Competitive Balance: Time Series Lessons from the English Premier League

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Abstract

Structural break points in the First Division/English Premier League time series of competitive balance identify an Early Period, a Pre-World War II Period, a Post-War Period, and a Modern Period. The Early Period corresponds to technology diffusion (defense and tactics) along with important economic structural imposition by leagues. The war periods are common to many time series. The Modern Period's sharp decline in balance corresponds to the newest version of the Champions League in 1994/1995 and the Bosman Ruling of 1995. Rottenberg's invariance principle suggests that it would be the former, rather than the latter, responsible for the historical rate of decline that follows this structural break.

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