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Why football players may benefit from the ‘shadow of the transfer system’

  • Helmut Dietl

    ()

  • Egon Franck

    ()

  • Markus Lang

    ()

The transfer system imposed by the football governing bodies on employment relations made sure that a player could not leave his current club and sign with another club without the current club's explicit consent. The 1995 Bosman judgement of the European Court of Justice declaring football players to free agents after expiration of their contracts and the 2001 intervention of the European Commission, which, among other things, limited contract durations in football, can be interpreted as the two major steps towards restricting the application of the transfer system. This paper provides a theoretical model to analyze whether professional football players in the European football leagues benefit from transfer restrictions. It shows that under a restrictive transfer system, clubs can partially insure their players against income uncertainty by transforming a part of the player's risky future salary into risk-free current income. As a result, a risk-averse player benefits from the 'shadow of the transfer system'.

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1007/s10657-008-9078-2
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Article provided by Springer in its journal European Journal of Law and Economics.

Volume (Year): 26 (2008)
Issue (Month): 3 (December)
Pages: 419-419

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Handle: RePEc:kap:ejlwec:v:26:y:2008:i:3:p:419-419
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=100264

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  1. Bernd Frick & Gunnar Pietzner & Joachim Prinz, 2007. "Career Duration a Competitive Environment: The Labor Market for Soccer Players in Germany," Eastern Economic Journal, Eastern Economic Association, vol. 33(3), pages 429-442, Summer.
  2. Feess, Eberhard & Muehlheusser, Gerd, 2003. "Transfer fee regulations in European football," European Economic Review, Elsevier, vol. 47(4), pages 645-668, August.
  3. Burguet, Roberto & Caminal, Ramon & Matutes, Carmen, 1999. "Golden Cages for Showy Birds: Optimal Switching Costs in Labour Markets," CEPR Discussion Papers 2070, C.E.P.R. Discussion Papers.
  4. Eberhard Feess & Bernd Frick & Gerd Muehlheusser, 2004. "Legal Restrictions on Buyout Fees: Theory and Evidence from German Soccer," Diskussionsschriften dp0411, Universitaet Bern, Departement Volkswirtschaft.
  5. Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-30, December.
  6. Oliver E. Williamson, 2003. "Examining economic organization through the lens of contract," Industrial and Corporate Change, Oxford University Press, vol. 12(4), pages 917-942, August.
  7. Eberhard Feess & Gerd Mühlheußer, 2002. "Economic Consequences of Transfer Fee Regulations in European Football," European Journal of Law and Economics, Springer, vol. 13(3), pages 221-237, May.
  8. Oriol Carbonell-Nicolau & Diego Comin, 2005. "Testing out Contractual Incompleteness: Evidence from Soccer," NBER Working Papers 11110, National Bureau of Economic Research, Inc.
  9. Peter Antonioni & John Cubbin, 2000. "The Bosman Ruling and the Emergence of a Single Market in Soccer Talent," European Journal of Law and Economics, Springer, vol. 9(2), pages 157-173, March.
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