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Transfer Fee Regulations in European Football

Author

Listed:
  • Feess, Eberhard

    (Victoria University of Wellington)

  • Muehlheusser, Gerd

    (University of Hamburg)

Abstract
We analyze the impact of three different transfer fee systems on payoffs, contract lengths, training and effort incentives in European football. The different regimes, being used until 1995 (”Pre-Bosman” or P), currently in use (”Bosman” or B), and recently approved (”Monti” or M) differ with respect to the transfer fee an initial club must accept in case of a transfer depending on whether a player has a valid contract or not. We show that the different systems differ only with respect to the contract length if the contract which maximizes the expected joint surplus of the initial club and the player is feasible under each system. Otherwise, regime P is strictly dominated by regime B in terms of expected social welfare. Regime M leads to higher effort but lower incentives to invest in training compared to system B.

Suggested Citation

  • Feess, Eberhard & Muehlheusser, Gerd, 2002. "Transfer Fee Regulations in European Football," IZA Discussion Papers 423, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp423
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    References listed on IDEAS

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    More about this item

    Keywords

    investment incentives; breach of contract; transfer fees; Bosman judgement; Labor contracts; general skills; externalities;
    All these keywords.

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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