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.
In this short chapter, I estimate the impact of between-season or long-term uncertainty of outcome (UO) on attendances based on a sample of 25 European top-division national championships. Attendances are measured by the average number of stadium spectators per game in the top division of the 2015–16 season. Long-term UO is approached by the number of teams that made it to the two top positions in the league over a period of 25 years. In estimating this effect, we controlled for population, size and welfare level of the country, as well as for the international success of the teams in the UEFA Champions League. The estimation results show a significant, and considerable, positive effect of long-term UO on attendances. Football supporters do not like dynasties that dominate the championships year after year.