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.
Edited by Plácido Rodríguez, Stefan Késenne and Jaume García
The study of sport in the economy presents a rich arena for the application of sharply focused microeconomics, macroeconomics and econometrics to both team and individual outcomes. This unique book offers a survey of recent research that follows the tradition of empirical and theoretical analysis of sport economics and econometrics.