Abstract
A peculiarity in professional sports is the fact that leagues regularly hold monopoly power within their sports. However, whether and to what extent these leagues may compete with other leagues across sports is relatively unexplored. This paper contributes to the literature by analyzing competition and fan substitution in Germany, where top-tier league managers in handball, basketball, and ice hockey have recently claimed that their teams suffer from football’s dominant position. Our attendance demand models confirm the existence of significant substitution effects in this setting, which suggests that leagues indeed do compete economically across sports for fan attendance.
Highlights
Competitor identification is an important task for any company with competitive threats that arise from substitutability either on the supply or the demand side
Already in 1982, the U.S Circuit Court of Appeals (670 F.2d 1249) found the National Football League (NFL) ban on cross-ownerships to be anticompetitive. This was based on the argument that the ban restricts teams in other sports—in this case North American Soccer League (NASL) teams—from sports ownership capital
Mills et al (2015) provided evidence for fan substitution across North American sports leagues by analyzing whether passenger car border crossings between the US and Canada are affected by National Football League (NFL), Major League Baseball (MBL), National Hockey League (NHL), National Basketball Association (NBA), and Canadian Football League (CFL) games of teams that are located across the border
Summary
Competitor identification is an important task for any company with competitive threats that arise from substitutability either on the supply or the demand side. Already in 1982, the U.S Circuit Court of Appeals (670 F.2d 1249) found the National Football League (NFL) ban on cross-ownerships to be anticompetitive This was based on the argument that the ban restricts teams in other sports—in this case North American Soccer League (NASL) teams—from sports ownership capital.. The franchise system enables leagues to limit or even avoid any competition across sports within the same region Most of these studies only offer limited evidence given the rough substitution measures that were employed. Professional football dominates by far all other sports (see Buzzacchi et al, 2010) and thereby constitutes a practically highly relevant case to explore This dominant position has raised serious concerns among league officials and managers in other sports, who have recently claimed that their teams suffer from an intensified competition for fan interests – in Germany..
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