A Market’s Reward Scheme, Media Attention, and the Transitory Success of Managerial Change
-
Bernd Süssmuth
and
Stefan Wagner
Summary
Against the background of growing media interest in professional soccer, this paper proposes a moral hazard model with costly state verification to explain how rule changes affecting the reward scheme of team performance impact on the success of managerial change. As has been shown recently based on four decades of data from the German soccer premiership by Wagner (2010), the incentive change in professional soccer leagues enacted by the FIFA in 1995/96 rendered the drastic measure of firing a coach a more efficient instrument in the clubs’ striving for success. In contrast to existing approaches, our model by accommodating the role of media interest is able to jointly explain (i) the impact of introducing an asymmetric reward scheme, (ii) of managerial turnover and (iii) of the perceived degree of ambition of a club on the athletic output of the team. It is shown that the rule change induces a higher agency cost, which is temporarily economized by clubs that change their management. This cost reducing effect temporarily enhances the efficiency of generating athletic output for top league clubs.
© 2012 by Lucius & Lucius, Stuttgart
Articles in the same Issue
- Inhalt / Contents
- Guest Editorial
- Abhandlungen / Original Papers
- One for Sure or Maybe Three
- Beating thy Neighbor: Derby Effects in German Professional Soccer
- Empirical Evidence on the “Never Change a Winning Team” Heuristic
- A Market’s Reward Scheme, Media Attention, and the Transitory Success of Managerial Change
- Gold, Silver, and Bronze: Determining National Success in Men’s and Women’s Summer Olympic Events
- Inner-Outer Lane Advantage in Olympic 1000 Meter Speed Skating
- Employment Effects of the 2002 Winter Olympics in Salt Lake City, Utah
- The Effects of Institutional Change in European Soccer
- A Contest Model of a Professional Sports League with Two-Sided Markets
- Infant Mortality of Professional Sports Clubs: An Organizational Ecology Perspective
- Buchbesprechung / Book Review
Articles in the same Issue
- Inhalt / Contents
- Guest Editorial
- Abhandlungen / Original Papers
- One for Sure or Maybe Three
- Beating thy Neighbor: Derby Effects in German Professional Soccer
- Empirical Evidence on the “Never Change a Winning Team” Heuristic
- A Market’s Reward Scheme, Media Attention, and the Transitory Success of Managerial Change
- Gold, Silver, and Bronze: Determining National Success in Men’s and Women’s Summer Olympic Events
- Inner-Outer Lane Advantage in Olympic 1000 Meter Speed Skating
- Employment Effects of the 2002 Winter Olympics in Salt Lake City, Utah
- The Effects of Institutional Change in European Soccer
- A Contest Model of a Professional Sports League with Two-Sided Markets
- Infant Mortality of Professional Sports Clubs: An Organizational Ecology Perspective
- Buchbesprechung / Book Review
