Why Does the Invariance Principle Hold? An Empirical Analysis of Collective Media Rights Sales and Competitive Balance

In this chapter I empirically investigate the effect of introducing collective media sales on competitive balance in a case study of the Italian top soccer league Serie A. I leverage a unique financial database containing the original accounts of clubs in the top European soccer leagues (see Hoey et al, 2021). The results show that collective sales resulted in a more egalitarian distribution of media revenues in Serie A in comparison to similar leagues. Likewise, the distribution of total revenues and wage spending also became more equal, while it diverged in rival leagues. This evolution in club finances did not result in more balanced sporting outcomes in Serie A.