This project focused on the unique setting of the UK football industry as a laboratory to examine how firms invest in employee training programmes to increase their human capital and firm productivity. Specifically, the researchers asked: does investment in purchasing football player contracts pay off?

Many firms invest in employee training programmes to increase their human capital and firm productivity. Yet, little is known what the benefit is, if any, to the investing firms, because data is not available. Given the high degree of uncertainty associated with such contracts, it is not clear that football clubs can, on average, benefit from such investments. Three measures of future performance were used: sales, operating profits and operating cash flows.

A relatively weak association was found between the investment in player contracts and these measures of future performance. This suggests that such investments in human capital lead to strong economic assets. However, examining share prices of buying clubs as a proxy for stock market perceptions, suggests the stock market perceives these contracts as valuable assets.

Read the full article below to find out more.