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Competitive Balance: Results of Two Natural Experiments from Rugby Union

Author

Listed:
  • Vincent (Vincent Peter) Hogan
  • Patrick Massey
  • Shane Massey
Abstract
The paper presents results from two natural experiments on the impact of revenue sharing and salary caps on competitive balance in sports leagues arising from the introduction of professionalism in Rugby Union in 1995. The first involves the English Premiership, which traditionally applied a binding salary cap, and the French Top 14, which only introduced a (non-binding) salary cap relatively recently, while the Premiership also has a higher level of revenue sharing than its French counterpart. The second involves French rugby and soccer as the French soccer league is generally recognised as having a more even distribution of revenue and greater competitive balance than other major European soccer leagues. We find short- and long-run competitive balance is higher in the Premiership, than in the Top 14, while French soccer appears more evenly balanced than rugby. Unlike soccer, balance within and between leagues in rugby has not been negatively affected by European competitions. This could change as the Anglo-French teams’ share of European competition revenues is set to increase from 2014/15 while broadcast revenues for both leagues are also set to increase substantially.

Suggested Citation

  • Vincent (Vincent Peter) Hogan & Patrick Massey & Shane Massey, 2014. "Competitive Balance: Results of Two Natural Experiments from Rugby Union," Working Papers 201413, School of Economics, University College Dublin.
    • Handle: RePEc:ucn:wpaper:201413
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    File URL: http://hdl.handle.net/10197/5991
    File Function: First version, 2014
    Download Restriction: no
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    Cited by:

    1. Vincent (Vincent Peter) Hogan & Patrick Massey, 2020. "Professional Rugby on the Celtic Fringe," Working Papers 202003, School of Economics, University College Dublin.

    More about this item

    Keywords

    Professional team sports; Competitive balance; Salary caps;
    All these keywords.

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