Our results indicate that there is a clear trend towards a more unequal distribution of player talent across teams in the German Bundesliga top divisions between 1998 and 2016. We interpret this as a reduction in competitive balance. Drivers of this decline in competitive balance are, on the hand rising inter-divisional inequality of teams, coaches and players between the two German top football divisions. On the other hand, we see increasing assortative matching of players to teams within the top division of the German football league system (1st Bundesliga). This does not hold for the 2nd Bundesliga where financial endowments such as media payments grew much more slowly compared to those in the 1st Bundesliga, where strong increases in revenue have been seen over the last two decades.

The following graph shows a measure of the distribution of playing talent among clubs over time. Playing talent is increasingly unequally distributed in the 1st and 2nd Bundesliga:

Assortatitve Matching Between Players and Teams over Time

We find this pattern across divisions and within the 1. Bundesliga but not within the second division:

Distribution of Playing Talent Across Teams by Division