Economics of Sports

Professional team sports have a peculiar economic dimension. One of the main differences between the organization of professional team sport and the market is that in a competitive market firm chooses its level of output to maximize profit. In contrast, sport clubs are limited in their output by the league, which determines the membership and number of clubs and the number of games played in a season. Another peculiar fact is that team owners in US professional team sports have a more profit-maximization goal and European club owners are more interested in win maximization, which results in big financial losses. This results in a different approach and use of measurements. In the closed leagues of the US is uncertainty of outcome (UOO) and competitive balance, the solid fundament of sport economic analyses, which resulted in the introduction of cross-subsidizations such as revenue sharing, salary caps, and drafting systems. In historical times was there also a reserve clause for transferring players between clubs, but this was forbidden by law in both continents and free agency was introduced. In the open leagues of Europe is UOO less important and are most of the fans focused on some major teams who have to compete for the championship. Cross-subsidization is not a main issue and in most countries is their only a collective sale of broadcasting rightsstatus: publishe