Competitive balance in professional team sports organisations: A comparison between the North-American and the European model
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- The theory of competitive balance is what lies at the core of sports economics. The demand for a professional sports league is closely linked to the capacity of the governing body to organise and manage a competition in which members have an equal opportunity of competing at the highest level. This study compares the operations and outcomes related to competitive balance of two distinctive sports organisational frameworks, namely the North-American and the European model. Both in North-America and Europe, leagues’ authorities have been implementing a set of regulatory interventions that are frequently justified by the need to improve competitive balance without which the league would not ensure its long-term viability. This master thesis retraces the main policies used to achieve competitive balance and points out that the North-American professional team sports are significantly more regulated than the European ones. Based on the rankings of the last 30 sporting seasons, this study compares the degree of competitive balance of the four major North-American leagues (MLB, NBA, NFL and NHL) and the five biggest European football leagues (Premier League, Serie A, Bundesliga, La Liga and Ligue 1). The empirical study concludes that there is no obvious difference in competitive balance when the championship season is taken as a whole (static approach). However, when analysing the number of different teams entering the top ranks of the highest division (dynamic approach), then the European open leagues appear to be significantly less balanced than the North-American closed leagues.