SHARING LEVELS THE
FOOTBALL FIELD AND
Revenue sharing is one of the most misunderstood devices in all of sports. Since the device reallocates revenues from those programs that make the most to those programs that make less, intuition suggests that revenue sharing will allow those that make less a fighting chance. For example, recipients of redirected revenues can buy more coaching talent or spend more in the pursuit of playing talent (including lavish practice facilities). But intuition clearly fails, since recipients don’t always do this. Intuition is so strong here that observers don’t turn to the device and wonder why it doesn’t seem to change balance. Instead, fingers get pointed at revenue sharing recipients. The conclusion is that failure actually to make more balance happen on the field or court is the fault of those who don’t spend the money as the designers of the revenue sharing mechanism apparently intended.
Interestingly, there is a large literature showing that this intuition, itself, is just wrong. Indeed, for North American sports, the conclusion is that there really is no reason to believe that the forms of revenue sharing chosen by pro sports leagues and college conferences was ever intended to level the playing field. Revenue sharing instead reduces compensation to players or other owner investments and then redistributes the proceeds to all teams according to the sharing device. To us, the complete absence from any and all discussions of revenue sharing of findings, so well established, smacks of the presence of a myth.
As with the rest of the myths in this book, the power of this myth rests on something that seems intuitive, that sharing revenues should lead to