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The relationship between ownership structure and club performance in the English Premier League

Robert Wilson (Academy of Sport and Physical Activity, Sheffield Hallam University, Sheffield, UK)
Daniel Plumley (SIRC, Academy of Sport and Physical Activity, Sheffield Hallam University, Sheffield, UK)
Girish Ramchandani (SIRC, Academy of Sport and Physical Activity, Sheffield Hallam University, Sheffield, UK)

Sport, Business and Management

ISSN: 2042-678X

Article publication date: 15 March 2013

Abstract

Purpose

The purpose of this paper is three‐fold. First, to explore the relationship between the financial and sporting performance of clubs competing in the English Premier League (EPL). Second, to investigate the effect of different models of EPL club ownership on financial and league performance. Third, to review the finances of EPL clubs in the context of UEFA's Financial Fair Play regulations.

Design/methodology/approach

Financial data from annual reports for the period 2001‐2010 was collected for 20 EPL clubs. Correlation analysis was conducted to examine the relationship between the finances of EPL clubs and their league position. One‐way analysis of variance (ANOVA) tests were then used to examine the effect of ownership type on clubs’ financial and league performances. Where the results of ANOVA testing revealed statistically significant differences between groups, these were investigated further using appropriate post hoc procedures.

Findings

The stock market model of ownership returned better financial health relative to privately owned (domestic and foreign) clubs. However, clubs owned privately by foreign investors or on the stock market performed better in the league in comparison with domestically owned clubs. The stock market model was more likely to comply with Financial Fair Play regulations.

Originality/value

The paper confirms empirically that football clubs that float on the stock market are in better financial health and that clubs in pursuit of short‐term sporting excellence are reliant on substantial investment, in this case from foreign investors.

Keywords

Citation

Wilson, R., Plumley, D. and Ramchandani, G. (2013), "The relationship between ownership structure and club performance in the English Premier League", Sport, Business and Management, Vol. 3 No. 1, pp. 19-36. https://doi.org/10.1108/20426781311316889

Publisher

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Emerald Group Publishing Limited

Copyright © 2013, Emerald Group Publishing Limited