Yunxia Ding, Yelena Y. Wang, Thomas A. Baker III

Abstract: China places high expectations on reforming its sport industry through streamlined administration on the part of the government and increased delegation of authority to private actors (Pan, 2018). Public-private partnerships (PPP) in sport facilities produce positive effects but are not without serious complications that have undermined the reforming purpose. This study addresses the gap that exists because no studies have examined or evaluated practice reform outcomes with regard to the entrusted operation of multi-purpose sports complexes in China. Also, this study is the first economic theory-oriented exploration of Chinese sport-related contract law. Through a content analysis examination of 1) Contract Law and Law on Physical Culture and Sports; 2) a sample of entrusted operating agreements; and 3) semi-structured interviews with the multi-purpose sports complex operators, the authors found that the extant contract mechanism in China does not guarantee that service integrators can fully and autonomously operate within the law. Furthermore, this mechanism cannot fully ensure that the government achieves the goal of asset preservation and appreciation because of the bounded rationality of the government, the existence of contracting and dispute costs, and the lack of industrial eco-management thinking. Our findings underscore the significance of introducing residual rights of control (Hart, 1988) into entrusted operating agreements to optimize the transition of the Chinese sport industry.

Keywords: Multi-purpose sports complex, entrusted operating agreement, residual control rights, service integrator, content analysis

Citation: Ding, Y., Wang, Y. Y. & Baker III, T. A. (2021). The application of residual control rights theory to the entrusted operating agreements of multi-purpose sports complexes in China: An exploration based on content analysis. International Journal of Sport Management, 22(1), 27-54.

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