Why football players may benefit from the "shadow of the transfer system"

Helmut Dietl, Egon Franck and Markus Lang

No 62, Working Papers from University of Zurich, Institute for Strategy and Business Economics (ISU)

Abstract: The transfer system imposed by the football governing bodies on employment relations made sure that a player could not leave his current club and sign with another club without the current club's explicit consent. The 1995 Bosman judgement of the European Court of Justice declaring football players to free agents after expiration of their contracts and the 2001 intervention of the European Commission, which, among other things, limited contract durations in football, can be interpreted as the two major steps towards restricting the application of the transfer system. This paper provides a theoretical model to analyze whether professional football players in the European football leagues benefit from transfer restrictions. It shows that under a restrictive transfer system, clubs can partially insure their players against income uncertainty by transforming a part of the player's risky future salary into risk-free current income. As a result, a risk-averse player benefits from the 'shadow of the transfer system'.

Keywords: Labour contracts; transfer restrictions; transfer fees; Bosman and Monti transfer system; FIFA regulations (search for similar items in EconPapers)
JEL-codes: D86 J49 L83 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2006, Revised 2007
New Economics Papers: this item is included in nep-spo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://repec.business.uzh.ch/RePEc/iso/ISU_WPS/62_ISU_full.pdf First version, 2006 (application/pdf)

Related works:
Journal Article: Why football players may benefit from the ‘shadow of the transfer system’ (2008)
Journal Article: Why football players may benefit from the ‘shadow of the transfer system’ (2008)
Working Paper: Why football players may benefit from the "shadow of the transfer system" (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:iso:wpaper:0062

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