Proceedings of the 55th International Academic Conference, Vienna

WELFARE MAXIMIZING COMPETITIVE BALANCE: THE EVIDENCE FROM TOP EUROPEAN FOOTBALL LEAGUES

DEJAN TRIFUNOVIĆ, VITO PIPITONE

Abstract:

In this paper we consider the pattern of competitive balance and the share of gate receipts in the top 5 European football leagues and the Scottish Premier League. Based on empirically identified preferences of fans in these leagues from different studies, we aim to identify whether the change of competitive balance moves the league towards or away from the welfare maximizing competitive balance. We have identified the reduction of competitive balance in Serie A and the English Premier League (EPL) in the seasons 2010/11-2018/19. In Serie A, this change of competitive balance does not reduce welfare, while it reduces welfare in EPL. There is also the reduction of competitive balance in Ligue 1, that does not make stadium fans worse off, but possibly reduces the surplus of media fans. In the other considered leagues, there is no trend of competitive balance, and we can only identify welfare consequences of the change of competitive balance in some sub-periods.

Keywords: Football leagues, competitive balance, fan preferences, welfare maximization

DOI: 10.20472/IAC.2020.055.013

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