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Decreasing financial imbalances or distorting competition? Examining the effects of the 50plus1-rule in German football

Author

Listed:
  • Budzinski, Oliver
  • Kunz-Kaltenhäuser, Philipp

Abstract

The so-called 50plus1-rule in German football is a controversially discussed institution that regulates the investment behavior of professional football teams. This paper provides an empirical analysis of its effects. We gathered panel data on 47 teams in the German Major League Football ("Erste Bundesliga") from the seasons 1989/90 until 2018/2019. This paper applies a Difference-in-Differences approach to examine investment behavior in budgets, as well as sporting success between impacted competitors and those exempted from the rule. Our results do not suggest any equalizing properties of the regulation. By contrast, we find anticompetitive effects and distorting properties of the current regulation.

Suggested Citation

  • Budzinski, Oliver & Kunz-Kaltenhäuser, Philipp, 2025. "Decreasing financial imbalances or distorting competition? Examining the effects of the 50plus1-rule in German football," Ilmenau Economics Discussion Papers 197, Ilmenau University of Technology, Institute of Economics.
    • Handle: RePEc:zbw:tuiedp:335039
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    JEL classification:

    • Z23 - Other Special Topics - - Sports Economics - - - Finance
    • Z21 - Other Special Topics - - Sports Economics - - - Industry Studies
    • Z2 - Other Special Topics - - Sports Economics
    • J83 - Labor and Demographic Economics - - Labor Standards - - - Workers' Rights
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General

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