Faculty of Business Administration and Social Sciences, Molde University College, Specialized University in Logistics Molde, Norway.
The article reports a series of regressions between various proxies for financial inequality and uncertainty of outcome in English football. The main finding is that no significant association between these two variables are identified. Potential alternative explanatory factors for the uncertainty of outcome are also discussed, and a significant association between corruption and uncertainty of outcome is identified.
JEL Classification: Z20, Z21, Z23
Keywords: Uncertainty of outcome, Financial inequality, European football, Gini index, Corruption index.
Uncertainty of outcome (UO) is a concept that have gained a lot of interest in Sport Management/Economics research, see for instance Borland and Macdonald (2003).
The original hypothesis introduced by Rottenberg (1956), states that demand for sport contests depends positively on uncertainty related to the outcome of the contest. That is, if the audience know the outcome of a football game, the interest (or willingness to pay) for watching it decreases.
The fact that this hypothesis is plausible, and more importantly, that it introduces a key difference between sport and other more “normal economic activities”, may be seen as an explanation of why this hypothesis has gained such awareness among researchers. The fact that the hypothesis has been hard to “prove”, see e.g. Szymanski (2001, 2009), has perhaps also contributed to its popularity.
However, the focus of this contribution is not related to the classical UO hypothesis. Here, UO itself, and its potential drivers are put under debate.
Figure 1, taken from Haugen and Heen (2018), shows the development of UO in English Premier League for the time period 1963 to 2017.
As Figure 1 clearly indicates, a downward sloping trend is identified. Numerically, UO has decreased significantly, from around 50% in the sixties to around 20% as of today.
The main question for discussion in this paper is why. Why has excitement in European top football leagues, here exemplified by Premier League, shown such a negative development over time? In forthcoming sections 2 and 3, I will try to shed some light on possible answers through some simple empirical analyses. Section 4 concludes.