Competing by investments or efficiency? Exploring financial and sporting efficiency of club ownership structures in European football

•Club ownership structures influence both investments and efficiency.•In France, clubs owned by private majority investors tend to decrease efficiency.•In England, foreign majority investors tend to be less efficient.•We identify three ownership types with different objective functions and efficiencies.•Future research should study whether the UEFA FFP encourages efficient management.Professional European football clubs have been hypothesized to maximize sporting or financial objectives. The authors analyze the impact of various ownership structures on the realized management efficiency in maximizing profitability and national sporting success. Therefore, they apply the time-varying stochastic frontier model by Battese & Coelli (1995) to an unbalanced panel from England and France between 2006 and 2012. French professional football is characterized by a shift towards private investors. Results show that clubs majority-owned by private investors are less efficient than other clubs in French Ligue 1. In English professional football, the majority of takeovers is pursued by foreign investors. Although previous researchers have shown that foreign investors increase financial resources and team investments, the authors demonstrate that foreign investors reduce both financial and sporting efficiency. The analysis of survival and financial team efficiencies of club ownership structures indicates that clubs tend to compete by investments rather than efficiency.