Greater Polarisation and Less Competition in the German Bundesliga

In the past two decades the German Bundesliga has suffered from a reduced level of competition. One of the key factors for this development is the change in the players' mobility. As a result, there is an increasingly high number of top-performing players in extraordinarily good football teams. These teams tend to win more games, which leads to a reduced level of competition. This is the finding of a study carried out by the Mannheim Centre for European Economic Research (ZEW).

As a result of the increasing concentration of talented players in successful and, for that matter, financially strong football clubs, the first two divisions of German football, the 1st Bundesliga and the 2nd Bundesliga, have suffered in terms of competitive balance. In the 1st Bundesliga, this has led to a significant rise in the performance level over time. At the same time, there has been a clear trend towards a more unequal distribution of player talent in the 1st Bundesliga, with the competitive balance falling by 30 per cent between 1998 and 2016. Teams like Bayern Munich or Borussia Mönchengladbach benefited from this development. By contrast, it also caused other teams, like Werder Bremen, to fall behind to a greater or lesser extent. There has been, however, no such trend in the 2nd Bundesliga.

Increasing inequality in the distribution of playing talent

The study is the first to analyse the extent to which above-average professional players are concentrated in leading football clubs, and how this development leads to a reduction in sporting competition. A high concentration of good players in high-ranking teams or of worse players in low-ranking teams causes an increasingly unequal distribution of playing talent. One way to measure the degree of concentration is by analysing the change in the Pearson correlation coefficient, a measure of the linear dependence between two variables, in this case, the ratio between player and team performance. The Pearson correlation coefficient has been sharply rising by an annual rate of 1.8 per cent, which means that the distribution of playing talent has become increasingly unequal from year to year.

Measuring the success and quality of football playersis one of the challenges researchers encounter in academic literature. In order to meet this challenge, ZEW has developed a new method. In the period considered in the study, the researchers calculated the goal margin of each player, derived from the difference between the number of goals scored and the goals conceded in each match. This way, it is possible to gain more information about the average match performance, including player, team and coach performance. The analysis is based on 1st and 2nd Bundesliga matches and DFB Cup matches. Changes during the game, such as substitution of players, dismissals or the minutes the goals were scored were also taken into account.

Decline in competitive balance

The fact that the Bundesliga is suffering from a decline in competitive balance is also closely related to the development of team revenues from TV rights, which have become one of the most important sources of revenue. According to the ZEW study, the unequal distribution between football clubs is even more distinct in times of high revenues gained from TV rights. This trend is, however, not discernible in times of stagnating television revenues. From 2007 onwards, there has been an increasing concentration of top-performing players in the leading football clubs and vice versa. This is reflected in teams like Bayern Munich, who have won four consecutive championship titles between 2012/13

and 2015/16.

"This development is also driven by an increasing heterogeneity of player talent over time between the first and second division. Over the years, the first division of German football has attracted more top players, thereby increasingly outperforming the 2nd Bundesliga," says Arne Jonas Warnke, ZEW economist and author of the study.

In addition, the results of the study also show an increasing polarisation within the 1st Bundesliga. UEFA Champions League payments have risen significantly over time.  Failing to regularly qualify for international competitions may thus lead to substantial losses of revenue in the long term. This also makes it more difficult for football clubs to secure prominent players. "With the recently approved reforms in the UEFA Champions League for the season 2018/2019, this trend may become even more pronounced," explains Warnke.

For more information please contact

Arne Jonas Warnke, Phone +49(0)621/1235-364, E-mail warnke@zew.de