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Vertical restraints in soccer: Financial fair play and the English Premier League

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  • PEETERS, Thomas
  • SZYMANSKI, Stefan

Abstract

In 2010 UEFA, the governing body of European soccer, announced a set of financial restraints, that clubs must observe when seeking to enter its competitions, notably the UEFA Champions League. We characterize these “Financial Fair Play” (FFP) regulations as a form of vertical restraint and assess their impact on the intensity of competition in the English Premier League. We build a structural empirical model to show that introducing FFP would substantially reduce competition, resulting in lower average payrolls, while average revenues would hardly be affected. Depending on the exact regime, wage to turnover ratios would decline by 8% to 15%.

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Bibliographic Info

Paper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2012028.

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Length: 42 pages
Date of creation: Dec 2012
Date of revision:
Handle: RePEc:ant:wpaper:2012028

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Postal: Prinsstraat 13, B-2000 Antwerpen
Web page: https://www.uantwerp.be/en/faculties/applied-economic-sciences/
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Keywords: Vertical restraints; Soccer; Financial Fair Play;

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Cited by:
  1. Budzinski, Oliver, 2014. "The competition economics of financial fair play," Ilmenau Economics Discussion Papers 85, Ilmenau University of Technology, Institute of Economics.
  2. Vöpel, Henning, 2013. "Is Financial Fair Play really justified? An economic and legal assessment of UEFA's Financial Fair Play rules," HWWI Policy Papers 79, Hamburg Institute of International Economics (HWWI).
  3. Egon Franck, 2014. "Financial Fair Play in European Club Football What is it all about?," Working Papers 328, University of Zurich, Department of Business Administration (IBW).

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