The mid-1990s saw two major changes in the structure of European club football with the potential to affect competitive balance in domestic leagues. One was the reorganization (and rebranding) of the European Cup into the Champions League (CL). With the European Cup only the champion of each national league could compete for the top European club title but, with the reform that took place in the 1996-97 season, higher revenue leagues now qualify more than one club to the competition (now named CL). The other was the Bosman Ruling, the set of 1995 European Court of Justice decisions that effectively eased player movement between clubs, especially that of European Union nationals to clubs in other EU countries. Each of these institutional changes could have plausibly increased the competitive advantage of higher revenue clubs against their league rivals.
In our project, still in its early stages, we plan to measure and analyze the competitive balance effects of these changes across a sample of domestic football leagues. We hypothesize that while the Bosman Ruling eased player movement and thus decreased competitive balance as the clubs with greater current and potential revenues could acquire more top players, the Champions League expansion would be more ambiguous in its implications across leagues. We hope to distinguish the implications of these two events that each took effect with the 1996-97 season.