Determinants of Revenue in Sports Leagues: An Empirical Assessment

20 Pages Posted: 5 Dec 2018

Multiple version iconThere are 2 versions of this paper

Date Written: January 2019

Abstract

This study investigates determinants of revenue in North America's four major professional sports leagues. Revenue is positively associated with on‐field success in baseball (MLB), basketball (NBA), and hockey (NHL), but not in football (NFL). The returns to success are not diminishing as commonly assumed, which casts doubt on the uncertainty of outcome hypothesis, and differences across leagues are consistent with revenue sharing arrangements. Estimates indicate a strong negative but diminishing relationship between stadium age and revenue. Teams in larger markets generate more revenue than smaller markets, but the returns to success do not differ according to market size.

JEL Classification: Z21

Suggested Citation

Bradbury, John Charles, Determinants of Revenue in Sports Leagues: An Empirical Assessment (January 2019). Economic Inquiry, Vol. 57, Issue 1, pp. 121-140, 2019. Available at SSRN: https://ssrn.com/abstract=3295886 or http://dx.doi.org/10.1111/ecin.12710

John Charles Bradbury (Contact Author)

Kennesaw State University ( email )

Dept. of Economics, Finance, and Quant. Analysis
560 Parliament Garden Way NW
Kennesaw, GA 30144
United States

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