Transfer Fee Regulations in European Football

Eberhard Feess () and Gerd Muehlheusser ()
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Gerd Muehlheusser: University of Hamburg

No 423, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We analyze the impact of three different transfer fee systems on payoffs, contract lengths, training and effort incentives in European football. The different regimes, being used until 1995 (”Pre-Bosman” or P), currently in use (”Bosman” or B), and recently approved (”Monti” or M) differ with respect to the transfer fee an initial club must accept in case of a transfer depending on whether a player has a valid contract or not. We show that the different systems differ only with respect to the contract length if the contract which maximizes the expected joint surplus of the initial club and the player is feasible under each system. Otherwise, regime P is strictly dominated by regime B in terms of expected social welfare. Regime M leads to higher effort but lower incentives to invest in training compared to system B.

Keywords: investment incentives; breach of contract; transfer fees; Bosman judgement; Labor contracts; general skills; externalities (search for similar items in EconPapers)
JEL-codes: J41 K12 L83 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2002-02
New Economics Papers: this item is included in nep-law, nep-pke and nep-spo
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Citations: View citations in EconPapers (14)

Published - published in: European Economic Review, 2003, 47(4), 645-668

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