This document discusses the field of sports economics and its impact on team competitiveness and financial health. It covers topics such as spatial awareness, tactical knowledge, and regulation of debt in sports. The document also provides information on the revenue and wage expenditure of Premier League teams.
Contribute Materials
Your contribution can guide someone’s learning journey. Share your
documents today.
Running head: SPORTS ECONOMICS1 Sports Economics Name Institution
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
SPORTS ECONOMICS2 Sports Economics I). The standard deviation of the six team seems to be decrease and then increase at the same time compared to the trend in class. The ideal standard deviation trend for the six teams also decreases and then increases at the same time as compare d to the one in class. II). The Herfindahl-Hischman index for the six teams during the pro-league increases in the beginning and then decrease to zero which is the minimum value. Afterwards, the Herfindahl –Hischman start increasing from 0.04 to 0.09 and 0.26 in the end. IV).Efforts taken by premier league to ensure competiveness of the teams. Spatial awareness This denotes the capacity to visualize space vividly across the whole football ground. The footballers have been made conscious of the instant space around them. Moreover, the logical footballers are conscious. There are two major reasons why footballer’s require to have an understanding where the members of the team are to anticipate the position of the teammates and tell them where they should be . Tactical Knowledge The structure for the team affects the methods how the team will utilize to succeed the division. Throughout the years soccer formations have adjusted radically Regulation of debt Expenses on salaries are believed to hike the quality of the team, and increased spending, than competitor will rise a team’s probability of winning a game(Allan, 2004). The football teams are supposed to hike the spending not completely, but in relation to the teams that are competing(Paul et al, 2010). This scrutiny, integrated with the debates that the football teams objective role is an impartial function that is linear of winning and profit. This insinuates that football teams will pursue to maximize spending above their means. Table 1.0Revenue, wage expenditure, profit and funds, Premier League (2010 - 2011) RevenueWage Expenditure Profit before tax Net Debt Arsenal226,825,000124,401,00014,776,000-97,827,000
SPORTS ECONOMICS3 Aston Villa92,028,00094,795,000-54,013,000- 153,169,000 Chelsea228,574,000191,214,000-78,262,000- 816,038,000 Everton82,021,00058,026,000-5,413,000-44,914,000 Fulham77,109,00057,672,0004,792,000- 192,947,000 Liverpool183,690,000134,768,000-49,317,000-61,274,000 Man City153,186,000173,977,000-197,491,000-42,900,000 Man Utd331,441,000152,915,00012,004,000- 308,258,000 Newcastle88,464,00053,585,00032,619,000- 130,485,000 Norwich23,391,00018,445,000-7,065,000-16,778,000 QPR16,229,00029,739,000-25,383,000-53,963,000 Reading23,138,00020,511,000-5,371,000-34,842,000 Southampton13,370,000 66,809,000 79,447,000 13,460,000 47,093,000 60,882,000 -11,740,000 -5,558,000 -7,838,000 -26,450,000 -339,000- 76,841,000 Stoke Sunderland Swansea11,669,00017,392,000-11,173,000-754,000 Tottenham163,486,00091,255,000402,000-56,080,000 West Brom65,086,00043,903,00018,934,000-1,948,000 West Ham80,939,00055,704,000-18,565,000-41,614,000 Wigan50,507,00039,948,000-7,155,000-72,696,000 Sum2,057,409,0001,479,685,000-400,817,000- 2,230,117,000 Average102,870,45073,984,250-20,040,850- 111,505,850 The division is selected for evaluation as UEFA declared tactics to control spending in the course of this period. Nearly one and a half billion bounds were utilized on paying the workers of the division in the course of this period(Barnett & Hilditch, 2013). A mean of 79.9 million euros per football team was spent in each year(Rascher, 2019. The division accumulated revenue, which is two billion euros offsets the division accumulate amount utilized on salaries (Pawlowski et al, 2010). Nevertheless, the Premier League salary spending went up at a high rate than proceeds, therefore causing a rise in the accumulated loss of pre-tax(Peel & Thomas, 2015).
SPORTS ECONOMICS4 Within this time, premier league teams have minimized the gross debt. This is greatly witnessed in richer football teams such as Manchester United who reimburse an income in every division (Peel & Thomas, 2012). As definite spending has a minimum effect on the positions of the league, guidelines embraced to counter spending are observed regularly. These tactics mostly take the structure of an increased salary spending allowed. There were no such tactics in the division of Premier League that were intended to supervise salary spending until the opening of the UEFA Regulations on Fair Play(Reep & Benjamin, B. 2018). UEFA FFP indicators for Premier League teams (2010 - 2011) Table 1.1 UEFA FFP indicators for Premier League clubs (2010 - 2011) NEDCBE <-£4mCBE <- £36m Debt/revWage/revRed Flags Arsenal70,744,00070,744,000-0.4355%0 Aston VillaYes-91,584,000*-91,584,000*-1.66*103%*5 ChelseaYes- 138,258,000 *- 138,258,000 *-3.57*84%*5 EvertonYes-6,016,000*-6,016,000-0.5571%*3 Fulham-8,886,000*-8,886,000-2.50*75%*3 Liverpool-13,477,000*-13,477,000-0.3373%*2 Man City- 308,471,000 *- 308,471,000 *-0.28114%*3 Man Utd-16,819,000*-16,819,000-0.9346%1 Newcastle102,828,000102,828,000-1.48*61%2 Norwich-9,602,000*-9,602,000-0.7279%*2 QPRYes-37,671,000*-37,671,000*-3.33*183%*5 Reading1,123,0001,123,000-1.51*89%*2 SouthamptonYes-19,050,000 -9,355,000 -33,407,000 * * * -19,050,000 -9,355,000 -33,407,000 -1.98 -0.01 -0.97 *101% 70% 77% * * * 4 2 2 Stoke Sunderland SwanseaYes-9,835,000*-9,835,000-0.06149%*3 Tottenham1,913,0001,913,000-0.3456%0 West Bromwich13,674,00013,674,000-0.0367%1
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
SPORTS ECONOMICS5 West HamYes-32,832,000*-32,832,000-0.5169%3 WiganYes-10,810,000*-10,810,000-1.44*79%*4 Sum- 555,791,000 - 555,791,000 Average-27,789,550-27,789,550-1.1385%3 In the year 2010, the organization commended a number of regulations on Financial Fai Play with the aim of initiating more specialty within the team’s resources and advocating for more investment, which is responsible (Welki, & Zlatoper, 2014). Notwithstanding a reduction of rising commercial and public interest in the football cub of European at this period, many teams all though Europe are experiencing a financial health that is poor. Equivalent to several the division of Premier League teams, other teams are observed to be wriggling to cope with obligations on finances and have recorded constant losses on finances. Table 3.5 Premier League revenue and payments (2003 - 2013) Total Revenue (TR) Premier League Payment (LP) % of TR Fixed Payments % of LP %of TR Variable Payments % of LP % of TR 2003 20041,327,770,000436,995,37033%205,644,98047%15%231,350,39053%17% 2004 20051,333,575,000467,682,04835%262,953,16056%20%204,728,88844%15% 2006 20071,530,430,000463,640,89830%259,284,48056%17%204,356,41844%13% 2007 20081,927,358,000766,793,96440%462,268,34060%24%304,525,62440%16% 2009 20102,030,000,000830,958,73241%494,780,86060%24%336,177,87240%17% 2010 20112,271,000,000952,749,97742%634,912,51367%28%317,837,46433%14% 2011 20122,360,000,000968,180,90041%651,054,74067%28%317,126,16033%13% 201239%67%26%33%13%
SPORTS ECONOMICS6 20132,525,000,000972,165,620654,695,280317,470,340 Based on the regulation of the FFP, the Premier league division revealed controls on expenses to begin from the 2013 to 2014 division(Baimbridge et al, 2016). The guidelines affirm that every team, beyond the coming 3 divisions, cannot make an accumulated deficit of more than one hundred and five million euros(Beckman et al, 2011). In a similar time, teams whose accumulated salary bill is above fifty-two euros will only be permitted to raise their wages by a total of four million euros per division(Peel, & Thomas, 2017). Moreover, any team generating a deficit great than five million euros yearly must warrant those deficits against the asset of the owner(Verbeek, 2008). The harshest penalty for violating the guidelines is the subtraction of division points. The effect of these guidelines will probably be seen past the 2015 -2016 division(Rascher, , & Solmes,. 2007). Table 1.2 Club revenues from the Premier League and UEFA competitions (2007-2008) Club total revenue Total Payment from FAPL (as % of TR) Total Payment from UEFA (as % of TR) Media Payment (PL + EUFA) (as % of TR) Manchester United 257,116,00049,851,27319%33,788,65213%83,639,92533% Chelsea213,648,00046,058,49022%28,663,50013%74,721,99035% Arsenal209,294,00047,524,65923%18,285,5409%65,810,19931% Liverpool164,222,00045,923,10628%21,130,22013%67,053,32641% Tottenham114,788,00036,465,21932%365,4940%36,830,71332% Newcastle100,866,00039,684,37239%39,684,37239% Manchester City 82,295,00040,106,57149%40,106,57149% West Ham United 81,726,00023,655,81729%23,655,81729% Everton75,650,00042,568,56956%412,7741%42,981,34357% Aston Villa75,639,00042,720,00056%42,720,00056%
SPORTS ECONOMICS7 Portsmouth71,556,00040,831,63257%40,831,63257% Sunderland63,597,00034,003,22153%34,003,22153% Bolton59,072,00032,401,66855%365,4941%32,767,16255% Reading58,023,00030,951,54653%30,951,54653% Blackburn56,395,00040,680,20172%78,8000%40,759,00172% Fulham53,670,00031,676,60759%31,676,60759% Birmingham49,836,00030,226,48561%30,226,48561% Derby48,558,00029,501,42461%29,501,42461% Middlesbrough47,952,00034,576,85172%34,576,85172% Wigan43,455,00033,851,79078%33,851,79078% Spending on Players The team’s quality is affected by the price of the specific players. The wage expenditure is likelyto be a strong predictor of the strength of the team, given a competitive market for players. Chelsea sent the largest amount on salaries, which isone hundred and fifty four million euros every year, on average over the data period, while Manchester United have the finest results of match win with a salary bill of one hundred and eighteen million per year Wooldridge, . 2010). There is a great association between the number of matches won (correlation index 0.77) and the spending on wages, indicating that a rise in expenditure on salaries hikes the quality of results for the team (Vrooman, 2011). This great association is significant indication backing up the allegation that the market of labor for players of soccer is competitive. Figure 1.1 depicts the association for the year 2011 to 2012 division (Vrooman, 2015). The football teams that sit north have more expenditure on salaries to obtain similar points such as those ones below the line. For instance, NewCastle and Chelsea managed to reach 65 and 64 points progressively but the salary bill was 64 and 174 million, progressively Conclusion
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
SPORTS ECONOMICS8 There is sense that regulation of debt and spending on players have a an effect on the results released by the team. Table 1.3Results from modelling match results by ordered Probit All ClubsTop 5Bottom 5All Clubs with fixed effects Coeff.SECoeff.SECoeff.SECoeff.SE Spending on wages Home Wages 0.470.08**0.430.12**0.700.26**0.580.18** Away Wages-0.480.06**-0.640.14**-0.460.11**-0.450.06** Additional Competitions Home FA Cup 0.010.08-0.240.180.290.16*-0.030.11 Away FA Cup-0.090.080.060.17-0.280.16*-0.080.10 Home Champions League 0.120.15-0.020.196.396.220.100.15 Away Champions League -0.260.15*-0.140.31-0.250.26-0.250.15* Home Europa League 0.020.15-0.510.360.030.24-0.180.16 Away Europa League -0.020.140.140.350.010.23-0.060.15 Legacy performance Home Form 0.030.030.050.08-0.010.05-0.060.03* Away Form-0.050.03*0.040.06-0.050.05-0.070.03** Attendance6.7E- 06 3.1E- 06 **1.5E- 05 4.8E- 06 **-8.8E- 06 7.3E- 06 -1.6E- 05 1.3E- 05 Distance3.1E- 04 3.4E- 04 - 1.8E- 04 7.1E- 04 1.2E- 03 6.1E- 04 *4.3E- 04 3.7E- 04
SPORTS ECONOMICS10 References Allan, S. (2018). Satellite television and football attendance: the not so super effect. Applied Economics Letters, 11(2), 123-125. doi: 10.1080/1350485042000200231 Baimbridge, M., Cameron, S., & Dawson, P. (2016). Satellite television and the demand for football: a whole new ball game? Scottish Journal of Political Economy, 43(3), 317. Barnett, V., & Hilditch, S. (2013). The effect of an artificial pitch surface on home team performance in football (soccer). Journal of the Royal Statistical Society. Beckman, E. M., Cai, W., Esrock, R. M., & Lemke, R. J. (2011). Explaining Game-to-Game Ticket Sales for Major League Baseball Games Over Time. Journal of Sports Economics, 13(5), 536-553. doi: 10.1177/1527002511410980 Paul, R. J., Wachsman, Y., & Weinbach, A. P. (2010). The Role of Uncertainty of Outcome and Scoring in the Determination of Fan Satisfaction in the NFL. Journal of Sports Economics, 12(2), 213-221. doi: 10.1177/1527002510376789 Pawlowski, T., Breuer, C., & Hovemann, A. (2010). Top clubs’ performance and the competitive situation in European domestic football competitions. Journal of Sports Economics, 11(2), 186-202. Peel, D., & Thomas, D. (2012). The demand for football: some evidence on outcome uncertainty. Empirical Economics, 17(2), 323-331. Peel, D., & Thomas, D. (2015). Outcome uncertainty and the demand for football: an analysis of match attendances in the English football league. Scottish Journal of Political Economy, 35(3), 242-249. Peel, D., & Thomas, D. (2017). Handicaps, outcome uncertainty and attendance demand. Applied Economics Letters, 4(9), 567-570. doi: 10.1080/135048597355041
Paraphrase This Document
Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
SPORTS ECONOMICS11 Premier League Judgement Rascher, D. A., & Solmes, J. (2007). Do fans want close contests? A test of the uncertainty of outcome hypothesis in the National Basketball Association. A Test of the Uncertainty of Outcome Hypothesis in the National Basketball Association (June 15, 2007). Rascher, D. A. (2019). A test of the optimal positive production network externality in Major League Football. Sports, Economics: Current Research. Reep, C., & Benjamin, B. (2018). Skill and chance in association football. Journal of the Royal Statistical Society. Series A (General), 581-585. Vrooman, J. (2011). Two to Tango: Optimum Competitive Balance in Professional Sports Leagues. .Vrooman, J. (2015). A general theory of professional sports leagues. Southern Economic Journal, 971-990. Welki, A. M., & Zlatoper, T. J. (2014). US professional football: The demand for game-day attendance in 1991. Managerial and Decision Economics, 15(5), 489-495. Wooldridge, J. M. (2010). Econometric analysis of cross section and panel data: MIT press.