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Financial fair play in European football

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  • PEETERS, Thomas
  • SZYMANSKI, Stefan

Abstract

In 2010 UEFA, the governing body of European football, announced a set of financial restraints, which clubs must observe when seeking to enter its competitions, notably the UEFA Champions League. We analyze the financial and sporting impact of these “Financial Fair Play” (FFP) regulations in four major European football leagues. We first discuss the details of FFP and frame these regulations in the institutional setup of the European football industry. We then show how the break-even constraint imbedded in FFP could substantially reduce average payrolls and wage-to-turnover ratios, while strengthening the position of the traditional top teams. Since the benefits of the break-even rule to consumers remain unclear, we argue that these rent-shifting regulations might fall foul European competition law.

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Bibliographic Info

Paper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2013021.

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Length: 51 pages
Date of creation: Sep 2013
Date of revision:
Handle: RePEc:ant:wpaper:2013021

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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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  1. 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.
  2. Stefan Szymanski, 2012. "Insolvency in English professional football: Irrational Exuberance or Negative Shocks?," Working Papers, International Association of Sports Economists;North American Association of Sports Economists 1202, International Association of Sports Economists;North American Association of Sports Economists.
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  4. Thomas Hoehn & Stefan Szymanski, 1999. "The Americanization of European football," Economic Policy, CEPR;CES;MSH, CEPR;CES;MSH, vol. 14(28), pages 203-240, 04.
  5. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, Econometric Society, vol. 64(6), pages 1263-97, November.
  6. Stefan Szymanski, 2003. "The Economic Design of Sporting Contests," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 41(4), pages 1137-1187, December.
  7. Egon Franck & Markus Lang, 2014. "A Theoretical Analysis of the Influence of Money Injections on Risk Taking in Football Clubs," Scottish Journal of Political Economy, Scottish Economic Society, Scottish Economic Society, vol. 61(4), pages 430-454, 09.
  8. Jeffery Borland, 2003. "Demand for Sport," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 19(4), pages 478-502, Winter.
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Cited by:
  1. Budzinski, Oliver & Szymanski, Stefan, 2014. "Are restrictions of competition by sports associations horizontal or vertical in nature?," Ilmenau Economics Discussion Papers, Ilmenau University of Technology, Institute of Economics 86, Ilmenau University of Technology, Institute of Economics.
  2. Budzinski, Oliver, 2014. "The competition economics of financial fair play," Ilmenau Economics Discussion Papers, Ilmenau University of Technology, Institute of Economics 85, Ilmenau University of Technology, Institute of Economics.

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