The transfer system in European football: A pro-competitive no-poaching agreement?

S Hoey, Thomas Peeters, Francesco Principe

Research output: Contribution to journalArticleAcademicpeer-review

8 Citations (Scopus)
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Abstract

We assess the proclaimed pro-competitive effects of the “transfer system”, the no-poaching agreement governing the European football (soccer) labor market. A major argument to legitimize this system is that transfer fees, which hiring clubs pay to release players from their current clubs, redistribute revenues from large market to small market clubs. This would strengthen small clubs’ financial clout and their ability to compete in sporting terms. Player transfer fees represent over 10 billion Euros in asset value in the financial statements of the 202 clubs we analyze. Still, small market clubs rarely obtain substantial revenues from the transfer market. The main beneficiaries are clubs around the middle of the market size distribution. A select group of large market clubs makes significant transfer losses, but this does not undo their initial financial advantage. Overall, the transfer system therefore leads to a very minor reduction in revenue inequality.

Original languageEnglish
Article number102695
JournalInternational Journal of Industrial Organization
Volume75
Issue numberMarch 2021
DOIs
Publication statusPublished - Mar 2021

Bibliographical note

Funding Information:
We thank two anonymous referees and the editor, Frank Verboven, for their valuable suggestions and insightful comments. We also thank Oliver Budzinski, Vicenzo Carrieri, Stefan Szymanski, Marko Tervi?, Jan van Ours and seminar participants at the University of Molde, Erasmus School of Economics and the Reading Online Sport Economics Seminar for constructive feedback and comments.

Publisher Copyright:
© 2020

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