IDEAS home Printed from https://ideas.repec.org/a/wly/mgtdec/v44y2023i2p767-786.html
   My bibliography  Save this article

To comply or not to comply? How a UEFA wage‐to‐revenue requirement might affect the sport and managerial performance of soccer clubs

Author

Listed:
  • Pedro Garcia‐del‐Barrio
  • Pablo Agnese

Abstract

This paper evaluates the soccer clubs' compliance with a potential wage‐to‐revenue requirement by the Union of European Football Associations (UEFA) and studies the effect on sport achievements resulting from sports and managerial skills. The empirical analysis uses data on first division teams of the Premier League, La Liga, Serie A, and Ligue 1, from seasons 2009/2010 to 2018/2019. We measure the teams' quality through the annual wages and use the wage‐to‐revenue ratio as a proxy measure for financial responsibility. Our results reveal that a more prudent financial performance, which is generally linked to good management practices, implies better sport performance and higher chances of qualifying for UEFA competitions.

Suggested Citation

  • Pedro Garcia‐del‐Barrio & Pablo Agnese, 2023. "To comply or not to comply? How a UEFA wage‐to‐revenue requirement might affect the sport and managerial performance of soccer clubs," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 767-786, March.
    • Handle: RePEc:wly:mgtdec:v:44:y:2023:i:2:p:767-786
    DOI: 10.1002/mde.3711
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/mde.3711
    Download Restriction: no
    File URL: https://libkey.io/10.1002/mde.3711?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. N. Scelles, 2017. "Star quality and competitive balance? Television audience demand for English Premier League football reconsidered," Applied Economics Letters, Taylor & Francis Journals, vol. 24(19), pages 1399-1402, November.
    2. Marc Rohde & Christoph Breuer, 2016. "Europe’s Elite Football: Financial Growth, Sporting Success, Transfer Investment, and Private Majority Investors," IJFS, MDPI, vol. 4(2), pages 1-20, June.
    3. Green, Colin & Lozano, Fernando & Simmons, Rob, 2015. "Rank-order tournaments, probability of winning and investing in talent: evidence from champions' league qualifying rules," National Institute Economic Review, National Institute of Economic and Social Research, vol. 232, pages 30-40, May.
    4. Egon Franck & Stephan Nüesch, 2012. "Talent And/Or Popularity: What Does It Take To Be A Superstar?," Economic Inquiry, Western Economic Association International, vol. 50(1), pages 202-216, January.
    5. Allen R. Sanderson, 2002. "The Many Dimensions of Competitive Balance," Journal of Sports Economics, , vol. 3(2), pages 204-228, May.
    6. Stefan Szymanski & Ron Smith, 2010. "The English Football Industry: Profit, Performance and Industrial Structure," Palgrave Macmillan Books, in: Football Economics and Policy, chapter 1, pages 1-26, Palgrave Macmillan.
    7. Helmut M. Dietl & Egon Franck & Markus Lang, 2008. "Overinvestment In Team Sports Leagues: A Contest Theory Model," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(3), pages 353-368, July.
    8. Stephen Hall & Stefan Szymanski & Andrew S. Zimbalist, 2002. "Testing Causality Between Team Performance and Payroll," Journal of Sports Economics, , vol. 3(2), pages 149-168, May.
    9. Paulo Reis Mourao, 2016. "Soccer transfers, team efficiency and the sports cycle in the most valued European soccer leagues – have European soccer teams been efficient in trading players?," Applied Economics, Taylor & Francis Journals, vol. 48(56), pages 5513-5524, December.
    10. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    11. Tony Caporale & Trevor Collier, 2015. "Are We Getting Better or Are They Getting Worse? Draft Position, Strength of Schedule, and Competitive Balance in the National Football League," Journal of Labor Research, Springer, vol. 36(3), pages 291-300, September.
    12. Nicolas Scelles & Christophe Durand & Liliane Bonnal & Daniel Goyeau & Wladimir Andreff, 2013. "Competitive balance versus competitive intensity before a match: Is one of these concepts more relevant in explaining attendance? The case of the French football Ligue 1 over the period 2008-2011," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00874478, HAL.
    13. William Greene, 2004. "The behaviour of the maximum likelihood estimator of limited dependent variable models in the presence of fixed effects," Econometrics Journal, Royal Economic Society, vol. 7(1), pages 98-119, June.
    14. Yatchew, Adonis & Griliches, Zvi, 1985. "Specification Error in Probit Models," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 134-139, February.
    15. Alessandro Ghio & Massimo Ruberti & Roberto Verona, 2019. "Financial constraints on sport organizations’ cost efficiency: the impact of financial fair play on Italian soccer clubs," Applied Economics, Taylor & Francis Journals, vol. 51(24), pages 2623-2638, May.
    16. N. Scelles & Christophe Durand & L. Bonnal & D. Goyeau & W. Andreff, 2013. "Competitive balance versus competitive intensity before a match: is one of these two concepts more relevant in explaining attendance? The case of the French football Ligue 1 over the period 2008–2011," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-02111054, HAL.
    17. Fiona Carmichael & Ian McHale & Dennis Thomas, 2011. "Maintaining Market Position: Team Performance, Revenue And Wage Expenditure In The English Premier League," Bulletin of Economic Research, Wiley Blackwell, vol. 63(4), pages 464-479, October.
    18. Benno Torgler & Sascha Schmidt, 2007. "What shapes player performance in soccer? Empirical findings from a panel analysis," Applied Economics, Taylor & Francis Journals, vol. 39(18), pages 2355-2369.
    19. Thomas Peeters & Stefan Szymanski, 2014. "Financial fair play in European football [v. National Football League, 560 (The Supreme Court May 24, 2010)]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 29(78), pages 343-390.
    20. Stefan Szymanski, 2017. "Entry into exit: insolvency in English professional football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(4), pages 419-444, September.
    21. Pedro Garcia-del-Barrio & Stefan Szymanski, 2009. "Goal! Profit Maximization Versus Win Maximization in Soccer," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 34(1), pages 45-68, February.
    22. N. Scelles & C. Durand & L. Bonnal & D. Goyeau & W. Andreff, 2013. "Competitive balance versus competitive intensity before a match: is one of these two concepts more relevant in explaining attendance? The case of the French football Ligue 1 over the period 2008--2011," Applied Economics, Taylor & Francis Journals, vol. 45(29), pages 4184-4192, October.
    23. Jeroen Ruijg & Hans van Ophem, 2015. "Determinants of football transfers," Applied Economics Letters, Taylor & Francis Journals, vol. 22(1), pages 12-19, January.
    24. Herm, Steffen & Callsen-Bracker, Hans-Markus & Kreis, Henning, 2014. "When the crowd evaluates soccer players’ market values: Accuracy and evaluation attributes of an online community," Sport Management Review, Elsevier, vol. 17(4), pages 484-492.
    25. Steffen Herm & Hans-Markus Callsen-Bracker & Henning Kreis, 2014. "When the crowd evaluates soccer players’ market values: Accuracy and evaluation attributes of an online community," Sport Management Review, Taylor & Francis Journals, vol. 17(4), pages 484-492, October.
    26. Richard Williams, 2012. "Using the margins command to estimate and interpret adjusted predictions and marginal effects," Stata Journal, StataCorp LP, vol. 12(2), pages 308-331, June.
    27. Glenn Hoetker, 2007. "The use of logit and probit models in strategic management research: Critical issues," Strategic Management Journal, Wiley Blackwell, vol. 28(4), pages 331-343, April.
    28. Stephan Birkhäuser & Christoph Kaserer & Daniel Urban, 2019. "Did UEFA’s financial fair play harm competition in European football leagues?," Review of Managerial Science, Springer, vol. 13(1), pages 113-145, February.
    29. Müller, Oliver & Simons, Alexander & Weinmann, Markus, 2017. "Beyond crowd judgments: Data-driven estimation of market value in association football," European Journal of Operational Research, Elsevier, vol. 263(2), pages 611-624.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Garcia-del-Barrio, Pedro & Agnese, Pablo, 2021. "Does Compliance with Financial Fair Play Rules Improve the Football Clubs' Sport Performance and Their Chances to Reach UEFA Competitions?," IZA Discussion Papers 14474, Institute of Labor Economics (IZA).
    2. Marc Rohde & Christoph Breuer, 2018. "Competing by investments or efficiency? Exploring financial and sporting efficiency of club ownership structures in European football," Sport Management Review, Taylor & Francis Journals, vol. 21(5), pages 563-581, December.
    3. Richau, Lukas & Follert, Florian & Frenger, Monika & Emrich, Eike, 2021. "The Rainmaker?! The impact of investors on transfer fees in the English Premier League," Working Paper 187/2021, Helmut Schmidt University, Hamburg.
    4. Craig A. Depken & Tomislav Globan, 2021. "Football transfer fee premiums and Europe's big five," Southern Economic Journal, John Wiley & Sons, vol. 87(3), pages 889-908, January.
    5. Marc Rohde & Christoph Breuer, 2016. "Europe’s Elite Football: Financial Growth, Sporting Success, Transfer Investment, and Private Majority Investors," IJFS, MDPI, vol. 4(2), pages 1-20, June.
    6. Tommy Quansah & Bernd Frick & Markus Lang & Kieran Maguire, 2021. "The Importance of Club Revenues for Player Salaries and Transfer Expenses—How Does the Coronavirus Outbreak (COVID-19) Impact the English Premier League?," Sustainability, MDPI, vol. 13(9), pages 1-22, May.
    7. Lukas Richau & Florian Follert & Monika Frenger & Eike Emrich, 2021. "The sky is the limit?! Evaluating the existence of a speculative bubble in European football," Journal of Business Economics, Springer, vol. 91(6), pages 765-796, August.
    8. Miquel Carreras-Simó & Jaume García, 2022. "Offensive/Defensive Talent and Sporting Success in Football: Evidence From the Big Five European Leagues," Journal of Sports Economics, , vol. 23(3), pages 251-276, April.
    9. Marco Di Domizio & Raul Caruso & Bernd Frick, 2020. "Intelligenza Collettiva E Valore Di Mercato Dei Calciatori: Il Caso Transfermarkt," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 16(2), pages 155-172, novembre.
    10. David Boto‐García & Carlos Varela‐Quintana & Alvaro Muñiz, 2023. "Foreign players, team production, and technical efficiency: Evidence from European soccer," Bulletin of Economic Research, Wiley Blackwell, vol. 75(4), pages 1209-1241, October.
    11. Stefan Szymanski, 2017. "Entry into exit: insolvency in English professional football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(4), pages 419-444, September.
    12. Fabio Wagner & Holger Preuss & Thomas Könecke, 2021. "A Central Element of Europe’s Football Ecosystem: Competitive Intensity in the “Big Five”," Sustainability, MDPI, vol. 13(6), pages 1-20, March.
    13. Fabíola Zambom-Ferraresi & Belén Iráizoz & Fernando Lera-López, 2019. "Are football managers as efficient as coaches? Performance analysis with and inputs in the Premier league," Applied Economics, Taylor & Francis Journals, vol. 51(3), pages 303-314, January.
    14. Luigi Buzzacchi & Federico Caviggioli & Francesco Luigi Milone & Davide Scotti, 2021. "Impact and Efficiency Ranking of Football Managers in the Italian Serie A: Sport and Financial Performance," Journal of Sports Economics, , vol. 22(7), pages 744-776, October.
    15. Åse Jacobsen & Morten Kringstad & Tor-Eirik Olsen, 2021. "Extraordinary Funding and a Financially Viable Football Industry—Friends or Foes? A Norwegian Football League Perspective," Sustainability, MDPI, vol. 13(5), pages 1-19, March.
    16. Coates, Dennis & Parshakov, Petr, 2022. "The wisdom of crowds and transfer market values," European Journal of Operational Research, Elsevier, vol. 301(2), pages 523-534.
    17. Carlo Bellavite Pellegrini & Raul Caruso & Marco Di Domizio, 2021. "Relative wages, payroll structure and performance in soccer. Evidence from Italian Serie A (2007-2019)," DISCE - Quaderni del Dipartimento di Politica Economica dipe0015, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    18. Maribel Serna Rodríguez & Andrés Ramírez Hassan & Alexander Coad, 2019. "Uncovering Value Drivers of High Performance Soccer Players," Journal of Sports Economics, , vol. 20(6), pages 819-849, August.
    19. Raul Caruso & Marco Di Domizio & Domenico Rossignoli, 2017. "Aggregate wages of players and performance in Italian Serie A," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(3), pages 515-531, December.
    20. Jaume García & Plácido Rodríguez & Federico Todeschini, 2020. "The Demand for the Characteristics of Football Matches: A Hedonic Price Approach," Journal of Sports Economics, , vol. 21(7), pages 688-704, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:mgtdec:v:44:y:2023:i:2:p:767-786. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/7976 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.