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The Impact of Transfer Fees on Professional Sports: An Analysis of the New Transfer System for European Football

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  • Eberhard Feess
  • Gerd Muehlheusser

Abstract

We evaluate the effect of the recently approved transfer system for European professional football which will replace the current system (implemented by the Bosman judgment in 1995). The focus is on the comparison of wages, profits, the length of contracts and investment incentives. Our main findings are that (i) the new regime reduces a player's overall payoff because it increases the new club's renegotiation payoff, and (ii) since training generates a general skill, the new regime will also diminish incentives to invest in the education of young talents, because a new club benefits more from the initial club's investment.

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  • Eberhard Feess & Gerd Muehlheusser, 2003. "The Impact of Transfer Fees on Professional Sports: An Analysis of the New Transfer System for European Football," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(1), pages 139-154, March.
    • Handle: RePEc:bla:scandj:v:105:y:2003:i:1:p:139-154
    DOI: 10.1111/1467-9442.00009
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    References listed on IDEAS

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    6. Feess, Eberhard & Muehlheusser, Gerd, 2003. "Transfer fee regulations in European football," European Economic Review, Elsevier, vol. 47(4), pages 645-668, August.
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    Cited by:

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    2. Amand, Marnix & Chéron, Arnaud & Pelgrin, Florian & Terriau, Anthony, 2023. "Soccer labour market equilibrium and efficient training of players," European Economic Review, Elsevier, vol. 156(C).
    3. Bernd Frick, 2009. "Globalization and Factor Mobility," Journal of Sports Economics, , vol. 10(1), pages 88-106, February.
    4. Karol Kempa, 2022. "Task-specific human capital and returns to specialization: evidence from association football [All about balance? A test of the jack-of-all-trades theory using military enlistment data]," Oxford Economic Papers, Oxford University Press, vol. 74(1), pages 136-154.
    5. Oliver Gürtler, 2012. "A Strategic Rationale for the Use of Sell–On Fees in European Sports," Journal of Sports Economics, , vol. 13(1), pages 76-84, February.
    6. Padma Rao Sahib, 2015. "Status, Peer Influence, and Racio-ethnic Diversity in Times of Institutional Change: An Examination from European Labour Law," Journal of Business Ethics, Springer, vol. 126(2), pages 205-218, January.
    7. Guimaraes, Bernardo & Cordeiro De Noronha Pessoa, Joao Paulo & Ponczek, Vladimir, 2021. "Non-compete agreements, wages and efficiency: theory and evidence from Brazilian football," LSE Research Online Documents on Economics 114417, London School of Economics and Political Science, LSE Library.
    8. Feess, Eberhard & Frick, Bernd & Muehlheusser, Gerd, 2004. "Legal Restrictions on Buyout Fees: Theory and Evidence from German Soccer," IZA Discussion Papers 1180, Institute of Labor Economics (IZA).
    9. Paul Downward, 2014. "English professional football," Chapters, in: John Goddard & Peter Sloane (ed.), Handbook on the Economics of Professional Football, chapter 17, pages 277-297, Edward Elgar Publishing.
    10. Harrie A. A Verbon, 2007. "Migrating Football Players, Transfer Fees and Migration Controls," CESifo Working Paper Series 2004, CESifo.
    11. Hoey, Sam & Peeters, Thomas & Principe, Francesco, 2021. "The transfer system in European football: A pro-competitive no-poaching agreement?," International Journal of Industrial Organization, Elsevier, vol. 75(C).

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