ABSTRACT
This chapter focuses on the economics of teams and the leagues in which they play. It provides the difference between open and closed leagues, and describes the various possible team goals and how those goals influence team behavior. The chapter analyses team demand, revenue, and cost in closed leagues in North America, and presents the differences in revenue, cost, and profits in open European soccer leagues. It discusses the possibility that an owner maximizes wins rather than profits, and looks at the individual components of teams' revenues and costs and the economics of open leagues. European soccer teams face a very different business climate than do North American sports teams. While some teams are highly profitable, most struggle financially. Placing franchises in the largest cities has important implications for the individual teams, as it ensures that each team has a large fan base to which it can appeal.
