Bad for Business? The Effects of Hooliganism on English Professional Football Clubs

Football hooliganism, defined as episodes of crowd trouble inside and outside football stadiums on match days, is commonly perceived to have adverse effects on the sport. We are especially interested in the effects of football-related fan violence on a club's potential for generating revenues. In this article, we measure hooliganism by arrests for football-related offenses. We analyze two distinct periods in the history of hooliganism in the English Football League: an early period, during which hooliganism was a fundamental social problem (seasons from 1984-1985 to 1994-1995), and a more recent period, in which hooliganism has been less prevalent (2001-2002 to 2009-2010). In the early period, we find evidence of an adverse effect of arrests on football club revenues for English League clubs. This effect disappears in the more recent period, showing that hooliganism, while still present but at lower levels, no longer has adverse effects on club finances. Our results support a hypothesis that recent gentrification has reduced hooliganism and thereby has had a positive influence on revenue generation.