Why the men's UEFA Champions League reduces competitive balance in domestic football leagues: an empirical study of the French league

This paper provides some empirical foundation in support of the observation that the men's UEFA Champions League (CL) reduces competitive balance in domestic football leagues. It relies on the assumption that clubs' optimal budgets result from win-maximising strategies, accounting for simi...

Full description

Saved in:
Bibliographic Details
Published in:International journal of sport management and marketing 2020-01, Vol.20 (3-4), p.232-248
Main Authors: Dessus, Sébastien, Raballand, Gaël
Format: Article
Language:English
Subjects:
Competition
Economic aspects
Nash equilibrium
Professional soccer
Soccer teams
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper provides some empirical foundation in support of the observation that the men's UEFA Champions League (CL) reduces competitive balance in domestic football leagues. It relies on the assumption that clubs' optimal budgets result from win-maximising strategies, accounting for similarly driven budget decisions from competitors in the domestic league and are thus ultimately determined through a Nash equilibrium process. Using a panel of 23 professional French clubs over nine consecutive seasons (2004/2005-2012/2013), we estimate such optimal budgets, and measure the extent to which access to the Champions League amplifies budget inequalities between clubs. Our results suggest that the CL amplifies inequalities by a magnitude significantly larger than the direct income received from UEFA for participating in the CL.
ISSN:1475-8962
1740-2808
DOI:10.1504/IJSMM.2020.110833