THE CHAMPIONS LEAGUE AND THE COASE THEOREM

This paper considers the relevance of the Coase Theorem to the analysis of sports leagues. It is widely believed that there exists an ideal competitive balance between teams in a sporting contest, and that without competitive restraints to redistribute resources championships will be too unbalanced. The paper reviews the empirical evidence on this issue to date, and then examines a model where the outcome may be either too little or too much competitive balance. Empirical evidence from English football suggests that the bias is likely to be in favour of too much competitive balance. The implications for European football in general and the Champions League in particular are then discussed.     

THEORY OF THE BEAUTIFUL GAME: THE UNIFICATION OF EUROPEAN FOOTBALL

European football is in a spiral of intra‐league and inter‐league polarization of talent and wealth. The invariance proposition is revisited with adaptations for win‐maximizing sportsman owners facing an uncertain Champions League prize. Sportsman and champion effects have driven European football clubs to the edge of insolvency and polarized competition throughout Europe. Revenue revolutions and financial crises of the Big Five leagues are examined and estimates of competitive balance are compared. The European Super League completes the open‐market solution after Bosman. A 30‐team Super League is proposed based on the National Football League.     

Are subjective evaluations biased by social factors or connections? An econometric analysis of soccer referee decisions

Many incentive contracts are based on subjective evaluations and contractual disputes depend on judges’ decisions. However, subjective evaluations raise risks of favouritism and distortions. Sport contests are a fruitful field for testing empirically theories of incentives. In this paper the behaviour of the referees in the Italian soccer (football) league (“Serie A”) is analyzed. Using data on injury (or extra) time subjectively assigned by the referee at the end of the match and controlling for factors which may influence it (players substitutions, yellow and red cards, penalty kicks, etc.), we show that referees are biased in favour of home team, in that injury time is significantly greater if home teams are losing. The refereeing bias increases greatly when there is no running track in the stadium and the crowd is close to the pitch. Following the 2006 “Serie A” scandal we test whether favouritism emerges towards teams suspected of connections with referees finding that these teams obtain favourable decisions. Social pressure by the crowd attending the match however appears to be the main cause of favouritism. I would like to thank Francesco Aiello, Martin Brimble, Maria De Paola, Filippo Domma, Nicola Meccheri, Antonio Nicita, Michela Ponzo and two anonymous referees for useful comments. The usual caveats apply.     

Star quality and competitive balance? Television audience demand for English Premier League football reconsidered

The aim of this article is to investigate the determinants of television audience for English Premier League (EPL) football matches during the 2013–2014 season (n = 154). The model is adapted from Buraimo and Simmons (2015) who concluded that star quality was an important determinant of television audiences for the EPL over the 2000–2008 period, whereas uncertainty of outcome and championship, Europe and relegation contention were not. Their measures for contention are replaced by indicators based on Scelles et al.’s (2013b, 2016) competitive intensity. Results show a significant positive impact of star quality but also championship and Champions League intensity and no significant impact of Europa League, potential Europa League and relegation intensity. Based on these results, the article suggests that the EPL should encourage both star quality and competitive balance so that all teams can be competitive in terms of the title or qualification for the UEFA Champions League. Given the differences in revenue generation between English teams, the best way to achieve both star quality and competitive balance would be through the introduction of a European Super League. However, this conclusion based on television audience contradicts that of Scelles et al. (2016) based on stadium attendance.     

UNBALANCED SCHEDULES AND THE ESTIMATION OF COMPETITIVE BALANCE IN THE SCOTTISH PREMIER LEAGUE

Since the season ending in 2001, the Scottish Premier League (SPL) has, unlike other European football leagues, utilised an unbalanced schedule, by which the strongest teams in a given season play each other an extra time, mutatis mutandis for the weakest teams. While this approach may make sense for several reasons, it also has implications for within-season measures of competitive balance, because it creates biases in the set of win ratios from the end-of-season league table. This paper applies a simple log-probability rule to calculate a set of adjusted win ratios correcting for this inherent bias. Such an adjustment is necessary if one wishes to compare within-season competitive balance of the SPL with other European leagues. It is shown that by correcting for the unbalanced schedule, the SPL is consistently less competitive over the sample period. The implications of this finding are discussed at length.     

WAGE DISPARITY,TEAM PERFORMANCE,AND THE 2005 NHL COLLECTIVE BARGAINING AGREEMENT

This paper provides an empirical analysis of salary disparity and team performance in the National Hockey League during the first decade of the twenty‐first century. We find that the 2005 Collective Bargaining Agreement (CBA) reduced average salaries immediately after it was introduced but did not change the trajectory of average salaries nor did it alter the salary disparity on the average team. Salary disparity harms overall team performance primarily through reduced defensive performance and this relationship was not altered by the 2005 CBA. (JEL J31, J42, L83)     

JUDGING BIAS IN COMPETITIVE ACADEMIC DEBATE: THE EFFECTS OF REGION,SIDE, AND SEX

Debate is a “mind sport” that requires fair and impartial judging. This study examines debate rounds at the Tournament of Champions from 2004 to 2009. We use a binomial choice model to estimate the marginal effects of regional bias, sex bias, and side bias, using transitive predictions to control for idiosyncratic quality. We find evidence of region and side bias but not sex bias. These factors may explain the significant number of nontransitive outcomes in the data. Finally, we suggest some policy remedies to mitigate the impact of biases and further applications of our methodology. (JEL C25, J16, J52, J71, L83)     

REVENUE, POPULATION, AND COMPETITIVE BALANCE IN MAJOR LEAGUE BASEBALL

This article examines the impact of hometown market size on competitive balance in Major League Baseball. We use a four-equation simultaneous model of win percent, team payroll, team total revenue, and team local revenue in order to avoid simultaneity bias in the estimates. Using two-stage least squares, our results show that consolidated metropolitan statistical area population does have a statistically significant positive impact on local revenue. This leads to increased payroll, which has a significantly positive, but small, impact on win percent. Specifically, the estimated impact of an additional one million in population ranges from 0.233 to 1.126 additional wins per season. ( JEL L38)     

Soccer transfers,team efficiency and the sports cycle in the most valued European soccer leagues – have European soccer teams been efficient in trading players?

The sale of soccer players is a serious issue for the sustainability of professional teams. This article discusses the efficiency of the values that 183 European soccer teams have received for the sales of their players since 2007. We estimated stochastic frontiers for these soccer teams using stochastic frontier analysis. We found that teams with higher numbers of titles, with huge past acquisitions of players, and achieving good rankings in the previous season tend to receive more transfer inflows. The efficiency of these inflows can be significantly influenced if the team exhibits a long sports history or if the team participates in the Champions League or in the Europa League.     

EXAMINING REGULATORY CAPTURE: EVIDENCE FROM THE NHL

Regulatory capture has garnered significant attention, but poses a difficult empirical exercise since most relationships between regulators and regulated parties occur behind closed doors. In this research, we overcome this problem by analyzing an environment where the behavior of both the regulator and regulated parties are publicly available. Specifically, we utilize data from the National Hockey League (NHL) to examine the impact of general experience as a referee as well as experience refereeing a particular team on the assignation of penalties. We find that gaining general experience as a referee significantly reduces the number of penalties that a referee assigns. However, as a referee gains experience refereeing a specific team, they significantly reduce the number of penalties assessed to this team relative to teams that they have less experience refereeing, confirming that regulatory capture is observed among referees and teams in the NHL. (JEL G18, L51, K42)     

SALARY INEQUALITY,TEAM SUCCESS,LEAGUE POLICIES,AND THE SUPERSTAR EFFECT

Using a simple model of a team's salary distribution and data from the recent Collective Bargaining Agreement between players and owners in the National Hockey League, I examine the relationship between a team's salary distribution and its winning percentage. I find that teams with higher relative payrolls and lower salary inequality have higher winning percentages. I also find evidence of a superstar effect, in that teams with a higher maximum player salary have higher winning percentages. The results are sensitive, however, to the particular measure of salary inequality used as well as the endogeneity of the salary distribution. (JEL Z22, L83, J52, C33, C26)     

MAINTAINING MARKET POSITION: TEAM PERFORMANCE,REVENUE AND WAGE EXPENDITURE IN THE ENGLISH PREMIER LEAGUE

This paper investigates the relationship between playing success and commercial success in team sports. Utilizing a data set relating to the English Premier League that combines both financial measures and indicators of playing skills and performances, our empirical analysis is based on three behavioural equations. Our analysis indicates that on‐field success can be directly related to players’ skills and abilities and that revenue is positively related to on‐field success. Wage expenditure is also shown to systematically reflect player skills and performances. One interpretation of this evidence is that investment in players’ skills and ability buys on‐field success, with richer teams becoming ever richer and able to maintain or even build upon success by spending more on players than less successful clubs. To the extent that richer clubs are successful in their objective there is a causal link between revenue earned and competitive imbalance via investments in players. The implications of this tendency within a league are discussed in our conclusion, which also considers the potentially wider implications of our study as they relate to the evolution of firm size and issues of market share.     

The influence of demand and supply side pressures on the quantity and quality of inventive activity

This article arguments the literature on the demand for professional team sports by estimating a demand function for attendance at home matches in the Malaysian Semi-Pro Football League (MSPFL) between 1989 and 1991. A single-equation demand (attendance) function based on a pooled cross-section and time-series panel data set of 399 games is estimated by ordinary least squares, a fixed effects dummy variable covariance model and an error components model. Our findings confirm the importance of market size and championship prospects for the home team (but not the visiting team), as well as divisional status and ‘star’ players. The first match of the season and derby matches also increased attendance.     

THE INCOME TAX RESPONSIVENESS OF THE RICH: EVIDENCE FROM FREE AGENT MAJOR LEAGUE BASEBALL ALL-STARS

This paper examines the responsiveness of the rich to state income taxes. We use Major League Baseball free agents who were named All-Stars at some point in their career and who signed with a U.S. team for the 1991 through 2002 seasons. This data set overcomes some of the previous difficulties encountered in similar studies but also has limitations representing the general rich population. We find evidence that the wages of this subset of players do adjust to offset the burden of state income taxes, specifically a 1% decrease in net-of-tax rate leads to a 3.3% increase in salary. ( JEL H20, H24, H71, R23)     

EVOLUTION OF COMMUNITY DETERRENCE: EVIDENCE FROM THE NATIONAL HOCKEY LEAGUE

Community and specialized enforcement are recognized as important components of deterring antisocial behavior. To provide insights on the interplay between deterrence methods, we examine the empirical evolution of fighting and scoring in the National Hockey League using time series data. We identify structural changes that correlate with changes in player behavior and rules. In particular, we find that player behavior related to fighting changed 4 or 5 years prior to most rule changes aimed at reducing fighting. We conclude that the decline in fighting in hockey was more closely associated with a change in community rather than specialized deterrence methods. (JEL Z22, D71, L83)     

Let's Get Messi? Top‐Scorer Productivity in the European Champions League

Getting a player like Lionel Messi in the squad would seem like a dream come true for a professional football manager, but is it always best to have top‐quality players? We study the determinants of top goal‐scorers’ productivity in the UEFA Champions League. We find evidence of a concave relationship between age and productivity and uncover an inverted‐U relationship between performance and minutes played. Finally, we find a positive effect on height, being left footed and being a striker on the probability of scoring a goal. The results have important implications for managers both in looking to sign on new players and to maximise their potential during a competitive match.     

ESTIMATING THE IMPACT OF MAJOR LEAGUE BASEBALL GAMES ON LOCAL AIR POLLUTION

Professional sporting events attract millions of fans to urban areas each year as they cheer on their favorite teams. While benefits, such as increased tax revenues and economic development, are often cited as reasons to host a professional sports franchise, the public and private costs receive much less attention. This paper uses air quality readings from the Environmental Protection Agency and Major League Baseball schedules to estimate the impact of Major League Baseball games on local air pollution. The results suggest that attendance at a Major League Baseball game has a statistically significant but negligible impact on local air pollution. (JEL Q53, R11)     

Evaluating strange forecasts: The curious case of football match scorelines

This study analyses point forecasts of exact scoreline outcomes for football matches in the English Premier League. These forecasts were made for distinct competitions and originally judged differently. We compare these with implied probability forecasts using bookmaker odds and a crowd of tipsters, as well as point and probability forecasts generated from a statistical model. From evaluating these sources and types of forecast, using various methods, we argue that regression encompassing is the most appropriate way to compare point and probability forecasts, and find that both these types of forecasts for football match scorelines generally add information to one another.     

BIASED REFEREES?: RECONCILING RESULTS WITH THE NBA'S ANALYSIS

In a recent study, we used National Basketball Association (NBA) box‐score data over a 13‐year period including nearly 600,000 foul calls to show that NBA referees call relatively more fouls on players of another race. The NBA commissioned its own study using internal data with information on calls made by individual referees and claimed the results show there is no bias among the referees in the NBA. This paper is an attempt to reconcile these competing claims. (JEL J15, J71)     

SAVED BY THE MORNING BELL: SCHOOL START TIME AND TEEN CAR ACCIDENTS

Adolescents today suffer from chronic sleep deprivation due to a combination of biological changes to the circadian clock and early morning school bell times. Many school districts are now considering delaying high school start times to accommodate the sleep schedules of teens. This paper explores whether such policy changes can have an unexpected impact on teen car accident rates. This impact could function both through a direct effect on teen sleep deprivation and indirectly through changes to the driving environment, that is, shifting the time and conditions under which teens commute to school. By focusing on late‐night accidents and employing a difference‐in‐differences strategy using adult drivers as a control group, I find evidence of a persistent sleep deprivation mechanism. A 15‐minute delay in school start time causes a significant decrease in late‐night teen accidents of approximately 23%. However, I also find evidence of an opposing mechanism that is present during the morning commuting hours. A 15‐minute delay in high school start time leads to a 21% increase in morning teen car accidents. (JEL I29, J13, R41)