The Effect of Private, Foreign and US Majority Ownership on Sporting and Financial Performance of English Soccer Clubs

Abstract

European soccer clubs have been experiencing changes in their ownership structures in the last two decades. This study analyzes the impact of different ownership structures on sporting and financial performance with a scope on English Premier League for the seasons from 2007-2008 to 2021-2022. This study contributes to the literature, first by constructing a novel dataset of ownership structures of Premier League Soccer Clubs for the seasons from 2007-2008 to 2021-2022. Second, the time scope of the previous literature is expanded, with the inclusion of post-covid league seasons. The panel regression results show a negative effect of foreign private majority ownership on sporting and financial performance. When US majority ownership and all foreign majority ownership are compared, we see that US majority ownership does not perform better in the league, but it does so financially. We also suggest evidence for the positive effect of the seasons 2013-2014 and 2016-2017 on financial performance, pointing out respectively the introduction of Premier League profit regulations, and the new TV broadcasting deal. The negative effect of Covid shock in 2019-2020 is also present. In addition, the results support prior literature by showing the positive and significant effect of payroll costs on sporting performance. Lastly, the transfer expenses do not seem to improve sporting performance when controlled for payroll costs