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Do soccer teams have to be compensated for releasing star players to the national teams?

Men-Andri Benz and Egon Franck ()

No 34, Working Papers from University of Zurich, Institute for Strategy and Business Economics (ISU)

Abstract: Despite its long tradition the practice of releasing star players for association matches without compensating the clubs has become increasingly controversial. The clubs claim that their players play in the tournaments organized by the associations while earning club money. However, the clubs do not receive any shares of the relevant revenues. Additionally they claim that they have to bear costs that arise from fatigued or injured players. The clubs want to be compensated for these (external) costs arising from association games. The purpose of this paper is to evaluate the extent to which it is necessary to compensate clubs for the releasing of star players to the national team. Using a contract theory based model one can show that compensation may not be necessary, since clubs are able to write efficient contracts with their player. Externalities do not occur under the assumption of efficient contracting.

Keywords: Soccer; Long-Term Contracts; Reputation (search for similar items in EconPapers)
JEL-codes: D83 D62 J31 J44 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-spo
Date: 2005
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http://repec.business.uzh.ch/RePEc/iso/ISU_WPS/34_ISU_full.pdf First version, 2005 (application/pdf)

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