Football Management论文模板 – Impact of Uncertainty of Outcome and Competitive Balance on Consumer Demand for League Football

Introduction

The English premier league is the most watched league in the world. It is also the richest in terms of professional football. There are many sponsors and the market is very attractive to the advertisers. There are huge sums of money involved in the TV rights. In comparison to the European rivals, the English premier league is ahead in terms of resources and the wage structure. A record breaking TV deal was signed by the league worth five billion pounds and this is from the UK alone (Chris Gratton, 2007).

The television company is the immediate client for the English premier league. The matches are purchased at huge price on behalf of the advertisers and viewers. Some of the characteristics that are considered in choosing which matches to air are discussed in detail in this paper. Among them is the uncertainty of outcome and the competitive balance between the teams. There are some factors that will make a match more attractive for example the famous derbies in the English premier league which attracts a lot of buzz and interest from the fans across the world. Such matches will attract very high bids in order to be aired (Richard Pomfret, 2016).

Review of relevant literature

Among the factors is the team’s strength which translates to the performance.

The uncertainty of outcome is an established influence to the demand of the game and also the basis for which the betting companies are able to thrive on (Rosner, 2011). The betting odds are established based on this outcome uncertainty and the competitive balance between the teams.

Competitive balance between the league teams is a critical factor for the demand by the fans. The fan attendance is usually at the highest with sold out tickets when the teams involved have very competitive players and managers. This is the selling point of world football since the TV rights are charged at a huge fee to the TV broadcasters (Wladimir Andreff, 2006). With an unbalanced league like the EFL cup there is a lot of imbalance between the teams and this attracts fewer interest unlike the competitive English premier league that is able to attract the highest number of viewers from across the globe. The uncertainty of outcome is also intertwined with the competitive ability of the teams. If there is predictability of the outcome with a certain degree of certainty, then there will be no interests from the fans and the betting companies will lose. This will reduce the revenues in the league and therefore there will be no much competition. In the first twelve years of the premier league, one club, Manchester united, won eight times. This makes the premier league unbalanced from the rankings of the titles.

The English football governing body, the football association(FA), has been prompted to make some changes in its governing body following the inability to make changes that will improve the quality of the football.

The sports minister gave the body six months to make some changes but this has not been effected. This has therefore worn out the patience and the FAA might lose 30 million pounds in grassroots money. There is a proposal to involve the legislation in order to force the reforms. However, forcing the reforms might not be right move since this will force the FA to make changes before they become necessary. The quality of football in England has been questioned with no English team capable of competing well for the prestigious champions league at the European level. This is in addition to the national sides inability to compete well in the national tournaments. There is a general consensus that the English players and managers need to step up in the competitive balance and the quality of their football. The aspect of the governing body needs to be considered to make the football environment attractive I terms of the competition.

An expected update in the reform plans by the FA is to be presented before the sports ministers who is seeking the parliamentary involvement. A no confidence motion has been passed by the House of commons due to the inability of the FA to reform and a threat to possible reduction on the funding.

in light of such issues the FA should reform and bring about a balance in the competitive ability of the league. The uncertainty of outcome does have an impact although it is not big enough relative to the competitive ability.

Empirical findings from the literature

One of the variables is the uncertainty of outcome and having set it to the respective mean, the improvement of outcome uncertainty by one standard deviation will increase the size of the predicted audience by more than 70,000. Likewise, an increase in the balance between the teams will also raise more interest form the audience by 6%.

The uncertainty of outcome is a function of the home advantage as measure in points per game less the away side points per game. This useful component forms a major factor when calculating the betting odds. The home advantage has a value in the match fixture with more odds going to the away team (Plácido Rodríguez, 2013).

The uncertainty of outcome largely depends on which time of the season the matches are aired. As the new season starts off, the coefficient is insignificant. As the season progresses to the second half, there is a strong negative co efficient of 1 suggesting a high demand in periods where the results are close.

The balance of competition has been an exciting topic and very crucial. Thrilling matches and seasons come from the correct balance of quality in the teams in the premier league. This competition has an impact on the league in terms of the player wages, team performance, sponsors and the general demand for the sport (John Goddard, 2014). This has led to the creation of the financial play rules where teams are not allowed to spend beyond a certain limit. This in turns ensures the competitive balance of the league in terms of the quality of the squad in every team. For professional sports the competitive balance cannot be underestimated. The competitive balance is underpinned by the assumption underlying of uncertainty of outcome (Richard Pomfret, 2016).

The hypothesis of uncertainty of outcome states that there is a lot of interest attracted when there is a fair chance for both teams to win. This therefore requires a competitive league where teams have an equal chance to win the matches. This will create the constant and ever growing demand for football (Richard Pomfret, 2016). This will create a successful league for the fans players and the owners. The TV broadcasters alike will have the profits when selling the premier league to the viewers.

This document attempts to analyze the balance of competition and the uncertainty of outcome in the English premier league

Relevance to outcome uncertainty and competitive balance

From the observations, sky is likely to choose the matches involving the most competitive teams in the race for either championship or the top four finish for a slot in the Uefa champions league.

From the results, the interest of the audience is largely due to the overall quality in the teams competing in the league. (John Goddard, 2014) Where there is a lot of talent and expensive players, there was a lot of interest from the media and the fans buzz in the social sites. Manchester united broke the bank to land the signature of Paul Pogba in a record world transfer fee. This has made the football club attract a lot of views per game with an interest from the fans to watch the skills of the most expensive player.

The wage bill is another measure of the team quality.  This has become a weak measure of the years although the wages translate to performance and the overall competition between the clubs.

The gate attendance is largely determined by the team performance. In the English premier league, a lot of the matches will be sold out in terms of the seats. There are some instances where there might be a few seats left unoccupied for security reasons of separating the home fans form the away fans.

The efficiency in the wage structure is a good performance indicator when compared to the investment level. However, this is not a good test of the performance of the team. This is evident when comparing Chelsea and hull city in the current premier league standings. With the highest level of wage efficiency in terms of points per pound, they are relegation threatened unlike Chelsea which is nine points clear with an inefficient wage structure (Szymanski, 2010).

The English premier league has the highest wage will and this is only going to increase in eh future.

Manchester city have now overtaken Manchester united to have the highest wage bill of record 225 million pounds per year relative to Manchester united which is 220 million pounds per year. Both clubs experienced an increase in the wage bill. In the similar fashion, Leicester got their players wages increases following the fairytale win of the premier league in the 2015/2016 season. The intellectual property rights have made the sport industry to become a billion dollar. There is a close cooperation between the sponsors, football association and the media (Chris Gratton, 2007). This has been possible to create the right coverage and quality of football that will attract the demand. This has largely been as a result of the competition that is ever rising due to the uncertainty of outcome.

The sophistication in technology has enabled the availability of football coverage across the world via the satellite and cable TV. As a result, new challenges have opened up in terms of piracy and illegal transmission of the TV signals airing a premier league match. The internet retransmission has been a big issue and the authorized sellers, sky have been actively investigating and imposing fines to t hose who are found guilty.

Conclusions and recommendations

The English premier league should formulate a policy to promote the competitive balance between the teams. The financial fair play is one of the policies that have been formed by the football association to limit the spending by the top teams. This creates a lot of imbalance in the competition between the league teams.

The impact of uncertainty in the outcome and the competitive balance is little. The playing standards should be constantly improved and even sourcing for quality talents from other leagues. There is a strong viewers interest in terms of the quality in the teams. Outcome uncertainty is not that significant in the demand for football in the premier league. The matches will still be watched as it is considered the most competitive league in world football. This attracts interest from the quality players who want to have an experience of the English football.

The balance in competition is critical for the success of all leagues in the world. The fans will be many and the revenues will be high for the club’s sponsors TV rights and even the betting companies.  The competitive balance of the English premier league should be improved as the same top four teams have been dominating in the past few years. However, recently Liverpool and Totten ham have joined the top four with a remarkable season that saw Leicester take the championship for the premier league.

References

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