Comment on “Professional Asian Football Leagues and the Global Market”

• Author: Jae Nahm
• Date: 01 January 2016
• DOI: http://doi.org/10.1111/aepr.12114
• Published date: 01 January 2016

Comment on “Professional Asian Football

Leagues and the Global Market”

Jae NAHM†

Korea University

JEL codes: Z21, Z28

Szymanski (2016) provides a good summary of the development of the professional

soccer industry. Most soccer leagues are developed at the national level. There are mul-

tiple leagues within a country, and these multiple leagues constitute a hierarchy of

leagues, so that teams can move up and down the hierarchy of these leagues based on

their performances (promotion and relegation). In terms of organization, it is very dif-

ferent from baseball leagues in the USA, which take the closed form of leagues. In soccer,

the top teams in the top league take a large share of revenues, and when teams are rel-

egated to a lower tier league they lose much of their revenue. In most of the European

leagues, a few teams are dominant in performance. As a result, the majority of teams are

experiencing economic difficulties.

These characteristics of soccer leagues result from the competitiveness in soccer

markets. Each soccer club faces two markets: The first market is the players’ “talent”

market, in which each clubs “buy and sell”players’ talent. The other market is the audi-

ence or fan market, in which teams try to sell their club performances to soccer fans. In

the players’ “talent”market, information on players’ talent is very public, and the market

is quite close to being perfectly competitive. The performances of the two markets (the

talent market and the fan market) are closely related. If a club succeeds in evaluating

players’ talents and buying “blue chip” players, it would succeed in generating revenues

as well. Szymanski shows that expenditure on wages is closely related to team perfor-

mances; at the same time, a team’s revenues are closely related to the team’s perfor-

mances in the league. Teams that produce good results earn a significant amount of

profits, and this enables the team to secure good players. A virtuous circle such as this

would bring brand values to the teams.

These kinds of competition are going on global wide. The games of prestigious clubs

are being broadcasted around the globe, and the broadcasting rights for such soccer

games are generating important sources of profit. Teams in different leagues and differ-

ent countries are competing for players and the revenues generated by facing interna-

tional viewers. On the other hand, the developments of soccer leagues in Asia are

relatively slow compared with the European league. According to Szymanski, although

the population of Asia is four times larger than Europe’s and their total gross domestic

product are almost the same, the size of audiences and the number of teams in Asia are

†Correspondence: Jae Nahm, Economics Department, Seongbuk-guAn-arm Dong, Korea Univer-

sity, Seoul, South Korea. Email: shnahm@korea.ac.kr

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doi: 10.1111/aepr.12114 Asian Economic Policy Review (2016) 11, 41–42

© 2016 Japan Center for Economic Research 41