The Optimal Size of a Sports League

There are a large number of sporting leagues around the world. However, when we study all the leagues, we find that each of them has around 10-20 members who are playing in the top professional class of leagues.

There are very few events such as the FIFA World Cup soccer where 50+ teams participate in the first round of the tournament.

The FIFA World Cup is an exception and can hold viewer interest since it happens once in four years. If it was an annual event, it would have been difficult to sustain viewer interest with so many teams participating.

This is true across all geographical regions are sports be it basketball or baseball in North America, club-level soccer in Europe, or cricket in Southeast Asia. There are often hundreds of different clubs which are playing these games. However, the number of spots in the top league remains restricted. This is because of several financial factors which impact the organization of the league.

In this article, we will have a closer look at some of these financial as well as organizational factors. These factors have been described in detail below:

1. Hierarchy of Leagues: It is important to note that there is a hierarchy of leagues in almost every professional sport across the world. This means that there are various tiers of leagues being played leading up to professional sports.

   In many European football leagues, there are leagues that have a six-layer hierarchy. However, in most parts of the world, a two or three-level hierarchy exists. The hierarchy of leagues is important for multiple reasons. One of the reasons is that it allows people with different levels of interest to view the game.

   Viewers who have a very high level of interest have the opportunity to watch a large number of games as lower hierarchy levels play.

   On the other hand, there are other viewers who only watch important matches and hence view the professional league. The hierarchy of leagues also allows the players to progress and get relevant exposure before they play at a professional level.

   Players who are performing well at the lower levels of the league are given the opportunity to play at the higher levels. This is beneficial for everyone since a good player has a higher revenue-generating potential at a higher level and hence higher-level clubs are willing to acquire them at a higher price. As a result, there is a financial benefit for both the clubs as well as the players.

2. Geographical Regions: The sporting teams in a good sporting league generally represent a geographical region. This region could be a country, state, or even a city. This is generally done to ensure that these teams have a dedicated fan base among the residents of the city.

   In most parts of the world, the area under the jurisdiction of sporting leagues is such that it becomes impossible to have more than twenty geographical regions that the clubs represent.

   It is financially not viable to have more than one club represent the same area. Similarly, the viability of sporting clubs gets reduced if they are not affiliated with or represent a particular region.

3. Loss of Viewer Interest: If more than 20 sporting teams are allowed to participate in a league, then it is possible that the league schedule will run into hundreds of leagues. The end result will be that there will be a match almost every day. This would make sporting events a mundane event and the special interest that sporting events arise would no longer be present.

   For a sporting event to be successful, it needs to have a decent interval between the games. This interval is necessary to prevent the loss of viewer interest.

4. Lower Individual Probability: The number of viewers who view an event is directly related to the probability of a team making it to the advanced stages of the event. For example, when a team is expected to make it to the semi-final of an event, their viewership numbers increase.

   At the same time, if they are eliminated from the event at an early stage, their viewership numbers decrease even if they have a few matches left. If the number of matches is too large, the individual probability of a team making it to the next round will be quite low and also will be difficult to predict. It is for this reason that leagues that have a very large number of teams do not exist in the world.

5. Irrelevant Games: Hypothetically, if a large number of teams were to participate in a sporting league, then there would be a possibility that a large number of relatively unknown and unpopular teams would also play a large number of matches with each other. The end result would be a large number of irrelevant games which would dilute the brand of the sporting league and the interest of the viewers.

6. Discrepancy in Budgets: If a large number of teams are allowed to play in the league, there would be a significant discrepancy in the capabilities of the teams.

   Some of the teams would have a lot more money and resources as compared to other teams. As a result, their ability to win matches will also be considerably higher than many other teams. This will result in a series of one-sided matches. Also, there will be issues with the pricing of tickets since viewers may not be willing to pay a huge amount to view such games.

The fact of the matter is that sporting leagues across the world have tried various formats and have come to the conclusion that having ten to twenty teams of similar capabilities is the best way to ensure the financial success of the league.