Why football players may benefit from the "shadow of the transfer system"
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. Based on a bargaining model with stochastic player productivity, we show that less restrictive transfer rules reallocate ex post bargaining power from players to clubs. This reallocation is efficient and in the ex ante self-interest of players. The right to charge transfer fees enables clubs to insure their players. The players, in turn, benefit by converting risky future income into riskless current income. Overall, player utility is higher under more than under less restrictive transfer rules.
|Date of creation:||2006|
|Date of revision:||2007|
|Contact details of provider:|| Postal: Plattenstrasse 14, CH-8032 Zürich|
Phone: ++41 1 634 29 27
Fax: ++41 1 634 43 48
Web page: http://www.crsa.uzh.ch
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eberhard Feess & Bernd Frick & Gerd Muehlheusser, 2004.
"Legal Restrictions on Buyout Fees: Theory and Evidence from German Soccer,"
dp0411, Universitaet Bern, Departement Volkswirtschaft.
- Feess, Eberhard & Frick, Bernd & Muehlheusser, Gerd, 2004. "Legal Restrictions on Buyout Fees: Theory and Evidence from German Soccer," IZA Discussion Papers 1180, Institute for the Study of Labor (IZA).
- Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-930, December.
- Oriol Carbonell-Nicolau & Diego Comin, 2005.
"Testing Out Contractual Incompleteness: Evidence from Soccer,"
Departmental Working Papers
200501, Rutgers University, Department of Economics.
- Oriol Carbonell-Nicolau & Diego Comin, 2005. "Testing out Contractual Incompleteness: Evidence from Soccer," NBER Working Papers 11110, National Bureau of Economic Research, Inc.
- 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.
- 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.
- 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.
- Feess, Eberhard & Muehlheusser, Gerd, 2003. "Transfer fee regulations in European football," European Economic Review, Elsevier, vol. 47(4), pages 645-668, August.
- 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.