The Effects of Home-Grown Rule on Eciency of Sports Teams : Evidence from English Premier League

Research question The English Premier League, one of the most successful football league, is on the verge of losing its competitive edge due to Home-grown regulation proposal. This study focuses on the effects of this regulation on football clubs’ nancial and operational eciency. Research methods To accurately measure the effects of these measures, Data Envelopment Analysis (DEA) technique was used to 10 different Premier League Clubs spanning 7 years. Data of 10 clubs that have never been relegated were collected over 7 years. and


Introduction
Every business has its innate pursuit, and for football clubs, it is to increase its win-rate in order to elevate its status and maximize pro t. Football clubs that are nancially ine cient or unstable face di culties in signing players and nalizing its team, which results in an adverse effect on the win-rate of the club itself.
Thus, football clubs strive to achieve eld success, and this pursuit has implications in terms of business decision-making (Morrow, 2003). Therefore, according to Szymanski and Kuypers (1999), the connection between sports and nancial activities greatly affects the competitiveness of football clubs.
However, from the league-perspective, other goals exist alongside nancial e ciency. As noted by Amenta et al (2012), "the young athlete is another area of interest in which political institutions have requested sport governing bodies to be active in guiding professional teams" (p. 28). While sound nancial structure is still important, bringing up the next generation of players and ultimately contributing to the development of national sports are held as a primary mission as a sports league. For this reason, a sports league's regulating body imposes regulations upon its sports clubs to ensure that this primary mission can be achieved. These regulations often involve restrictions on the sport clubs' nancial association. In doing so, this restructuring effect has led to "migration that patterns that appear to be having a negative impact on indigenous player development" (p. 638). (Bullough and Mills, 2014) However, its symptoms will be hard to observe, for the association and the club will not have any covert problem funding for signing ready-made players, due to their continuously increasing broadcast fees and incomes (Barros and Leach, 2006b). It will not be visible from performance standpoint, for these players are not likely to adversely affect the performance or quality of the league and football. Its talentdiminishing effects will be rather visible from the international tournaments involving national teams such as FIFA World Cup (Jewell, 2014). In fact, this phenomenon has plagued the English national team for decades. Unlike its league stature, English football has suffered massive depreciation in the international tournaments (Taylor, 2008).
One prime example suffering from this effect would be, ironically, English Premier League itself.
According to the UEFA (2016), the English Premier League stands at the third most skilled league in the world. Considering the fact that UEFA holds one of the most advanced football leagues, there is no doubt that English Premier League is one of the most successful and accomplished league in the world. Yet, England's football in World Cup has been disappointing. In fact, Spain, which holds the rst spot in league rankings, won the FIFA World Cup in 2010, and Germany, which holds second in League ranking, won FIFA World Cup in 2014. However, unlike these countries, England, which holds third, did not make through round of 16 in 1998 and 2010, and round of 8 in 2002 and 2006, making its reputation mismatched with results.
FA's adoption of Home-grown rule is focused on these realities that "pipeline for young Home-grown talent is still broken" (p. 1) (The FA, 2016). The purpose of this very regulation is to "create as many opportunities as possible for young Home-grown talent to compete at the highest level" (p. 1) thereby stimulating growth in youth academies (ibid). This, in turn, is expected to help England to achieve higher position in international competitions such as FIFA World Cup. The Home-grown regulation aims to x such phenomenon by raising younger, indigenous athletes by requiring the usage of these players in the well-infrastructured league.
In England, as Henderson (2011) asserts, clubs could sign any player around the globe without any restriction until the 2009-2010 season. However, starting from 2010-2011 season, the regulation was in place to restrict foreign players to 17 players in 25 people roster. Each team is therefore required to submit the 25 player roster comprised of players 21 years old or older. This regulation, for it required the certain level of English players, propelled the signing fee of such players to skyrocket, burdening the club and the league greatly.
However, even after these power implementations were in place, England's international competition did not improve. In 2014, England failed to qualify from the group stage, putting its team in abysmal situation. In light of this disappointing result with strong league status, FA is seeking to harden the Homegrown regulation. The details of regulation, reported by Chosun Ilbo (2015), are: rst, to restrict non-EU players to EPL by tightened requirements for work-visa through restricting the maximum FIFA rank of originating country from 70 to 50 and drastically increasing the number of A-matches the athlete has to compete in. Second, FA tightened the regulation by raising the required number of home-grown players from currently 8 to 12 out of 25 players-roster starting from 2016 incrementally and proposing stricter home-grown status. Currently, if a player is registered to English or Welsh club before he turns 18, he is given the status. However, under the new regulations, a player must be registered before the age of 15.
In other words, under the Home-grown regulation, the football club will need to increase its dependence on English players. With the toughened the status of English players, there will be an increase in the scarcity of English Players in the league as some players will lose their status as home-grown players.
Prime examples of this would be Morgan Schneiderlin (Everton) and Cesc Fabregas (Chelsea). According to Skysports, "Mid elder Schneiderlin has been with Southampton since 2008 when he joined as an 18- year-old from Strasbourg, France (2015b)" (p. 1). With new toughened rule, he will lose his status as a player has to be signed in a club at age of 15. Cesc Fabregas falls under the same category as he joined Arsenal at the age of 16 (Skysports, 2015b). With these effects, the cost to sign an English player will skyrocket, as English players will be of scarcity in the market.
Overall, the Home-grown regulation is obviously on the way to increase burden for not only football clubs, but also to fans, the regulatory agency, and to the entire league as well. In due course, it will prove to be detrimental to the nancial situation of the league. It is in light of this situation that this study attempts to measure ine ciency that the Home-grown regulation imposes on the football clubs and football as a sport using data envelopment analysis (DEA) technique.

Literature Review on Analytical Model
This study utilizes the data envelopment analysis (DEA) model in determining the effect of the Homegrown regulation on the EPL football clubs' nancial e ciency. In formulating a model for DEA, it is crucial to set proper input factor, output factor and decision making unit (DMU) to adequately show the e ciency of respective DMUs. The following previous literature on the e ciency of English football clubs have been reviewed for guidelines in deciding which factors to include in input and output factors, and in deciding the DMUs. Barros and Leach (2006a) uses league points, average attendance, and turnover as outputs. and the number of players, player's wage, and facility cost as inputs in evaluating the performance of EPL using DEA. As DMUs, 12 teams that were not relegated between the seasons from 1998-99 to 2002-03 were chosen, resulting in 60 DMUs (12 teams over 5 years). Meanwhile, Guzmán and Morrow (2007) set points earned, turnover as outputs to account for commercial and playing factor, and staff wage including those of the players as well as the director, managers and coaching staffs and operating expenses as input factors in calculating the e ciency and productivity of EPL football teams. Espitia-Escuer and Garcia-Cebrian (2010) applies player's individual ability tendency and physicality as input factors and the number of games played and the number of players for output factors. Haas (2003) chose remuneration for managers and players as input factor and earned points (for performance measure) and turnover (for franchise's nancial success) as output factors. Guzmán (2006) uses similar input and output factors in that it uses pro t and expense including speci ed standards as wage and administrative expense as input factors, and for output factor, turnover including all the matchday revenue and broadcast revenue. Table 2 summarizes the input and output factor used in the literature review.
Based on this literature review, the input and output factors for this study have been decided as follows. First, the operating cost and net asset were chosen as input factors. Operating cost includes the club's nancial burden and activities, including, but not con ned to, players' salaries, transfer fees, and various maintenance fees. The operating costs of a club re ects the comprehensive well-being of the club, providing the information about its nancial activities. The net asset is the second input factor. Although nancial activities primarily affect the clubs' nancial health, the assets that clubs own and utilize tend to have a signi cant impact on the nancial activities themselves. For example, the stadium, which is the primary asset for most clubs, directly in uences the matchday revenue, which directly affects the turnover and operating pro t. Three factors were chosen as output factors. In all of the literature reviewed, earned points were considered an important output factor, which signi es the performance of a club. The club's annual turnover was chosen as the second output factor since it represents and measures nancial success of the club, and possibly the overall state of the club. As the nal output factor, operating pro t was chosen to re ect the overall cost spent in running the football club, which will allow us to see the e ciency of the club's management. Also, in this paper, authors have included both the number of players and operating expenses as factors for following reasons. In this paper, we wanted to assess how regulation requiring a certain number of home-grown players on the team unfairly in uences the clubs by giving home-grown players undeserved advantages not only in terms of signing bonus but in terms of wage level as well. In other words, with similar wage levels, clubs are now less able to recruit quality players than before, affecting both their wage expense as well as the size of the squad. With this in mind, we wanted to assess how the home-grown rules also affect the wage levels of players by evaluating both wages and the number of staff members as input variables. In addition, the authors carried out the analysis multiple times by singling out and using different output factors. In order to see the performance management of the football clubs, the authors also did a separate analysis using points earned as the output factor. The authors conducted separate analyses using operating pro t and turnover as output factors respectively by employing the same method as above. Conducting multiple analyses with different output factors allowed us to see the e ciency of the clubs' performance, which is measured by each of the output factors. With this in mind, we wanted to see how the Home-grown regulation affected clubs both from a nancial standpoint and a performance standpoint.
In addition, there are literatures that include both wages and number of staff members as factors. As mentioned in the literature review part, Barros and Leach (2006) discusses the importance selecting the proper input and output measures, and therefore, includes both players' wages and the number of staff members as the output factors to measure the performance of a team in the analysis. Moreover, in a different paper, Barros and Santos (2003) uses both the salaries of the staff and the number of staff members as the input factors for the analysis. Various studies have also highlighted and included the number of staff as its input; for example, Barros (2003) included the number of trainers in assessing the e ciency of training activities of sports federation; Espita-Escuer (2010) included the number of players listed in the squad throughout the season to measure the e ciency of UEFA Champions Leagueparticipating clubs. Following these studies, we included both the wages and the size of staff to see how the Home-grown regulation affects the wage negotiation for the staff as well.
The descriptive statistics for clubs' wages and for the number of staff members also show that each of the factors had a different impact on the e ciency of the team, thus implying a weak correlation between the two variables and thus, implying that they are quite independent from each other. For these reasons, we believe that using both clubs' wages and the number of staff members are variables that are helpful in seeing how the Home-grown regulation negatively affects clubs in negotiating players' salaries.
In order to see how input factors decided affected the different measurements of performance, this study also chose to conduct independent and separate analysis by singling out and using different individual output factors such as points earned, operating pro t and turnover. This analytical consideration allowed the author(s) to trace the correlation between each output factors and input factors, making the study more meaningful.
In selecting the DMUs, author(s) have observed 10 teams that were not relegated throughout the seasons from 2007-08 to 2013-14, taking into account that major provisions of the Home-grown regulation took effect during the 2010-2011 season. The 10 football clubs chosen for analysis are Arsenal, Aston Villa, Chelsea, Everton, Fulham, Liverpool, Manchester City, Manchester United, Sunderland, and Tottenham Hotspur, as they are the only teams that were not relegated throughout the chosen periods, which make them better quali ed for DEA comparison. In addition, " rst division teams were chosen rather than those in other divisions because of their economic and social relevance and due to the abundance of available statistics" (p. 25). (Garcia-Sanchez, 2007) The chosen seasons for analysis includes 3 years before the Home-grown regulation was strictly implemented and 3 years after it was implemented in order to chronologically compare the effect of the regulation imposed. Unfortunately, the data for 2014-15 season was not included due to nancial reporting deadline for UK companies at the time of this study. For the comparison, authors have included clubs that were not relegated during the observed time period, selecting 10 DMUs per year. The analysis compares the e ciency scores of the chosen teams over the 7-year period. This study followed the recommended DMU selection proposed by banker et al. (1984), the recommended minimum of the Data Envelopment Analysis technique. Furthermore, according to Nyhan&Martin (1999), the appropriate number of input and output variables for DEA should be determined based on the number of DMUs. This is because the increase in variables for DEA results in the increase in e cient DMUs and this hinders identi cation of ine cient DMUs. Cooper et al. (2004) stated that the number of DMUs should be triple the sum of the number of input and output variables for DEA, and Bousso ane et al. (1991) mentioned that the number of DMUs should be larger than the product of the numbers of input and output variables.
The number of DMUs and the numbers of input and output variables used in this study are 10, 2, and 1, respectively, and thus this study meets the requirement stated in Cooper et al. (2004) as well as in Bousso ane et al (1991). Thus, the number of variables and DMUs used in this study is deemed appropriate for DEA.
Originally, there has been a controversy between Cooper et al. (2004) and the Bousso ane et al. (1991) rule on number of DMUs required for the analysis. Therefore, in this research, author(s) discreetly approached the matter in order to satisfy both Cooper et al. (2004) rule, which stated that the number of DMUs to be equal or greater than the three times the sum of the number of input factors and output factors, and the Bousso ane et al. (1991) rule, which stated that the number of DMUs to be equal or larger than the product of the number of input factors, and the number of output factors. First, author(s) designed the original model derived from the multiple literature reviews. In this model, the operating cost and and net asset have been used as input factors, while points earned, operating pro t, and turnover have been used as the output factor. Barros and Leach (2006a) has used net asset as the input factor in the research, while Guzman and Morrow (2007) has used the various cost as the input factor. Also, Guzman and Morrow (2007) has used the turnover and points earned as the output factor. Thus, this model contained 2 input factors, and 3 output factors as shown in the gure 1.
However, taking into account the fact that this research uses 10 DMUs, this model satis es the Bousso ane et al. (1991) rule but does not satisfy the Cooper et al. (2004) rule. In compliance with the Cooper et al. (2004) rule, the original model would have to have at least 18 DMUs, for 2 input factors and 3 output factors. However, in the scope of this research, this was impossible to achieve due to the lack of DMUs that satis ed both homogeneity and comparability within the group of DMUs. This is due to the unique characteristics that Premier League clubs possess and the unbridgeable nancial difference between Premier League teams and EFL Championship Teams (second division). Therefore, in this research, author(s) intentionally limited the DMUs to the teams that have never been relegated during the proposed 7-year timeframe. We suspected and con rmed that if a club were to be relegated in any point during the timeframe, the nancial impact of the relegation would seriously impact the homogeneity of the DMUs. This claim is substantiated by many articles and policies including the article from Daily Mail by Alex Miller.
According to Alex Miller, in 10-11 season, "Average Premier League wages have reached £22,353 a week -before lucrative bonuses -or £1.16million a year." "Average Championship earnings are £4,059 a week (£211,068 a year), less than a fth of players one division above." (Miller, 2011) As shown in the gure, players wage alone shows ve-times difference between the leagues, rendering the simple comparisons meaningless. Other aspects of nancial differences are even more striking. Due to the TV Broadcasting right deal that Premier League struck with Skysports and others, the gap is due to be widened. This phenomenon is best shown by how much the Championship teams are wanting to the be promoted.
"The stakes could scarcely be higher. With a £1.7bn pot of gold waiting at the nish line, the incentive to reach the Premiership has never been greater. The new Premier League television deal, rati ed in May, means that the three teams to be promoted from the Championship will get their hands on a jackpot that will have chairmen drooling." (James, 2006) However, the gap is widening. According to BBC, "The Premier League has sold television rights to its games for a record £5.136bn, 71% above last time." (BBC, 2015). This TV rights fee will be distributed the Premier League clubs, making the turnover gap between two leagues even more bigger, quite possibly to incomparable level. Premier League clubs, with much higher turnover, are able to operate on expensive stadiums, players and higher operating cost.
Therefore, in the interest of the proper usage of DEA, it was deemed highly unsuitable to compare the Premier League teams with relegated teams or Championship teams. It was very clear that relegated teams, even for a one-time relegation, did not have the same means and measures to compete nancially with Premier League teams.
For the homogeneity and comparability of the DMUs, it was not only inevitable, but also necessary to only include the teams that remained in the Premier League during the observed seasons. Therefore, as described in the First model, as shown, uses points earned as the output factor, operating cost and net asset as the input factor. Second model, on the other hand, uses operating pro t as the output factor, while using the same input factors as the rst model. Third model shares the input factor with rst and second model, while using turnover as the output factor. The analytical results of each model as DEA scores are described in the Table 5 in the part 4 of this paper.
After setting three models, author(s) performed Kruskal Wallis one-way ANOVA nonparametric test at .05 signi cance level in order to determine the model that is best suited for the analysis. Result showed that the model 1 of the revised model which incorporates points earned as the output factor, and original model are statistically same. The result of the pairwise analysis is shown in the gure 3 and the statistical calculation is shown in the table 3.
Each row tests the null hypothesis that the Sample 1 and Sample 2 distributions are the same. Asymptotic signi cances (2-sided tests) are displayed. The signi cance level is .05 Therefore, in this research, author(s) will incorporate the rst model (point-earned) model to further analysis of the impact that the Home-grown regulation has on each football club.

Analytical Model and Data Gathering
The nancial data necessary for DEA were gathered from each club's annual investor relations reports, and other data such as points earned were gathered from the Barclays English Premier League website.

Methodology
Semi-Oriented Radial Measure(SORM) DEA is a method to measure relative e ciency based on input and output variables. The advantage of DEA is that there is no need for de ning the relative importance of the input and output variables to allow the simultaneous analysis of multiple variables. The Charnes-Cooper-Rhodes (CCR) model and the Banker-Charnes-Cooper (BCC) model are the two major models for DEA, where the CCR model assumes a constant return to scale and the BCC model, variable return to scale. As the increase in input variables does not necessarily increase productivity in this study, the BCC model was considered a better t for this study.
However, our data set has some negative values in output variables. In this reason, we cannot use the normal DEA method but have to use Semi-Oriented Radial Measure(SORM) for evaluation of football clubs in EPL. SORM uses the absolute value de nition and proposes a model that can deal with negative data in its datasets (Emrouznejad et al., 2010). This model can be applicable to non-radial slacks of datasets with positive values and negative values. The most important concern of SORM is that it separates the negative and positive values parts from the original variables, containing negative data, and then utilizes the absolute value to change the negative value to the positive value part. DEA can be also divided into output-oriented DEA and input-oriented DEA: output-oriented DEA explores how much output needs to be increased for better e ciency whereas input-oriented DEA evaluates how much input must be decreased for better e ciency. As the football clubs analyzed in this study aim to increase their e ciency scores, output-oriented VRS-SORM model proposed by the Emrouznejad et al. (2010) with positive and negative values in input and output variables was used.

Results
Chronological analysis of DEA result: Change in the e ciency The DEA was performed on the data of the 10 teams over the 7-year period. According to Charnes et al. (1978), Banker et al. (1984), DMU is at its e cient state at the e ciency score of 1. The following graph shows the changes in the e ciency score of each of the 10 clubs by season.
Following is the result from the original model, However, due to the limitations regarding the Cooper et al. (2004), author(s) used the 3 models that utilizes 2 input models and 1 output model, and the rst of those models has been used for analysis.
Following is the extensive result from each model.
With the analysis above, the author(s) used the rst model, noted model (1), as the subject of analysis.
With this, following gure shows the uctuations of e ciency for each club before and after the implementation of the Home-grown regulation.
Two things can be inferred based on the gure above based on the gure above. While some of the clubs showed uctuations within limits, the major trend of the e ciency scores was an overall drop pattern starting from the 10-11 season. This trend was even more conspicuous for Tottenham Hotspur, Chelsea, Aston Villa and Arsenal, which showed unparalleled and unprecedented drops in their e ciency scores. Also, unlike the relatively concentrated and uniform pattern of the e ciency scores of the football clubs prior to the 10-11 season, the trend seemed to dive and diverge starting from the 10-11 season. These drops in the e ciency scores for the most clubs can be attributed to the universal application of the Home-grown regulation starting from 10-11 season. These drops in e ciency is also shown by the average DEA scores of the football clubs. Following shows the overall trend of the average DEA scores of the EPL clubs used for this research.
In this gure, it clearly shows that the clubs, in general, shows signi cant and unparalleled drop in e ciency after the 10-11 season when the Home-grown regulation has been implemented. Also, the impact is never fully recovered until much later seasons, showing the lasting impact that the regulation has on each club. This shows that it requires much more asset and operating cost to achieve the same league scores than the Home-grown regulation was implemented. This is due to the fact that signing quality English players has become much more burdensome and di cult.
On a more individual level, clubs seemed to have been affected to varying degrees. However, there are some uni ed trends among the clubs that show the drops in e ciency starting from 10-11 season. There are, of course, clubs that do not show the drops in e ciency score in 10-11 season or after. Yet, these clubs are more adversely or favorably affected by other factors, which will be further elaborated.
Following is the clubs that are affected by the Home-grown regulation.
We can see that Tottenham Hotspur, Aston Villa, and Manchester United were e ciently run prior to 10-11 season. However, they took a signi cant turn starting from the 10-11 season. Aston Villa, for example, showed continuous drop in the e ciency score after the implementation of the Home-grown regulation in the 10-11 season, suggesting that this club was signi cantly impacted by this very regulation. Tottenham Hotspur showed a much more drastic drop after the implementation of the Home-grown regulation.
Before the 10-11 season, this club showed outstanding e ciency scores, hinting that the overall management created maximum output with minimal input. However, when the regulation was put in place, its e ciency dropped signi cantly, recovering seasons after the initial drop.
Other clubs showed drops during the 11-12 season. Clubs like Chelsea, Liverpool, and Manchester United showed drops in their e ciency. In fact, Chelsea and Liverpool showed the particularly signi cant drops in e ciency. All of these clubs seem to have been affected by the Home-grown regulation due to the strain this regulation has imposed on the football clubs, when we consider the fact that drops in e ciency coincide with the implementation of the Home-grown regulation.
However, in case of Manchester City and Everton, it is very di cult to attribute the drops in their e ciency entirely to the Home-grown regulation. Manchester City had been largely run ine ciently before the implementation of the Home-grown regulation in the observed timeframes, which may have been due to the change in its ownership and the massive investment made to the club. In fact, the new owner of the club, City Football Group, renovated the stadium and changed the players and coaching staffs to completely transform the club, resulting in massive spending which, in part, led to the low e ciency score. Therefore, in this case, it is not clear how much impact the Home-grown regulation had compared to the massive investments that its holding company made. Because much of the investment on stadium and infrastructure has been made starting from 08-09 season, it can also be inferred that the impact of the Home-grown regulation may not have had impact on Manchester City like it did on other clubs. Everton went through similar changes after management promoted much of its squad from youth players, and those changes had an impact on its e ciency score.
In clubs' perspective, players' salaries, and transfer fees signi cantly affect the solvency and operating cost of the football club. As shown in the table 3 of this paper, personnel wage itself constitutes more than half of the operating cost, showing that overall increases in transfer fees and wages will signi cantly affect the clubs' running e ciency.
The Home-grown regulation has an impact on clubs in this particular manner. Requiring clubs to play and include certain number of English-bred players leads to the lack of supply of and the surge of demand for English players, making them extremely expensive and even unaffordable. This phenomenon has driven up the English players' transfer fees to unimaginable levels, leading to compromised e ciency on the clubs' part. In section 5, this paper seeks to further investigate this phenomenon and clarify this chain reaction of an event.

Discussion
Understanding the implications of the Home-grown regulation affects greatly on the e ciency management of the football clubs, and ultimately expansion of the league as the whole. This section will touch upon three discussion topics: First, we will discuss the ine ciency that the regulation imposes on the clubs as well as its e cacy in achieving their intended political purposes. Second, we will look into the difference in the regulation's effect on different clubs, which vary by situation. Lastly, we will consider whether the effects stemming from the implementation of the Home-grown regulation is a temporary shock or a lasting change.

The E cacy of Regulations
The ultimate purpose of the Home-grown regulation is to utilize high standards and infrastructures of English Premier League to elevate the levels of English players. This, in turn, is hoped to lead to better results in the international tournaments for the England. In order to do so, the Home-grown regulation, and the new proposal must achieve following sets of criteria. First, they must allow younger English players to be endowed with more time in the eld. More experience will lead to better performance, and it cannot be achieved without giving more eld time to younger athletes. Second, English players, as a whole, must comprise bigger portion of the league. However, the Home-grown regulation and the new proposal fails to achieve both these requirements. Figure 5 shown above e ciency change before and after the Home-grown regulation enforcement It has been well established throughout this paper that FA's Home-grown regulation and its proposal imposes nancial burden causing massive ine ciency in affected football clubs. However, since these regulations contain political purposes, they must also be considered in a different light: the e cacy. According to various statistics, the regulation's e cacy is doubtful. It is evident from statistics that English players take lesser parts of the Premier League. According to Rhodes (2014), the percentage of English footballers in Premier League is consistently showing downward pattern despite all the regulations and breaks in place.
"A quick look at the transfer market reveals a rather striking downward trend in the percentage of homegrown talent in the PL. In fact, less than 1/3 of the league is actually comprised of footballers from England, it stands to reason that before the Premier League existed (pre-1992), the percentage of Englishmen was at least 70% and probably higher (it was di cult to switch teams before 1995). It's not that the PL is lled with players from one foreign nationality; rather, the other 68% come from 65 different countries. The PL should be complemented on its wide diversity of its players" (p. 1). (Rhodes, 2014) The Home-grown regulation has not shown any e cacy in nurturing the youth players in the Premier League. In fact, the harsh regulation has ironically led to detrimental effects in training young athletes.
Statistics support that this regulation is not effective in promoting youth players to be introduced into the Premier League. English Premier League has given not only one of the lowest play time for youth players among all major football leagues in Europe, including Serie A and Bundesliga, but also one of the lowest number of contracts for youth players. For example, according to Tayloer (2008), In the 2006-7 season, 498 players started Premier League games. Of these, only 191 were English -just 38%. Statistics suggest that even after the Home-grown regulation in place, football clubs in England still prefers to sign expensive ready-made players with much more experience. The league's tendency to prefer such players deters the growth of young English athletes, thus rendering such regulations ine cient or virtually useless.
It can be seen that England has the highest number of international and expatriate's percentage along with minimal percentage of club-trained players next to Italy. With the lowest percentage of English footballers in the Premier League, it is not impossible to understand the FA's proposal to tighten the Home-grown regulation. Even after the major clauses have been adopted in the 2010-2011 season, there has been a consistent trend of downward drop in the percentage of not only youth players in the eld, but also in English players as a whole.
The e cacy of the Home-grown regulation has thus proved to be minimal (Danziel et al, 2013). However, the FA insists on strengthening regulations for the similar reasons that failed to be achieved by the previous regulations (The FA, 2016). According to proposal, each football club must include 12 or more English or Welsh players in the designated 25 people roster. This would impose heightened demand on English players, making it more di cult for clubs to nd players with both nationality and decent performance. Moreover, the Home-grown regulation can be interpreted as protectionism for national players. Considering the fact that much of the popularity derives from the various parts of the globe, it is a very perilous move to put in discriminative clause in the regulation that might upset the global fans of EPL. It seems highly recommendable for the FA to reconsider its clauses in the regulation.

Consideration for initial conditions
The football clubs will face the same or similar costs in ful lling the mandated regulation. It is no secret that some of the clubs such as Arsenal and Manchester United have superior youth academy system to supply their rst teams with better and younger English players. However, many other clubs do not have the same advantage. For the former clubs, it will be much less costly to ful ll the regulation, as they can supply players with much more ease. However, for the latter, the story is not the same.
The DEA in this paper substantiates this claim. Some of the clubs are relatively less impacted by the augmented the Home-grown regulation, whereas other clubs are heavily impacted. This is shown in the DEA scores. The clubs which rank among lower 50% of e ciency scores tend to stay in the lower category even after the implementation, showing their inability to cope with huge nancial burden imposed by the regulation. The clubs that tend to cope well and stay in the upper 50% are the clubs such as Manchester United, and Arsenal. This difference is derived from difference in the youth academy among clubs. A few clubs such as Manchester United have maintained a high-quality youth academy which has helped them in adapting to the Home-grown regulation. However, other clubs which did not have or had lesser ability in raising younger athletes, such as Fulham and Aston Villa, faced higher costs in adapting, for they previously retained a team with foreigners consisting much of the roster sheet.
Following chart summarizes the changes in e ciency score before and after the home-grown clause was put in place.
The home-grown clause has affected the e ciency of football clubs differently, and in the case of Manchester United, the club bene ted from the strengthened clause for it had a strong youth academy including the U-21 (Under the age of 21) teams. In fact, Manchester United was able to supply homegrown players without incurring much cost, whereas other clubs had much burden. As shown above, Aston Villa, Fulham, and Sunderland stayed as lower 50% in e ciency, as it used the policy to sign cheaper players from abroad to consist its team before the regulation. Many of these clubs have low percentage of English players, and it was pushed to sign English players to meet the regulation's requirements. What must be noted here is that the Home-grown regulation affects each team to a different degree, thereby creating arti cial discrepancies that unfairly discriminate teams nancially. Therefore, aside from the obvious nancial impact that affects all teams, this regulation is unfair in its in uence.

Consideration of temporary shock
The DEA results show a tendency of concentrated drop over the 2011-2012 season, while after the initial concentrated shock, clubs show a little recovery but never fully recovers. Therefore, it is important to investigate whether this shock is temporary or has long-term effects on the clubs. In order to look into this matter, further observation is needed for a longer timeframe. At this point in time, due to the lack of data starting form 14-15 season, it is di cult to make any further observations. However, as the three years after the implementation of the Home-grown regulation have not been enough for clubs to fully recover, it can be said that this regulation has lasting in uence in a medium to long term range.
Nonetheless, regardless of how long the regulation's effect lasts, there is no doubt that this regulation imposes impact that is signi cant enough to nancially and operationally sway the clubs. In fact, in the 2010-11 season, the clubs had already prepared for years for the home-grown clause and so were able to minimize the impact. However, starting from the next 2011-12 season when clubs had to make amends to their roster, their operational and nancial e ciency plummeted with minimal signs of recovery. It is clear that this regulation imposes burden on football clubs for the price of achieving a political goal which, as discussed earlier, is showing in nitesimal progress.
With the FA recently proposing to toughen these regulations starting from 16-17 season, where clubs would be required to increase the number of English player to 12 per 25 roster with stricter imposition on home-grown status, there is no doubt that this will create a massive shock that would be incomparable to the previous shock when the regulation was rst implemented. Therefore, the newly revised the Homegrown regulation must be receded for further consideration.

Lack of English Players in major leagues?
While English National Team's lack of performance hints the ine cacy of the FA's Home-grown regulation, others can argue that English Team's sagging performance is the result of the lack of English players playing in major football leagues abroad. However, this assertion is not entirely true. Poli (2009) asserts his claim in following manner.
In total, in 2006/07 there were 28 English international footballers that played for the top ve clubs in the major ve leagues in European football. This gure appears to be high enough to form a competitive national squad (p. 43).
In fact, if we take into account the number of international players in the ve major European leagues, the result becomes clearer. According to Poli (2009), Table 11 shows the countries with the most international players in the ve major European leagues for the 06/07 season.
In fact, this table shows that England has 67 players who played in the ve major European league in 06/07 season. This is more than "60 German Internationals and 59 French internationals" (p. 42) (Poli 2009). If we take into account the fact that Germany was in the third place and France was the runner-up in the 2006 World Cup, the lagging performance of English international football team is not explained by the lack of English players who play in foreign leagues. Rather, foreign players help the improvement of the domestic league and players. According to Berlinschi et al (2012), "the effect of migration on national team performance is positive and that it increases with the difference in the quality of training between foreign and home clubs" (p. 23).
In addition, if we consider the average number of league matches played by international players by nationality, it becomes obvious that lack of English players in foreign leagues is not the main factor in lacking performance. Poli (2009) proves further point by showing Table 12 -Average number of league matches played by international players by nationality for season 06/07.
Here we can also see that English international footballers do not lack matches nor the playing time in the foreign leagues. In fact, Poli (2009) analyzes in following manner: It shows that the English international players employed by the top clubs in Europe play on average a little less than Spanish, French or Italian players, although the differences are unlikely to lead to the conclusion that their competitiveness is affected. By way of comparison, although the German full international players at the top clubs in Europe played less than the English counterparts, this did not prevent Germany from qualifying for the nal phase of Euro 2008 (p. 44).
Rather, the problem lies elsewhere. From the youth academy point, English players lack technical ability and mentality while overly focusing on physical aspect and speed. According to Elliott and Weedon (2010), coaches at English football club youth academy describes the critical difference between foreign players and English players as following: [Foreign players] are far more technically oriented . . . Technique is so important, it's the great English drawback. Physically we're good, tactically we're okay, but technically we're poor. The Dutch and the Italians totally leave us standing. The [foreign] boys we've got, their technique is really really good, and there's the challenge for the English boys, they've learnt that they have to work on their technique (p. 71).
In fact, due to the feet-exchange between foreign players and English players in youth academy, Elliott and Weedon argues that inviting foreign players into the English football has helped English players greatly in the youth level (2010). English players not only reported improvement in skill, but also improvement in the mentality (Elliott and Weedon 2009). Therefore, it should be argued that there are plenty of English players in the foreign major football leagues and that lack of English international footballers is not the reason for sagging performance. As Berlinschi et al (2012), Poli (2009), andElliott andWeedon (2009) asserts, there is a positive correlation between foreign players in the league and the national team's performance. Therefore, it should be considered that English players lack the development of crucial technical skills, making it ever more important to accept the foreign players who have superior skill levels.

Conclusions
This study uses SORM-DEA method to observe the changes in the e ciency of English football clubs chronologically to evaluate the effect of the Home-grown regulation. The timeframe was divided into two different periods: 3 years before the 2010-2011 season and 3 years after the 2010-2011 season, taking into account the fact that the 2010-2011 season is the season when the main clauses of the home-grown rules in EPL were adopted. Dividing the timeframe into two periods allowed us to see the impact that this regulation had on both clubs' operation and nances. The DEA method used in this study utilizes the previously reviewed literature as guidelines for setting the input factors, output factors, and the DMUs in evaluating the e ciency of football clubs in many different leagues such as La Liga, Bundesliga, and Ligue 1.
According to the DEA results, the e ciency of the clubs, although varied depending on initial situations, showed a downward pattern after the implementation of the Home-grown regulation clause. This trend tended to last for a few years, during which the e ciency score of the club signi cantly dropped.
Moreover, the Home-grown regulation with its political motivations, did not even show minimum e cacy for its validation. In fact, according to various research, the regulation worsened the environment for the English football.
However, the FA is pushing to strengthen the Home-grown regulation by strongly asserting its political motivations and heavily relying on current status quo. The present study contributes to the argument that it is highly undesirable to strengthen or even retain the Home-grown regulation. The current measures proposed by the FA will work to massively burden football clubs, jeopardizing the football clubs both nancially and operationally. Notes. This table is adopted from Poli (2009) and (1) means average number of league matches played by international players at the top ve clubs in the ve major leagues, (2) means (2) average number of league matches played by all international players and (3) means international players playing in the ve major European leagues. Figure 1 Description of the original model. Figure 2