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Handbook on the Economics of Professional Football

Handbook on the Economics of Professional Football

Elgar original reference

Edited by John Goddard and Peter Sloane

In this comprehensive Handbook, John Goddard and Peter Sloane present a collection of analytical contributions by internationally regarded scholars in the field, which extensively examine the many economic challenges facing the world's most popular team sport.

Chapter 7: Insolvency in English football

Stefan Szymanski

Subjects: economics and finance, sports


‘It was the best of times, it was the worst of times’. It is a strange paradox of English football that between 1949 and 1980 attendance at league matches halved but no current member of the Football League was subject to insolvency proceedings, while between 1986 and 2010 attendance at League football almost doubled, but there were 59 cases of insolvency (an average of two to three per year) (Figure 7.1). The period between 1949 and 1980 is generally identified as one of decline for English football. Within the game poor facilities, and a growing association between the game and hooliganism, made going to football less and less attractive; while outside of the game rising prosperity opened up a whole new range of leisure activities which drew fans away from the game. On the cost side, the removal of the maximum wage in 1961 triggered a wage spiral which has continued to the present day. Faced with these financial pressures one might have expected financial failure to ensue, but other than in those few cases where teams exited the League, it did not. From 1986 onwards attendances rose, prices rose even further and income from broadcasting, sponsorship and merchandising exploded; yet despite this prosperity, insolvency became a chronic problem. This chapter will explore this paradox.

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