New Horizons in the Economics of Sport series
Edited by Plácido Rodríguez, Stefan Késenne and Ruud Koning
Chapter 6: The optimal competitive balance in a sports league?
In this chapter, we try to derive theoretically what the optimal competitive balance in a sports league should be. In a first approach, we consider the total revenue of the league as the optimality criterion, but from a welfare economic point of view, the interests of all stakeholders should be taken into account. In this contribution, we concentrate on the preferences of the supporters and spectators, and try to derive the most important parameters that affect this optimum. Our main findings are that neither very large differences in drawing potential of the teams nor significant differences in supporter preferences regarding winning and competitive balance, all else equal, can justify a very unbalanced competition. Also, the growing group of more neutral television spectators warrants a more balanced optimal competition.
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