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The Champions League and the Coase Theorem

In: Football Economics and Policy

Author

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  • Stefan Szymanski

    (Imperial College Management School)

Abstract

This chapter 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 chapter 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.

Suggested Citation

  • Stefan Szymanski, 2010. "The Champions League and the Coase Theorem," Palgrave Macmillan Books, in: Football Economics and Policy, chapter 10, pages 202-225, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-27426-6_10
    DOI: 10.1057/9780230274266_10
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    References listed on IDEAS

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    Cited by:

    1. Vincent (Vincent Peter) Hogan & Patrick Massey, 2020. "Professional Rugby on the Celtic Fringe," Working Papers 202003, School of Economics, University College Dublin.
    2. Vincent Hogan & Patrick Massey & Shane Massey, 2013. "Competitive Balance and Match Attendance in European Rugby Union Leagues," The Economic and Social Review, Economic and Social Studies, vol. 44(4), pages 425-446.
    3. Diána Ivett Furész & Pongrác Ács, 2020. "The Relation Between National Competition and International Competitiveness," Problemy Zarzadzania, University of Warsaw, Faculty of Management, vol. 18(87), pages 11-26.
    4. Trudo Dejonghe & Wim Van Opstal, 2010. "Competitive balance between national leagues in European football after the Bosman Case," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 6(2), pages 41-61, Settembre.
    5. Tim R. L. Fry & Guillaume Galanos & Alberto Posso, 2014. "Let's Get Messi? Top-Scorer Productivity in the European Champions League," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(3), pages 261-279, July.
    6. Helena Fornwagner, 2017. "Incentives to lose revisited: The NHL and its tournament incentives," Working Papers 2017-07, Faculty of Economics and Statistics, Universität Innsbruck.
    7. Trudo Dejonghe & Wim Van Opstal, 2009. "The Consequences of an Open Labour Market in Separated Product Markets in European Professional Football," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(4), pages 489-511.
    8. Trudo Dejonghe & Wim Van Opstal, 2008. "The consequences of an open labour market in a closed product market in the economic environment of European professional football," Working Papers 0830, International Association of Sports Economists;North American Association of Sports Economists.
    9. Scelles, Nicolas (Сели, Николя) & Duran, Christophe (Дюра, Кристоф) & Bonnal, Liliane (Бонналь, Лилиан) & Goyeau, Daniel (Гойюс, Даниэль) & Andreff, Wladimir (Андрефф, Владимир), 2016. "Do all sporting prizes have a significant positive impact on attendance in a European national football league? Competitive intensity in the French Ligue 1 [Действительно Ли Все Спортивные Призы Ок," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 3, pages 82-107, June.
    10. Gábor Rappai & Diána Ivett Fűrész, 2024. "Domestic Competitive Imbalance as the “Price†of Surprise in the Champions League," Journal of Sports Economics, , vol. 25(2), pages 231-256, February.
    11. Fornwagner, Helena, 2019. "Incentives to lose revisited: The NHL and its tournament incentives," Journal of Economic Psychology, Elsevier, vol. 75(PB).
    12. Vincent (Vincent Peter) Hogan & Patrick Massey & Shane Massey, 2014. "Analysing Match Attendance in the European Rugby Cup," Working Papers 201412, School of Economics, University College Dublin.
    13. Geoffrey N Tuck & Athol R Whitten, 2013. "Lead Us Not into Tanktation: A Simulation Modelling Approach to Gain Insights into Incentives for Sporting Teams to Tank," PLOS ONE, Public Library of Science, vol. 8(11), pages 1-10, November.
    14. Bernd Frick & Rob Simmons, 2014. "The footballers’ labour market after the Bosman ruling," Chapters, in: John Goddard & Peter Sloane (ed.), Handbook on the Economics of Professional Football, chapter 13, pages 203-226, Edward Elgar Publishing.
    15. Haan Marco & Koning Ruud & Witteloostuijn Arjen van, 2012. "The Effects of Institutional Change in European Soccer," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 232(3), pages 318-335, June.
    16. John Vrooman, 2007. "Theory Of The Beautiful Game: The Unification Of European Football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 54(3), pages 314-354, July.
    17. Patrick Massey & Shane Massey & Vincent (Vincent Peter) Hogan, 2012. "Analysing Determinants of Match Attendance in the European Rugby Cup," Working Papers 201228, School of Economics, University College Dublin.
    18. Michela Pierini, 2011. "Diritti Tv E Competitive Balance Nel Calcio Professionistico Italiano," Rivista di Diritto ed Economia dello Sport, Centro di diritto e business dello Sport, vol. 7(2), pages 87-113, September.
    19. Norbäck, Pehr-Johan & Olsson, Martin & Persson, Lars, 2016. "Talent Development and Labour Market Integration: The Case of EU Football," Working Paper Series 1126, Research Institute of Industrial Economics, revised 14 Mar 2018.
    20. 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.
    21. Helmut Dietl & Markus Lang & Johannes Orlowski & Philipp Wegelin, 2023. "The Effect of the Initial Distribution of Labor-Related Property Rights on the Allocative Efficiency of Labor Markets," Working Papers 398, University of Zurich, Department of Business Administration (IBW).
    22. Vani K. Borooah & John Mangan, 2012. "Measuring competitive balance in sports using generalized entropy with an application to English premier league football," Applied Economics, Taylor & Francis Journals, vol. 44(9), pages 1093-1102, March.

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    More about this item

    Keywords

    Nash Equilibrium; Free Agency; Major League Baseball; Competitive Balance; Coase Theorem;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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