DP12702 Talent Development and Labour Market Integration: The Case of EU Football

Author(s): Pehr-Johan Norbäck, Martin Olsson, Lars Persson
Publication Date: February 2018
Keyword(s): Bosman ruling, Champions League, Sports industry, star players
JEL(s): J44, L50, L83
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=12702

We analyse how the Bosman ruling changed the incentives for football clubs in the European Union (EU) to develop talents. We show that the stiffer bidding competition over star players after the Bosman ruling has spurred talent development primarily in EU countries without established top clubs. This, in turn, has had a positive impact on their junior and senior national teams' performance. However, the stiffer bidding competition has also led to a lower competitive balance in the Champions League, as non-established clubs prefer to sell their star players instead of challenging the top clubs. We provide empirical evidence consistent with these findings.