IDEAS home Printed from https://ideas.repec.org/a/wej/wldecn/106.html
   My bibliography  Save this article

The Promotion Test

Author

Listed:
  • Stefan Szymanski

Abstract

The collapse of broadcaster ITV Digital owing £178m to the English Football League will cause, according to the League’s Chairman, the financial failure of up to fifty of the seventy two clubs. If this were to happen a major restructuring of English football would have to take place, including measures to make sure it could not happen again. This paper examines the underlying causes of the crisis and proposes a simple financial stability rule that would achieve this aim. The rule, which would deny promotion to any team spending over a fixed percentage (e.g. 70%) of its income on player wages, is designed to be a minimum intervention in the operation of the football market, which has in fact worked well until now. The paper argues that because (a) financial stability is in consumers’ interests, (b) the proposed rule involves minimal intervention, and (c) since competition between clubs would remain intense, the rule would not be subject to competition law challenge.

Suggested Citation

  • Stefan Szymanski, 2002. "The Promotion Test," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 3(2), pages 171-183, April.
    • Handle: RePEc:wej:wldecn:106
    as

    Download full text from publisher

    File URL: https://www.worldeconomics.com/Journal/Papers/Article.details?ID=106
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Babatunde Buraimo & Rob Simmons & Stefan Szymanski, 2010. "English Football," Palgrave Macmillan Books, in: Football Economics and Policy, chapter 8, pages 162-181, Palgrave Macmillan.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wej:wldecn:106. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ed Jones (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.