Business Life: Football

27th December, 2007

First published in Business Life magazine, August 2007

The new football season is upon us, bringing the traditional complaints that the big clubs are getting ever richer and more successful at the expense of the fans’ enjoyment. Europe’s sports ministers are even pressing for action. Who, after all, wants to see a predictable football match?
Ironically, the European model of sport – global, very open, highly unequal – seems more American than American sport does. American sports leagues tend to be highly regulated, closed to newcomers, and redistributive. Sport does not always imitate life.
Many people intuitively feel that football should be a little more American, with more redistribution of television and gate revenues. Yet our intuition can sometimes deceive us. Both economic theory and the data suggest that an uneven sporting struggle may not be as bad for fans as many of us believe.
The assumption that people value an evenly-matched contest is challenged by the game’s statistics. Think of Arsenal’s unprecedented “invincible” season in 2003-04; the club won 84 per cent of its premier league matches and lost none. Hardly fair on Arsenal’s opponents, but every match was a sell-out. The small chance of a defeat was presumably enough to keep Arsenal’s many fans interested.
In any case, their dominance also allowed them to play great football. That is important: sports fans care about quality as well as the odd surprise.
That’s just one example, but Stefan Szymanski of Imperial College London, one of the world’s leading sports economists, has done a more rigorous analysis of attendance over 25 years at English second-tier football matches. He finds that that in seasons where inequality between the top teams and the bottom teams is higher, the audience for football is not smaller and perhaps a little larger.
That shouldn’t be too surprising: more fans turn up when their team is winning, so in seasons when the bigger teams are winning more often, average attendance should rise.
Similar reasoning suggests that some sport regulator genuinely trying to make the largest number of fans happy would favour the big teams, because the big teams have more fans.
The statistics certainly suggest that the rise of the mega-teams such as Manchester United, Barcelona, and Real Madrid has boosted global interest in the sport rather than killing it. Giant-killing feats are a good story but they disappoint millions of loyal big-club fans. Upsets are necessary but if they happen too often they would not be upsets. And if you really think that football is predictable, the bookies will be happy to take your bets on this season’s champion.

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