Impact of Immigration on transfer activity by English football clubs

Analyzing the effect of The Bosnan Ruling of 1996

Abstract

Rising immigration has led to a larger proportion of foreign players in each league. This paper aims to explore the relationship between rising immigration and average transfer fees. This paper also studies the impact of the Bosman Ruling in 1996 on the football transfer market. The variables are studied pre and post the ruling. In order to build the economic model, data of all teams from the English Premier League for the past 28 years is collected. The variables for which data are collected include the Relative Average Transfer Price (inclusive of inflation), Relative Broadcast Revenues earnt per club, and the league coefficient of the English Premier League. A multivariable linear regression is performed on these data with the Relative Average Transfer Price as the response variable and other variables as explanatory variables.
Further, dummy variables are created for each team and each year to account for unaccounted changes. After analyzing the regression, the model is found to be relatively strong in its prediction power with an adjusted R Squared of 0.642 and a standard error of the regression of 21.528. The model’s results suggest that broadcast revenues and immigration numbers have the greatest impact on transfer fees, while the league coefficient is not as important as the general public’s view of it. However, it is seen that before the ruling it was the league coefficient that had a major impact on transfer fees. After the ruling in 1996, broadcast revenues and number of immigrants took precedence.