Revenue Sharing Sports Leagues

The issue of revenue sharing in professional sports leagues has attracted considerable attention in recent years.

Revenue sharing sports leagues. Revenue sharing is used in sports as a way to improve competitive balance. It is felt that teams with larger revenue streams are able to afford more talent over the long run. 6 of total league revenue 13 the top ten revenue teams in the nhl after deducting certain costs evenly contribute 50 of the revenue sharing pool the remainder is financed from playoff 35 and other league revenues. The league generated 13 billion and has 29 of the top 50 most valuable sports franchises in the world.

The league definitely has the numbers to back up this claim. In professional sports leagues revenue sharing commonly refers to the distribution of proceeds generated by ticket sales to a given event. Nfl revenue sharing to many the nfl may be considered america s greatest sports league. The following is a list of sports competitions by revenue.

In this table the season column refers to the league season for which financial data is available and referenced which is usually not the most recently completed season of competition. The ever growing sport has maintained keen interest from fans all across the world all the while generating enormous amounts of revenue. We show that revenue sharing always increases competitive. The amount of money distributed to a visiting team can significantly impact a team s total revenue which in turn affects the team s ability to attract and pay for talent and resources.

Revenues are listed in millions of euros. Currently the league rakes in close to 9 billion annually. Revenues of each club depend on absolute quality relative quality and on competitive balance itself so that our model captures much of the preceding literature as special cases. According to the sports economics literature if teams maximize their own respective profits then more talent will drift to the teams for which talent generates the.

The pool is paid out to the bottom 15 revenue teams using a formula based on attendance and revenue. Szymanski 1 and szymanski and késenne 2 showed that in the standard model of a sports league gate revenue sharing will tend to increase competitive imbalance between weak and strong teams a seemingly perverse result. The dallas cowboys according to forbes are the most valuable sports franchise in the world with an estimated worth of 4 8 billion that number is up 14 percent from 2017 tied for the largest jump amongst the top 50. American football baseball basketball ice hockey and football soccer.

Another smaller trend to notice is the diversity of sports leagues in america and canada. Dobson and goddard 3 claim that this analysis is flawed. We employ a model of n heterogenous profit maximizing clubs to analyze the impact of revenue sharing in professional sports leagues on competitive balance. No league tops the nfl when it comes to bringing in revenue globally.