Cost efficiency of French soccer league teams

This article evaluates the operational activities of French soccer clubs from 2003 to 2011 by using a finite mixture model that allows controlling for unobserved heterogeneity. In doing so, a stochastic frontier latent class model, which allows the existence of different technologies, is adopted to estimate cost frontiers. This procedure not only enables us to identify different groups of French soccer clubs but also permits to analyse their cost efficiency. The main result is that there are two groups among the French soccer clubs, both following completely different 'technologies' to obtain league points, suggesting that business strategies need to be adapted to the characteristics of the clubs. Some managerial implications are developed.