Does money really buy titles? An empirical analysis of the ‘Big Five’ European football leagues

Thomas Kalapis

Master's thesis

Abstract:

Owing to the economization and internationalization of world’s most popular sport, the financial value of the football players’ labor market has been steadily increasing and European football clubs have no longer been only competing on the pitch. At the same time, research has utilized publicly available football data to assess, among others, the relationship between an individual football player’s monetary value and his performance. Postulating rationality, football teams with the most valuable individual players should also be most successful. Building upon prior research, this thesis examines the predictability of sportive success based on a team’s initial (relative) market value across the major European football leagues, the so-called “Big Five”. More than that, by applying a two-dimensional approach to examine this relationship at the individual player and the team level, potentially existing inefficiencies in the football players’ labor market are detected and further exploited to form strategies that can be relevant to any football club. This study finds evidence for the predictive power of market values. In line with this, by conducting a benchmarking analysis, it is determined whether a team overperformed or underperformed. Furthermore, this research outlines how market value and performance based on several classifications of players can substantially differ. It generally stresses the importance of player development to secure sportive and financial success.

Abstract:

Owing to the economization and internationalization of world’s most popular sport, the financial value of the football players’ labor market has been steadily increasing and European football clubs have no longer been only competing on the pitch. At the same time, research has utilized publicly available football data to assess, among others, the relationship between an individual football player’s monetary value and his performance. Postulating rationality, football teams with the most valuable individual players should also be most successful. Building upon prior research, this thesis examines the predictability of sportive success based on a team’s initial (relative) market value across the major European football leagues, the so-called “Big Five”. More than that, by applying a two-dimensional approach to examine this relationship at the individual player and the team level, potentially existing inefficiencies in the football players’ labor market are detected and further exploited to form strategies that can be relevant to any football club. This study finds evidence for the predictive power of market values. In line with this, by conducting a benchmarking analysis, it is determined whether a team overperformed or underperformed. Furthermore, this research outlines how market value and performance based on several classifications of players can substantially differ. It generally stresses the importance of player development to secure sportive and financial success.

Keywords

European Football, Market Value, Football Players&apos, Labor Market, Benchmark Analysis, Moneyball

Keywords

Football Players&apos, Labor Market, Market Value, Benchmark Analysis, Moneyball, European Football

Language used: English

Date on which the thesis was submitted / produced: 11. 5. 2020

Thesis defence

• Date of defence: 4. 2. 2021
• Supervisor: Marek Hudík
• Reader: Jaroslav Petrů

Vysoká škola ekonomická v Praze

Master programme / field:
Ekonomika a management / Management