Review of Industrial Organization

, Volume 54, Issue 1, pp 175–190 | Cite as

A Prospective Analysis of Competitive Balance Levels in Major League Soccer

  • Carlos Gomez-GonzalezEmail author
  • Julio del Corral
  • R. Todd Jewell
  • Jorge García-Unanue
  • Cornel Nesseler


This study introduces a graphical methodology to the analysis of competitive balance in sports, which is prospective in nature and captures more subtleties than commonly-used retrospective measures. Thus, this study examines the evolution of competitive balance in Major League Soccer from 2004 to 2015, including the potential role played by certain league policies. For this purpose, we use prospective measures, based on probabilities that are extracted from betting odds (ex-ante) and on retrospective indicators (ex-post). The results differ slightly when analyzing competitive balance and predicting attendance. However, the graphical measures provide additional practical information about the characteristics of competitive balance.


Betting odds Competitive balance MLS Soccer 



The authors are grateful to Ph.D. Leonor Gallardo for her former contribution to this paper, which is a revised version of the undergraduate thesis of Carlos Gomez-Gonzalez. Moreover, the authors would like to thank the reviewers for their thoughtful comments and, especially the editor for the effort to improve the paper. This contribution benefited from the financial support of the government of Castilla-La Mancha (Project PPII-2014-004-A) and the funds for international visiting scholars stays at the University of Castilla-La Mancha (2017).


  1. Anscombe, F. (1973). Graphs in statistical analysis. American Statistician, 27(1), 17–21.Google Scholar
  2. Berri, D. J., & Simmons, R. (2011). Catching a draft: On the process of selecting quarterbacks in the National football league amateur draft. Journal of Productivity Analysis, 35(1), 37–49.Google Scholar
  3. Bloching, B., & Pawlowski, P. (2013). How exciting are the major European football leagues?. Tübingen: Roland Berger Strategy Consultants.Google Scholar
  4. Bowman, R. A., Ashman, T., & Lambrinos, J. (2013a). Prospective measures of competitive balance: Application to money lines in major league baseball. Applied Economics, 45(29), 4071–4081.Google Scholar
  5. Bowman, R. A., Lambrinos, J., & Ashman, T. (2013b). Competitive balance in the eyes of the sports fan prospective measures using point spreads in the NFL and NBA. Journal of Sports Economics, 14(5), 498–520.Google Scholar
  6. Buraimo, B., Forrest, D., & Simmons, R. (2007). Outcome uncertainty measures: How closely do they predict a close game? In J. Albert & R. Koning (Eds.), Statistical thinking in sports (pp. 167–178). Boca Raton, FL: Chapman and Hall.Google Scholar
  7. Buraimo, B., & Simmons, R. (2008). Do sports fans really value uncertainty of outcome? Evidence from the English premier league. International Journal of Sport Finance, 3(3), 146–155.Google Scholar
  8. Coates, D., Frick, B., & Jewell, R. T. (2016). Superstar salaries and soccer success: The impact of designated players in major league soccer. Journal of Sports Economics, 17(7), 716–735.Google Scholar
  9. Depken, C. (1999). Free-agency and the competitiveness of major league baseball. Review of Industrial Organization, 14(3), 205–217.Google Scholar
  10. Dietl, H., Grossmann, M., & Lang, M. (2011). Competitive balance and revenue sharing in sports leagues with utility-maximizing teams. Journal of Sports Economics, 12(3), 284–308.Google Scholar
  11. Flepp, R., Nuesch, S., & Franck, E. (2016). Does bettor sentiment affect bookmaker pricing? Journal of Sports Economics, 17(1), 3–11.Google Scholar
  12. Forrest, D., Beaumont, J., Goddard, J., & Simmons, R. (2005). Home advantage and the debate about competitive balance in professional sports leagues. Journal of Sports Sciences, 23(4), 439–445.Google Scholar
  13. Forrest, D., & Simmons, R. (2008). Sentiment in the betting market on Spanish football. Applied Economics, 40(1), 119–126.Google Scholar
  14. Fort, R. (2006). Competitive balance in North American professional sports. In F. John (Ed.), Handbook of sports economics research (pp. 190–206). Armonk, NY: Sharpe.Google Scholar
  15. Fort, R., & Maxcy, J. (2003). Competitive balance in sports leagues: An introduction. Journal of Sports Economics, 4(2), 154–160.Google Scholar
  16. Franck, E., Verbeek, E., & Nuesch, S. (2010). Prediction accuracy of different market structures—Bookmakers versus a betting exchange. International Journal of Forecasting, 26(3), 448–459.Google Scholar
  17. Goossens, K. (2006). Competitive balance in European football: Comparison by adapting measures: National measure of seasonal imbalance and top 3. Rivista di Diretto ed Economia dello Sport, 2(2), 77–122.Google Scholar
  18. Humphreys, B. R. (2002). Alternative measures of competitive balance in sport leagues. Journal of Sports Economics, 3(2), 133–148.Google Scholar
  19. Jewell, R. T. (2015). Major league soccer in the USA. In J. Goddard & P. Sloane (Eds.), Handbook on the economics of professional football (pp. 351–367). Cheltenham, UK: Edward Elgar.Google Scholar
  20. Jewell, R. T. (2017). The effect of marquee players on sports demand: The case of US major league soccer. Journal of Sports Economics, 18(3), 239–252.Google Scholar
  21. Jewell, R. T., & Molina, D. J. (2005). An evaluation of the relationship between Hispanics and major league soccer. Journal of Sports Economics, 6(2), 160–177.Google Scholar
  22. Knowles, G., Sherony, K., & Haupert, M. (1992). The demand of major league baseball: A test of the uncertainty of outcome hypothesis. American Economist, 36(1), 72–80.Google Scholar
  23. Kringstad, M., & Gerrard, B. (2007). Beyond competitive balance. In M. M. Parent & T. Slack (Eds.), International perspectives on the management of sport (pp. 149–172). Burlington, MA: Butterworth-Heinemann.Google Scholar
  24. Larsen, A., Fenn, A. J., & Spenner, E. L. (2006). The impact of free agency and the salary cap on competitive balance in the national football league. Journal of Sports Economics, 7(4), 374–390.Google Scholar
  25. Lee, T. (2010). Competitive balance in the national football league after the 1993 collective bargaining agreement. Journal of Sports Economics, 11(1), 77–88.Google Scholar
  26. Levitt, S. (2004). Why are gambling markets organised so differently from financial markets? Economic Journal, 114(1), 223–246.Google Scholar
  27. Markovits, A. S., & Hellerman, S. L. (2001). Soccer and American exceptionalism. Princeton, NJ: Princeton University Press.Google Scholar
  28. Maxcy, J., & Mondello, M. (2006). The impact of free agency on competitive balance in North American professional team sports leagues. Journal of Sport Management, 20(3), 345–365.Google Scholar
  29. McEwen, W., & Metz, N. E. (2016). Competitive balance: Championship futures betting markets. International Journal of Sport Finance, 11(1), 63–78.Google Scholar
  30. Nalbantis, G., Pawlowski, T., & Coates, D. (2017). The fans’ perception of competitive balance and its impact on willingness-to-pay for a single game. Journal of Sports Economics, 18(5), 479–505.Google Scholar
  31. Neale, W. (1964). The peculiar economics of professional sports: A contribution to the theory of the firm in sporting competition and in market competition. Quarterly Journal of Economics, 78(1), 1–14.Google Scholar
  32. Oikonomidis, A., & Johnson, J. (2011). Who can beat the odds? The case of football betting reviewed. In L. Vaughan Williams (Ed.), Prediction markets: Theory and applications (pp. 204–220). New York, NY: Routledge.Google Scholar
  33. O’Reilly, N., Nadeau, J., & Kaplan, A. (2011). Do fans want their team to be competitive in the short-term (the next game) or the long-term (the full season), and does the answer affect management decisions? European Sport Management Quarterly, 11(1), 73–86.Google Scholar
  34. Owen, P. D., Ryan, M., & Weatherston, C. R. (2007). Measuring competitive balance in professional team sports using the Herfindahl–Hirschman index. Review of Industrial Organization, 31(4), 289–302.Google Scholar
  35. Paul, R., Weinbach, A., Borghesi, R., & Wilson, M. (2009). Using betting market odds to measure the uncertainty of outcome in major league baseball. International Journal of Sport Finance, 4(4), 255–263.Google Scholar
  36. Pawlowski, T. (2013). Testing the uncertainty of outcome hypothesis in European professional football: A stated preference approach. Journal of Sports Economics, 14(4), 341–367.Google Scholar
  37. Pawlowski, T., & Anders, C. (2012). Stadium attendance in German professional football—The (un)importance of uncertainty of outcome reconsidered. Applied Economics Letters, 19(16), 1553–1556.Google Scholar
  38. Peel, D., & Thomas, D. (1988). Outcome uncertainty and the demand for football: An analysis of match attendance in the English football league. Scottish Journal of Political Economy, 35(1), 242–249.Google Scholar
  39. Peel, D., & Thomas, D. (1992). The demand for football: Some evidence on outcome uncertainty. Empirical Economics, 17(1), 323–331.Google Scholar
  40. Rottenberg, S. (1956). The baseball players’ labor market. Journal of Political Economy, 64(3), 242–258.Google Scholar
  41. Sauer, R. (1998). The economics of wagering markets. Journal of Economic Literature, 36(December), 2021–2064.Google Scholar
  42. Schmidt, M. B. (2001). Competition in major league baseball: The impact of expansion. Applied Economic Letters, 8(1), 21–26.Google Scholar
  43. Schmidt, M. B., & Berri, D. J. (2001). Competitive balance and attendance the case of major league baseball. Journal of Sports Economics, 2(2), 145–167.Google Scholar
  44. Štrumbelj, E., & Šikonja, M. R. (2010). Online bookmakers’ odds as forecasts: The case of European soccer leagues. International Journal of Forecasting, 26(3), 482–488.Google Scholar
  45. Strutner, M., Parrish, C., & Nauright, J. (2014). Making soccer “Major League” in the USA and beyond: Major league soccer’s first decade. Sport History Review, 45(1), 23–36.Google Scholar
  46. Totty, E. S., & Owens, M. F. (2011). Salary caps and competitive balance in professional sports leagues. Journal for Economic Educators, 11(2), 46–56.Google Scholar
  47. Villar, J., & Rodríguez, P. (2007). Spanish football: Competitive balance and the impact of the UEFA champions league. In P. Rodríguez, S. Késenne, & J. Villar (Eds.), Governance and competition in professional sport leagues (pp. 171–190). Oviedo: Ediciones de la Universidad de Oviedo.Google Scholar
  48. Vrooman, J. (2009). Theory of the perfect game: Competitive balance in monopoly sports leagues. Review of Industrial Organization, 34(5), 5–44.Google Scholar
  49. Zimbalist, A. (2002). Competitive balance in sports leagues: An introduction. Journal of Sports Economics, 3(2), 111–121.Google Scholar
  50. Zimbalist, A. (2006). The bottom line: Observations and arguments on the sport business. Philadelphia, PA: Temple University Press.Google Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Department of Economic Analysis and FinanceUniversity of Castilla-La ManchaCiudad RealSpain
  2. 2.IGOID Research GroupUniversity of Castilla-La ManchaCiudad RealSpain
  3. 3.Department of Finance and Economics, McCoy College of BusinessTexas State UniversitySan MarcosUSA
  4. 4.Faculty of Sport SciencesEuropean University of MadridVillaviciosa de OdónSpain
  5. 5.Department of Business AdministrationUniversity of ZurichZurichSwitzerland

Personalised recommendations