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The Economic Consequences Of Foreigner Rules In National Sports Leagues

Author

Listed:
  • Markus LANG

    (Institute of Strategy and Business Economics, University of Zurich)

  • Alexander RATHKE

    (Institute for Empirical Research in Economics, University of Zurich)

  • Marco RUNKEL

    (Faculty of Economics and Management, University of Magdeburg)

Abstract

Profitable and balanced domestic league sports are among the central prerequisites for attracting the right to host a mega-event like the soccer world cup as well as for the overall economic success of such events. This paper provides a contest model of a professional team sports league and analyzes the impact of a restriction on foreign players. It shows that a league with binding restrictions on foreign talent for all clubs is more balanced than a league without binding restrictions on foreign talent. Moreover, the wage level of domestic (foreign) talent is higher (lower) in a league with a binding restriction on foreign players. Finally, a tighter restriction on foreign players increases profits of all clubs.

Suggested Citation

  • Markus LANG & Alexander RATHKE & Marco RUNKEL, 2010. "The Economic Consequences Of Foreigner Rules In National Sports Leagues," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 31, pages 47-64.
    • Handle: RePEc:tou:journl:v:31:y:2010:p:47-64
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    1. Limit foreigners in sports leagues
      by Economic Logician in Economic Logic on 2009-08-17 19:49:00
    2. Limiting Foreigners in Sports Leagues
      by jamesreade in International Journal of Sport Finance Blog on 2009-08-20 22:35:45
    3. 6+5: the economics
      by chris dillow in Stumbling and Mumbling on 2009-05-05 18:57:45

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    Cited by:

    1. Helmut Dietl & Egon Franck & Markus Lang & Alexander Rathke, 2010. "Organizational Differences between U.S. Major Leagues and European Leagues: Implications for Salary Caps," Working Papers 0122, University of Zurich, Institute for Strategy and Business Economics (ISU).
    2. Ozmen M. Utku, 2012. "Foreign Player Quota, Experience and Efficiency of Basketball Players," Journal of Quantitative Analysis in Sports, De Gruyter, vol. 8(1), pages 1-18, March.

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    More about this item

    Keywords

    TEAM SPORTS LEAGUES; COMPETITIVE BALANCE; PLAYER SALARIES;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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