New players? New managers? New stadiums? Which investments drive football club performance?

PurposeProfessional football clubs, like other businesses, need to make investments in both human capital and fixed capital. We examine how investments in players, managers and stadiums drive football club performance.Design/methodology/approachUsing data from the English Premier League (EPL) from 2012 to 2021, we use a lag model to relate investments in the past two years to the current financial and sporting performance of clubs.FindingsWe find that investments in new players are associated with better subsequent sporting performance. A £100 million increase in transfer expenditure is associated with 12 more points and 4 better table positions over the following two seasons. Investments in stadiums are associated with better subsequent financial performance. An increase in stadium capacity by 10,000 seats is associated with an extra £26 million in profits over the next two seasons. Manager changes are associated with better sporting performance in non-Big Six clubs, but worse sporting and financial performance in Big Six clubs.Originality/valueThese results have implications for optimal investment strategies at professional football clubs. For example, we find that new managers in Big Six clubs need to be complemented by additional transfer expenditure of at least £135 million to maintain the same level of sporting performance.