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The English Football Industry: profit, performance and industrial structure

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Author Info

  • Stefan Szymanski
  • Ron Smith

Abstract

The English (Association) Football League is a long established industrial cartel selling a highly popular product with only imperfect substitutes. Despite that, the majority of its member clubs lose money and the industry has faced successive financial crises over the last decade. This paper develops an empirical model of the financial performance of English League clubs using a high quality dataset of 48 clubs over the period 1974-89. The underlying model explains how rents are competed away through the maximising behaviour of club owners subject to production constraints. This model is parameterised by a system of equations which describe the behaviour of a maximising owner subject to demand and production constraints. The model is then used to examine the coordination failure which lies at the heart of the English Football League's decline and to assess the prospects for the Premier League.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal International Review of Applied Economics.

Volume (Year): 11 (1997)
Issue (Month): 1 ()
Pages: 135-153

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Handle: RePEc:taf:irapec:v:11:y:1997:i:1:p:135-153

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Citations

RePEc Biblio mentions

As found on the RePEc Biblio, the curated bibliography for Economics:
  1. > Industrial Organization > Industry studies > Sports, recreation and tourism > Sports
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Cited by:
  1. Pelnar, Gregory, 2007. "Antitrust Analysis of Sports Leagues," MPRA Paper 5382, University Library of Munich, Germany.
  2. Palomino, F.A. & Rigotti, L. & Rustichini, A., 1998. "Skill, Strategy and Passion: An Empirical Analysis of Soccer," Discussion Paper 1998-129, Tilburg University, Center for Economic Research.
  3. Kern, Markus & Süssmuth, Bernd, 2003. "Managerial Effiency in German Top League Soccer," Discussion Papers in Economics 5, University of Munich, Department of Economics.
  4. Wladimir Andreff, 2006. "New Perspectives in Sports Economics: A European View," Working Papers 0605, International Association of Sports Economists & North American Association of Sports Economists.
  5. Francisco Gonzalez-Gomez & Andres J. Picazo-Tadeo, 2010. "Can We Be Satisfied With Our Football Team? Evidence From Spanish Professional Football," Journal of Sports Economics, , vol. 11(4), pages 418-442, August.
  6. Bove Vincenzo & Gleditsch Kristian Skrede, 2011. "2010 Lewis Fry Richardson Lifetime Achievement Award: Ron P. Smith and the Economics of War and Peace," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 17(1), pages 1-12, December.
  7. Frederic Palomino & Luca Rigotti, 2001. "The Sport League's Dilemma: Competitive Balance versus Incentives to Win," Industrial Organization 0012003, EconWPA.
  8. Wladimir Andreff, 2006. "New Perspectives in Sports Economics: The European View," IASE Conference Papers 0601, International Association of Sports Economists.
  9. Tunaru, Radu & Clark, Ephraim & Viney, Howard, 2005. "An option pricing framework for valuation of football players," Review of Financial Economics, Elsevier, vol. 14(3-4), pages 281-295.
  10. R. Antonietti, 2006. "Human Capital, Sport Performance, and Salary Determination of Professional Athletes," Working Papers 561, Dipartimento Scienze Economiche, Universita' di Bologna.
  11. Stephen Dobson & John Goddard & John Wilson, 2001. "League Structure and Match Attendances in English Rugby League," International Review of Applied Economics, Taylor & Francis Journals, vol. 15(3), pages 335-351.
  12. Jardin, Mathieu, 2009. "Efficiency of French football clubs and its dynamics," MPRA Paper 19828, University Library of Munich, Germany.
  13. Guido Ascari & Philippe Gagnepain, 2007. "Evaluating Rent Dissipation in the Spanish Football Industry," Post-Print hal-00622841, HAL.
  14. Sébastien Dessus & Gaël Raballand, 2011. "L'Etat peut-il rendre compétitif les clubs de football français ?," Post-Print halshs-00639300, HAL.
  15. Sébastien Dessus & Gaël Raballand, 2011. "L'Etat peut-il rendre compétitif les clubs de football français," Documents de travail du Centre d'Economie de la Sorbonne 11048, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  16. Stefan Szymanski, 2012. "Insolvency in English professional football: Irrational Exuberance or Negative Shocks?," Working Papers 1202, International Association of Sports Economists & North American Association of Sports Economists.

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