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Published in:
2010 | OriginalPaper | Chapter
The Champions League and the Coase Theorem
Author : Stefan Szymanski
Published in: Football Economics and Policy
Publisher: Palgrave Macmillan UK
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This chapter considers the relevance of the Coase Theorem to the analysis of sports leagues. It is widely believed that there exists an ideal competitive balance between teams in a sporting contest, and that without competitive restraints to redistribute resources championships will be too unbalanced. The chapter reviews the empirical evidence on this issue to date, and then examines a model where the outcome may be either too little or too much competitive balance. Empirical evidence from English football suggests that the bias is likely to be in favour of too much competitive balance. The implications for European football in general and the Champions League in particular are then discussed.