IDEAS home Printed from https://ideas.repec.org/a/sae/jospec/v8y2007i5p468-490.html
   My bibliography  Save this article

Evaluating Rent Dissipation in the Spanish Football Industry

Author

Listed:
  • Guido Ascari

    (Università di Pavia, Italy)

  • Philippe Gagnepain

    (Universidad Carlos III, Madrid)

Abstract

This article proposes to evaluate empirically the consequences of the rent-seeking behavior of football clubs on their costs. The empirical work entails estimating a football wage, result, and demand system with data on clubs competing in the first and second Spanish leagues during the 1996-2003 seasons. The estimation sheds light on wage distortions that differ from 45% to 52% throughout the period considered. This provides an interesting illustration of the financial difficulties faced recently by many European football clubs.

Suggested Citation

  • Guido Ascari & Philippe Gagnepain, 2007. "Evaluating Rent Dissipation in the Spanish Football Industry," Journal of Sports Economics, , vol. 8(5), pages 468-490, October.
    • Handle: RePEc:sae:jospec:v:8:y:2007:i:5:p:468-490
    DOI: 10.1177/1527002506292582
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/1527002506292582
    Download Restriction: no
    File URL: https://libkey.io/10.1177/1527002506292582?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Chung, Tai-Yeong, 1996. "Rent-Seeking Contest When the Prize Increases with Aggregate Efforts," Public Choice, Springer, vol. 87(1-2), pages 55-66, April.
    2. Walter C. Neale, 1964. "The Peculiar Economics of Professional Sports," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 78(1), pages 1-14.
    3. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-1398, November.
    4. Rosen, Sherwin & Sanderson, Allen, 2001. "Labour Markets in Professional Sports," Economic Journal, Royal Economic Society, vol. 111(469), pages 47-68, February.
    5. Nti, Kofi O, 1999. "Rent-Seeking with Asymmetric Valuations," Public Choice, Springer, vol. 98(3-4), pages 415-430, March.
    6. Richard Hofler & James Payne, 1996. "How close to their offensive potential do national football league teams play?," Applied Economics Letters, Taylor & Francis Journals, vol. 3(11), pages 743-747.
    7. Stefan Szymanski, 2010. "A Market Test for Discrimination in the English Professional Soccer Leagues," Palgrave Macmillan Books, in: Football Economics and Policy, chapter 6, pages 136-150, Palgrave Macmillan.
    8. 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.
    9. Simon Rottenberg, 1956. "The Baseball Players' Labor Market," Journal of Political Economy, University of Chicago Press, vol. 64, pages 242-242.
    10. Thomas Hoehn & Stefan Szymanski, 2010. "The Americanization of European football," Palgrave Macmillan Books, in: Football Economics and Policy, chapter 3, pages 52-96, Palgrave Macmillan.
    11. Szymanski, Stefan & Valletti, Tommaso, 2004. "First and Second Prizes in Imperfectly Discriminating Contests," CEPR Discussion Papers 4484, C.E.P.R. Discussion Papers.
    12. Arye L. Hillman & John G. Riley, 1989. "Politically Contestable Rents And Transfers," Economics and Politics, Wiley Blackwell, vol. 1(1), pages 17-39, March.
    13. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
    14. Clark, Derek J & Riis, Christian, 1996. "A Multi-winner Nested Rent-Seeking Contest," Public Choice, Springer, vol. 87(1-2), pages 177-184, April.
    15. Clark, Derek J. & Riis, Christian, 1998. "Influence and the discretionary allocation of several prizes," European Journal of Political Economy, Elsevier, vol. 14(4), pages 605-625, November.
    16. Stein, William E, 2002. "Asymmetric Rent-Seeking with More Than Two Contestants," Public Choice, Springer, vol. 113(3-4), pages 325-336, December.
    17. Sloane, Peter J, 1971. "The Economics of Professional Football: The Football Club as a Utility Maximiser," Scottish Journal of Political Economy, Scottish Economic Society, vol. 18(2), pages 121-146, June.
    18. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-858, December.
    19. Hofler, Richard A. & Payne, James E., 1997. "Measuring efficiency in the National Basketball Association1," Economics Letters, Elsevier, vol. 55(2), pages 293-299, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wladimir Andreff, 2014. "Building Blocks for a Disequilibrium Model of a European Team Sports League," Post-Print halshs-00971782, HAL.
    2. Carlos Pestana Barros & Eduardo Couto & Antonio Samagaio, 2014. "Management ability, strategy, tactics and team performance," Chapters, in: John Goddard & Peter Sloane (ed.), Handbook on the Economics of Professional Football, chapter 11, pages 166-188, Edward Elgar Publishing.
    3. Kostas Kounetas, 2014. "Greek football clubs’ efficiency before and after Euro 2004 Victory: a bootstrap approach," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 22(4), pages 623-645, December.
    4. Alberto Calahorro-López & Melinda Ratkai & Julio Vena-Oya, 2022. "The Financial/Accounting Impact of FFP on Participating in European Competitions: An Analysis of the Spanish League," IJFS, MDPI, vol. 10(3), pages 1-19, September.
    5. Carlos Pestana Barros & Nicolas Peypoch & Scott Tainsky, 2014. "Cost efficiency of French soccer league teams," Applied Economics, Taylor & Francis Journals, vol. 46(8), pages 781-789, March.
    6. Wladimir Andreff, 2014. "Building Blocks for a Disequilibrium Model of a European Team Sports League," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00971782, HAL.
    7. Andrés Picazo-Tadeo & Francisco Gónzalez-Gómez & Jorge Guardiola Wanden-Berghe, 2011. "Referee home bias due to social pressure. Evidence from Spanish football," Working Papers 1119, Department of Applied Economics II, Universidad de Valencia.
    8. Patrice Bouvet, 2020. "L'économie du sport professionnel par équipe en Europe : production, monétisation, déficit et régulation Patrice BOUVET," Working Papers hal-02515012, HAL.
    9. Wladimir Andreff, 2018. "Financial and Sporting Performance in French Football Ligue 1: Influence on the Players’ Market," Post-Print hal-03206972, HAL.
    10. Carlos Pestana Barros & Albert Assaf & Fabio Sá-Earp, 2010. "Brazilian Football League Technical Efficiency: A Simar and Wilson Approach," Journal of Sports Economics, , vol. 11(6), pages 641-651, December.
    11. Aurélien François & Nadine Dermit-Richard & Daniel Plumley & Robert Wilson, 2021. "Analyzing the effectiveness of UEFA's financial fair play regulations: A comparative study of the French Ligue 1 and the English Premier League [L'analyse du fair-play financier au prisme de son ef," Working Papers hal-03167685, HAL.
    12. Carlos Pestana Barros & Gaël Bertrand & Laurent Botti & Scott Tainsky, 2014. "Cost efficiency of French rugby clubs," Applied Economics, Taylor & Francis Journals, vol. 46(23), pages 2721-2732, August.
    13. 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.
    14. Aurélien François & Nadine Dermit-Richard & Daniel Plumley & Robert Wilson, 2021. "Analyzing the effectiveness of UEFA's financial fair play regulations: A comparative study of the French Ligue 1 and the English Premier League [L'analyse du fair-play financier au prisme de son ef," Post-Print hal-03167685, HAL.
    15. Javier Cifuentes‐Faura, 2022. "Efficiency and transparency of Spanish football clubs: A non‐parametric approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 1850-1860, September.
    16. Barros, Carlos Pestana & Assaf, A.George & de Araujo, Ari Francisco, 2011. "Cost performance of Brazilian soccer clubs: A Bayesian varying efficiency distribution model," Economic Modelling, Elsevier, vol. 28(6), pages 2730-2735.
    17. Wladimir Andreff, 2018. "Financial and Sporting Performance in French Football Ligue 1: Influence on the Players’ Market," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03206972, HAL.
    18. Wladimir Andreff, 2018. "Financial and Sporting Performance in French Football Ligue 1: Influence on the Players’ Market," IJFS, MDPI, vol. 6(4), pages 1-17, November.
    19. David Alaminos & Manuel Ángel Fernández, 2019. "Why do football clubs fail financially? A financial distress prediction model for European professional football industry," PLOS ONE, Public Library of Science, vol. 14(12), pages 1-15, December.
    20. Girish Ramchandani & Daniel Plumley & Adam Davis & Rob Wilson, 2023. "A Review of Competitive Balance in European Football Leagues before and after Financial Fair Play Regulations," Sustainability, MDPI, vol. 15(5), pages 1-15, February.
    21. Wladimir Andreff, 2009. "Équilibre compétitif et contrainte budgétaire dans une ligue de sport professionnel," Revue économique, Presses de Sciences-Po, vol. 60(3), pages 591-633.
    22. Carlos Pestana Barros & Julio del Corral & Pedro Garcia-del-Barrio, 2008. "Identification of Segments of Soccer Clubs in the Spanish League First Division With a Latent Class Model," Journal of Sports Economics, , vol. 9(5), pages 451-469, October.
    23. Carlos Barros & Pedro Garcia-del-Barrio, 2011. "Productivity drivers and market dynamics in the Spanish first division football league," Journal of Productivity Analysis, Springer, vol. 35(1), pages 5-13, February.

    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. Pedro Garcia‐del‐Barrio & Francesc Pujol, 2009. "The Rationality of Under‐employing the Best‐performing Soccer Players," LABOUR, CEIS, vol. 23(3), pages 397-419, September.
    2. Markus LANG & Alexander RATHKE & Marco RUNKEL, 2010. "The Economic Consequences Of Foreigner Rules In National Sports Leagues," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 31, pages 47-64.
    3. Peter Dawson & Stephen Dobson & Bill Gerrard, 2000. "Estimating Coaching Efficiency in Professional Team Sports: Evidence from English Association Football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 47(4), pages 399-421, September.
    4. Helmut Dietl & Egon Franck & Martin Grossmann & Markus Lang, 2009. "Contest Theory and its Applications in Sports," Working Papers 0105, University of Zurich, Institute for Strategy and Business Economics (ISU).
    5. Wladimir Andreff, 2009. "Équilibre compétitif et contrainte budgétaire dans une ligue de sport professionnel," Revue économique, Presses de Sciences-Po, vol. 60(3), pages 591-633.
    6. 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.
    7. 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.
    8. Roberto Burguet & József Sákovics, 2019. "Bidding For Talent In Sport," Economic Inquiry, Western Economic Association International, vol. 57(1), pages 85-102, January.
    9. Guido Ascari & Philippe Gagnepain, 2006. "Spanish Football," Journal of Sports Economics, , vol. 7(1), pages 76-89, February.
    10. Konrad, Kai A., 2007. "Strategy in contests: an introduction [Strategie in Turnieren – eine Einführung]," Discussion Papers, Research Unit: Market Processes and Governance SP II 2007-01, WZB Berlin Social Science Center.
    11. Jardin, Mathieu, 2009. "Efficiency of French football clubs and its dynamics," MPRA Paper 19828, University Library of Munich, Germany.
    12. Szymanski, Stefan & Valletti, Tommaso M., 2005. "Incentive effects of second prizes," European Journal of Political Economy, Elsevier, vol. 21(2), pages 467-481, June.
    13. Cedric Duvinage & Peter-J. Jost, 2019. "The Role of Referees in Professional Sports Contests," Journal of Sports Economics, , vol. 20(8), pages 1014-1050, December.
    14. Stefan Szymanski, 2010. "The Economic Design of Sporting Contests," Palgrave Macmillan Books, in: The Comparative Economics of Sport, chapter 1, pages 1-78, Palgrave Macmillan.
    15. Subhasish M. Chowdhury & Patricia Esteve‐González & Anwesha Mukherjee, 2023. "Heterogeneity, leveling the playing field, and affirmative action in contests," Southern Economic Journal, John Wiley & Sons, vol. 89(3), pages 924-974, January.
    16. Raul Caruso & Francesco Addesa & Marco Di Domizio, 2019. "The Determinants of the TV Demand for Soccer: Empirical Evidence on Italian Serie A for the Period 2008-2015," Journal of Sports Economics, , vol. 20(1), pages 25-49, January.
    17. Roberto Burguet & Jozsef Sakovics, 2016. "To the highest bidder: The market for talent in sports leagues," Edinburgh School of Economics Discussion Paper Series 275, Edinburgh School of Economics, University of Edinburgh.
    18. Helmut M. Dietl & Markus Lang & Stephan Werner, 2009. "Social Welfare in Sports Leagues with Profit‐Maximizing and/or Win‐Maximizing Clubs," Southern Economic Journal, John Wiley & Sons, vol. 76(2), pages 375-396, October.
    19. 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.
    20. Emmanuel Dechenaux & Dan Kovenock & Roman Sheremeta, 2015. "A survey of experimental research on contests, all-pay auctions and tournaments," Experimental Economics, Springer;Economic Science Association, vol. 18(4), pages 609-669, December.

    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:sae:jospec:v:8:y:2007:i:5:p:468-490. 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: SAGE Publications (email available below). General contact details of provider: .

    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.