Vertical restraints in soccer: Financial fair play and the English Premier League
AbstractIn 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%.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2012028.
Length: 42 pages
Date of creation: Dec 2012
Date of revision:
Contact details of provider:
Postal: Prinsstraat 13, B-2000 Antwerpen
Web page: https://www.uantwerp.be/en/faculties/applied-economic-sciences/
More information through EDIRC
Vertical restraints; Soccer; Financial Fair Play;
Find related papers by JEL classification:
- L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-01-07 (All new papers)
- NEP-COM-2013-01-07 (Industrial Competition)
- NEP-SPO-2013-01-07 (Sports & Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- G.F. Mathewson & R.A. Winter, 1984. "An Economic Theory of Vertical Restraints," RAND Journal of Economics, The RAND Corporation, vol. 15(1), pages 27-38, Spring.
- Baye, M.R. & Kovenock, D. & De Vries, C.G., 1993.
"The Solution to the Tullock Rent-Seeking Game when r>2: Mixed-Strategy Equilibria and Mean Dissipation Rates,"
Purdue University Economics Working Papers
1039, Purdue University, Department of Economics.
- Baye, M.R. & Kovenock, D. & De Vries, C.G., 1993. "The Solution to the Tullock Rent-Seeking Game when R > 2: Mixed Strategy Equilibria and Mean Dissipation Rates," Papers 10-93-9, Pennsylvania State - Department of Economics.
- Baye, M.R. & Kovenock, D., 1993. "The Solution to the Tullock Rent-Seeking Game When R > 2: Mixed Strategy Equilibria and Mean Dissipation Rates," Papers 9368, Tilburg - Center for Economic Research.
- Luis Garicano & Ignacio Palacios-Huerta & Canice Prendergast, 2005.
"Favoritism Under Social Pressure,"
The Review of Economics and Statistics,
MIT Press, vol. 87(2), pages 208-216, May.
- Luis Garicano & Ignacio Palacios & Canice Prendergast, 2001. "Favoritism Under Social Pressure," NBER Working Papers 8376, National Bureau of Economic Research, Inc.
- Luis Garicano & Ignacio Palacios-Huerta & Canice Prendergast, 2001. "Favoritism Under Social Pressure," Working Papers 2001-16, Brown University, Department of Economics.
- Pedro Garcia-del-Barrio & Stefan Szymanski, 2009. "Goal! Profit Maximization Versus Win Maximization in Soccer," Review of Industrial Organization, Springer, vol. 34(1), pages 45-68, February.
- Simon Rottenberg, 1956. "The Baseball Players' Labor Market," Journal of Political Economy, University of Chicago Press, vol. 64, pages 242.
- Stefan Szymanski & Stefan KÈsenne, 2004.
"Competitive balance and gate revenue sharing in team sports,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 52(1), pages 165-177, 03.
- Késenne Stefan & Szymanski S., 2003. "Competitive balance and gate revenue sharing in team sports," Working Papers 2003003, University of Antwerp, Faculty of Applied Economics.
- Oliver Guertler & Markus Lang & Tim Pawlowski, 2011. "On the Release of Players to National Teams," Working Papers 0046, University of Zurich, Center for Research in Sports Administration (CRSA).
- Sloane, Peter J, 1971. "The Economics of Professional Football: The Football Club as a Utility Maximiser," Scottish Journal of Political Economy, Scottish Economic Society, vol. 18(2), pages 121-46, June.
- James Levinsohn & Amil Petrin, 2003.
"Estimating Production Functions Using Inputs to Control for Unobservables,"
Review of Economic Studies,
Wiley Blackwell, vol. 70(2), pages 317-341, 04.
- James Levinsohn & Amil Petrin, 2000. "Estimating Production Functions Using Inputs to Control for Unobservables," NBER Working Papers 7819, National Bureau of Economic Research, Inc.
- Egon Franck & Markus Lang, 2013. "A Theoretical Analysis of the Influence of Money Injections on Risk Taking in Football Clubs," Working Papers 0160, University of Zurich, Institute for Strategy and Business Economics (ISU).
- Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-97, November.
- Jia, Hao & Skaperdas, Stergios & Vaidya, Samarth, 2013.
"Contest functions: Theoretical foundations and issues in estimation,"
International Journal of Industrial Organization,
Elsevier, vol. 31(3), pages 211-222.
- Hao Jia & Stergios Skaperdas & Samarth Vaidya, 2012. "Contest Functions: Theoretical Foundations and Issues in Estimation," Working Papers 111214, University of California-Irvine, Department of Economics.
- Stijn FERRARI & Frank VERBOVEN, 2010.
"Vertical control of a distribution network - an empirical analysis of magazines,"
Center for Economic Studies - Discussion papers
ces10.19, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- Stijn Ferrari & Frank Verboven, 2012. "Vertical control of a distribution network—an empirical analysis of magazines," RAND Journal of Economics, RAND Corporation, vol. 43(1), pages 26-50, 03.
- Ferrari, Stijn & Verboven, Frank, 2010. "Vertical Control of a Distribution Network - An Empirical Analysis of Magazines," CEPR Discussion Papers 7832, C.E.P.R. Discussion Papers.
- Young Hoon Lee & David Berri, 2008. "A Re-Examination Of Production Functions And Efficiency Estimates For The National Basketball Association," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(1), pages 51-66, 02.
- Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, vol. 41(4), pages 1137-1187, December.
- Scully, Gerald W, 1974. "Pay and Performance in Major League Baseball," American Economic Review, American Economic Association, vol. 64(6), pages 915-30, December.
- repec:jsf:intjsf:v:7:y:2012:i:2:p:117-140 is not listed on IDEAS
- Carlos Pestana Barros & Stephanie Leach, 2006. "Performance evaluation of the English Premier Football League with data envelopment analysis," Applied Economics, Taylor & Francis Journals, vol. 38(12), pages 1449-1458.
- Lawrence M. Kahn, 2000. "The Sports Business as a Labor Market Laboratory," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 75-94, Summer.
- Konrad, Kai A., 2009. "Strategy and Dynamics in Contests," OUP Catalogue, Oxford University Press, number 9780199549603.
- Paul Madden, 2012. "Welfare Economics of "Financial Fair Play" in a Sports League With Benefactor Owners," The School of Economics Discussion Paper Series 1221, Economics, The University of Manchester.
- Egon Franck, 2013. "Financial Fair Play in European Club Football What is it all about?," Working Papers 328, University of Zurich, Department of Business Administration (IBW).
- 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).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joeri Nys).
If references are entirely missing, you can add them using this form.