Transfer Market Economics - Soccer's Global Marketplace

Abstract

This study focuses on the effects of committed fan support on the global soccer transfer market. Soccer supporters exhibit unique microeconomic decision-making, fueled by their passionate commitment and identity ties to their desired good. I examine this relationship and the effects it has on their club's business model, seeing how a team's loyal fan base can also have an influence in its purchases on the transfer market. Using work by economist Stephen Syzmanski as a basis, I explore a standard club (with influencing fans) optimization model, as well as offer alternative team business models of clubs free of fan influence. Finally, I explain a self-conducted experiment regarding player transfers after the most recent FIFA World Cup, hypothesizing that players will transfer to the higher ranked leagues, where the fan bases are the largest and teams are under the most pressure to be buyers on the market. After reviewing the regression analysis, I find that my hypothesis holds, and that the relationship between rank and transfers is negative.