TV-income and football performance: A study of how broadcasting revenues affect domestic and international sporting success for Europe’s elite leagues

Abstract

Europe's elite football leagues are often defined by the collective term “the Big Five”, and consist of clubs originating from England, Spain, Italy, Germany and France. By dominating both the UEFA Club Coefficient Ranking and Deloitte's “Football Money League”, the teams from these European leagues win the vast majority of international tournaments as well as being the most profitable in terms of revenue generation. While previous research explores the relationship between total revenue generation and sporting achievements, our paper aims to isolate the effect of broadcasting revenues, and examine how the income from TV-deals influences both domestic and international sporting success. By handpicking information from “the Big Five” leagues across a timespan of seven years (2010- 2017), we built a robust dataset containing thousands of observations. After running our data through a set of correlation tests and multiple regression models, we were able to establish positive significant relationships between both broadcasting revenues and domestic sporting success, and broadcasting revenues and international sporting success. In fact, as our findings imply broadcasting revenues to be a weaker success predictor for English teams than for non-English, the results may indicate that the usage of different broadcasting revenue distribution models influence sporting achievements. We believe that the uniform allocation model practiced in England enhances the internal league competition, making it tougher for one or two teams to dominate the rest. On the other hand, looking at how the broadcasting revenues are distributed in non-English leagues, we observe that the skewed allocation fuels a few superior clubs, enabling them to retain both domestic and international sporting success.