Sports business and multisided markets: towards a new analytical framework?

Abstract

Purpose

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 by externalities. Examples include payment systems, matching agencies, commercial media, and software platforms. However, professional sports markets have largely been neglected so far in this kind of research although they possess the characteristics of multisided markets. The purpose of this paper is to contribute to filling this gap by describing the platform elements of professional suppliers of sports events and by conceptually outlining issues where an application 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 as attendees, broadcasters, sponsors, etc., including their welfare and antitrust implications, and 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.

Design/methodology/approach

The paper applies the theory of multisided markets to sports markets. It analyses whether the participants and their interrelations can be described as facing a multisided market context and briefly outlines the strategy implications for sports business.

Findings

The paper finds that the multisided market framework offers a promising framework for analysing sports business and adds insights to several problems of sports markets that “traditional” analysis cannot fully solve.

Originality/value

This is the first paper to systematically discuss the applicability of the multisided market framework to sports markets. As a conceptual paper, it hopes to stimulate further research in this area and open a promising avenue for scientific progress in the field.

Citation

Budzinski, O. and Satzer, J. (2011), "Sports business and multisided markets: towards a new analytical framework?", Sport, Business and Management, Vol. 1 No. 2, pp. 124-137. https://doi.org/10.1108/20426781111146736