Quantifying speculative-bubble effects in major European soccer leagues

Fry, John; Binner, Jane

Abstract

We apply the theory of super-exponential rational bubbles to football transfer data. Refining previous qualitative approaches we model the aggregate transfer spend as a fraction of the TV income. Evidence of substantial bubble effects is found across the English, French, German and Italian leagues. This suggests long-term reductions in transfer spending relative to TV receipts. Our model predicts the existence of other signs of soccer bubbles beyond over-pricing. These include differences in the market for star players and the market for regular players and other signs of illiquidity.

Citation

Fry, J., & Binner, J. (2025). Quantifying speculative-bubble effects in major European soccer leagues. Economics letters, 248, Article 112208. https://doi.org/10.1016/j.econlet.2025.112208

• Journal Article Type: Article
• Acceptance Date: Jan 23, 2025
• Online Publication Date: Feb 4, 2025
• Publication Date: Mar 1, 2025
• Deposit Date: Jan 27, 2025
• Publicly Available Date: Feb 27, 2025
• Print ISSN: 0165-1765
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 248
• Article Number: 112208
• DOI: https://doi.org/10.1016/j.econlet.2025.112208
• Keywords: Behavioural economics; Econophysics; Finance; Speculative Bubbles; Sports JEL classification: C1 G1 Z2
• Public URL: https://hull-repository.worktribe.com/output/5008814