Sports Business and Multisided Markets: Towards a New Analytical Framework? (Long Version)

Abstract

Despite still being younger than a decade, the theory of multisided markets has offered numerous valuable insights for the analysis of industries in which a supplier serves two distinct customer groups that are indirectly interrelated through externalities. Examples include payment systems, matching agencies, commercial media, and software platforms. However, professional sports mar-kets have largely been neglected so far in this kind of research although they possess the characteristics of multisided markets. This conceptual paper con-tributes to filling this gap by describing the platform elements of professional suppliers of sports events and conceptually outlining issues where an applica-tion of this theoretical framework is likely to provide valuable insights and to add to the existing knowledge. Among these problems are integrative pricing strategies of sports clubs towards such different customer groups like attendees, broadcasters, sponsors, etc., including their welfare and antitrust implications, design decisions of sports associations in order to promote positive feedback loops among the customer groups as well as management strategies to reinforce positive externalities among customer groups and alleviate negative ones. The authors would like to thank Anna Lund Jepsen and Nadine Lindstädt for valuable comments on earlier versions of this paper as well as Barbara Güldenring and Liz Patti for editorial assistance. A substantially shorter version of this paper will be published in Sports, Business, Management: An International Journal in 2011.sports economics, sports management, two-sided markets, multisided platforms, professional sports business, pricing strategies, broadcasting rights