The increase in payouts to European football clubs appearing in the Union of European Football Associations (UEFA) Champions League (CL) in 1999-2000 had a lasting impact on the performance of top clubs in domestic football leagues. This policy change is treated as a natural experiment to compare the level of competitive balance in five top European leagues (England, Spain, Italy, Germany, and France) before and after the turn of the millennium. Based on several competitive balance measures, this article reveals a significant decrease in competitive balance after the modification of the CL payout system.
Previous research based on revealed preferences cannot assess whether (increasingly imbalanced) football competitions might be at risk of moving into territory where consumer demand will fall off as suggested by the uncertainty of outcome hypothesis. Therefore, this article provides a subsequent examination of the relationship between perceived balance (in a number of dimensions) and intention to consume based on a stated preference approach in Germany. The estimated demand functions reveal that around 70% of fans care about competitive balance in the German Bundesliga but the league is not close to any tipping point at present.
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