FiT Publishing

It is often assumed that sports leagues should have teams in the largest markets. However, a very basic model of a sports league shows that, depending on talent investment’s role in team revenue, this assumption is not necessarily true. Heterogeneity in markets sizes can not only decrease costs but also increase expected league revenue. Having a smaller market leads to more wins for the larger market team and less competition for playing talent. Therefore, leagues may prefer smaller markets for expansion teams or team relocation. Given that leagues typically want larger markets, the paper...Read more

Madden (in press) hopes that it is “Game Over” regarding the “Walrasian Fixed Supply Conjecture” and “Contest-Nash” solutions. In this paper, I argue that framing the debate as such misses the point of Winfree and Fort (2012). Furthermore, Madden (in press) argues that under certain assumptions, which need to be made, the model that follows was previously given in Madden (2011). However, I argue that Madden (2011) is one of many models that might follow and his assumptions do not hold in all leagues.Read more

In response to the severe financial plight of many clubs that regularly take part in European competitions, UEFA developed the concept of Financial Fair Play as an extension of its licensing regulations. The aim of the concept is to curtail financial foul play in European football (nonpayment of liabilities owing to rival clubs or employees) and financial doping (excessive funding provided to cover losses arising from expenses for playing talent not balanced by revenues). The paper addresses the question if the Financial Fair Play is an adequate concept to ensure the long-term viability...Read more

In this contribution, based on a simple theoretical approach, we try to show that the number of teams that is optimal to a monopoly league, being a cartel of clubs and acting in the interest of the participating or insider clubs only, is smaller than the welfare optimal number of teams in a league, which also takes into account the interests of the spectators.Read more