The winner’s curse in the bidding process: The case of broadcasting rights in football

Citation

Feuillet A, Scelles N & Durand C (2017) The winner’s curse in the bidding process: The case of broadcasting rights in football. EURAM 2017, Glasgow, 21.06.2017-24.06.2017. http://2017.euramfullpaper.org/program/papers.asp

Abstract
The winner’s curse is a well-known phenomenon in the auction theory. The main aim of this article is to verify its existence in football broadcasting rights. The underlying objective is to assess whether some indices of this situation are verified and can cause a winner’s curse. The methodology is based on the application of Andreff (2014)’s six indices to the domestic markets for broadcasting rights of the French and English football leagues. These two markets have seen an increase in the number of packages offered to broadcasters, with the possibility of several ‘winners’. The paper shows that the winner of the major packages in the auction is not cursed. The curse is more likely to happen for the second mover. As such, the paper suggests a practical recommendation for broadcasters interested in football rights: win the best package or keep away.

Keywords
winner’s curse; media rights; second mover