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The transfer system in European football: a pro-competitive no-poaching agreement?

Samuel Hoey, Thomas Peeters () and Francesco Principe ()
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Samuel Hoey: Erasmus School of Economics

No 20-034/VII, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: We assess the proclaimed pro-competitive effects of the “transfer system†, the no-poaching agreement governing the European football (soccer) labor market. A major argument to legitimize this system is that transfer fees, which hiring clubs pay to release players from their current clubs, redistribute revenues from large market to small market clubs. This would strengthen small clubs’ financial clout and their ability to compete in sporting terms. Player transfer fees represent over 10 billion Euros in asset value in the financial statements of the 202 clubs we analyze. Still, small market clubs rarely obtain substantial revenues from the transfer market. The main beneficiaries are clubs around the middle of the market size distribution. A select group of large market clubs makes significant transfer losses, but this does not undo their initial financial advantage. Overall, the transfer system therefore leads to a very minor reduction in revenue inequality.

Keywords: no-poaching; antitrust; revenue redistribution; transfer system; European football (search for similar items in EconPapers)
JEL-codes: J41 K12 L41 L83 (search for similar items in EconPapers)
Date: 2020-06-20, Revised 2020-12-14
New Economics Papers: this item is included in nep-eur and nep-spo
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