Fan welfare maximization as a club objective in a professional sports league

Motivated by aspects of European soccer club governance (members' clubs supporters' trusts), a first formal analysis of fan welfare maximization as a club objective in a sports league is provided, with comparisons to objectives studied previously (profit and win maximization). Positive comparisons focus on team qualities, ticket prices, attendances and the impact of capacity crowds; empirically observed ticket black markets and inelastic pricing are consistent only with fan welfare maximization. Normatively, social welfare (aggregate league surplus) is well-served by a league of fan welfare maximizers, or sometimes win maximizers, but not profit maximizers; leagues should not normally make profits.

► Profit maximizing clubs tend to produce poor quality teams and low attendances. ► The welfare performance of leagues with profit maximizing clubs is generally poor. ► Fan welfare maximizing clubs tend to attract large attendances. ► Leagues of fan welfare maximizing clubs usually do well from the welfare economics viewpoint. ► If fans' desire for quality is high, leagues of win maximizing clubs outperform the alternatives.