Practicing sports as well as the organization of sports events generate considerable positive external effects which cause an inefficiently low provision of private funds and thus justify public interventions in the sports market. For instance, organising competitions and providing sports infrastructure to the public have positive impacts on regional tourism and the sectors linked to the tourism industry. Several empirical studies of professional skiing competitions in Switzerland confirm the existence of such effects. Furthermore, practicing sports improves general health and may contribute to higher productivity and growth. Even when taking into account external costs caused by sports accidents it has been estimated that in Austria the net gain obtained from physical exercise amounts to about € 265 million p. a. The demand for sports, however, may be too low due to lack of information on its health improving effects, distorted preferences or irrational behaviour on the part of consumers (meritorious properties of sports). Income distribution issues are another argument in favour of an active role to be played by the state in the sports market.