Football and externalities: Using mathematical modelling to predict the changing fortunes of Newcastle United

TL;DR

This paper develops a mathematical model to forecast how Saudi Arabia's investment in Newcastle United FC might influence the club's league performance, using Manchester City as a comparative benchmark.

Contribution

It introduces a novel application of DiD logistic regression to predict football club performance based on external investment levels.

Findings

Model predicts potential league position improvements for Newcastle United

Investment levels significantly impact club performance

Method demonstrates effective forecasting in sports economics

Abstract

The Public Investment Fund (PIF), is Saudi Arabia's sovereign wealth fund. It is one of the world's largest sovereign wealth funds, with an estimated net capital of $382 billion. It was established to invest funds on behalf of the Government of Saudi Arabia. Saudi Arabia is aiming to transfer the PIF from a mere local authority to the world's largest sovereign fund. Thus, PIF is working to manage $400 billion worth of assets by 2020. It was with this Public Investment Fund that Saudi Arabia decided to buy out the football club- Newcastle United FC- a mid-table club of the premier league. In this paper, we aim to forecast the investment levels and the subsequent improve in the league position of Newcastle United FC using the model of another premier league club- Manchester City as the base. We employ the DiD approach of logistical regression through Python. Keywords: Regression, Investment, Football, Forecasting