The Economics of Competitive Sports

The Economics of Competitive Sports

New Horizons in the Economics of Sport series

Edited by Plácido Rodríguez, Stefan Késenne and Ruud Koning

The essence of any sports contest is competition. The very unpredictability of a sporting outcome distinguishes it from, say, an opera performance. This volume presents a state of the art overview of the economics of competitive sport along two main themes. In the first part, the discussion centers on the organization of sports and competition. The second part deals with the competitive balance, rewards and outcomes of the actual contests.

Chapter 6: The optimal competitive balance in a sports league?

Stefan Késenne

Subjects: economics and finance, sports


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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