Resumen de Impact on competitive balance from allowing foreign players in a sports league: an analytical model and an empirical test
Ramón Flores, David Forrest, Juan de Dios Tena
Different theoretical frameworks have yielded different predictions concerning the impact on competitive balance of widening the pool of players from which clubs in a sports league are permitted to recruit. We identify that one reason for differences in prediction is that models may represent clubs as hiring from the pool of talent either simultaneously or in a leader-follower fashion (such that strong clubs have first pick of players). With the former assumption, we show that a two team league model predicts no effect on competitive balance; but, with the latter, there is an effect, the sign depending on how many extra talented players are admitted to the pool. Whether balance is modified favourably or unfavourably if, for example, foreign players are introduced is therefore an empirical matter. In our empirical analysis, we test for effects from the liberalisation of football player labour markets associated with the Bosman Ruling. In the context of Spain, results derived from tables of aggregated seasonal performance indicate some weakening of dominance by top teams. We propose an alternative approach to measuring competitive balance, employing data disaggregated to the match level. It also reveals a tendency after Bosman for there to be less dominance of weak clubs by strong clubs, at least when the latter play away. This is despite other changes in the environment that might have been expected to worsen balance.
