Limiting Foreigners in Sports Leagues

The blog Economic Logic has a post on some new research from sports leagues on the prevalence of foreign players. It’s based on new research from Markus Lang, Alexander Rathke and Marco Runkel on the potential benefits of restricting foreign players in leagues.

The suggestion is that leagues with foreigner restrictions are more balanced competitively, domestic player wages are higher and club profits rise too. I can certainly believe much of this, and in the case of the English Premier League, some of it sounds desirable – Man United’s dominance in recent years means I lose interest.

But would such a restriction really be enough? My micro theory isn’t my strongest suit, but it seems that the model in the paper doesn’t allow for outside injections of cash into clubs, such as Roman Abramovich’s money at Chelsea, or the Abu Dhabi United Group and Manchester City. Such developments will likely always, when the talent pool isn’t fixed by roster size (something referred to in the paper), lead to competitive imbalance as the teams with outside injections can buy up the best of the available player talent, domestic or foreign, and dominate a league.

I personally am not in favour of restricting foreign players, particularly in the Premiership, as I believe it will do little to help develop domestic players (all economists know about the virtues of protectionism), and I don’t think it will help create a more balanced contest because of other issues such as the absence of squad size limits.

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