- New Horizons in the Economics of Sport series
Edited by Plácido Rodríguez, Stefan Késenne and Ruud Koning
Chapter 2: The pyramid market of the European Sports Model: the economics of federations
AbstractThe chapter discusses the economy of sport federations as the instrument of economic efficiency of the European Sports Model. The analysis argues that sport federations are monopolies as: first, the peculiarity of sport products and three production functions define federations as monopolies that compete between each other individually for the production of a single sport good; second, some federations generate a critical mass of consumers allowing them to take-off and throughout its own human technology to produce world champions, as a top-of-the-class good, consumers predispose to consume worldwide. The chapter suggests that the private regulation of sport federations, maximizing production and co-production of sport goods and internalizing external benefits generates social benefits close to social optimum, according to Coase (1960). As a consequence public regulation should support the monopoly competition of sport federations.
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