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The effect of professional football clubs' legal structure on sponsoring revenue


Dietl, Helmut; Weingärtner, Christian (2011). The effect of professional football clubs' legal structure on sponsoring revenue. Journal of Sponsorship, 4(4):377-390.

Abstract

Professional football clubs earn most of their revenues from four sources: sale of broadcasting
rights, matchday revenues, merchandising, and sponsorship. The relative importance of these
sources differs among clubs and leagues.
Economists often argue that the ability of
professional football clubs to generate revenues depends to a large extent on their legal
structure. In this paper we analyze the effect of different legal structures, such as private
company, public company, members’ association, on sponsorship. Based on the platform
theory we introduce a model of value creation in professional football. After elaborating the
property rights situation for each of the legal structures we show the direct and indirect effects
on the generation of sponsorship revenues. We theoretically proof the members’ association
to be the favorable legal structure with regard to sponsorship. The lack of hold-up risks for the
stakeholders and the strong position of the fans are the major reasons for the superiority of
this non-profit legal structure.

Professional football clubs earn most of their revenues from four sources: sale of broadcasting
rights, matchday revenues, merchandising, and sponsorship. The relative importance of these
sources differs among clubs and leagues.
Economists often argue that the ability of
professional football clubs to generate revenues depends to a large extent on their legal
structure. In this paper we analyze the effect of different legal structures, such as private
company, public company, members’ association, on sponsorship. Based on the platform
theory we introduce a model of value creation in professional football. After elaborating the
property rights situation for each of the legal structures we show the direct and indirect effects
on the generation of sponsorship revenues. We theoretically proof the members’ association
to be the favorable legal structure with regard to sponsorship. The lack of hold-up risks for the
stakeholders and the strong position of the fans are the major reasons for the superiority of
this non-profit legal structure.

Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Language:English
Date:2011
Deposited On:17 Nov 2011 13:37
Last Modified:05 Apr 2016 15:06
Publisher:Henry Stewart Publications
ISSN:1754-1360
Related URLs:http://www.isu.unizh.ch/static/ISU_WPS/141_ISU_full.pdf (Organisation)

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