Revenue Sharing Arrangements and the Survival of Promoted Teams:
Empirical Evidence from the European Soccer Leagues

In some of the European Soccer Leagues revenues from the sale of broadcasting rights are evenly (re-)distributed among the teams playing in that league, while in others every team sells the broadcasting rights for its home matches itself (and keeps the money). A third possibility is that the broadcasting rights are again sold collectively, but that the teams are awarded different amounts of money depending on their league position either after every single match day or at the end of the season. The "redistribution hypothesis" - as put forward by many writers emphasizing the "peculiar economics" of professional team sports leagues - suggests that in order to maintain competitive balance, teams with a weak drawing potential should be subsidized by the more wealthy clubs. The teams that have recently been promoted from the second to the first division are most likely to be unable to assemble a competitive squad of "high quality" players because of their poor drawing potential in the second division. Thus, the teams that have been recently promoted should be the main beneficiaries of any arrangement that redistributes financial re-sources from a joint marketing of the broadcasting rights: The more equal the sharing rule, the higher c.p. the survival probabilities of the new members of the first division. Using data from eleven different European countries with a high degree of variation in these revenue sharing arrangements and covering a period of 25 consecutive seasons (1976-2000) we use semi-parametric regression analysis to estimate the survival probabilities of those teams that have recently been promoted to the respective first division. Controlling for a number of changes in the institutional environment (such as an increase or decrease in the number of promoted and/or relegated teams, of changes in the rewards for winning (2 or 3 points for a win)), the number of qualification slots for the European cup competitions, path dependence ("success breeds success") and a time trend, our estimates show that the extent of revenue sharing does not affect the survival probabilities of recently promoted teams.



Zusammenfassung

Die in nahezu allen europäischen Fußballligen praktizierte Umverteilung der Einnahmen aus der zentralen Vermarktung der Fernsehübertragungsrechte wird üblicherweise damit gerechtfertigt, dass die für die Aufrechterhaltung der "Spannung" - und damit der Produktnachfrage - erforderliche Angleichung der finanziellen Möglichkeiten der Vereine anders kaum zu bewerkstelligen sei.
Damit eine solche Umverteilung tatsächlich "erfolgreich" ist, müssten insbesondere die wirtschaftlich schwächsten Teams davon profitieren. Unter Verwendung eines umfassenden Datensatzes mit den erforderlichen Angaben aus 12 der wichtigsten europäischen Fußballligen für einen Zeitraum von 25 aufeinanderfolgenden Spielzeiten (1976-2000) können wir zeigen, dass eine wie auch immer geartete Redistribution keinerlei Einfluss auf die sportliche Performance und die "Überlebenswahrscheinlichkeit" von Aufsteigern hat. Dieser Befund impliziert, dass die unter Anreizgesichtspunkten ohnehin problematische Umverteilung keineswegs die intendierten Folgen zeitigt.