Gate-Sharing and Talent Distribution in the English Football League

• Published in: International journal of the economics of business Vol. 21; no. 3; pp. 413 - 429
• Main Authors: Robinson, Terry, Simmons, Robert
• Format: Journal Article
• Language: English
• Published: Abingdon Routledge 02.09.2014; Taylor & Francis Ltd
• Subjects: Athletic drafts & trades; Business economics; Comparative studies; Competitive Balance; Competitiveness; Econometrics; Economic models; Economic theory; Football; Game theory; L83; Nash equilibrium; Player Mobility; Probability theory; Professional soccer; Profit maximization; Revenue Sharing; United Kingdom > UK
• ISSN: 1357-1516; 1466-1829
• DOI: 10.1080/13571516.2014.947705

Using a database of the movements of more than 2,000 professional footballers in the top two divisions of the English Football League between 1969 and 1995, this article examines the impact on talent distribution via the movement of players after abolition of gate revenue sharing in 1983. We compare the results with the predictions of the Walrasian and Nash theoretical models presented in the sports economics literature. Our key finding is that the termination of gate revenue sharing brought about increased rates of transfers of quality players towards top division teams. We also find that there is an increased probability that better quality players will be transferred within divisions to bigger teams. These results go against one of the main theoretical predictions of the sports economics literature - that gate sharing will have no effect on competitive balance. Instead, they offer support for models based on win maximisation rather than profit maximisation.