Arbitrator Decision‐Making in the Transfer Market: an Empirical Analysis

This paper analyses data generated by the annual round of arbitrated settlements of disputed transfer fees for end‐of‐contract players in the English Football League. Using information on final‐offers of the disputant clubs and data on a variety of player and club characteristics we analyse arbitrated fees and final‐offers, and the relative importance of final‐offers and case facts in fashioning outcomes. Our analysis suggests that a large proportion of the variation in settlements can be accounted for by certain case facts rather than a mechanical compromise of final‐offers, with the latter receiving a relatively low weight. In general, our findings are consistent with the view that conventional arbitration systems generate little useful information in terms of final‐offers from the disputant parties.