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Do soccer teams have to be compensated for releasing star players to the national teams?

Author

Listed:
  • Men-Andri Benz
  • Egon Franck

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

Abstract

Despite its long tradition the practice of releasing star players for association matches without compensating the clubs has become increasingly controversial. The clubs claim that their players play in the tournaments organized by the associations while earning club money. However, the clubs do not receive any shares of the relevant revenues. Additionally they claim that they have to bear costs that arise from fatigued or injured players. The clubs want to be compensated for these (external) costs arising from association games. The purpose of this paper is to evaluate the extent to which it is necessary to compensate clubs for the releasing of star players to the national team. Using a contract theory based model one can show that compensation may not be necessary, since clubs are able to write efficient contracts with their player. Externalities do not occur under the assumption of efficient contracting.

Suggested Citation

  • Men-Andri Benz & Egon Franck, 2005. "Do soccer teams have to be compensated for releasing star players to the national teams?," Working Papers 0001, University of Zurich, Center for Research in Sports Administration (CRSA).
    • Handle: RePEc:rsd:wpaper:0001
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    File URL: http://repec.business.uzh.ch/RePEc/rsd/CRSA_WPS/01_CRSA_full.pdf
    File Function: First version, 2005
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    Cited by:

    1. Oliver Gürtler & Markus Lang & Tim Pawlowski, 2015. "On the Release of Players to National Teams," Journal of Sports Economics, , vol. 16(7), pages 695-713, October.

    More about this item

    Keywords

    Soccer; Long-Term Contracts; Reputation;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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