Do finances explain performance? : Relationship between financial performance and sports performance in Premier League and Allsvenskan.

Abstract: The topic of finance in football have drawn a great deal of attention, not least in the last twenty-five years. While many see football simply as a game, set up to amuse spectators or as a way for athletes to compete for becoming the number one, football has more to it than meets the eye. By introducing alternative rulings for labour, the football industry set of to become increasingly competitive and created opportunities for substantial financial advancements. Today, football has become an industry worth studying in its own right, not least in the sense of financial elements that has become central topics when assessing and evaluating performance. This study has been inspired by the growing competitive landscape we today observe when dealing with European football. Correspondingly, this study will examine how the financial part of football teams correlate with the sportive part. The study follows previous research such as Szymanski (1998) and and Ferri et al. (2017) in the sense of taking a closer look at what impact the financial performance has on sport performance. Although, previous research contains vital information regarding the connection between the two, this study will further contribute to the subject. This study somewhat differentiate itself from others by taking on an approach as comparative in the context of different leagues. By looking at the Swedish Allsvenskan and the English Premier League, this study seeks to see what differ between the two. The study was made by collecting financial data together with assessing the final league table position in order to investigate if correlation could be found and to what extent the two leagues differ in the context of financial impact on sports performance. The findings of this study were mixed in the sense of expectations where significant relationships could be found for numerous variables but not entirely in line with previous research (Ferri et al., 2017). The two leagues also possessed different characters in the context of results, which the authors believe can be due to factors such as the size of clubs and investment opportunities. By presenting an alternative approach to the research field, the authors believe that this study can be of interest to those willing to look closer into the different characteristics of finances and its relationship with sports in European football.