As discussed in the previous post, ‘Competitive Balance Part 1: What are the Issues?’ (24th Jan 2024), competitive balance remains an elusive concept in many ways. There is considerable disagreement over the definition and measurement of competitive balance which has generated multiple metrics. In addition, the variety of real-world nuances in the structure of sporting tournaments across different sports and different countries has exacerbated the problem as refinements to existing metrics are proposed to improve comparability across sports and countries.
Morten Kringstad and I have attempted to bring some order to the chaos by arguing that competitive balance metrics can be categorised by their timeframe and scope. In particular, as regards timeframe, competitive balance metrics either focus on the distribution of sporting outcomes of participants within a single season (i.e. win dispersion) or the degree to which to which participants replicate their level of sporting performance across seasons (i.e. performance persistence). Competitive balance metrics also differ in respect to their scope, either including all of the participants (i.e. whole league) or a subset of the strongest/weakest performers (i.e. tail outcomes).
The practical problem created by the multiplicity of competitive balance metrics is identifying which metrics should be used by league authorities in determining whether or not intervention is required to improve competitive balance. There is no general definitive empirical evidence on which aspects of competitive balance impact on gate attendances and TV viewing. There seems to be an implicit assumption that the competitive balance metrics tend to move together in the same direction, so that interventions such as centralised revenue distribution and salary caps would be expected to improve both win dispersion and performance persistence. Is this assumption valid? This is the question that Morten and I investigated in an exploratory study published in 2022 on competitive balance in European football.
Competitive Balance in European Football Leagues (EFLs)
The dataset compiled by Morten and I covers the 18 best attended, top tier domestic leagues in European football. We grouped the leagues into three groups – the Big Five (England, France, Germany, Italy and Spain), medium-sized leagues (including the Netherlands and Scotland) and the smaller–sized leagues (including Denmark and Norway). We used final league positions for ten seasons from 2008 to 2017. In the published study we reported seven alternative competitive balance metrics but found that the four win dispersion metrics were highly correlated with each other but much less so with the performance persistence metric which supports our contention of differentiating between these two types of metric. Some of the key results are reported in Table 1 below.
Table 1: Competitive Balance in European Football Leagues, 2008 – 2017
The English Premier League (EPL) stands out as the least competitively balanced of the Big Five leagues with the highest 10-year average for both win dispersion and performance dispersion. The Spanish La Liga has similar levels of competitive dominance as the EPL. In contrast, the German Bundesliga and the French Ligue 1 are the most competitively balanced. The Bundesliga has the lowest 10-year average for performance persistence across all teams. But the Bundesliga has the highest championship concentration in that period due to the dominance of Bayern Munich who won the league seven out of ten of those seasons. It is also noticeable that smaller EFLs tend to be more competitively balanced in win dispersion, performance persistence and championship concentration compared to the Big Five and the medium-sized leagues.
As regards the dispersion-performance relationship, across all 18 leagues there is a general tendency for a small positive relationship between win dispersion and performance persistence. But the dispersion-persistence relationship is highly variable across leagues especially in the Big Five. In the Spanish La Liga, which is one of the least competitively balanced leagues in our sample due to the dominance of the two global “super” teams – Real Madrid and Barcelona, there is a strong positive relationship between win dispersion and performance persistence. On the other hand, the German Bundesliga which, as highlighted above, is one of the most competitively balanced leagues despite the dominance of Bayern Munich, has a negligible dispersion-persistence relationship. The most surprising result is that for the EPL which has a strong negative relationship between win dispersion and performance persistence. The Juliper Pro League in Belgium and the Dutch Eredivisie also display a similar strong negative dispersion-persistence relationship during these ten seasons. As sporting performance becomes more dispersed across teams within a season in these three leagues, there is a tendency for sporting performance of teams to become less persistent across seasons. Perhaps this strong negative dispersion-persistence relationship is the part of the explanation of the paradox (at least in the eyes of sports economists) that the EPL is one of the least competitively balanced football leagues but remains the most commercially successful football league in the world.
What could be causing the win dispersion and performance persistence to be strongly negatively related in the EPL in defiance of the usual assumption that all competitive balance metrics tend to move together in the same direction? In our published study Morten and I develop a simple theoretical model that shows a negative dispersion-persistence relationship is more likely when there are strong persistence effects amongst the smaller teams. We suggest that the continuing growth of the value of the EPL’s media rights is putting the smaller teams in a particularly advantageous position vis-à-vis newly promoted teams and increasing the likelihood of incumbent teams avoiding relegation. And, on the other side of the coin, there is a greater likelihood of newly promoted teams becoming yo-yo teams, bouncing between the EPL and the Football League Championship.
Other Related Posts
Competitive Balance Part 1: What Are The Issues?
Financial Determinism and the Shooting-Star Phenomenon in the English Premier League
Note: The results reported in this post are published in B. Gerrard and M. Kringstad, ‘The multi-dimensionality of competitive balance: evidence from European football’, Sport, Business, Management: An International Journal, vol. 12 no. 4 (2022), pp. 382-402.
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