nep-spo New Economics Papers
on Sports and Economics
Issue of 2007‒01‒13
three papers chosen by
Joao Carlos Correia Leitao
University of the Beira Interior

  1. Why football players may benefit from the "shadow of the transfer system" By Helmut Dietl; Egon Franck; Markus Lang
  2. Explaining International Soccer Rankings By Peter Macmillan; Ian Smith
  3. Economic Und Fiscal Effects of the FIFA World Cup in Germany - the Case of Munich By Alina Mihaela Popescu; Peter Friedrich; Gunther Wonnemann

  1. By: Helmut Dietl; Egon Franck; Markus Lang (Institute for Strategy and Business Economics, University of Zurich; Institute for Strategy and Business Economics, University of Zurich; Institute for Strategy and Business Economics, University of Zurich)
    Abstract: 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. In this paper, we develop a model to analyze whether players really benefit from these developments. Based on our model, we show that incomplete contracts with respect to the transfer fee result in an efficient allocation of playing talent. Further, we derive that under the Pre-Bosman regime clubs can partially insure their players against income uncertainty by transforming a part of the player's risky future salary into risk-free current income. As a result, a risk-averse player benefits from the "shadow of the transfer system".
    Keywords: Labour contracts, transfer restrictions, transfer fees, Bosman and Monti transfer system, FIFA regulations
    JEL: D86 J49 L83
    Date: 2006
  2. By: Peter Macmillan; Ian Smith
    Abstract: Existing research on the determinants of FIFA’s international soccer rankings suffers from serious statistical problems, particularly sample selection bias and non normal errors. We correct for this by extending the data set by an additional 100 countries. Furthermore, we find important roles for new variables in the form of the size of population and a long history of international soccer in explaining world football rankings. We also investigate the determinants of an alternative ranking measure to that constructed by FIFA.
    Keywords: international football rankings, history.
    JEL: F0 L83 H50 Z10
    Date: 2006–12
  3. By: Alina Mihaela Popescu; Peter Friedrich; Gunther Wonnemann
    Abstract: The authors determine the income effects, employment effects, production effects, migration effects as well as the budget effects and effects concerning social insurances. These effects concern the city of Munich, the hinterland, other municipalities, Bavaria, other states and the federation. The so-called “Taxonomic Localization Approach for Public Offices“ is applied. The model for identifying the effects considers the characteristics of the games and of the Munich region. Direct effects are related to economic units directly involved in the World Cup™ games. Indirect effects concern the reaction of economic units which are not part of the project, e.g. hotels in Munich. A project includes the effects of the visitors and accompanying persons, of journalists, of a media centre, of FIFA-congresses and of special social events related to the games organized by the city of Munich. In addition, activities of fan-shops, restaurants, service and marketing companies, of the FIFA, the firm operating the stadium influence the size of the effects. The effects are estimated for the year 2006. In Munich, the effects on income, employment, and production turn out considerable high. The budget effects to the city of Munich are also positive. These are going to be positive for the hinterland and the social insurance, too. The size of the effects depend mainly on the visitors and journalists as well as on their expenses. Positive effects caused by the World Cup™ games in Munich compensate the losses of other regions. Moreover, the business and financial conditions of the stadium, the intergovernmental horizontal and vertical fiscal relations, the characteristics of the regional economy, number of visitors, etc. determine the effects. Public relation effects for Munich, social and political effects and promotion of sports occur, but are not considered here.
    Date: 2006–08

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