Market Power in the National Football League, pp. 239-244

Stacey L. Brook
Aju J. Fenn

Much of the sport economics literature is able to demonstrate that teams have downward-sloping demand curves that imply market power, but there has been no formal test of this hypothesis. This paper provides an initial empirical test of market power for the NFL during the 1995 to 1999 seasons. We employ the price-cost margin methods under constant returns to scale as outlined by Neumann and Haid (1985) and Martin (1988).The two-stage least squares estimates, which control for the endogeneity of the price-cost margin and attendance as a percentage of total capacity, suggest that market power exists for the NFL during the 1995 to 1999 seasons.