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The Effects of the Bosman Ruling on National and Club Teams in Europe

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The Bosman ruling and its aftermath allowed soccer players to move more freely between clubs in Europe. This study examines the performance of national and club teams in Europe before and after Bosman. Some national teams improved after the ruling while others became weaker, but the overall effects are small. At the club level, there is little evidence that the competitive balance of the domestic leagues in Europe was seriously harmed, although in the Champions League the top clubs appear to have become noticeably stronger.
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The Effects of the Bosman Ruling on National and Club Teams in Europe
John J. Binder
Department of Finance (MC 168)
University of Illinois - Chicago
601 S. Morgan
Chicago, IL 60607
jbinder@uic.edu
Murray Findlay
Chief Operating Officer, Soccer Success, Inc.
murrayfindlay@hotmail.com
Fourth Draft January 2011
The comments of Borja Garcia, two anonymous referees and the editor, Leo Kahane, noticeably
improved this paper. We are extremely grateful to Advanced Satellite Consulting and the creators of the
ELO rating system for providing us with data.
Abstract
The Bosman ruling and its aftermath allowed soccer players to move more freely between clubs in
Europe. This study examines the performance of national and club teams in Europe before and after Bosman.
Some national teams improved after the ruling while others became weaker, but the overall effects are small.
At the club level, there is little evidence that the competitive balance of the domestic leagues in Europe was
seriously harmed, although in the Champions League the top clubs appear to have become noticeably
stronger.
1
“It is pointless having the best league in the world if our national team is going to suffer in
the long run.” Steven Gerrard, captain of the Liverpool Football Club and sometime captain
of the English national team.
“Should we let the rich become richer and say nothing?” Joseph Blatter, FIFA president.
1. Introduction
On December 15, 1995, the Bosman ruling changed the face of soccer within the European Union
(EU). It eliminated transfer fees for players out of contract with their teams who wished to change clubs
within and between European Union countries. It also made quotas on the number of foreigners playing for
a club illegal. The governing bodies in various European nations responded by immediately ending quotas
on foreign players from EU countries for club matches played within their domestic leagues. Two months
later, on February 19, 1996, UEFA struck down restrictions on foreign players (the so-called 3+2 rule) in
all its club competitions, such as the Champions League and the UEFA Cup.
1
While some data sources count foreigners in the starting lineup versus those in each squad, there is
no doubt that the influx of foreign players into many countries has been significant. In 2008, 63 per cent of
players registered in the top division in England were not English. This figure was 36 per cent in Italy, 41
per cent in Spain and 51 per cent in Germany. Non-English players started only 28.9 per cent of the league
matches during the 1994/1995 season, but this figure rose to 45.8 per cent during the 1998/1999 season and
57.6 per cent in 2003/2004.
2
,
3
Although academic research on the ruling initially focused on the market for players, recent work
investigates the impact on national and club teams.
4
Regarding national teams, Maguire and Pearton (2000)
conjecture that an influx of top foreign players to a given country will hurt its national team because it limits
the development of domestic players.
5
Symmetrically, this may improve the national teams of countries
exporting players to the top European domestic leagues because their skills will improve by playing against
better competition.
6
2
Non-academic observers largely agree with Maguire and Pearton (2000) on the impact of Bosman
on national teams. For example, Gerry Sutcliffe, Minister for Sport for Britain argues “we have the best
league in the world and it's great that we have got the talent. But obviously we need to see how that . . .
affects the national team.”
7
Similarly, England’s Football Association (FA), in a report on the national team,
concludes that “it is no longer possible to consider the success of the senior men’s national team without
acknowledging that the number of eligible players for it is declining” due to the number of foreign players
in England.
8
FIFA’s Blatter has called for a limit of five foreigners playing for a European club during any
match. According to Blatter, having more foreigners “is not good for the development of football, for the
education of young players.”
9
Although the discussion to date focuses largely on the negative effects of Bosman on the national
teams of the major footballing countries, the ruling may also have had positive effects. For example, an
influx of top players into a country could increase the quality of the domestic league and the domestic
players, improving the country’s national team.
10
Furthermore, a country whose best players move to
stronger leagues may see an increase or a decrease in the quality of its national team. The team would
deteriorate if the players are dispersed around Europe and they no longer “understand” each other. This
would be especially true if before Bosman the team was block built, i. e., its core players came from one or
two clubs in the domestic league. Or if many of the country’s best players move to clubs in the English
Premier League, the grueling schedule may leave them exhausted or unfit for international matches.
These effects could occur immediately and/or over the longer term. For example, if the equilibrium
placement of players was reached quickly and the quality of soccer improved immediately in a domestic
league, an improvement in the national team would occur immediately. On the other hand, if an influx of
foreign players limited the opportunities for young domestic players, the effect on the national team would
not have been fully realized for some time. The current national players were fully developed and the team
would weaken only as they were replaced by lower caliber players.
3
Interestingly, while some blame the Bosman ruling for the failures of the English national team,
many hail the current English players as a “golden generation” of great ability.
11
David Beckham, Steven
Gerrard, Frank Lampard, Michael Owen, John Terry and Wayne Rooney are among the players England has
produced post-Bosman. Similarly, Germany has produced Michael Ballack, Miroslav Klose, Thomas
Mueller and Lukas Podolski, to name just a few, since the Bosman ruling, while Spain recently won both the
European championship and the World Cup.
Frick (2009) empirically investigates the effect of Bosman on national teams, using data from
matches at the European championships and the World Cup from 1976 to 2006. He finds no evidence that
team performance, i. e., whether the national team made the semi-finals/final match of the tournament, is
correlated with how many of the country’s players were rostered by club teams abroad. Similarly, he can
not reject the null hypothesis that individual match results (measured by goal difference) were on average
unaffected by Bosman. However, these tests may not be very powerful because the dependent variable,
based on individual match or tournament outcomes, is quite noisy. Secondly, if some national teams
improved and others declined due to Bosman, the average effect may be indistinguishable from zero even
though the ruling had important effects on individual countries. Baur and Lehmann (2008) regress the FIFA
ranking for national teams in the 2006 World Cup against the number of top players imported into/exported
by each participating country. This is a less noisy measure of national team quality. They find that national
team strength is positively related to both the number of top players imported into and exported from the
country. This indicates that on average an inflow/outflow of top players to/from a given country improved
the national team. As noted above, however, there may still be considerable variability around these averages
which is hidden within the aggregate effect.
Regarding club teams, Kesenne (2007) theoretically examines the effects of Bosman within and
across countries. He uses a two country (where the markets are of different sizes) model with two clubs per
country and assumes that each club is a win maximizer subject to its constraints. His model predicts that
4
post-Bosman more talent will flow to the countries with the bigger markets for club soccer, increasing the
disparity between club teams across countries. The competitive balance within countries, defined as the
variability in strength across clubs within a country, is not affected, however.
Outside of academia, it is generally claimed that the stratification between clubs within each EU
country as well as across clubs in Europe has increased since the Bosman ruling. FIFA president Joseph
Blatter believes that “[t]he gap between football’s rich and poor is widening, as is the imbalance between
associations and leagues.”
12
He likens it to a battle between the “haves”, who compete with nuclear
warheads, and the “have-nots”, who rely on spears.
13
Regarding the English Premier League, Kevin Keegan
states “[t]his league is in danger of becoming one of the most boring . . . in the world. The top four teams
this year will be the same next year.”
14
In terms of competitive balance within the domestic leagues, Vrooman (2007) empirically
investigates the variability of club performance over time in the five largest European leagues (measured by
attendance). He finds little effect of the Bosman ruling on these leagues. Haan et al. (2008) examine various
measures of competitive balance at the club level for the six biggest European leagues plus Belgium. They
find that the variability of team strength across teams (within season) increased in England and decreased
in Italy after the Bosman ruling, while dominance by the top four club teams increased in England and Italy.
In contrast to Vrooman (2007), Haan et al. (2008) report a significant decrease in the variability of team
performance over time in England and the Netherlands using one of two different statistics. Overall, with
the exception of England, they find little evidence of a decrease in competitive balance at the club level
within Europe countries.
15
However, these results are difficult to interpret because the number of teams in
each league changes over time, affecting the various measures of competitive balance.
In terms of the competitiveness of club teams across countries, Kesenne (2007) examines the
percentage of semi-finalists in the Champions League from the four strongest domestic leagues in Europe,
England, Germany, Spain and Italy, over time. He finds that from 1994 to 1998 55 per cent of the semi-
5
finalists were from the Big Four while from 1999 to 2003 the figure increased to 95 per cent. On the surface,
these statistics support his hypothesis that there will be an influx of strong players from around Europe into
the major domestic leagues after Bosman. However, this test does not hold everything else equal. First, the
inflow of foreign players to many European leagues began in 1995, which is during Kesenne’s control period.
Second, starting with the 1997/1998 season the Champions League changed its format to include second
place finishers from the top eight leagues. All else equal, the number of semi-finalists from the four strongest
leagues would have increased due to this.
This paper statistically examines the effects of the Bosman ruling on 1) the strength of national teams
in Europe and 2) competitive balance within domestic leagues in the EU and also in the Champions League.
National team strength is measured by the country’s ELO rating, which is a more accurate ranking during
the sample period than the one constructed by FIFA. Individual countries in Europe are examined as well
as broad groups of countries on average. While various national teams are affected by Bosman, the effects
differ across countries and appear to be much less negative than has been hypothesized by many observers.
For example, the national teams in the countries with the greatest influx of players were unaffected by
Bosman.
At the club level, the ruling did not noticeably affect competitive balance within the various domestic
leagues. Across countries, evidence from the Champions League indicates that the top European clubs have
become relatively stronger due to Bosman. But this also greatly increased the level of play and interest in
the Champions League and some of the domestic leagues, which has been beneficial for the growth of the
game worldwide. Overall, the negative effects of the Bosman ruling appear to be fairly minor.
2. National Team Regressions
2.1 Methodology
To test the hypothesis that Bosman affected the strength of national teams in Europe, we examine
6
the major Euopean soccer powers which were EU members at the time of the Bosman ruling.
16
The sample
consists of countries which were 1) EU members at the time of the Bosman ruling and 2) among the 20
European countries with the highest average match attendance in their domestic soccer league during the
2006-2007 season. In order from highest to lowest average attendance, these countries are: Germany,
England, Spain, France, Italy, the Netherlands, Scotland, Portugal, Belgium, Sweden, Norway, Denmark,
Austria and Greece.
17
We estimate the following equation for these fourteen countries as well as for various groups of
countries:
ELOt = α0 + α1ELOt-1 + α2TRENDt + α3THIRDt + α4D1991t + α5D1t + α6D2t + εt . (1)
Equation (1) is an intervention analysis model of the type discussed by Box and Tiao (1975). It models the
stochastic part of the series as a first order autoregressive process and the deterministic part of the series with
zero-one and other variables. The variable ELOt is the ELO (sometimes written as Elo) rating for the country
(or the average ELO rating for a group of countries) at time t. The ELO rating, discussed further below, is
a measure of national team strength. ELO ratings six months apart are examined in this study. The first two
variables control for the time series behavior of the rating by allowing for an autoregressive process and a
linear time trend in it. These variables will capture the influence of other factors which may affect the
quality of the national team(s) but are not directly measurable. For example, national team strength might
be a function of some variable X which is not observable but whose values persist over time. This will cause
the ELO rating to be positively autocorrelated.
18
Similarly, a steady rise over time in national interest in
sports or the technical abilities of the country’s players would gradually improve the quality of the domestic
league and the national team. This type of effect is captured by the coefficient on the time trend variable
TRENDt. This eliminates spurious regression results due to the time series behavior of the ELO ratings, such
as those discussed by Granger (1969).
7
During the estimation period (1984 to 2007) there were two other major changes in world soccer
which likely affected the relative strengths, and therefore the ELO ratings, of European national teams. First,
countries in what might be described as soccer’s “Third World” that is, outside of Europe and South
America improved dramatically, partly because they adopted the same tactics as the European and South
American teams and partly because the training of their players improved. The variable THIRDt is the
average ELO rating for ten randomly selected countries outside of Europe and South America whose ELO
rating put them among the top 50 in the world at some time during the sample period. If third world soccer
improved dramatically during this period, as appears to be the case, and the ELO ratings of those countries
increased at the expense of the European countries, the estimate of α3 will be negative in at least some of
the regressions.
Second, political changes in the Soviet Union around 1991 and the resulting freedom of the former
East Bloc countries had various effects on soccer. On the one hand, this was equivalent to a mini-Bosman
ruling for these countries, with their players allowed to move abroad and foreign players allowed to play for
teams in the countries’ domestic leagues (within the bounds of the prevailing limits on foreigners per team
effective at the time). Second, the economic changes which occurred in the former East Bloc countries
coupled with changes in state sponsorship of sports also changed the level of support for the club and
national teams. These factors would have affected the relative strength of the Eastern European countries’
national teams as well as those of the other European countries. For example, if Eastern European national
teams improved after 1991, their ELO ratings would increase while the ratings of other Europeans would in
some cases decrease. The zero-one variable D1991t, which equals one beginning March 1991 and zero
before that point, is included in equation (1) to model these changes.
19
The last two independent variables directly examine the effects of the Bosman ruling on the national
teams. We allow Bosman to have an immediate effect as well as a longer term effect on the teams in
question. D1t equals zero before March 1996 and one afterward and allows for a step change in the ELO
8
rating after the Bosman decision. For example, if an influx of foreign players immediately improved the
quality of a country’s national team, the ELO rating would increase by α5.
Separately, there may have been longer term effects of the Bosman ruling. If foreign players
inhibited the growth of domestic talent in the longer term, the full effect of this would probably not be felt
for years as national team players were replaced gradually from the smaller pool of talent. For the same
reason, this effect may not begin immediately after Bosman. D2t equals zero before March 1998 (two years
after Bosman) and .05 in March 1998.
20
It increases by .05 every six months until it reaches a value of one
in September 2007. This variable allows for a gradual change in the ELO rating, starting two years after
Bosman and continuing for 10 years. That is, D2t has twenty step changes from September 1997 to
September 2007 with the longer term effect of Bosman on the ELO rating, equal to α6, fully realized starting
in September 2007.
The ELO ratings at the beginning of March and September for each year in the sample are collected
from the ELO website, as are the ratings for the ten randomly chosen countries outside Europe and South
America.
21
,
22
Some discussion of the ELO data is in order. This rating system was developed by Bob
Runyan in 1997 by adapting the method used by the international chess federation (FIDE) to rate players,
which was created by Dr. Arpad Elo.
23
The ELO soccer ratings have been calculated back to 1872 when the
first international match, between England and Scotland, took place. After every match, a country’s rating
is revised through an exchange of points between it and the opposing country. The number of points
exchanged depends on the relative pre-match ratings of the two countries and the importance of the match,
with major tournaments receiving a higher weight than friendly matches. The winning country can not lose
ELO points, but if it is rated much higher than its opponent it may gain only a few (or zero) points despite
winning the match. Thus, ELO ratings are a measure of national team strength based on longer term match
results, as opposed to the opinions of a survey group (as in some college sport ratings in the United States).
They are similar to the FIFA rankings used by Baur and Lehmann (2008), which are discussed further below,
9
and suggested for use by Frick (2009, ftnt. 9). On April 24, 2008, Brazil’s national team ranked first in the
world with an ELO rating of 2062.
24
Mexico was ranked number 10 (ELO rating of 1874), Paraguay was
ranked number 20 (1778), Ireland was ranked number 30 (1736), Norway was ranked number 40 (1705) and
Peru was ranked number 50 (1614). At the other end of the spectrum, Palau in the Northern Pacific ocean
was ranked number 229 with a rating of 488.
The important question in this study is how accurately the ELO ratings measure the strength of the
various national teams. The forecasting ability of the ELO ratings, compared to FIFA’s own ratings and
bookmaker odds, is evaluated with data from recent World Cup matches. For each of the last four World
Cup finals a probit model is estimated with data from matches which did not end in a draw using the
difference between the two teams’ ELO ratings or their FIFA ratings as the explanatory variable. In the last
two World Cup finals, for which pre-tournament bookmaker odds are available, the model was also estimated
using the difference in the pre-tournament odds of each team winning the competition (which in an efficient
capital market are the best possible forecast).
The results are reported in Table 1. The average value of the pseudo R-squared in the four
regressions using the ELO measure was .2575 compared to an average of .19 with the FIFA variable. The
probit models using the ELO rating predicted the match winner correctly in 145 cases as opposed to 135
cases with the FIFA rating. This indicates that before 2007 the ELO ratings were a much better indicator
of national team strength than the FIFA ratings. In the last two World Cups, probit models using the ELO
measure had an average pseudo R-squared of .245 (and 78 correct forecasts) as opposed to an average pseudo
R-squared of .38 (and 77 correct forecasts) when the betting odds are used. Although the ELO ratings do not
fit the data as well as bookmaker odds, the latter are not a time series measure of national team strength.
Therefore the ELO ratings provide the best available measure of national team strength and are used in the
tests which follow.
25
The average ELO rating for the fourteen European nations is examined along with the averages for
10
two subgroups. Group 1 consists of the so-called “Big Six” countries with the strongest domestic leagues,
the highest average attendance and apparently the greatest percentage of foreign players Germany, England,
Spain, France, Italy and the Netherlands. Group 2 contains the remaining eight countries in the sample.
Table 2 reports various statistics related to the ELO ratings of each country and the average ELO rating for
all fourteen European countries (labeled Europe in the table), the two groups of European countries and the
average for the 10 third world countries (labeled Third World in the table), including the first order
autocorrelation of the ELO rating
ρ(1)
. The average ELO rating for the Big Six (Group 1) countries during
this period, 1925, is 170 points greater than the Group 2 average ELO rating and about 100 points above the
fourteen country average. France’s average ELO of 1955 is the highest among these countries while
Austria’s average rating of 1659 is the lowest. The individual country ELO figures are, in some cases, quite
volatile. For example, Portugal’s ELO rating ranges from 1685 to 1983 during this time period. This
variation is measured by the standard deviations of the ELO ratings, which range from 78 for Portugal to 42
for England.
The average ELO ratings for the fourteen countries and the two subgroups are much less variable
than the individual country ELOs, indicating that tests with the European and group average data should be
powerful. For example, the European average ELO has a minimum value of 1799 and a maximum value of
1863 during this period, with a standard deviation of only 17. The standard deviation of the Group 1 average
is somewhat greater than that of the European average but the Group 2 average is as variable as the European
average. The average rating for the 10 third world countries is as variable as the Group 1 average and ranges
from 1526 (the first observation in the time series) to 1629 (the last observation). This reflects the increase
in the quality of soccer outside Europe and South America during this time period. As expected, the ELO
ratings are highly positively autocorrelated, with all first order autocorrelations greater than .50.
2.2 Empirical Results
The coefficient estimates and related statistics from equation (1), when the dependent is the average
11
rating for a group of countries, are reported in Table 3. The figures in parentheses are the absolute values
of the t statistics and coefficient estimates which are statistically significant at the .05 (.10) level in a two
tailed test are denoted by two (one) asterisks. The χ2
statistic tests the hypothesis that the overall effect of
the ruling (α5 + α6) equals zero and is reported along with its p-value. In each case the adjusted R-squared
of the regression is greater than .60, consistent with the models having substantial explanatory power.
26
The
average ELO rating for the 14 European countries and the two group averages are, controlling for other
factors, significantly positively correlated with their lagged value. Two of the average ELO ratings show
a noticeable upward trend over time, although the latter effect (an increase of two to three points per year)
is fairly small. The Group 1 average ELO rating is significantly negatively affected by the rise in the quality
of soccer outside Europe and South America and both the European average and the Group 1 average are
significantly negatively impacted by political change in Eastern Europe.
Regarding the Bosman ruling, the fourteen countries were on average significantly positively affected
immediately by the court decision, with the average ELO rating increasing by 10.69. However, over the
longer term Bosman significantly decreased the average ELO rating of these countries by 33.83. The overall
effect of Bosman on these countries over ten years, which is the sum of the estimates of α5 and α6, is an
average decrease in the ELO rating of about 23 points (which is statistically significant in tests at the five per
cent level). While the coefficient estimates are statistically significant at well beyond the five per cent level,
this is partly due to the power of the tests. The overall effect for European national teams on average does
not appear to be especially large. Based on recent ELO ratings a team ranked in the top 50 in the world would
on average drop two or three places in the rankings -- for example, the number 10 ranked national team in the
world would drop to number 12 or 13 over twelve years -- if its ELO rating fell by 23 points.
27
The results for the two groups within the fourteen countries provide insight into the behavior of the
sample average. The Big Six countries were immediately positively affected by the ruling, with the average
ELO rating increasing by more than 21 points. This estimate is reliably different from zero in tests at the five
12
per cent level. There is also a significant (at the ten per cent level) longer term negative effect of Bosman on
these countries on average, but the overall effect of the ruling is not statistically significant. For the Group
2 countries the estimate of α5 is statistically insignificant but there is a significant negative longer term effect
of Bosman on these countries on average. This is consistent with the national teams of the Group 1 and 2
countries being negatively impacted in the longer term by Bosman. Thus, the immediate positive impact of
Bosman on European national teams is driven by the Big Six while the longer term negative effect is due to
both groups of countries.
The regression results for the individual national teams are reported in Table 4. The adjusted R-
squareds range from .279 to .889 but they are generally above .50.
28
The coefficient estimates, including
those related to Bosman, vary considerably across the sample countries. The lagged ELO rating has
significant explanatory power in all fourteen regressions and there is a significant time trend (at the ten per
cent level in two tailed tests) in the ELO rating in nine cases. Regarding the increase in the strength of
national teams outside of Europe and South America, only four estimates of α3 are statistically significant
at the ten per cent level. Germany, Italy and Denmark have a negative effect on their ELO rating while
Sweden’s ELO increases due to changes in soccer outside of Europe and South America.
Political and economic change in Eastern Europe had a very noticeable effect on the national teams
of the EU nations as ten of fourteen coefficient estimates on D1991t are reliably different from zero. Five of
the Big Six countries are significantly affected by these events and four of those estimates are negative, which
is reflected in the result for the Group 1 countries on average in Table 3. For the remaining eight countries
three of the significant estimates of α4 are negative while two are positive. In fact, the fall of the Iron Curtain
had, based on the number of countries with significant estimates of α4versus those with significant estimates
of α5 and/or α6, an impact on soccer in Europe at least as large as the Bosman ruling.
Turning to the effects of the Bosman ruling, six of the fourteen countries in the sample were
significantly affected immediately by the decision. Four of these countries are in the Big Six and, as
13
evidenced by the Group 1 regression reported in Table 3, three of the four were positively affected. France’s
ELO rating increased immediately by about 93 points, Spain’s increased by 44 points and England’s by 37
points, while Italy’s ELO rating dropped immediately by 27 points. Among the other eight countries, Sweden
was immediately negatively affected by Bosman while Austria was positively affected. In the longer term,
England and France were positively affected by Bosman. Spain, Italy, the Netherlands, Belgium and Sweden
were significantly negatively affected, however, with each losing between 90 and 130 points in their ELO
ratings over the longer term.
The estimated overall effect of Bosman is statistically significant for seven countries. England gained
100 (ELO) points, Spain lost 85 points, France gained 212 points, Italy lost 121 points, the Netherlands lost
152 points, Belgium lost 132 points, Scotland gained 53 points and Sweden lost 189 points. Sweden, not one
of the Big Six, was the most negatively affected by Bosman. Conversely, there is no evidence that England,
the source of the loudest complaints about the elimination of quotas on foreign players, was negatively
affected. In fact, the English national team was stronger after Bosman than before. England’s poor results
in some matches recently, such as during the qualifying for Euro 2008 and to an extent at the 2006 World Cup,
appear to be due to an inability to shine in critical situations as opposed to a lack of talented players. If the
Bosman ruling hurt the growth of domestic talent anywhere, from these results it was in Spain, Italy, the
Netherlands, Belgium and Sweden, not in England.
Based on the evidence presented here, what conclusions can be drawn about the effects of Bosman
on national teams in the EU countries? First, the effects appear to be variable. Some countries were
positively impacted while others were negatively affected overall, as opposed to Frick’s (2009) finding of no
effect. Therefore, it is fruitful to examine individual countries as well as the average effects, because the
individual results vary noticeably around the average. Inconsistent with Baur and Lehmann (2008), the
European countries were negatively affected on average by the end of the time period. In the big picture, the
average effect on the fourteen EU countries over the entire 12 year period, while statistically significant, was
14
fairly small, which is consistent with Frick (2009). Also, any negative impact of Bosman on some European
national teams must be weighed against the positive impact on others and the positive effects the removal of
foreign player quotas have had on the market for players and the increased quality of soccer played by the top
clubs in Europe, as evidenced by the Champions League competition.
3. Competitive Balance at the Club Level
It has long been recognized (see Rottenberg (1956) and Neale (1964)) that professional sports differs
fundamentally from other industries. In the standard industry it is of little concern if some competing firms
are better (more efficient) than others. In fact, this is to be encouraged because societal welfare is maximized
by increasing efficiency (lowering production costs). However, the degree of interest in professional sporting
events, and therefore the success of a league overall is positively related to how competitive the teams are
because fans are not interested in competitions with very predictable or very lopsided outcomes.
Vrooman (1996) proposes three separate measures of competitive balance: 1) the variability of
performance across teams in the league (“across team” competitive balance), 2) the continuity of team
performance over time (“across season” competitive balance) and 3) the extent to which certain teams
dominate the league (“league dominance”). If each season there is a wide dispersion in team strength (and
therefore the final results, measured in soccer by a statistic such as total points earned) then many matches
will be one sided and fan interest in those matches will be fairly low. Similarly, if each club finishes in
roughly the same place in the league year in and year out, the season is fairly predictable and the fans will find
the competition uninteresting. Regarding league dominance, if the same teams finish atop the league on a
regular basis then the battle for the championship will be very predictable, which can negatively affect fan
interest in the league overall. These three aspects of competitive balance are empirically examined for the
domestic leagues of the sample countries before and after Bosman. Furthermore, because the UEFA
15
Champions League is a club competition which overarches the various domestic leagues, we also examine
dominance in that league.
To examine whether the Bosman ruling increased the stratification within the domestic leagues in
Europe, data are collected on the number of points earned by each team in the top league in the eleven sample
countries for the seasons ending from 1984 to 2007 and the variance of this variable is estimated before and
after Bosman.
29
In this analysis each team is awarded three points for a win and one point for a draw, which
standardizes the data across leagues and over time. The dispersion across teams of the number of points
earned may change over time, however, simply because the number of teams in the league changes. For
example, the English Premier League consisted of 22 teams from 1984 to 1987 and from 1992 to 1995, 21
teams in 1988 and 20 teams from 1989 to 1991 and again from 1996 to 2007. To avoid this problem, we use
only the years where the number of teams in the league is the same and choose the league size which yields
the most years of data. For example, in England we pool the 60 observations for the years 1989 to 1991 to
measure the variance of points earned before Bosman and the 240 observations from 1996 to 2007 to estimate
the post-Bosman variance. Following Haan et al. (2008), we conduct two tailed tests of statistical significance
when testing whether competitive balance changed.
The results, along with the F-statistic testing the hypothesis that the variance changed after the
Bosman ruling, are reported in Table 5.
30
In five of 11 countries the variance estimate increased after Bosman
and in six countries it decreased. However, only in Greece is there a significant (in two tailed tests at the ten
per cent level) change in the variance of points earned across teams. Therefore, consistent with Haan et al.
(2008), there is little evidence to support the claim that stratification within the various domestic leagues has
increased, i. e., competitive balance across teams has decreased. Certainly there is no wide spread decrease
in this type of competitive balance in the top six European leagues.
The variance results are somewhat surprising, at least for England, because the rich (based on casual
observation) do appear to have gotten richer there post-Bosman as Arsenal, Chelsea, Liverpool and
16
Manchester United perennially battle for the top three places in the league. The variance would not increase
noticeably, however, if the top teams became stronger (earned more points) while the rest of the league
remained essentially unchanged. In England, most teams have improved by adding foreign players since the
Bosman ruling, not just the teams at the top, and therefore the poor have not necessarily gotten poorer. This
is reflected in the fact that the bottom three teams in the league earned 32.25 points on average after Bosman
compared to 33.56 points before while, consistent with greater dominance by a few clubs, the average points
earned by the top three teams increased from 72.89 to 78.19 after the Bosman ruling.
We examine across season competitive balance with the data used to construct Table 5, except the
variable of interest is the change in the number of points earned by each team between consecutive seasons.
31
The results are reported in Table 6. In four countries the estimated variance of the across season point change
increased after Bosman and in seven countries it decreased. However, only four of these changes are
statistically significant in two tailed tests at the ten per cent level. In England, consistent with casual
observation, and Greece the variance decreased significantly, indicating that club performance became less
variable over time and that competitive balance of this type decreased. However, in the Netherlands and
Portugal club performance over time was significantly more variable after the ruling. Overall, Bosman did
not noticeably increase or decrease this type of competitive balance in the European domestic leagues, which
is consistent with the results in Haan et al. (2008).
To examine whether these leagues became more heavily dominated by the same teams after Bosman,
data are collected on the top three clubs each year for the eleven seasons before Bosman (1984/1985 to
1994/1995) and the eleven years after (1996/1997 to 2006/2007). For each of these seasons we count how
many of the clubs in the top three spots also finished in the top three the preceding season. The number of
times the same club was in the top three in the league for two consecutive seasons (out of a possible 33 times)
before Bosman, N1, and after Bosman, N2, along with the percentage of cases in which this occurred, p1 and
p2, are reported in Table 7. Before Bosman, league dominance by the same teams was weakest in Germany
17
(with N1 equal to 12). On the other hand, in the Netherlands in 29 of 33 cases (p1 = .88) the clubs finishing
in the top three places in the league also did so during the preceding season. After Bosman, Greece was the
most dominated at the top by the same teams (p2 = .88). In five cases dominance at the top increased (p2 >
p1) after Bosman while it decreased in four cases. The greatest decrease was in Spain while, again consistent
with casual observation, the greatest increase was in England.
32
A few further words on the subject are in order. Casual observation seems to indicate that as in
England, other leagues are dominated by a few teams. This is true in Scotland where Glasgow Celtic and
Glasgow Rangers have virtually monopolized the top two positions in the league. In fact, since 1985 no other
team has won the Scottish league title and only twice have these two clubs not occupied the top two positions
in the league. However, this has been the case throughout the sample period and is not, therefore, due to the
Bosman ruling. Similarly, the Dutch domestic league has for years been dominated by Ajax Amsterdam, PSV
and Eindhoven.
The t-statistic to test the hypothesis that p2 equals p1 is reported in the last column of Table 7.
33
In
two tailed tests at the ten per cent level, the null hypothesis of no change in competitive balance of this type
(league dominance) is rejected for five countries. Competitive balance decreased in England, Germany and
Greece but increased in Spain and the Netherlands after Bosman, indicating that dominance by the same teams
did not noticeably increase or decrease in Europe on average.
34
This conflicts with the conclusion by Haan
et al. (2008) that league dominance increased somewhat after the ruling.
Based on the results of these three tests, overall competitive balance within Europe’s domestic soccer
leagues has not been damaged by the Bosman ruling, including in the Big Six. A separate issue is whether
the flow of top players to the biggest clubs, many of which are in the Big Six countries, has caused some
clubs/leagues in Europe to become stronger at the expense of others. Casual observation, based on the
domination of the Champions League by clubs from the Big Six since the Bosman ruling, seems to confirm
that this type of stratification has occurred. This is misleading, however, because (as mentioned above) the
18
format of the Champions League -- possibly in response to the effects of Bosman -- was altered for the
1997/1998 season. Previously, only one team from each domestic league, the winner the preceding year, was
entered in the Champions League (along with the winner of the previous year’s Champions League final).
In the 1997/1998 competition the runners-up from the top eight leagues the previous year were also included.
Currently, some domestic leagues send their top four teams to the Champions League.
To examine the effect of Bosman on the Champions League, we adjust the data to control for the
change in the format. That is, from the 1956/1957 season to the 1996/1997 season, we count the number of
semi-finalists each year from the Big Six.
35
From the 1997/1998 season through the 2006/2007 season, we
first eliminate the semi-finalists who would not have qualified for the competition under the pre-1997/1998
format. That is, they were not 1) champions of their domestic league or 2) winners of the Champions League
the preceding year.
36
We then count how many of the semi-finalists who entered the competition in the
traditional way were from the Big Six. Prior to the Bosman ruling, 102 of 156 semi-finalists (about two
thirds) were from the Big Six, indicating that domination by teams from these countries is not an entirely new
phenomena. From 1995/1996 to 2006/2007, 23 of 26, or 88 per cent of the semi-finalists were from the Big
Six. The t-statistic to test the hypothesis that the probability did not change is 3.10, which rejects the null
hypothesis of no effect due to Bosman at well beyond the one per cent level.
37
Clearly, the influx of top
players to these countries has helped their clubs noticeably in soccer’s most prestigious club competition.
This increased stratification across club teams in the Europe is not necessarily bad, however. First,
it creates all-star type clubs where the eleven starting players, and in some cases all the rostered players, are
outstanding. When these teams meet, just as when national teams meet in the World Cup, spectators see the
highest form of the art. Second, its effects are seen only in the Champions League, which is a cup type of
competition, similar to the cups in the various domestic soccer leagues. One feature of cup competitions
which makes them more exciting and increases spectator interest is the fact that they pit the Davids against
the Goliaths and the Davids sometimes win. For example, the domestic league cups in Europe include clubs
19
from lower professional leagues as well as amateur clubs. The Bosman ruling, because it increased the
stratification across leagues, has amplified this variability within the Champions League. Similarly, the
creation post-Bosman of some four all-star teams in the English Premier League has made it the world’s most
watched sporting league.
38
Although it is fairly predictable which clubs will finish in the top four spots, it
is not clear which one will win the championship. To the extent that the flow of talent to England, the other
Big Six Countries and the top teams in the Champions League has increased interest in the game in North
America and Asia, the Bosman ruling has been a great success in terms of promoting football in those regions.
4. Conclusion
While there has been considerable discussion about the effects of the Bosman ruling, by academics,
club and federation officials, players and spectators, there have been only a handful of empirical studies of
its effects on national and club teams in Europe. We find that while some national teams were
negatively/positively affected by Bosman, the average effect on the Big Six countries (which apparently have
had the greatest influx of high quality players) and other European nations was fairly small. Certainly the Big
Six as a whole, including England, have not been greatly affected.
At the club level, competitive balance in the domestic leagues, measured in any of several ways, has
not decreased overall (although England, which has been the subject of the most discussion, has clearly been
affected) . That is, imported players have gone to a variety of clubs, not just the top teams, largely preserving
the competitiveness of the various leagues. The clubs have become more stratified across countries with
teams from the Big Six more heavily dominating the Champions League since the decision in Bosman. The
free flow of players has, however, turned the Champions League, and some of the domestic leagues, into
virtual super leagues, showcasing a number of “all star” teams which has also greatly increasing interest in
the game worldwide.
20
All things considered, the negative effects of Bosman appear to be fairly small. Furthermore, they
must be balanced against the ruling’s positive effects, including those on the market for players and interest
in soccer around the world. Hopefully this paper and further empirical research on the subject will provide
evidence useful to policy makers in various countries as well as broader governing bodies such as UEFA,
FIFA and the EU parliament. Furthermore, if the decrease in the quality of some European national teams
is an important concern, it can be addressed without restricting the movement of players (as Joseph Blatter’s
“6+5" proposal would do). One alternative is for UEFA to impose a lump sum “tax” on the Champions
League and UEFA Cup revenues and transfer this money, based on how many players from each country play
their club soccer for a top team abroad, to the countries exporting these players for further training and
development of their national teams.
21
Table 1
The Ability of Different Variables to Forecast World Cup Match Outcomes
FIFA Ratings ELO Ratings Bookmaker Odds
World Cup N Number R2 Number R2 Number R2
Correct Correct Correct
____________________________________________________________________
1994 44 29 .18 31 .15 – –
1998 48 33 .24 36 .39 – –
2002 50 36 .13 33 .08 32 .24
2006 53 37 .21 45 .41 45 .52
____________________________________________________________________
Average 33.75 .19 36.25 .258 – –
(for four 4 World Cups)
Average 36.50 .17 39.00 .245 38.50 .38
(WC2002 and WC2006)
22
Table 2
Descriptive Statistics of the ELO Ratings
Average Minimum Maximum Standard Deviation ρ(1)
____________________________________________________________________________
Europe 1828 1799 1863 17 .88
Group 1 1925 1872 1979 28 .74
Group 2 1755 1722 1786 15 .82
Third World 1587 1526 1629 28 .92
Germany 1933 1815 2061 67 .73
England 1908 1833 1977 42 .67
France 1955 1805 2106 76 .74
Italy 1927 1818 2023 53 .75
Netherlands 1927 1810 2021 61 .67
Spain 1902 1791 1999 58 .82
Scotland 1720 1573 1833 59 .89
Portugal 1824 1685 1983 78 .94
Belgium 1760 1616 1846 48 .69
Sweden 1834 1731 1951 46 .54
Denmark 1849 1733 1928 46 .72
Austria 1659 1569 1775 52 .87
Greece 1666 1557 1896 77 .82
Norway 1728 1543 1897 87 .92
____________________________________________________________________________
23
Table 3
Estimates from Equation (1) for Groups of European Countries
ELO α
^
0
α
^
1
α
^
2
α
^
3
α
^
4
α
^
5
α
^
6
R2
a χ2
(1) p
_____________________________________________________________________________________________________
Europe 1144** .45** 1.17** -.09 -10.37** 10.69** -33.83** .830 5.06 .0245**
(6.24) (4.56) (4.86) (1.29) (3.72) (2.75) (4.40)
Group 1 1471** .52** 1.58** -.36** -23.33** 21.61** -28.96 * .610 .14 .7059
(5.27) (5.05) (3.66) (2.41) (4.45) (3.08) (1.82)
Group 2 621** .57** .61 .08 -.25 .92 -28.10** .677 1.81 .1781
(2.57) (5.05) (1.14) (.92) (.05) (.12) (1.98)
____________________________________________________________________________________________________
The absolute value of the t-statistic is in parentheses below the coefficient estimate. R2
a is the adjusted R-squared and χ2
(1) is the chi-
squared statistic to test the hypothesis that α5 + α6 equals zero. The p-value associated with the chi-squared statistic is in the last column
of the table.
** = statistically significant at the five per cent level in a two tailed test.
* = statistically significant at the ten per cent level in a two tailed test.
24
Table 4
Estimates from Equation (1) for Individual Countries in Europe
ELO
α
^
0
α
^
1 α
^
2 α
^
3 α
^
4 α
^
5 α
^
6 R2
a
χ2
(1) p
____________________________________________________________________________________________________________
Germany 2579** .61** 2.71** -1.17** -44.27** 13.28 -35.60 .524 .14 .7078
(2.48) (3.56) (1.98) (2.31) (2.54) (.42) (.72)
England 1224** .60** -2.10 -.28 4.07 37.27** 62.49* .421 4.19 .0407**
(2.06) (6.40) (1.59) ( .70) (.25) (2.41) (1.66)
Spain 912* .39** 3.95** .13 -66.41** 44.07** -129.51** .725 3.84 .0500**
(1.91) (5.09) (2.21) (.45) (2.84) (4.28) (3.44)
France 1218* .46** 5.60* -.10 76.67** 92.58** 119.65** .570 4.10 .0429**
(1.68) (4.82) (1.96) (.21) (2.82) (2.00) (1.83)
Italy 1244** .56** 4.70** -.29* -37.86** -27.12** -93.55** .565 7.65 .0057**
(4.39) (6.88) (3.97) (1.65) (3.48) (2.15) (2.66)
Netherlands 1342* .46** 7.03* -.23 -90.64** -24.35 -127.46* .469 2.23 .1357
(1.71) (2.96) (1.72) ( .62) (2.04) (.73) (1.79)
Scotland 316 .77** -2.73** .07 36.33** 3.10 49.84 .777 2.80 .0940*
(.67) (6.40) (2.82) (.29) (2.91) (.23) (1.62)
Portugal 381 .78** 1.82* -.01 -.18 3.94 -40.38 .889 .72 .3966
(.81) (11.46) (1.71) (.02) (.02) (.23) (1.34)
Belgium 996** .52** 2.95** -.10 -36.80** -19.64 -112.10** .547 15.88 .0001**
(2.04) (4.56) (2.62) (.43) (2.40) (1.60) (3.84)
Sweden 139 .34** 4.59** .67** -44.91** -74.48** -115.00** .279 12.10 .0005**
(.26) (5.92) (2.81) (2.01) (2.25) (3.32) (3.25)
Norway 11 .68** 1.15 .32 41.61** -16.33 -68.55 .867 1.13 .2873
(.03) (8.72) (.56) (1.15) (2.12) (.57) (1.17)
Denmark 1566** .64** -.50 -.57** 5.37 4.41 34.65 .503 1.04 .3076
(3.66) (10.00) (.39) (2.12) (.29) (.34) (1.09)
Austria 820** .44** -1.51 .09 -42.02** 65.37** -28.53 .836 .66 .4161
(2.46) (4.99) (1.25) (.44) (4.15) (3.05) (1.06)
Greece 449 .55** .86 .17 -7.53 -2.00 45.62 .688 .73 .3930
(.81) (5.18) ( .57) (.40) (.41) (.11) (1.11)
__________________________________________________________________________________________________
Absolute values of the t-statistic are in parentheses. R2
a is the adjusted R-squared and χ2
(1) is the chi-squared statistic to test the hypothesis
that α5 + α6 equals zero. The p-value associated with the chi-squared statistic is in the last column of the table.
** = statistically significant at the five per cent level in a two tailed test.
* = statistically significant at the ten per cent level in a two tailed test.
25
Table 5
Variance of Points Earned in Each League (Across Teams) Before and After Bosman
Country Teams s2
1 s2
2 N1 N2 F-statistic
_______________________________________________________________________
Germany 18 147.66 157.66 197 197 1.0673
England 20 163.20 223.87 59 219 1.3718
France 20 148.06 148.52 239 119 1.0031
Italy 18 200.93 172.68 125 143 1.1636
Netherlands 18 227.82 267.31 215 197 1.1733
Spain 20 199.81 157.68 159 199 1.2672
Portugal 18 216.23 204.31 89 179 1.0583
Belgium 18 219.71 218.73 215 179 1.0045
Sweden 14 110.45 93.77 41 153 1.1779
Austria 10 238.05 205.66 19 109 1.1575
Greece 16 165.38 249.46 95 95 1.5084**
_______________________________________________________________________
s2
1 and s2
2 are the estimated variances before and after Bosman. N1 and N2 are the degrees
of freedom in the variance estimates before and after the Bosman ruling, respectively. The
F-statistic is the larger variance estimate divided by the smaller.
** = statistically significant at the five per cent level in a two tailed test.
* = statistically significant at the ten per cent level in a two tailed test.
26
Table 6
Variance of the Across Season Change in Points Earned Before and After Bosman
Country Teams s2
1 s2
2 N1 N2 F-statistic
__ _____________________________________________________________________
Germany 18 104.06 122.65 140 164 1.1786
England 20 165.83 103.18 33 186 1.6072*
France 20 112.72 106.98 188 84 1.0537
Italy 18 113.19 114.45 69 111 1.0111
Netherlands 18 84.02 127.20 167 161 1.5139**
Spain 20 114.25 112.28 119 151 1.0175
Portugal 18 57.65 116.83 47 149 2.0265**
Belgium 18 146.46 133.79 174 173 1.0947
Sweden 14 112.14 80.79 23 125 1.3880
Austria 10 282.13 136.91 7 96 2.0607
Greece 16 150.87 95.06 67 52 1.5871*
________________________________________________________________________
s2
1 and s2
2 are the estimated variances before and after Bosman. N1 and N2 are the degrees
of freedom in the variance estimates before and after the Bosman ruling, respectively. The
F-statistic is the larger variance estimate divided by the smaller.
** = statistically significant at the five per cent level in a two tailed test.
* = statistically significant at the ten per cent level in a two tailed test.
27
Table 7
League Dominance Before and After Bosman
Country N1 N2 p1 p2 t-statistic
______________________________________________________
Germany 12 19 .36 .58 1.80*
England 13 25 .40 .76 3.13**
France 19 14 .58 .42 -1.29
Italy 14 19 .42 .58 1.29
Netherlands 29 23 .88 .70 -1.81*
Spain 22 15 .67 .45 -1.82*
Portugal 19 20 .58 .61 .24
Belgium 27 27 .82 .82 .00
Sweden 13 13 .40 .40 .00
Austria 23 20 .70 .61 -.76
Greece 20 29 .61 .88 2.60**
______________________________________________________
N1 and N2 are the number of times a club finishes in the top three
places two consecutive years before and after Bosman, respectively,
and p1and p2 are the percentage of times each outcome occurs.
** = statistically significant at the five per cent level in a two tailed test.
* = statistically significant at the ten per cent level in a two tailed test.
28
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30
1.
Garcia (2007) provides an excellent discussion of these and other issues confronting UEFA and
the EU.
2.
See http://www.majorleaguecharts.com/mlc/index.cfmed and also “Fact Sheet 16: The Bosman
Ruling, Football Transfers and Foreign Footballers.”
3.
On December 26, 1999 Chelsea was the first English team to field an entirely non-English
starting eleven. Almost six years later, Arsenal FC was the first English club to name an entire
squad of sixteen without a domestic player.
4.
See, for example, the papers in Jeanrnaud and Kesenne (1999) and the literature surveys in Frick
(2007, 2009).
5.
A similar argument appears in Milanovic (2003).
6.
This argument is also made by Frick (2009).
7.
See Greg Hurst and Matt Dickinson, “Minister Gerry Sutcliffe Risking Another Own Goal
Joining the Debate Over Imports” Times Online, November 11, 2005.
8.
Mike Collett, “English FA Set Capello Semi-Final Target” Yahoo Sports, May 6, 2008.
9.
“Blatter Wants Limits on Foreign Talent” Times Online, October 5, 2007.
10.
This “spillover” hypothesis is also advanced by Baur and Lehmann (2008, pp. 2-3).
11.
See, for example, Jon Bramley, “England’s Golden Boys Turn Out To Be Tin Men” Manchester
Guardian November 22, 2007.
12.
See David Conn, The Guardian, October 12, 2005.
13.
This quote is from the article “Half-full Blatter” SI.com, October 13, 2005. See also “UEFA to
Discuss Bosman Drawbacks” BBC Sport Football, December 15, 2005.
14.
See Steve Brenner, “Kevin Keegan Claims the Premier League is Boring but Great” The Sun,
May 6, 2008.
15.
More recently, Flores et al. (2010) examine within and across season competitive balance for 14
domestic leagues in Europe. They conclude that competitive balance increased within season
after Bosman and they find some evidence that it decreased across season, i. e., team outcomes
became less fluid, following the loosening of the nationality restrictions.
16.
Norway is a member of the European Economic Area, which consists of Norway, Iceland,
Lichtenstein and the EU countries. No cross border work permits are required among the EEA
countries so Norway was affected by Bosman in the same manner as the EU countries and is
End Notes
31
included in the sample.
17.
The data are from a wikipedia article on attendance at domestic professional sports leagues.
Poland and Romania are among the 20 leagues with the highest attendance in Europe but they are
excluded from the sample because they joined the EU in 2004 and 2007, respectively. Similarly,
Switzerland, which has a bilateral agreement with the EU since 2002 regarding entry and
employment, is excluded from the sample.
18.
We also estimate a variant of equation (1) which includes two lags of the ELO rating as
explanatory variables. Only the coefficient estimates on the first lag of ELOt are statistically
significant.
19.
We focus on 1991 because the Soviet Union’s Eastern European satellites, such as Poland and
Romania, gained their freedom in 1990 while various Soviet republics, such as the Ukraine,
separated from Russia in 1992.
20.
Several alternative specifications of equation (1) are also estimated. They allow D2t to increase
right after Bosman (in March 1996) or four years after Bosman (in March 2000), they have the
step up in D2t to occur over eight or 12 years rather than 10 years or D1t equals one starting in
March 1997 or March 1998 as opposed to March 1996. The results are qualitatively similar to
those reported below.
21.
The ratings are available at www.eloratings.net and were created using data supplied by
Advanced Satellite Consulting. The ten third world countries are New Zealand, Angola, Iran,
Saudi Arabia, Canada, Honduras, the United Arab Emirates, Morocco, Mexico and Guatemala.
22.
Before German reunification, Germany’s ELO rating is that of West Germany. Similarly, the
rating for the USSR is used as the rating for Russia before the break up of the Soviet Union. Any
change in the series due to these political changes is measured by the coefficient on D1991t.
23.
A detailed description of the ELO methodology, including the equation used to revise each
country’s rating, is available at www.eloratings.net/system.html.
24.
The highest ELO rating ever, 2165, was achieved by Hungary in 1954.
25.
The odds also capture other factors unrelated to overall national team strength, such as weather,
altitude and field conditions, which can be used to forecast match outcomes.
26.
The Durbin-Watson statistics are close to two, indicating that the residuals are not first order
autocorrelated.
The Box-Ljung statistics show little evidence of higher order autocorrelation.
Also, the standard errors of the coefficient estimates are corrected in the RATS software package
for heteroskedasticity and autocorrelation.
27.
On April 24, 2008 Brazil (ranked number one in the world) had an ELO rating of 2062 while
Guinea (ranked number fifty-one) had a rating of 1609. Therefore, on average the top 51
national teams were separated from the next highest rated team by about nine ELO points.
32
28.
Most of the Durbin-Watson statistics are close to two.
29.
Denmark and Norway are dropped from the analysis because there are not two or more seasons
before the Bosman ruling (the season ending in 1995 or before) where the league had the same
number of teams as after the ruling. Scotland is excluded because starting in 2001 the domestic
league broke into two divisions after 33 matches. The season during which the Bosman ruling
became effective, 1995 to 1996, is left out of the analysis.
30.
Because the F-distribution is not symmetric and significance is determined using tables based on
its right tail, in each case the larger variance estimate (regardless of whether it comes before or
after Bosman) is divided by the smaller estimate to calculate the F-statistic. The critical value is
that for α (the size of the two tailed test) divided by two, as in a two tailed t-test.
31.
For example, Arsenal earned 76 points in the English Premier League in 1989 and 62 points in
1990. Therefore the observation for Arsenal in 1990 equals -14. To be included in the sample
for year t, the club must have been in the league during year t and t - 1. The change between
season ending in 1995 and the one ending in 1996 is excluded from the analysis because the
Bosman ruling occurred during the latter.
32.
The top three results are not affected by changes in league size because adding or subtracting
teams to the league essentially impacts only the bottom of the league table.
33.
Because the variable of interest (whether a club finishing in the top three did so the previous
season) is Bernoulli distributed, p2 and p1 are estimates of the mean of the distribution before
and after Bosman. By the Central Limit Theorem, p2 and p1 are asymptotically normally
distributed and a standard t test of the hypothesis that the means are equal is appropriate.
34.
The significant results for England in Tables 6 and 7 may, in fact, be due to the formation of the
English Premier League in 1992, which decreased the sharing of television revenues among the
clubs. Therefore the effects of Bosman on the domestic leagues may be even smaller than the
tests in Section 3 indicate.
35.
The initial 1955/1956 season is excluded because the sixteen entrants included only seven league
champions.
36.
Before 1997/1998, if the winner of the Champions League the previous year also won its
domestic league, the second place finisher in the latter automatically qualified for the Champions
League. We include these teams when tabulating the semi-finalists from Big Six countries
beginning with 1997/1998.
37.
If we exclude the five years beginning with the 1985/1986 season, when English clubs were
banned from European competitions following the Heysel disaster, before Bosman 92 of the 136
semifinalists (.676) in the Champions League were from the Big Six and the t-statistic testing the
hypothesis that the percentage changed after Bosman equals 2.77.
38.
Dennis Campbell. "United (versus Liverpool) Nations" The Observer. January 1, 2002.
... The football governing bodies -and the other football bodies-pass several types of legal documents that affect the daily operations and activities of the sport. Some of these procedures, besides the basic rules of the game, involve good governance (Garcia, 2009;Dimitropoulos, Leventis and Dedoulis, 2016); the players free movement and contracting (Binder and Findlay, 2012); the employment relationships (Barmpi, 2018); the club licensing system (Union of European Football Associations, 2018); and many more. All these rules and procedures affect almost every stakeholder in the football ecosystem. ...
... Commission participates at expert groups to develop policies and regulatory frameworks regarding good governance, accountability, free movement of workers, employment (Binder and Findlay, 2012), sports violence (Yiapanas, Thrassou and Vrontis, 2020), match-fixing and integrity (Council of Europe, 2012), grassroots development, etc., and to promote physical activity, solidarity, integrity and European identity (Geeraert, 2016). ...
... The ruling initially introduced a quota on the number of foreign players allowed to play in each club, something that in the end was not implemented due to the immediate reaction by the clubs. Based on the European Court of Justice's decision on the free movement of workers within the European Union, clubs are currently allowed to sign up to ten EU players (Binder and Findlay, 2012). Bosman ruling reshaped the competitive structure of the football industry. ...
Thesis
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... As the most famous sport of the world by far (Matheson, 2003) with its 4 billion followers, the football has an impact that goes far beyond the sport. Previously maintained into the national boundaries, the arrival of the Bosman Ruling changed the whole economy of football (Binder & Findlay 2011). The freedom of the players' movement was a revolution that created a huge competition between clubs in terms of attractivity. ...
... Indeed, this is the moment the Bosman ruling appeared. This new law has been put in place after the transfer of a Jean-Marc Bosman from Liège to Dunkerque and has changed drastically the world football within the European Union and in the world (Binder & Findlay 2011). Prior to this date, quotas were imposed on the number of foreign players who can play in a League. ...
Thesis
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The world of football is followed by billions of people around the world. The financial stake of this sport goes far beyond the understanding of many fans. Many criticisms occurred in the last few years due to some tremendous salaries given to the football players. To understand this up-to-date subject, this paper will investigate what are the determinants of these high wages. We found that the wages are mainly affected by the income of the clubs but also the position on the pitch, the image a player brings, his age, and the grade he receives (which includes goals, assists etc).
... In particular, outside of baseball, the Reserve Clause can be seen as similar to the Bosman Ruling (1995) from the European Courts of Justice, which allowed soccer players to move across European countries to play in different national leagues and teams. Research such as Binder and Findlay (2012) argued that this decision resulted in significant improvement in the performance of Champions' League teams. This suggests that, perhaps as in more usual industries, competition in the labor market improves the quality of the services produced. ...
Thesis
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... Bosmanovo pravilo iz 1995. godine ubrzalo je razvoj i širenje tržišta fudbalera, a samim tim povećalo ukupan promet igrača, odnosno tražnju i ponudu, što je sa sobom donelo i rast pojedinačnih cena najboljih igrača na tržištu(Binder & Findlay, 2008;Mitić, 2016). Ovaj naizgled ograničavajući faktor, ne mora biti ključan za profitabilnost kluba. ...
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... Finally, although it is debated that competitive balance has recently worsened in the UEFA Champions League (Schokkaert & Swinnen, 2016), the Bosman ruling has led to increasing inequality among European football clubs according to several economic models (Binder & Findlay, 2012;Milanovic, 2005). In particular, the ruling has created a liquid market for star players with stiff bidding competition between incumbent clubs, hence the reward for nursery clubs from selling star players is found to exceed the reward from keeping them and challenging the more established clubs (Norbäck et al., 2021). ...
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