Please use this identifier to cite or link to this item: http://hdl.handle.net/1893/24829
Appears in Collections:Faculty of Health Sciences and Sport Journal Articles
Peer Review Status: Refereed
Title: The win/profit maximization debate: Strategic adaptation as the answer?
Authors: Terrien, Mickael
Scelles, Nicolas
Morrow, Stephen
Maltese, Lionel
Durand, Christophe
Contact Email: nicolas.scelles@stir.ac.uk
Keywords: Profit maximization
Utility maximization
Football finance
Strategy
Issue Date: 2017
Citation: Terrien M, Scelles N, Morrow S, Maltese L & Durand C (2017) The win/profit maximization debate: Strategic adaptation as the answer?, Sport, Business and Management: An International Journal, 7 (2), pp. 121-140.
Abstract: Purpose: The purpose of this paper is twofold. First, to highlight the heterogeneity of the organizational aims within the professional football teams in Ligue 1. Second, to understand why some teams swing from a win orientation toward a soft budget constraint from year to year, and vice versa.  Design/methodology/approach: Financial data from annual reports for the period 2005/15 was collected for the 35 Ligue 1 clubs. To define the degree of compliance with the intended strategy for those clubs, an efficiency analysis was conducted thanks to the data envelopment analysis (DEA) method. This measure of performance was supplemented with the identification of productivity and demand shocks to identify whether clubs suffered from such shock or changed their strategy. It enables to precise the nature of the evolution in the utility function, with regards to the gap between expectation and actual performance.  Findings:The paper suggests that a team can switch from one orientation to another from year to year due to the uncertain nature of the sports industry. The club director’s utility function could also be maximized under inter temporal budget function in order to adjust the weight between win and profit according to the opportunities in the environment.  Originality/value: The paper sheds new light on the win/profit maximization. The theoretical model provides an assessment of the weight between win and profit in Ligue 1 and then identifies a new explanation for persistent losses in the sports industry.
DOI Link: http://dx.doi.org/10.1108/SBM-10-2016-0064
Rights: This item has been embargoed for a period. During the embargo please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study. Publisher policy allows this work to be made available in this repository. Published in Sport, Business and Management: An International Journal, 2017, Vol. 7 Issue: 2, pp.121-140 by Emerald. The original publication is available at: https://doi.org/10.1108/SBM-10-2016-0064

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