Governance of Professional Sports Leagues - Cooperatives versus Contracts

35 Pages Posted: 20 Feb 2009 Last revised: 2 Mar 2010

See all articles by Helmut M. Dietl

Helmut M. Dietl

University of Zurich - Department of Business Administration (IBW)

Egon P. Franck

University of Zurich - Department of Business Administration (IBW)

Tariq Hasan

University of Zurich - Department of Business Administration (IBW)

Markus Lang

University of Lausanne - Faculty of Social and Political Sciences

Date Written: December 2007

Abstract

Historically, European team sports leagues were run by their respective national and international associations and were legally independent from the professional clubs playing in these leagues. Recently, European leagues have adopted an organizational form similar to their North American counterparts who are organized since their beginning in a cooperative-like manner. Based on a comparative institutional analysis, we explain the advantages of the cooperative form of league organization over contractual governance. With our four-stage game-theoretic model, we show that contractual governance of sports leagues leads to larger investment distortions than cooperative league organization.

Keywords: sports leagues, cooperative organization, contractual governance, hold up, bargaining

JEL Classification: L83, L14, D23

Suggested Citation

Dietl, Helmut M. and Franck, Egon P. and Hasan, Tariq and Lang, Markus, Governance of Professional Sports Leagues - Cooperatives versus Contracts (December 2007). International Review of Law and Economics, Vol. 29, No 2, pp. 127-137, 2009, Available at SSRN: https://ssrn.com/abstract=1347100

Helmut M. Dietl

University of Zurich - Department of Business Administration (IBW) ( email )

Hottingerstrasse 10
Plattenstrasse 14
Zurich, 8032
Switzerland

Egon P. Franck

University of Zurich - Department of Business Administration (IBW) ( email )

Plattenstrasse 14
Zurich 8032
Switzerland
+41 1 634 28 45 (Phone)

Tariq Hasan

University of Zurich - Department of Business Administration (IBW) ( email )

Hottingerstrasse 10
Plattenstrasse 14
Zurich, 8032
Switzerland

Markus Lang (Contact Author)

University of Lausanne - Faculty of Social and Political Sciences

Quartier UNIL-Centre
Synathlon
Lausanne, 1015
Switzerland

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