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Portuguese football league efficiency and players' wages

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  • António S. Ribeiro
  • Francisco Lima

Abstract

In this article, we use Data Envelopment Analysis (DEA) to measure the efficiency of Portuguese football clubs in the First League for seasons 2002/03 to 2008/09. Clubs spend different amounts of money on their players and use different incentive devices to achieve their aims for each season. Our first aim is to find out whether clubs are spending more money than they need to. Evidence shows that this is the case for several clubs, suggesting that buying players solely with a view to selling them on for future financial gain can seriously damage clubs' accounts and efficiency. This is all the more remarkable as the competitive level is increasing and Union of European Football Associations (UEFA) is issuing more stringent financial stability conditions. Our second aim is to ascertain the relationship between the players' wage distribution and the clubs' efficiency. We demonstrate that a higher wage spread tends to be associated with an increase in efficiency. The implication is that clubs should structure wages so as to have the optimal pay ranking for inducing players' effort.

Suggested Citation

  • António S. Ribeiro & Francisco Lima, 2012. "Portuguese football league efficiency and players' wages," Applied Economics Letters, Taylor & Francis Journals, vol. 19(6), pages 599-602, April.
    • Handle: RePEc:taf:apeclt:v:19:y:2012:i:6:p:599-602
    DOI: 10.1080/13504851.2011.591719
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    2. António Sérgio Ribeiro & Francisco Lima & Sascha Kraus & Ferran Calabuig, 2022. "Tournaments within football teams: players’ performance and wages," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 4884-4901, December.
    3. Sergio Destefanis & Francesco Addesa & Giambattista Rossi, 2022. "The impact of COVID-19 on home advantage: a conditional order-m analysis of football clubs’ efficiency in the top-5 European leagues," Applied Economics, Taylor & Francis Journals, vol. 54(58), pages 6639-6655, December.
    4. Fabíola Zambom-Ferraresi & Belén Iráizoz & Fernando Lera-López, 2019. "Are football managers as efficient as coaches? Performance analysis with and inputs in the Premier league," Applied Economics, Taylor & Francis Journals, vol. 51(3), pages 303-314, January.
    5. Marina Schloesser & Václav Adamec, 2023. "Does Better Sports Performance Generate Higher Revenues in the English Premier League? A Panel Data Approach," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 9(1), pages 21-36.
    6. R. Todd Jewell, 2017. "Technical efficiency with multi-output, heterogeneous production: a latent class, distance function model of english football," Journal of Productivity Analysis, Springer, vol. 48(1), pages 37-50, August.
    7. Lucía Isabel García-Cebrián & Fabíola Zambom-Ferraresi & Fernando Lera-López, 2018. "Efficiency in European football teams using WindowDEA: analysis and evolution," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 67(9), pages 2126-2148, November.
    8. Halil İbrahim KESKİN & Hakan ÖNDES, 2020. "Measuring the Efficiency of Selected European Football Clubs: DEA and Panel Tobit Model," Sosyoekonomi Journal, Sosyoekonomi Society, issue 28(43).
    9. Marcelo Machado de Freitas & Rafael Araújo Sousa Farias & Leonardo Flach, 2017. "Efficiency Determinants in Brazilian Football Clubs," Brazilian Business Review, Fucape Business School, vol. 14(Special I), pages 1-23, January.
    10. António S. Ribeiro & Francisco Lima, 2019. "Football players’ career and wage profiles," Applied Economics, Taylor & Francis Journals, vol. 51(1), pages 76-87, January.
    11. Ana Pérez-González & Pablo Carlos & Elisa Alén, 2022. "An analysis of the efficiency of football clubs in the Spanish First Division through a two-stage relational network DEA model: a simulation study," Operational Research, Springer, vol. 22(3), pages 3089-3112, July.
    12. Isidoro Guzmán-Raja & Manuela Guzmán-Raja, 2021. "Measuring the Efficiency of Football Clubs Using Data Envelopment Analysis: Empirical Evidence From Spanish Professional Football," SAGE Open, , vol. 11(1), pages 21582440219, February.
    13. Justin Doran & Declan Jordan, 2018. "The effect of geographical proximity and rivalry on performance: evidence from the English Football League," Regional Studies, Taylor & Francis Journals, vol. 52(11), pages 1559-1569, November.
    14. Mu Fan & Fei Liu & Qing Yi & Bo Gong, 2023. "Does high investment lead to high efficiency in Chinese Super League clubs?," Applied Economics Letters, Taylor & Francis Journals, vol. 30(4), pages 548-552, February.
    15. S. Mohammad Arabzad & Mazaher Ghorbani & Arash Shahin, 2013. "Ranking players by DEA the case of English Premier League," International Journal of Industrial and Systems Engineering, Inderscience Enterprises Ltd, vol. 15(4), pages 443-461.
    16. Emilios Galariotis & Christophe Germain & Constantin Zopounidis, 2018. "A combined methodology for the concurrent evaluation of the business, financial and sports performance of football clubs: the case of France," Annals of Operations Research, Springer, vol. 266(1), pages 589-612, July.
    17. Dina Miragaia & João Ferreira & Alexandre Carvalho & Vanessa Ratten, 2019. "Interactions between financial efficiency and sports performance," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 8(1), pages 84-102, July.
    18. Dina Alexandra Marques Miragaia & João José de Matos Ferreira & Vanessa Ratten, 2017. "The strategic involvement of stakeholders in the efficiency of non-profit sport organisations: from a perspective of survival to sustainability," Brazilian Business Review, Fucape Business School, vol. 14(1), pages 42-58, January.

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