Competitive Imbalance and Budget Constraints
- New Horizons in the Economics of Sport series
The issue of competitive imbalance in professional sport leagues is one of the most central topics in the field of the economics of sport. It is traditionally considered that in a perfectly balanced league, each team would have the same probability of winning; there would be a great degree of uncertainty over the outcome of a championship. Conversely, an unbalanced competition is supposed to diminish interest on the part of the spectator, consequently decreasing demand for sports contests and also confidence in the legitimacy of competition (Neale, 1964; Daly, 1992; Zimbalist, 2003; Késenne, 2006). The relationship between the attractiveness of a league and its level of competitive imbalance is probably quite complex: Szymanski (2001, 2007) has observed that in some cases, the majority of the fans seem to prefer that a dominant team beats all opponents, like Manchester United in the English Premier League (EPL) during the 1990s, and that despite its growing imbalance since 1995, the attractiveness of the EPL has not declined. Szymanski (2001, pp. 72–3) explains that the traditional argument about competitive balance has to be qualified: since ‘some teams draw on larger (or more devoted) fan bases, then the success of these teams will yield greater total utility than the success of teams with small fan bases’.
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