Revenue sharing has multiple, related meanings depending on context: In business, revenue sharing refers to the distribution of profits and losses between stakeholders, who could be general partners (and limited partners in a limited
partnership), a company’s employees, or between companies in a business alliance.
Revenue sharing in Internet marketing is also known as cost per sale, in which the cost of advertising is determined by the revenue generated as a result of the advertisement itself. This scheme accounts for about 80% of affiliate marketing programs.Web-based companies including HubPages, Squidoo, Helium and Infobarrel also practice a form of revenue sharing, in which a company invites writers to create content for a website in exchange for a share of its advertising revenue, giving the authors the possibility of ongoing income from a single piece of work, and guaranteeing to the commissioning company that it will never pay more for content than it generates in advertising revenue. Pay rates vary dramatically from site to site, depending on
the success of the site and the popularity of individual articles.In professional sports league, “revenue sharing” commonly refers to the distribution of proceeds generated by ticket sales to a given event, the amount of money distributed to a visiting team can significant impact a team’s total revenue, which in turn affects the team’s ability to attract (and pay for) talent and resources.
In 1981, for example, the Scottish Premier League changed its policy from splitting a match’s receipts evenly between its two competing football teams over to a system in which the hosting team could keep all of the proceeds from matches hosted at its facilities.The move is generally believed to have negatively affected the league’s parity and enhanced the dominance of Celtic F.C. and Rangers F.C.