Player Mobility and Competitive Balance Regulation in Professional Sports Leagues

Abstract

Competitive balance regulation is more widespread in North American than in Europan sports leagues. The present paper addresses the question whether this observation can be explained with the help of differences in the degree of player mobility. Using an extended version of the workhorse contest model of sports leagues, the paper shows that the answer depends on the kind of competitive balance regulation. While player mobility may help to explain the difference with respect to salary regulation (e.g., salary caps), the choice of revenue sharing schemes turns out to be independent of player mobility.