Thesis (Selection of subject)Thesis (Selection of subject)(version: 348)
Assignment details
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The Prize Money Distribution in UEFA Champions League
Thesis title in Czech: Distribuce výher v Lize Mistrů UEFA
Thesis title in English: The Prize Money Distribution in UEFA Champions League
Key words: Fotbal, Liga Mistrů UEFA, Teorie soutěže, Pobídkový efekt, Turnaj
English key words: Football, UEFA Champions League, Contest theory, Incentive effect, Tournament
Academic year of topic announcement: 2018/2019
Type of assignment: Bachelor's thesis
Thesis language: angličtina
Department: Institute of Economic Studies (23-IES)
Supervisor: PhDr. Radek Janhuba, M.A., Ph.D.
Author: Bc. Šimon Scharf - assigned by the advisor
Date of registration: 23.05.2019
Date of assignment: 23.05.2019
Date and time of defence: 10.06.2020 09:00
Date of electronic submission:06.05.2020
Date of proceeded defence: 10.06.2020
Reviewers: Mgr. Matěj Kuc
URKUND check:
ANDREFF, Wladimir. The Winner's Curse in Sports Economics. Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers), 2014.
ANDREFF, Wladimir a Stefan SZYMANSKI, ed. Handbook on the Economics of Sport. Books, 2006.
DIETL, Helmut m., Egon FRANCK a Markus LANG. OVERINVESTMENT IN TEAM SPORTS LEAGUES: A CONTEST THEORY MODEL. Scottish Journal of Political Economy. 2008, 55(3), 353-368.
FEHR, D. a J. SCHMID. Exclusion in all-pay auctions: An experimental investigation. Journal of Economics and Management Strategy. 2018, 27(2), 326-339.
SHITOVITZ, Benyamin, A. SELA, Diego MORENO, Ori HAIMANKO a Ezra EINY. Tullock contests with asymmetric information. UC3M Working papers. Economics, 2013.
SZYMANSKI, Stefan. Football economics and policy. New York: Palgrave Macmillan, 2010.
SZYMANSKI, Stefan. The Economic Design of Sporting Contests. Journal of Economic Literature. 2003, 41(4), 1137-1187.
Preliminary scope of work in English
Research question and motivation
I intend to analyse UEFA Champions League (henceforth UCL) in the context of contests theory, specifically all-pay-auction and Tullock’s lottery. The questions I intend to ask are: Is the revenue distribution effort maximizing? How did the contests’ discriminatory and inequality parameters change?

The sporting league can be viewed as a monopolist who aims at maximizing the economic rent through creating an “auction-like” environment for the contestants (Andreff 2014). Hence, the league focuses on these factors that affect the gross revenue: uncertainty of the outcome and aggregated talent of the players on the pitch (Szymanski, 2003), and how they can be affected through the revenue distribution. Some literature (Andreff, Szymanski 2006) suggests that in certain cases to increase the total effort and to spur competitive balance, it may be useful to exclude the strong competitor. Nonetheless, in other situations it is the opposite (Fehr, Schmidt 2018), I will try to evaluate which of those attitudes can be used in our situation. The Champions League seemed to be chronically imbalanced (Szymanski 2010). Is that the case?

With the estimated gross commercial revenue over €3bn for the 2018/19 UCL, which is more than double the amount from 2012/13 campaign, the football market appears to be flourishing. The fact that UCL is among the top revenue generating leagues across sports makes it industry which is worth closer inspection.

The thesis should contribute to literature on design of sporting contests (Szymanski, 2003) by an observation that aspires to compare theoretical concepts with the reality of this competition, thus it may be a good connection of theory and practice. Moreover, its’ conclusions could provide useful results not only for the sport competitions designers, but also for the contest designers in other fields.

I plan to gather the data both on revenue distribution from UCL and clubs’ investments and use econometric model utilizing the panel structure of such dataset (specific method will be chosen based on the characteristic of the data) in order to estimate the discriminatory as well as the inequality parameter (Dietl, Franck 2008). Furthermore, I use the data to comment on some of the, above mentioned, concepts.

• motivation
• brief overview of existing literature
• contents of the thesis
Literature review
• literature on contests
• connection to sports economics
Model and data
• revenue distribution mechanism
• information on the data
• description of the model
• interpretation of the results
• implications for practice
• further research suggestions
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