring that revenue sharing renders the contest closer.

scholarly journals Competitive balance and gate revenue sharing in team sports

2004 ◽  
Vol 52 (1) ◽  
pp. 165-177 ◽  
Author(s):  
Stefan Szymanski ◽  
Stefan Kesenne
Keyword(s):  
Team Sports ◽  
Revenue Sharing ◽  
Competitive Balance

Competitive Balance in Team Sports and the Impact of Revenue Sharing

2006 ◽  
Vol 20 (1) ◽  
pp. 39-51 ◽  
Author(s):  
Stefan Kesenne
Keyword(s):  
Economic Theory ◽  
Relative Size ◽  
Team Sports ◽  
Professional Sports ◽  
Revenue Sharing ◽  
Competitive Balance ◽  
The Impact ◽  
Uncertainty Of Outcome

This article uses economic theory to examine the variables that affect the competitive balance in a professional sports league and the impact of revenue sharing. The generally accepted proposition that revenue sharing does not affect the competitive balance in a profi t-maximizing league has been challenged by many. It is shown that the competitive balance and the impact of revenue sharing not only depend on the relative size of the market of the clubs, but that they are also affected by the objectives of the club owners and the importance to spectators of absolute team quality and uncertainty of outcome. Furthermore, the clubs’ hiring strategies, including the talent supply conditions, turn out to be important elements affecting competitive balance and the impact of revenue sharing.

scholarly journals Competitive Balance and Revenue Sharing in Sports Leagues With Utility-Maximizing Teams

2011 ◽  
Vol 12 (3) ◽  
pp. 284-308 ◽  
Author(s):  
Helmut M. Dietl ◽  
Martin Grossmann ◽  
Markus Lang
Keyword(s):  
Revenue Sharing ◽  
Competitive Balance ◽  
Sports Leagues

A Proposal for Incentive-Compatible Revenue Sharing in Major League Baseball

2012 ◽  
Vol 26 (6) ◽  
pp. 479-489 ◽  
Author(s):  
Michael G. Wenz
Keyword(s):  
Major League Baseball ◽  
Current System ◽  
Profit Maximization ◽  
Field Performance ◽  
Revenue Sharing ◽  
Optimal Level ◽  
Competitive Balance ◽  
Payroll Tax ◽  
Marginal Value ◽  
Major League

This paper proposes a payroll tax and revenue sharing model for Major League Baseball that better aligns the incentives of individual team owners with league-wide goals of competitive balance and cartel profit maximization. The author demonstrates why the current system is poorly suited for improving competitive balance, then argue for a system of transfer payments based on a more aggressive payroll tax combined with a subsidy distributed based on on-field performance rather than market size or financial performance. High-payroll teams would contribute disproportionately to the revenue-sharing pool, while successful teams would receive disproportionately large subsidies. By increasing the marginal value of a win through the performance-based subsidies, small-market teams will see increased incentives to invest in playing talent. The author presents some limited financial data and suggest how to calibrate the model to yield the optimal level of competitive balance and optimal revenue split between players and owners.

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