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- W3122748138 abstract "North American sporting teams receive enormous public funding for new and renovated stadiums after threatening to depart their hometowns, or by actually moving elsewhere. In contrast, English sporting teams neither receive much public money for such projects, nor move towns. We argue that no inherent cultural or political cross-Atlantic variations cause the differences; rather, it is the industrial organization of sports in the two countries—the structure of league control—that enables rent seeking by American sporting teams but not by their English counterparts. Crosscountry time series data contrasting American professional football and baseball stadiums with English soccer grounds support our claim, as does data regarding the stadiums of geographically flexible NFL teams contrasted with those of functionally immobile major collegiate football teams. North American sports leagues are cartels: they control entry of teams, then collaborate to maximize effective rent seeking, stave off competition and keep prices high. In most of the world, competitive merit determines entrance into leagues via a system known as promotion-and-relegation, whereby the worst performing teams in one competitive tier are demoted to the next lower tier at season’s end, and an equivalent number of top teams are promoted from the division below. The fluidity created by promotion-and-relegation severely undermines the credibility of a team’s * Professor, Northwestern University School of Law & Department of Economics; Professor, Northwestern University School of Law; Associate Professor, Loyola University Chicago and Visiting Fellow at Northwestern’s Searle Center on Law, Regulation, and Economic Growth. The authors gratefully acknowledge a generous grant from the Searle Center on Law, Regulation, and Economic Growth in conjunction with its Fourth Annual Conference on Antitrust Economics and Competition Policy, 2011. We received useful feedback from conference participants, including our discussant, Jerry Hausmann. Thanks also to Charlotte Crane, Matthew Mitten, John McGinnis, Spencer Waller, and the faculty of Northwestern Law School for comments and to Kelli Rucker for research. † Robert Burns, To a Louse (1786)" @default.
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- W3122748138 date "2013-10-12" @default.
- W3122748138 modified "2023-09-23" @default.
- W3122748138 title "League Structure &Stadium Rent Seeking— the Role of Antitrust Revisited" @default.
- W3122748138 hasPublicationYear "2013" @default.
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