INTRODUCTION

Although baseball can lay claim to be the home of sports economics in North America, association football (soccer) is the subject's primary focus in Europe. Fifteen years after Rottenberg's paper (1956), the first football paper was published on the labour market of the professional game in England (Sloane 1969). Sloane's contribution paved the way for investigations into many aspects of football from an economic perspective. This chapter purposefully aims to address three topics that are important to the economics of association football: (a) competitive balance; (b) empirical studies of attendance demand (spectator turnout); and (c) labour mobility. Notwithstanding that these are stand-alone issues addressed in detail elsewhere, we aim to provide a concise and accessible introduction to these research areas. Our intention is to offer an overview for those unfamiliar with these areas. From the outset it is important to note that the reach of the economics of football far exceeds the topics covered in this chapter. That said, the three branches we focus on here are all part of a developed literature in their own right and have a strong historical basis with solid theoretical and empirical foundations. They are also of universal interest and remain central to the economics of football today. As outlined in Chapter 1

, the need for competitive balance within sport goes to the very heart of sport economics, from where Rottenberg's (1956) examination began. We focus on the “big five” European leagues of England, France, Germany, Italy and Spain. Second, we survey studies that examine the demand for football, focusing on the traditional form of consuming the sport, namely ticket demand (stadium attendance). We collate literature on this topic for studies published over a 45-year period and offer a brief synopsis (biased toward studies published in English), which can serve as a companion to those exploring the literature for the first time. The third and final part of the chapter examines the labour market for footballers since the early 1990s. We consider the internationalization of this market, again in the context of the “big five” leagues (England, France, Germany, Italy and Spain) from 1992 to 2015, and describe a new dataset on the topic.

More than half a century ago Simon Rottenberg initiated the study of sport and economics when he considered both the industrial organization and labour market for professional baseball. What has followed since is the examination of almost every conceivable economic concept and sport on the planet.

Reference to Rottenberg's seminal work is made throughout this book, and the collection of chapters presented here constitute an effort to further the work he started. The individual chapters are by no means the final word on the topics addressed. In fact, they are quite the opposite. Traditionally, sports economics has been applied to the major team sports in the United States and Europe. Many of the contributions explore concepts and ideas in sports economics that are deserving of further attention. Where it has been possible, this book includes the application of the principles of economics to sports that have garnered less attention from researchers to date. We address less visible sports including Australian-rules football, cricket, Gaelic games, horse racing, rugby and tennis. Naturally, the more popular themes in sports economics, such as baseball, basketball and soccer, are also included.

Before exploring the economics of specific sports, we address three broad areas that are important in order to contextualize what follows. The first is an exploration into the history of sports economics as a field of study. This is something that receives very little attention, and what is presented here is a first attempt to remedy this. The second introduces some of the methods and theories most widely used in sports economics. The third demonstrates how the burgeoning field of sports analytics and the skills of the economist can be used at a practical level. The various sections that follow then consider specific sports. These groupings are by no means perfect but are an attempt to make underlying connections between these sports.

Many of the contributors to this collection of chapters are leading academics in the field of sports economics. It is thanks to their passion and research that this work has been possible to assemble. I would also like to acknowledge the contributions of various other people to the realization of this book. First, Alison Howson of Agenda Publishing, whose idea this collection was.

The field of sports economics is one that can be traced back to very definite origins. Just as the discipline of economics can be attributed to Adam Smith's An Inquiry into the Causes of the Wealth and Poverty of Nations, the first application of economic methods to sport dates back almost seven decades, to 1956. The same year that the New York Yankees’ Don Larsen pitched a perfect game in the World Series against the Brooklyn Dodgers, which remains the only perfect game in World Series history, University of Chicago economist Simon Rottenberg published “The baseball players’ labor market” in the Journal of Political Economy. Economics and sport were then introduced, and subsequently they have spawned a plethora of research.

Of course, one can legitimately ask: why sport? In 2015 three well-known sports economists, Alex Bryson, Bernd Frick and Rob Simmons, tried to answer this question in “Sports economics: it may be fun but what's the point?”. The authors argue that there are four reasons why sport and economics are a great fit. First, sport is big business and it is growing rapidly. Second, it is an industry that contributes significant employment in most developed economies today. The third reason is that sport actually matters to people. Although the connection with sports teams and events can be irrational, this bond is real and affects peoples’ lives. It can help both physical and mental well-being and is actively promoted by most governments as having a positive impact on life satisfaction. Finally, sport can shed light on fundamental economic questions. The data that professional sports generate, which are largely unparalleled in any other industry, provide a wealth of information, to which economists can bring their analytic toolkit to understand various aspects of different sports and sporting events. This extends to issues such as competition, productivity, decision-making, labour markets and discrimination.

Back in 1956, Rottenberg was drawn to baseball as a subject for investigation because of “a number of market problems which are interesting because of some unusual characteristics of the baseball labor market and the organization of the baseball industry” (Rottenberg 1956: 242). He identified a number of key issues in the labour market for baseball players that were economic in nature.

INTRODUCTION

This chapter explores economic issues in Irish horse racing, including funding of the sport through the betting duty and the Irish government budget, television broadcasting arrangements and the future of both the sport and wider industry in the context of the United Kingdom leaving the European Union. Both the industry and sport are multifaceted and rely on a complex supply chain that is interwoven between Ireland, Great Britain and France. This includes the breeding, selling, training and racing of horses. Unlike many other jurisdictions where the sport takes place, horse racing in Ireland is heavily subsidized by the exchequer in the form of an annual grant issued each year by the Department of Agriculture, Food and the Marine. This funding has resulted in both the sport and industry flourishing at home and on the international scene. Irish horses – horses that are trained on the island – compete internationally at venues in Great Britain, France, the Middle East, Australia, Japan and the United States, with considerable success. The industry has also been greatly assisted by exchequer support and has resulted in Ireland becoming a global centre of excellence for the breeding and training of thoroughbred racehorses.

The general success of horse racing over the past 20 years has occurred within a very unstable macroeconomic environment from which public funding is sourced. The Irish economy experienced a period of unprecedented growth from the mid-1990s until 2007 (the “Celtic tiger”), followed by an economic collapse in 2009 that resulted in the government requiring international funding support from the European Union, the International Monetary Fund and the European Central Bank. An economic recovery, driven by the buoyant export-oriented sectors, started apace around 2014 and was gathering pace by the time Covid-19 arrived in Ireland in 2020. Despite the global pandemic, Ireland's export-orientated economy proved to be remarkably resilient, with double-digit annual economic growth recorded in 2021. During these various periods of boom and bust, government support for horse racing has remained steadfast. Horse Sport Ireland3 (2012

: 33) notes that Irish horse racing “has benefited from substantial financial support from the Government”.