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The Effect of Professional Football Clubs' Legal Structure on Sponsoring Revenue

Author

Listed:
  • Helmut Dietl

    (Institute for Strategy and Business Economics, University of Zurich)

  • Christian Weingärtner

    (Institute for Strategy and Business Economics, University of Zurich)

Abstract

Professional football clubs earn most of their revenues from four sources: sale of broadcasting rights, matchday revenues, merchandising, and sponsorship. The relative importance of these sources differs among clubs and leagues. Economists often argue that the ability of professional football clubs to generate revenues depends to a large extent on their legal structure. In this paper we analyze the effect of different legal structures, such as private company, public company, membersÕ association, on sponsorship. Based on the platform theory we introduce a model of value creation in professional football. After elaborating the property rights situation for each of the legal structures we show the direct and indirect effects on the generation of sponsorship revenues. We theoretically proof the membersÕ association to be the favorable legal structure with regard to sponsorship. The lack of hold-up risks for the stakeholders and the strong position of the fans are the major reasons for the superiority of this non-profit legal structure.

Suggested Citation

  • Helmut Dietl & Christian Weingärtner, 2011. "The Effect of Professional Football Clubs' Legal Structure on Sponsoring Revenue," Working Papers 0141, University of Zurich, Institute for Strategy and Business Economics (ISU).
    • Handle: RePEc:iso:wpaper:0141
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    Cited by:

    1. Artur Wyszyński, 2021. "Niewypłacalność zawodowych klubów piłki nożnej," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 1, pages 142-166.
    2. Pamela Wicker & Christian Weingärtner & Christoph Breuer & Helmut Dietl, 2012. "The Effect of a Sports Institution’s Legal Structure on Sponsorship Income: The Case of Amateur Equestrian Sports in Germany," International Journal of Sport Finance, Fitness Information Technology, vol. 7(4), pages 340-357, November.
    3. Artur Wyszyński, 2021. "Niewypłacalność zawodowych klubów piłki nożnej," Ekonomista, Polskie Towarzystwo Ekonomiczne, vol. 1, pages 142-166, January.
    4. Richau, Lukas & Follert, Florian & Frenger, Monika & Emrich, Eike, 2021. "The Rainmaker?! The impact of investors on transfer fees in the English Premier League," Working Paper 187/2021, Helmut Schmidt University, Hamburg.

    More about this item

    Keywords

    Organization; Sponsorship; Network Effects; Platform; Property Rights;
    All these keywords.

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