The Long-Term Performance of Professional Sports Clubs: An Organizational Ecology Perspective Der Fakultät für Wirtschaftswissenschaften der Universität Paderborn zur Erlangung des akademischen Grades Doktor der Wirtschaftswissenschaften - Doctor rerum politicarum - vorgelegte Dissertation von Diplom-Kaufmann Björn Wallbrecht geboren am 13.01.1982 in Bad Soden-Salmünster 2013 I Table of Contents List of Figures ........................................................................................................................................... V List of Tables ........................................................................................................................................... VI 1 Introduction ..................................................................................................................................... 1 2 Infant Mortality of Professional Sports Clubs: An Organizational Ecology Perspective ................ 10 2.1 Introduction ............................................................................................................................... 10 2.2 Literature Review ...................................................................................................................... 11 2.3 Organizational Ecology .............................................................................................................. 12 2.4 Survival in Professional Team Sports Leagues: Descriptive Evidence ....................................... 15 2.5 Model, Estimation Method, and Findings ................................................................................. 18 2.6 Discussion .................................................................................................................................. 25 2.7 Summary and Conclusions ........................................................................................................ 35 2.8 Appendix 2-1: Testing the Equality of Survivor Functions ........................................................ 37 2.9 Appendix 2-2: Comparison of the Fit of the Different Parametric Models ............................... 38 2.10 Appendix 2-3: Sensitivity Analysis ............................................................................................. 38 3 Location and Success in German Soccer: The Impact of Location on the Performance of 'Bundesliga' Soccer Clubs ...................................................................................................................... 41 3.1 Introduction ............................................................................................................................... 41 3.2 Literature Review ...................................................................................................................... 42 3.2.1 Impact of Club-Internal Factors on Team Performance ................................................ 42 3.2.2 Impact of Sport on Economy ......................................................................................... 43 3.2.3 Impact of Socioeconomic Factors on Team Performance ............................................. 44 3.3 Promotion and Relegation in German 'Bundesliga' Soccer ....................................................... 45 3.4 Club External Factors ................................................................................................................. 47 3.5 Research Design ........................................................................................................................ 48 II 3.6 Empirical Results and Analysis .................................................................................................. 52 3.7 Findings and Discussion ............................................................................................................. 53 3.8 Summary and Conclusions ........................................................................................................ 58 3.9 Appendix 3-1: Fit of Parametric Models .................................................................................... 59 3.10 Appendix 3-2: State vs. County Data ......................................................................................... 61 4 Up and Down: Competing Risks in Second Tier Soccer ................................................................. 64 4.1 Introduction ............................................................................................................................... 64 4.2 Literature Review on Promotion and Relegation ...................................................................... 65 4.3 Data Description ........................................................................................................................ 67 4.4 Regression Model ...................................................................................................................... 76 4.5 Regression Results ..................................................................................................................... 79 4.6 Differences in Regression Results Between Countries .............................................................. 85 4.7 Promotion and Relegation Forecasts ........................................................................................ 94 4.8 Summary and Conclusions ........................................................................................................ 98 5 Increasing Competitive Balance Differently: How Schedule Design Can Help Promoted Teams 100 5.1 Introduction ............................................................................................................................. 100 5.2 Literature Review .................................................................................................................... 101 5.2.1 Competitive Balance .................................................................................................... 101 5.2.1.1 Concept and Measures ............................................................................................ 101 5.2.1.2 Measurement of Competitive Balance .................................................................... 104 5.2.2 Schedule Design .......................................................................................................... 105 5.3 Data Description ...................................................................................................................... 107 5.4 Regression Model and Results ................................................................................................ 111 5.5 Findings and Discussion ........................................................................................................... 116 5.5.1 Win Percentage ........................................................................................................... 116 5.5.2 Degree of Schedule Difficulty ...................................................................................... 117 III 5.5.3 Competitive Balance .................................................................................................... 120 5.6 Summary and Conclusions ...................................................................................................... 121 5.7 Appendix 5-1: Schedule Example of German 'Bundesliga' from 1983/84 .............................. 122 5.8 Appendix 5-2: Variables of Bartsch et al. for Scheduling German 'Bundesliga' 1995/96 ....... 124 5.9 Appendix 5-3: Detailed Regression Results ............................................................................. 125 6 Conclusion and Outlook .............................................................................................................. 133 Bibliography ........................................................................................................................................ XXIII IV List of Figures Figure 2-1 Survivor curves for different leagues ................................................................................... 18 Figure 3-1 Number of clubs by number of seasons played in the 'Bundesliga' .................................... 46 Figure 3-2 Number of clubs by number of relegations ......................................................................... 46 Figure 3-3 Kaplan-Meier survival estimate for survival in the 'Bundesliga' since 1963/64 .................. 47 Figure 5-1 Competitive balance in the German 'Bundesliga' since 1963 ............................................ 105 Figure 5-2 Example regression results ................................................................................................ 114 Figure 5-3 Regression results .............................................................................................................. 114 Figure 5-4 Regression results including market value and net transfer revenues for 1995 to 2008 .. 115 Figure 5-5 Regression results – Decade models .................................................................................. 115 Figure 5-6 Easiest possible schedule for rank 1 of the previous season ............................................. 117 Figure 5-7 Degree of schedule difficulty for season 2009/10 ............................................................. 118 Figure 5-8 Average degree of schedule difficulty for all 'Bundesliga' clubs since 1964/65 ................ 119 Figure 5-9 Comparison of degree of schedule difficulty for complete model vs. decade models ...... 120 Figure 5-10 Real and estimated competitive balance