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The paper analyzes the effects of financial fair play (FFP) in the competitive balance of European football industry throughout a long-term perspective.
Abstract
Purpose
The paper analyzes the effects of financial fair play (FFP) in the competitive balance of European football industry throughout a long-term perspective.
Design/methodology/approach
The authors analyze the evolution of the competitive balance in the European football industry through a time-series analysis from season 1992/93 to 2018/19.
Findings
Results indicate an industry by nature dominated by a few clubs showing a general stationary behavior. FFP has had very little impact in local competitions. Just in some leagues, such as the Spanish, German, and French leagues, we can observe an increase in the imbalance in some indicators, but these results are not very robust. The improvement on the financial situation happens especially in a small group of firms that coincide with the big leagues with a strong European market orientation and strict local financial control standards.
Research limitations/implications
Although the study covered 17 European Leagues, there are several leagues not accounted for and thus results should be generalized with caution.
Practical implications
The authors observe heterogeneity of the results of FFP in the competitive balance, associated to how the standard has been implemented in each market. This opens opportunities to study and deepen the local codes and their influence, especially in the recommendations of future financial control standards.
Originality/value
The authors’ main contribution to the literature is to examine the impact of the FFP rules in the competitive balance utilizing a very broad study of 17 European markets with a rich and unusual overview and long-term perspective.
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Patrick McNamee, Kathleen Greenan and Brendan McFerran
The economic contribution that small firms make is being increasingly recognised. Consequently robust strategic benchmarks for small firms must be extremely valuable not just for…
Abstract
The economic contribution that small firms make is being increasingly recognised. Consequently robust strategic benchmarks for small firms must be extremely valuable not just for the firms themselves but also for the wider economic community. The Competitive Analysis Model (CAM) is a new approach to the strategic benchmarking of small firms. Currently this model comprises 893 firms on which are held 320 separate data items. These data items are used to provide individual firm reports so that participating firms can benchmark their performance in terms of measures such as: growth rates, internal performance measures, external performance measures and strategic priorities. The benchmarks are provided in two major manners: sectoral comparisons so that a firm can benchmark its performance with others of a similar size in the same industry sub‐sector and cross‐sectional comparisons so that a firm can benchmark its performance with others of similar size irrespective of the industry in which they operate. This article describes the operation of CAM and illustrates its operations through a typical CAM report.
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Bill Gerrard and Morten Kringstad
The purpose of this paper is to address the problem of designing league regulatory mechanisms given the multi-dimensionality of competitive balance and the proliferation of…
Abstract
Purpose
The purpose of this paper is to address the problem of designing league regulatory mechanisms given the multi-dimensionality of competitive balance and the proliferation of empirical measures.
Design/methodology/approach
A three-stage approach is adopted. Firstly, a taxonomy of empirical measures of competitive balance is proposed, identifying two fundamental dimensions – win dispersion and performance persistence. Secondly, a simple two-team model of league competitive balance is used to explore the dispersion–persistence relationship. Third, correlation and regression analysis of seven empirical measures of competitive balance for the 18 best-attended top-tier domestic football leagues in Europe over the 10 seasons, 2008–2017, are used to (1) validate the proposed categorisation of empirical measures into two dimensions; and (2) investigate the nature of the dispersion–persistence relationship across leagues.
Findings
The simple model of league competitive balance implies a strong positive dispersion–persistence relationship when persistence effects increase for big-market teams relative to those for the small-market teams. However, the empirical evidence indicates that while leagues such as the Spanish La Liga exhibit a strong positive dispersion–persistence relationship, other leagues show little or no relationship, and some leagues, particularly, the English Premier League and top-tier divisions in Belgium and Netherlands, have a strong negative dispersion–persistence relationship. The key policy implication for leagues is the importance of understanding the direction and impact of dispersion and persistence effects on the demand for league products.
Originality/value
The variability in the strength and direction of the dispersion–persistence relationship across leagues is an important result that undermines the “one-size-fits-all” approach to designing league regulatory mechanisms.
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This paper reflects on recent events in the global football landscape and their implications for the Middle East, especially in their ambitious aspiration to be the future…
Abstract
Purpose
This paper reflects on recent events in the global football landscape and their implications for the Middle East, especially in their ambitious aspiration to be the future destination of the sport.
Design/methodology/approach
By drawing on a mixture of interviews, personal observation and a documentary analysis of scholarly papers on sports marketing in general and comparable “small-time” football leagues in England, the study takes on a qualitative approach.
Findings
Even though the tiny Gulf state of Qatar has “controversially” won the hosting rights of the greatest football event in the world (i.e. FIFA 2022), the FIFA world ranking of the State puts it just within the top 100 global footballing nations (ranked no. 95 as at November 2011). Its sibling, the UAE, fares even worse. However both countries have made the most investments in the sport of football in recent years.
Research limitations/implications
This paper does not place emphasis on futures studies per se, but does, in any case, suggest how the Middle East may be shaping their future in football along the six-pillars identified in the literature, which could also become a potential area for future research enquiry.
Practical implications
Countries with established leagues, including Australia, England and the USA recently lost the FIFA World Cup hosting rights to Russia for 2018 and “little known” (in football terms) Qatar for 2022. All these have implications for the future of football in the Middle East, and this paper investigates the sustainability of the discourse and its implication for the global sport, not the least in the Middle East.
Originality/value
With recent developments in global football, it is useful to understand how West Asia in particular has responded to the challenges and/or concerns of their legitimacy. This discussion is scant in the literature and this study draws attention to this trend considering the millions of dollars that have been spent by governments to improve their world ranking. Whether these investments confer on the Middle East the title of “future football destination” is a matter open to debate. This is exactly where the pioneering effort of this paper lies.
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A study of companies in three different industries shows that growing internationalization of business brings about major changes in the positioning of competitors and the…
Abstract
A study of companies in three different industries shows that growing internationalization of business brings about major changes in the positioning of competitors and the appropriate competitive strategies. Only after going through a financial crisis did the companies studied emerge from national to international status.
Matthew Mazzei and W. Nathan Kirkpatrick
The authors integrate the established literature on corporate entrepreneurship with the expanding inquiry into sport entrepreneurship by examining professional teams and leagues…
Abstract
Purpose
The authors integrate the established literature on corporate entrepreneurship with the expanding inquiry into sport entrepreneurship by examining professional teams and leagues across North America. By situating the discussion in the context of organizational theory on competition, the authors argue for how teams (contestants) and leagues (organizers) uniquely apply the different forms of corporate entrepreneurship, providing contemporary examples of each. Additionally, the authors identify notable challenges of entrepreneurship within a sport context, emphasizing components that allowed organizations to overcome these concerns. By shining a light on the occurrences and challenges of corporate entrepreneurship within the sport industry, the authors hope to continue the push for greater interest in and examination of sport-related innovation and entrepreneurship.
Design/methodology/approach
This work researches and shares numerous examples across the North American sport landscape to illustrate corporate innovation and venturing by sport entities.
Findings
This research identifies innovation, sourced from different competitive actors, involving new products, new services, new processes and new administrative structures and approaches, and even includes the development of new businesses.
Originality/value
In looking at the entrepreneurial efforts of established sport teams and leagues, the authors highlight the impressive efforts of these entities to innovate, grow and evolve their products, service offerings and markets despite unique industrial constraints.
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Richard Evans, Geoff Walters and Richard Tacon
The purpose of this paper is to provide an assessment of the effectiveness of the Salary Cost Management Protocol, a form of financial regulation introduced by the English…
Abstract
Purpose
The purpose of this paper is to provide an assessment of the effectiveness of the Salary Cost Management Protocol, a form of financial regulation introduced by the English Football League in 2004 to improve the financial sustainability of professional football (i.e. soccer) clubs.
Design/methodology/approach
The analytical approach is to assess the effect of the regulation from evidence of change in measures of the financial performance of clubs drawing on three criteria: profitability, liquidity and solvency. A unique database was created from the published financial statements and notes to the accounts of the clubs in the Tier 4 league (known since 2004 as League Two) from 1994 to 2014 to encapsulate the 10-year period before and after the regulation was introduced. To show trends in the data within the study period, the data are reported in graphical form. The statistical significance of change in both the slope and intercepts for trends between breaks of interest in the data is estimated by linear regression.
Findings
The results show that financial regulation failed to significantly improve the profitability or the solvency of football clubs in League Two. Whilst the liquidity of the clubs improved in response to the introduction of the financial regulation, the results show this was only in the year in which the financial regulation was introduced.
Research limitations/implications
The results extend theoretical debate on financial regulation in sports leagues by moving beyond the assumption that financial regulation is a “technical exercise” to provide an alternative way of thinking about financial regulation as a “legitimising exercise”.
Originality/value
This is the first study to assess the impact of financial regulation for football league clubs over a longitudinal period. It is also extends previous research in which only single aspects of the financial sustainability of football clubs, such as insolvency, have been considered.
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Business & Management
Abstract
Subject area
Business & Management
Study level/applicability
This case is suitable for senior students taking marketing courses from marketing communications, marketing research and consumer behavior. Other students including postgraduate students on international business, strategic management and CSR courses may also benefit and/or partake in the discussions. Last and most importantly sports marketing students would find this case useful. The case study can be taken from a range of angles from consumer behavior, through researching of the same (i.e. consumer behavior); to marketing communications strategies by the football clubs themselves.
Case overview
The case study documents the growth and development of the UAE Professional Football League using the particular case of one of the oldest teams, Sharjah Football Club (also known as Sharjah FC) founded in 1966 – five long years before the Football Association was conceived.
Sports marketers have long sought to better understand the factors that influence attendance at sporting events. This is couched upon the expectations that an understanding of such factors will improve the efficiency of marketing communication between service providers and consumers, and, as Cunningham and Kwon put it, possibly influence the entire marketing program of a sport organisation. Attracting people to the stadium not only increases ticket revenues but also increases supplementary revenue sources, such as parking, concessions and merchandising.
Expected learning outcomes
To understand key aspects of the consumption of sports (i.e. consumer perceptions, attitudes and influences). Readers would also understand the changing aspects of marketing of sports vis-à-vis sports marketing.
Supplementary materials
Teaching notes and www.fifa.com/associations/association=uae/nationalleague/standings.html
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Michelle Shumate, Liz Livingston Howard and Waikar Sachin
“Driving Strategic Change at the Junior League (A)” describes a troubled organizational environment. Challenges included a dissatisfied membership, declining membership numbers, a…
Abstract
“Driving Strategic Change at the Junior League (A)” describes a troubled organizational environment. Challenges included a dissatisfied membership, declining membership numbers, a large diversity among local leagues, and limited resources to meet the organization's overall objectives. The case describes a “participatory roadmap” approach, drawing on the insights of comprehensive research, and highlights a strategic-change approach that focuses on participation and local-level flexibility.
The (B) case examines how the Association of Junior Leagues International (AJLI) took initial steps to implement the participatory roadmap. Through a purposeful messaging strategy that involved many targets and various modes of communication, AJLI leaders sought to influence and inform active members, sustainers, and their local leaders. Further, through the use of design teams, AJLI gained deep insight into the ways that implementation might vary across local leagues. Finally, these design teams enabled AJLI to make initial gains in membership and develop a cross-league learning community.
After reading and analyzing the (A) case, students should be able to:
Describe the challenges of leading organizational change in a federated membership nonprofit
Appraise different forms of data to determine the types of changes needed in a large-scale nonprofit transformation
Identify ways to unfreeze the organization, encouraging individual members' readiness for change
Formulate a plan for collaborative, large-scale organizational transformation, as opposed to a coercive strategy
Describe the challenges of leading organizational change in a federated membership nonprofit
Appraise different forms of data to determine the types of changes needed in a large-scale nonprofit transformation
Identify ways to unfreeze the organization, encouraging individual members' readiness for change
Formulate a plan for collaborative, large-scale organizational transformation, as opposed to a coercive strategy
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Rory Bishop, Aaron C.T. Smith and Daniel Read
This article provides a plain language commentary on the distributive equity structure of the English Premier League (EPL) with the aim of introducing sport business practitioners…
Abstract
Purpose
This article provides a plain language commentary on the distributive equity structure of the English Premier League (EPL) with the aim of introducing sport business practitioners to a foundational challenge facing professional leagues as they grow financially with market opportunities, namely financial inequality between clubs.
Design/methodology/approach
Introducing and discussing data from seasons 2009/10–2018/19, the article reveals that despite maintaining a consistent distribution of the EPL prize fund over time, the financial imbalance within the league has grown throughout the period.
Findings
The EPL's financial distributive equity is exacerbated by growing imparity in the acquisition of sponsorship revenues, the distribution of broadcasting revenues and the implications of policies concerning financial fair play and parachute payments, leading to a problematic differential in the talent distribution and win–wage relationship experienced by the top six teams and the remainder.
Practical implications
The EPL's market-driven continuation of its revenue allocation policies has led to a broadening financial imbalance, in favour of the top clubs, which could paradoxically undermine the financial security of the teams and league. Sport business practitioners should be familiar with this fundamental challenge for sport leagues that accompanies financial growth.
Originality/value
Whilst the percentage difference in prize fund allocation between top and bottom clubs appears minor, there is a significant financial variation across the league, primarily due to the large increase in broadcasting income. This is compounded by positive feedback via the relative dominance of the top six clubs receiving the larger share allocated to higher finishing teams.
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