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Revenue Sharing and Absolute League Quality; Talent Investment and Talent Allocation
Author(s) -
Kesenne Stefan
Publication year - 2015
Publication title -
scottish journal of political economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.4
H-Index - 46
eISSN - 1467-9485
pISSN - 0036-9292
DOI - 10.1111/sjpe.12062
Subject(s) - league , revenue sharing , revenue , balance (ability) , profit (economics) , profit sharing , quality (philosophy) , economics , absolute (philosophy) , total revenue , microeconomics , investment (military) , business , finance , political science , medicine , philosophy , physics , epistemology , astronomy , politics , law , physical medicine and rehabilitation
Abstract Beside the competitive balance or the relative quality of teams in a sports league, also a league's absolute quality matters to attract spectators. If the absolute quality depends among other variables, on the total budget of the league, it can be shown that that revenue sharing enhances the absolute quality by improving the allocation of talent over the teams in both a profit‐ and a win‐maximisation league, even if it worsens the competitive balance.