Broadcasting, Attendance and the Inefﬁciency
, ROB SIMMONS
and STEFAN SZYMANSKI
School of Accounting, Economics and Management Science, University of Salford, M5 4WT,
UK. E-mail: firstname.lastname@example.org
Department of Economics, The Management School, Lancaster University, UK.
Tanaka Business School, Imperial College London, 53 Prince’s Gate, Exhibition Road, London
SW7 2PG, UK. E-mail: email@example.com
Abstract. The English Premier League is a cartel of soccer teams that collectively sells the
rights to broadcast its matches. Despite considerable demand for their product from broad-
casters, the clubs agreed to sell only a small fraction of the broadcast rights (60 out of 380
matches played each season between 1992 and 2001). The clubs have explained this reluctance
by claiming that increased broadcasting would reduce attendance at matches and therefore
reduce cartel income. However, this paper produces detailed econometric evidence to show
that broadcasting has a negligible eﬀect on attendance and that additional broadcast fees
would be likely to exceed any plausible opportunity cost. The paper concludes that a more
likely explanation for the reluctance to market their rights is the failure of the cartel to reach
agreement on compensation for individual teams.
Key words: Attendance, broadcasting, cartels, football, ineﬃciency
‘‘it is desirable to limit the number of matches which are televised live
because excessive live broadcasting of football would be likely to reduce
attendances’’ FA Premier League, Statement of Case, Restrictive Practices
A typical cartel sets out to maximise the joint proﬁts of its members. Most
industrial countries have adopted antitrust laws prohibiting cartel-like
behaviour because of the adverse consequences for social welfare of
monopolistic behaviour. However, a cartel is more complex than a monop-
oly. To achieve joint proﬁt maximisation members of a cartel must reach
agreement among themselves, and if they fail to reach an agreement
Author for correspondence: Department of Economics, The Management School,
Lancaster University, LA1 4YX, UK. Tel.: +44-1524-594234; Fax: +44-1524-594244;
Review of Industrial Organization 24: 243–265, 2004.
Ó 2004 Kluwer Academic Publishers. Printed in the Netherlands.