The Economics of Football

Cover......Page 1
Half-title......Page 3
Title......Page 5
Copyright......Page 6
Dedication......Page 7
Contents......Page 9
Figures......Page 11
Tables......Page 13
Preface......Page 17
Acknowledgements......Page 20
1 Introduction......Page 21
Rottenberg: ‘The baseball players’ labor market’, Journal of Political Economy, 1956......Page 23
Neale: ‘The peculiar economics of professional sports’, Quarterly Journal of Economics, 1964......Page 25
Sloane: ‘The economics of professional football: the football club as a utility maximiser’, Scottish Journal of Political…......Page 27
The economics of team sports since the 1970s......Page 29
1.2 Outline of this volume......Page 31
1.3 The use of econometrics in this volume......Page 36
2 Professional football: historical development and economic structure......Page 42
2.1 The commercial structure of Europe’s ‘big five’ football leagues......Page 44
Origins and competitive structure......Page 58
Team performance......Page 61
Trends in attendances......Page 76
Explanations for changes in attendances......Page 86
2.4 Admission prices and gate revenues......Page 91
The history of televised football......Page 100
The BSkyB takeover bid for Manchester United, and the collective sale of broadcasting rights......Page 104
2.6 Other sources of revenue and cross-subsidy......Page 107
2.7 Football’s labour market: players’ wages and the transfer system......Page 110
2.8 The historical development of professional football: international comparisons......Page 121
France......Page 122
Japan......Page 125
Measuring convergence, divergence and inequality......Page 129
Convergence tests: empirical results......Page 136
2.10 Conclusion......Page 143
3 Competitive balance and uncertainty of outcome......Page 145
The North American professional team sports model......Page 146
Theoretical models of sports leagues: some preliminaries......Page 151
The closed model......Page 153
The open model......Page 160
Empirical investigations and extensions......Page 166
Average home and away performance......Page 170
Good and poor sequences, and match result probabilities......Page 178
Previous literature on modelling football results......Page 187
Specification of the model......Page 192
Estimation of the model......Page 199
An illustration: Middlesbrough v.Arsenal, Premier League, 24 April 1999......Page 203
3.4 Conclusion......Page 207
4 The labour and transfer markets......Page 209
Ages and dates of birth......Page 211
Birthplaces and first clubs......Page 213
Professional career histories......Page 218
4.2 Patterns of international migration for professional footballers......Page 223
4.3 The earnings of professional footballers......Page 229
The economics of superstars......Page 231
Rank-order tournaments and intra-team earnings distributions......Page 235
4.4 Determinants of players’ compensation: empirical evidence......Page 241
4.5 The football transfer market......Page 247
The determination of transfer fees: a theoretical model......Page 249
The determination of transfer fees: data and empirical results......Page 251
4.6 Conclusion......Page 256
5 The contribution of the football manager......Page 260
5.1 The role of the football manager......Page 262
Production’ in professional team sports......Page 265
Estimation of team production functions......Page 269
5.3 Measuring managerial efficiency in English football......Page 272
5.4 Conclusion......Page 282
6 Managerial change and team performance......Page 284
6.1 Patterns of managerial change in English football......Page 285
6.2 Determinants of managerial change: evidence from North American team sports......Page 300
6.3 Specification of job-departure hazard functions......Page 304
Estimation of managerial efficiency scores......Page 306
Estimation of hazard functions......Page 311
6.5 Hazard functions for English managers: duration measured in matches......Page 316
6.6 The effect of managerial change on team performance: evidence from North American team sports......Page 323
6.7 Managerial succession effects in English football: performance measured by season......Page 326
6.8 Managerial succession effects in English football: performance measured by match......Page 329
6.9 Conclusion......Page 334
7 The demand for football attendance......Page 337
7.1 Econometric analysis of football attendances......Page 338
Measuring the demand for football attendance......Page 339
Demographic and geographic determinants of attendance......Page 344
Price, income and unemployment......Page 346
Team quality and uncertainty of outcome......Page 349
Other influences on attendance......Page 352
FC Barcelona......Page 355
Celtic and Rangers......Page 359
7.3 Modelling the demand for attendance at English league football, 1947–1997......Page 362
Estimation of club-level annual average attendance equations......Page 363
Explaining base attendances, and the loyalty, league position, price and goals scored coefficients......Page 375
7.4 Conclusion......Page 391
8 Information transmission and efficiency: share prices and fixed-odds betting......Page 393
8.1 Ownership, finance and English football’s stock market boom......Page 395
8.2 Football team performance and share price movements: an event study......Page 401
League match results......Page 403
Promotion and relegation......Page 404
FA Cup and European elimination......Page 405
The BSkyB bid for Manchester United......Page 406
8.3 Efficiency of prices in the fixed-odds betting market......Page 417
Testing for weak-form efficiency without using the forecasting model......Page 427
Testing for weak-form efficiency using the forecasting model......Page 430
An illustration: bets on the results of Premier League matches played on 24 April 1999......Page 434
8.4 Conclusion......Page 436
9 Professional football: current issues and future prospects......Page 438
9.1 Sources of competitive imbalance in English football......Page 439
European leagues......Page 445
Wage inflation and football’s ‘arms race’......Page 448
Ownership, control and media interests in football......Page 455
9.3 Conclusion......Page 459
References......Page 460
Index......Page 472