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Competitive balance & league stability

A paper on Competitive Balance by Jonathan Michie and Christine Oughton has prompted considerable discussion in the better British press. The paper is good at what it does: it documents that competitive balance has worsened in the last 15-20 years in top flight English football, discusses the factors contributing to this result, and potential remedies. The paper addresses a real problem in a sensible way. Its weakness is that it fails to analyze what I view as the root cause of the problem: the increasing scale of competition, and the need to abandon the concept of the domestic-only league. It simply assumes that a European Super League is something that must be avoided by policy. I agree that the stability of the English League is adversely affected by the increasingly unbalanced nature of the competition, but I doubt seriously whether they can return to the days of old.

The decrease in balance is real, and may be a factor in declining attendance at Premier League Games. Patrick Barclay discusses this, and the proposed remedy of more equal sharing of new media revenues in Saturday's Telegraph. This proposed remedy is actually quite modest, and amounts to shifting the scale of revenue sharing a bit more towards the NFL. Currently, much of the media revenue is split according to the position where a team finishes the season, which provides an incentive to compete, but also concentrates the wealth among the wealthier clubs.

Michie and Oughton use several measures of balance; one of the simplest is the percent of the total points earned by the top 5 clubs each year. This percentage has been increasing since the mid-1980s:

Michie and Oughton's paper can be obtained here (45 pages, pdf). The work of US scholars such as Depkin, Fort, Humphreys, Zimbalist and others that have been mentioned here are referenced. Again, though I have a different view of the problem (see the post below), it is certainly a paper that anyone seeking to be knowledgeable on the topic should read.