Can sporting success in Norwegian football be predicted from budgeted revenues?

Abstract

ABSTRACTResearch question: Although previous research has shown that there is an association between financial strength and sporting outcome, whereby teams with larger budgeted revenues typically perform better in sports than other teams, this was not supported by a newspaper article describing the 2012 season in Norwegian football. Drawing on the Norwegian football league over the period 2011–2013, this paper sets out to explore the association between financial strength and sporting outcome in detail.Research methods: To examine fully the association between financial strength and sporting outcome, a wide array of different statistical methods is adopted, ranging from simple t-tests to regression analysis and fixed effects regression analysis.Results and findings: A duality is present in the relationship between budgeted revenues and sporting outcome, as evidence is found suggesting that budgeted revenues are a significant driver of sporting outcome among the bottom-half teams but not among the top-half teams. Moreover, the static and dynamic regression models, as well as the fixed effects panel data models, support the notion of budgeted revenues being a driver of sporting outcome.Implications: The duality in the results is also supported by the fixed effects models, indicating that competitive advantages other than financial advantages are relevant. An interpretation of these findings is that money is a significant driver of sporting success, but only to a certain extent (i.e. avoiding relegation). In other words, a focus on sports is still important (i.e. Moneyball).