Working Paper Series,
Research Institute of Industrial Economics

Abstract: 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.

Keywords: Sports industry; Star players; Champions League; Bosman ruling

JEL-codes: J44; L50; L83

49 pages, First version: May 31, 2016. Revised: March 14, 2018.

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