TV Rights, Financial Inequality, and Competitive Balance in European Football: Evidence from the English Premier League and the Spanish LaLiga

Miquel Carreras and Jaume Garcia

The recently signed TV deals by the English Premier League and LaLiga imply that income from TV rights are expected to increase significantly in both football championships. We analyzed the impact of these revenue increases in terms of the effect on financial inequality. We conclude, and provide empirical evidence, that the expected financial imbalance between clubs will suffer an increase in absolute terms, but a decrease in relative terms for both competitions. The aim of this paper is to measure the effect of the new TV deals on the competitive balance of these championships. We estimate an econometric model in which the result of a particular game (and the final standings and points in the championship) depends on the financial inequality in absolute terms, using this model to carry out a simulation exercise. We conclude that the new TV deals are not helping to make both competitions more balanced.

Open Access