And if the ball does not cross the line? A comprehensive analysis of football clubs’ performance

The football club market is changing fast in the social media era. In this global market, clubs must maintain or improve fans’ attendance at the stadium; simultaneously, they need, more than ever, to take care of social media. The aim of this article is to test and discuss a comprehensive approach to analysing the performance of football clubs regarding their multiplicity of objectives. We analyse the efficiency of English Premier League (EPL) clubs during three seasons (2012/13–2014/15). The methodologies employed are data envelopment analysis (DEA) and a bootstrapped DEA model. The input is the market value of the squad, and the outputs are sports results, total revenue, the ratio of stadium utilization during the season and an index of social media impact. The results are robust to alternative estimation methods and indicate that EPL clubs still have a margin for improving their overall efficiency, mainly the medium clubs. The analysis of football clubs’ performance with the proposed comprehensive approach provides a useful tool to help managers with evaluation and feedback considering the actual context of the market. The approach brings closer the opportunity to design appropriate strategies to improve clubs’ efficiency as well as competition policies.     

The efficiency of Mozambique soccer league: the Moçambola

This paper analyses the technical efficiency of the Mozambique football league from 2008 to 2014 using a Bayesian stochastic frontier model with exponential specification. Covariates include contextual characteristics such as location, identification as a Muslim club, and sporting performance. The results uncover that Mozambique sports clubs display varying efficiency, revealing distinct managerial incentives in the Mozambique football league. Policy implications are derived, including efficiency scores deemed to be acceptable to the league and reconsideration of the rationale for national investment in all league’s clubs.     

Football players’ career and wage profiles

The objective of this article is to look over football players’ career path, from lower leagues to the first league, and the associated wage profile. The information comes from a Portuguese longitudinal matched employer–employee data set defining several career events according to players’ movement across football clubs and across professional and semi-professional leagues. Our identifying strategy relies on coach changes to reduce the potential bias resulting from players’ moves between clubs. The estimated first-difference wage equations indicate that players can expect a wage premium when they get transferred to new clubs in higher leagues or a wage penalty when moving to lower leagues. Players who stay in the same club after the club being relegated can also expect a wage penalty.     

Productivity and efficiency at english football clubs: a random coefficient approach

This paper analyzes productivity and efficiency of English professional football clubs from 1981–1982 to 2010–2011, using a random coefficient stochastic distance frontier (SDF) model. Our Bayes factor analysis indicates that this model is strongly favored over the commonly used fixed coefficient SDF model. Our empirical results show that clubs in our sample operate at different levels of technical efficiency and technical change. Our further analysis using ordered logistic regression suggests that technical efficiency is more important than technical change in predicting whether clubs in our sample are promoted or relegated.     

The Brazilian Soccer Championship: an efficiency analysis

This article analyses the top Brazilian football league from 2003 to 2011 by estimating a cost function and using a stochastic frontier model. Among the covariates, the number of fans per club and club remoteness is taken into account. The Brazilian clubs are then ranked according to their technical efficiency during the 2000–2011 period. Based on the results, the policy implication is presented, and the economic implications arising from the study are also considered.     

Performance evaluation of the English Premier Football League with data envelopment analysis

This paper uses data envelopment analysis (DEA) to evaluate the performance of English Premier League football clubs from 1998/99 to 2002/03 combining sport and financial variables. The paper evaluates how close the clubs are relative to the frontier of best practices, analysing how they manage sport as well as financial results. Managerial implications of the research are devised.     

Value-maximizing football clubs

In this paper, football clubs are modeled as value-maximizing enterprises. With a long-term perspective in this framework, players are not only factors of production, but also assets of the club. It is shown that talent investment is higher with value-maximization than with profit maximization for homogeneous football clubs. Club heterogeneity is then modeled by different time-horizons regarding future profits, which leads to asymmetric levels of talent investment. Teams with longer time-horizons demand more talent and tilt the competition to their favor. Increases in transfer prices for players worsen the competitive balance, while higher player wages improve it.     

Financial constraints on sport organizations’ cost efficiency: the impact of financial fair play on Italian soccer clubs

We analyze the effect of the introduction of stricter financial constraints on the trade-off between sporting and economic results. We apply a stochastic Cobb-Douglas production frontier model to a sample of Italian Serie A teams, i.e. first division, over the period 2005–2015 to evaluate the variation in soccer clubs’ cost efficiency following the application of the UEFA Financial Fair Play (FFP) principles in 2010. FFP imposes stricter financial regulation as a requirement for a club to be admitted to Union of European Football Associations (UEFA) tournaments. Firstly, we find that FFP does not improve the average efficiency of the Italian first division teams. Secondly, we show that FFP has contributed to leveling the playing field, reducing the gap in terms of efficiency between top teams and lower-tier teams.

Abbreviations: FFP: Financial Fair Play; UEFA: Union of European Football Associations; DEA: Data Envelopment Analysis; SFA: Stochastic Frontier Analysis     

The trickle-down effect: how elite sporting success affects amateur participation in German football

The trickle-down effect assumes that sporting success at the elite sport level descends down to the amateur sport level in the sense that people are inspired by sporting success to participate themselves. Previous research failed to find convincing evidence for this relationship, mostly because the data used and the methods applied (e.g. cross-sectional data, primary data, correlations) were not adequate. This study addresses these shortcomings and examines the effect of national sporting success on amateur sport participation in German football using longitudinal data from 1950 to 2014. Since an individual’s decision to participate in sport also depends on other factors, the regression models also control for working hours, real wages etc. The results show that only World Cup title wins of the men’s national team have a positive and statistically significant impact on the number of and percentage changes in individual club memberships, clubs and teams. The coefficients of European Championship titles and title wins of the women’s national team turn out to be mostly insignificant. Future research should examine the reasons as to why only title wins by the men’s team have a measurable inspirational effect on amateur sport participation in football.     

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.     

The impact of skilled immigrants on their local teammates’ performance

We use the Bosman ruling, which invalidated restrictions on the maximum number of foreign players allowed on professional football teams, to identify a causal positive impact of foreign players in German Bundesliga clubs on the individual performance of their domestic teammates.     

广东省大中型工业企业研发效率区域差异及其收敛性

基于中间-最终产出效率的视角,运用随机前沿分析和β收敛性检验,利用2002—2010年广东省的统计数据研究了广东省大中型工业企业研发效率的区域差异及其收敛性。结果表明:广东省三大区域(珠三角地区、粤东粤西两翼地区和粤北山区)的大中型工业企业的研发中间产出效率的差异不明显,研发最终产出效率存在显著差异,该差异主要是由环境因素造成;三大区域的大中型工业企业研发中间产出效率不存在绝对收敛,而研发最终产出效率存在明显的"俱乐部收敛",并分化出珠三角地区和粤东粤西两翼地区-粤北山区两大俱乐部。     

Entry into exit: insolvency in English professional football

This study uses a unique database of financial accounts for English football clubs between 1974 and 2010 to examine the process by which firms fail, which in this context means entering insolvency proceedings. From the data it is possible to estimate shocks to demand and productivity and to show that failing firms typically experience a series of negative shocks. This is consistent with the standard IO theory models of exit.     

Over the moon or sick as a parrot? The effects of football results on a club's share price

This article considers the impact of match results on the stock returns of English football clubs. We propose that the magnitude of the response to a given result depends on the importance of the game, which is measured in two ways. First, we consider the extent to which the clubs are close rivals vying for similar league positions, as winning such games is particularly significant. Second, we argue that each individual game becomes more important for those clubs likely to be promoted or relegated as the season draws to a close, since a given match will have increasing information content concerning the final league position of the club. Using a fairly large panel comprising data for 19 clubs, we find some support for the notion that stock prices are affected more by the results of important matches than matches of lesser importance. We also observe that the difference between the number of points the club secures from a given match, and the number it was expected to secure, affects its stock price, as does the number of goals that the club under question scores in the match, relative to its competitor.     

Perceived trade-off between education and sports career: evidence from professional football

To explore the attitudes towards risky career choices of young people in highly competitive environments, we surveyed almost 1000 football players in the youth academies of German professional clubs (Bundesliga), who must generally decide early in their careers whether or not to risk quitting school to focus solely on a professional football career. Based on the survey responses, we empirically analysed which factors influence these youths’ tendencies to choose a high-risk career option over a lower risk one. Our results seem to indicate that such risk taking in competitive environments can be explained by potential benefits expected from this decision, as well as judgments about the likelihood of achieving the desired career. Risk attitudes towards career choices vary by differences in individuals’ estimates of the potential benefits and in particular, in their own assessments of the likelihood of success, which is an important driver of risk acceptance. We also found that opportunity cost considerations influence risk acceptance: the better the low-risk option, the less willing the individual to give it up for a high-risk alternative. In addition, both national origin and level of cultural integration play a role in attitudes towards risky career choices, with reductions in the latter increasing the risk premium of quitting school.     

Consumer mobility and community tax bases : The financing of local public goods

In a model of economic ‘clubs’, size is fixed and members consuming a public good raise the question of composition; with whom would they rather consume? This depends on the way collective consumption is financed, and three results are proven With a poll tax, clubs must be homogeneous in income for all to be satisfied With a marginal benefit (Lindahl) tax, no consumer is ever satisfied with any composition; and with an income tax, at least one consumer in each club is always dissatisfied. Satisfaction implies there exists no club composition preferred to the existing one.     

A Spatial Cross–Sectional Analysis of Elasticity of Demand for Soccer

Several studies estimate the demand for watching English professional football (soccer) as highly inelastic, a puzzling result given that clubs appear to possess a degree of monopoly power. We discuss weaknesses in earlier studies and offer an alternative method of assessing elasticity based on travel costs of spectators living different distances from the grounds. We find that elasticity varies across the 20 senior clubs for which data were available but in almost every case demand is more elastic than reported in the existing literature and pricing policy appears therefore to be more orientated towards profit maximisation than previously thought.     

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.     

Inequality and club formation

We study the relationship between social segmentation and income inequality by means of the economic theory of clubs with private provision of the club good. After having characterized the core partition of society in clubs and investigating its characteristics, we show how the clubs’ sizes depend on income distribution and compare segmentation profiles arising in societies characterized by different inequality patterns.     

Time overruns as opportunistic behavior in public procurement

We consider the supplier’s strategic choice on delivery time in a public procurement setting as the result of the firm’s opportunistic behavior on the optimal investment timing when production costs are uncertain. We model the supplier’s trade-off between the option value to defer the contract execution and the penalty payment in the event of delays. We also take into account the issue of penalty enforcement, which in turn depends on both the discretion of the court of law in voiding contractual clauses and the “efficiency” of the judicial system (i.e. the average length of civil trials). We test our main results on Italian public procurement data showing that the supplier’s incentive to delay is greater the higher the volatility of production costs and the lower the “efficiency” of the judicial system. We then calibrate the model using parameters that mimic the Italian scenario on public works procurement and calculate the maximum amount that a supplier is “willing to pay” (per day) to postpone the delivery date and infringe the contract provisions. Our calibration results are consistent with the theoretical model’s predictions and the empirical findings.