Title: Why the men's UEFA Champions League reduces competitive balance in domestic football leagues: an empirical study of the French league

Authors: Sébastien Dessus; Gaël Raballand

Addresses: The World Bank, 442 Rodericks Rd., Lynwood 0081, Pretoria, South Africa ' The World Bank, 50 Mirambo St, Dar es Salaam, Tanzania

Abstract: This paper provides some empirical foundation in support of the observation that the men's UEFA Champions League (CL) reduces competitive balance in domestic football leagues. It relies on the assumption that clubs' optimal budgets result from win-maximising strategies, accounting for similarly driven budget decisions from competitors in the domestic league and are thus ultimately determined through a Nash equilibrium process. Using a panel of 23 professional French clubs over nine consecutive seasons (2004/2005-2012/2013), we estimate such optimal budgets, and measure the extent to which access to the Champions League amplifies budget inequalities between clubs. Our results suggest that the CL amplifies inequalities by a magnitude significantly larger than the direct income received from UEFA for participating in the CL.

Keywords: Champions League; optimal budget; competitive balance; Ligue 1; football club revenues.

DOI: 10.1504/IJSMM.2020.10032915

International Journal of Sport Management and Marketing, 2020 Vol.20 No.3/4, pp.232 - 248

Accepted: 23 Dec 2018
Published online: 30 Oct 2020 *

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