THE PECULIAR INTERNATIONAL ECONOMICS OF PROFESSIONAL FOOTBALL IN EUROPE
| Published date | 01 July 2007 |
| Author | Stefan Kesenne |
| Date | 01 July 2007 |
| DOI | http://doi.org/10.1111/j.1467-9485.2007.00421.x |
THE PECULIAR INTERNATIONAL
ECONOMICS OF PROFESSIONAL
FOOTBALL IN EUROPE
Stefan Kesenne
n
Abstract
Most European industries have a history of gradually opening international
markets, with growing international capital mobility and increasing free trade of
goods and services. However, although labour markets have been officially
deregulated as well, there is much less international mobility of labour, mainly due
to cultural and social barriers. An apparent exception to the rule been the industry
of professional team sports in Europe, where the Bosman verdict in 1995 has freed
the European player market while the product market was still nationally
protected. In this paper, we try to derive the consequences of this deviant evolution
in the European sports industry, concentrating on the competitive balance within
and between national leagues and on the player salary levels, using a simplified ‘two
country–four team’ model with quadratic revenue functions.
I Intro ductio n
In the post-war period, Europe created a common market of goods and services
and a European Union with growing international capital mobility, one single
currency and a European Central Bank. Although the European labour market
had been officially deregulated as well, the international mobility of labour
clearly lagged behind. Most people are reluctant to move to another country
within the European Union, given the existing political, social, cultural and
language barriers. Hence, for most industries, the general picture of the
European Union is one of a high degree of international trade and capital
mobility, but with a relatively immobile labour market. A small country like
Belgium, with its trade balance well in equilibrium, is exporting over 75% of its
GDP, whereas only a very small percentage of its labour force is emigrating or
working abroad.
There is at least one exception to this rule. The football industry, Europe’s
most professional sport, is facing a very high degree of international player
mobility while the product market is still relatively closed and nationally
protected. Since the Bosman verdict of the European Court of Justice in 1995,
n
University of Antwerp
Scottish Journal of Political Economy, Vol. 54, No. 3, July 2007
r2007 The Author
Journal compilation r2007 Scottish Economic Society. Published by Blackwell Publishing Ltd,
9600 Garsington Road, Oxford, OX4 2DQ, UK and 350 Main St, Malden, MA, 02148, USA
388
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