Income Inequality, Competitive Balance and the Attractiveness of Team Sports: Some Evidence and a Natural Experiment from English Soccer

Abstract: This paper examines the relationship between financial inequality, competitive balance and attendance at English professional league soccer. It is shown that while financial inequality among the clubs has increased, competitive balance has remained relatively stable and match attendance appears unrelated to competitive balance. A clearer test of the relationship between these three variables is suggested by a natural experiment comparing attendance at FA Cup matches with the equivalent league fixture. Because income inequality is primarily driven by inter- rather than intra-divisional inequality, the FA Cup has been a much more unbalanced competition than the divisional championships. The data shows that attendance at FA Cup matches relative to the corresponding league matches has fallen over the last twenty years. I would like to thank Syariza Kamsan for valuable research assistance. I also thank