Internal Balance and International Competitiveness: Sports Leagues Decision Models

In this paper, we consider the sports industry and in particular we focus our study on the European Football. In this market, the more the league is balanced with good teams and the more it becomes profitable. However, empirical data suggest that the top teams involved in more balanced national championships have less probability to win the international competitions. Starting from these considerations, we propose a model which examines, from the point of view of a profit-maximizer sports league, the opportunity to introduce measures in order to foster a balanced internal championship, taking into due account the competitiveness of the internal teams in the international competitions. Then we extend the model in order to include strategic interactions between more leagues in a non-cooperative game setting, and compare the Nash Equilibrium of the game with the cooperative outcome, in which the leagues maximize their joint expected profits.