ABSTRACT
Tournaments should be designed to give incentives to participants to perform at their best and maintain spectator interest. Most competitive professional team sports are organised through leagues which can be seen as joint ventures in which clubs (as businesses) pool their complementary assets and capabilities to gain integrative efficiencies and share risks. The essence of league survival and sustainability is mutual interdependence and the acceptance by constituent clubs of regulations imposed by the leagues, though there is still a need for mechanisms to enforce them. Open leagues have their membership determined by quality control via promotion and relegation, whereas closed leagues promise their constituents clubs stability of membership. Many leagues, especially in the United States, have focused on creating competitive balance by means of revenue redistribution, salary caps, and restrictions on the recruiting process. A criticism of leagues is that they act as cartels (something illegal in conventional business), behaving uncompetitively and consequently reducing economic welfare for sports consumers, usually by them having to pay higher prices for their entertainment.
