Efficiency English professional soccer clubs. An empirical research on the performance of professional soccer clubs active in England

This study examines whether professional English soccer clubs perform up to their potential. Furthermore we assess whether large soccer clubs perform more efficient than smaller clubs. In order to do so we use Data Envelopment Analysis (DEA) and Stochastic Frontier Analysis (SFA) to analyze our dataset. The dataset contains 54 clubs that remained active in the top 4 divisions of English professional soccer (FA Premier League, Championship, Coca-Cola League 1 and Coca-Cola League 2) all five analyzed seasons (2004/05 – 2008/09). We use three inputs and three outputs in every preliminary model. The input variables are: employees, salary and expenses. The used outputs are: profit, turnover, return on assets (ROA), points and stadium utilization. We executed Canonical Correlation Analysis (CCA) in order to test whether all the used variables have a sufficient contribution to the power of the preliminary models. Based on the outcome of CCA we deleted the variables employees, profit and ROA. The results of the adjusted models show that soccer clubs do perform efficient. Bolton Wanderers is the most efficient club in both the DEA and the SFA Premier League model. Notts County, Shrewsbury and Manchester United are the most efficient clubs in the England DEA model. Furthermore we see results that indicate that large clubs do perform more efficient than smaller clubs. The study concludes that although English soccer clubs perform well according to their potential, the soccer industry do not necessary performs more efficient than other industries. Furthermore we conclude that larger soccer clubs do perform more efficient than smaller clubs.