A payroll efficiency analysis of Europe’s top football leagues

Abstract

Abstract Accepted by: Ali Emrouznejad Top European football teams have large budgets mainly due to the high wage bills they pay to the players. Therefore, it would be interesting to determine if these football teams are paying inflated salaries considering the sports results that they obtain each season in both national and international competitions. This study focuses on the top five European football leagues (Italian, Spanish, English, French and German). We propose a novel non-convex, non-parametric metafrontier analysis approach to determine whether the football clubs are overpaying their players considering their sporting performance. Goals against in both national and international competitions are modelled as undesirable outputs. Each football team is benchmarked first within its own league and then against all five leagues. From this, apart from estimating the payroll efficiency of each team, the average efficiency of each of these five leagues can also be computed. An exhaustive analysis and discussion of the results is presented using data from three seasons (2020–2023). Some ‘important’ football clubs pay salaries that are not justified by their performance when compared with other, more modest, clubs that pay salaries more in line with the sports results obtained. Ligue 1 is the league that, on average, makes the most efficient use of their payroll, followed by the Bundesliga and, somewhat behind, La Liga and Serie A. The Premier League occupies the last position in terms of average payroll efficiency.