Competitive balance in Major League Soccer

01/06/2013 to 31/07/2013

Ever since the pioneering work of Rottenberg (1956) and Neale (1964), the uncertainty of outcome hypothesis (UOH) has played a major role in the economic analysis of professional sport leagues. The UOH suggests that increasingly imbalanced leagues potentially influence fan interest in a negative way and, consequently, stadium attendance and TV viewership will decrease. Therefore, regulations (like salary caps), redistribution schemes (like the redistribution of media revenues) as well as specific rules of competitions (like play-offs or promotion/relegation) are common practices in professional sports leagues. To evaluate the necessity and effectiveness of regulations and rules of competitions it is of great importance for league organizers to monitor the development of competitive balance (CB) over time and compare the situation with other (benchmark) leagues.
This is the overall objective of the project.