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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%.

Suggested Citation

  • PEETERS, Thomas & SZYMANSKI, Stefan, 2012. "Vertical restraints in soccer: Financial fair play and the English Premier League," Working Papers 2012028, University of Antwerp, Faculty of Applied Economics.
  • Handle: RePEc:ant:wpaper:2012028
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Egon Franck, 2014. "Financial Fair Play in European Club Football: What Is It All About?," International Journal of Sport Finance, Fitness Information Technology, vol. 9(3), pages 193-217, August.
    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. Stephen Morrow, 2014. "Football finances," Chapters,in: Handbook on the Economics of Professional Football, chapter 6, pages 80-99 Edward Elgar Publishing.
    4. Peter Sloane, 2014. "Club objectives," Chapters,in: Handbook on the Economics of Professional Football, chapter 1, pages 13-22 Edward Elgar Publishing.
    5. Budzinski, Oliver, 2014. "The competition economics of financial fair play," Ilmenau Economics Discussion Papers 85, Ilmenau University of Technology, Institute of Economics.

    More about this item

    Keywords

    Vertical restraints; Soccer; Financial Fair Play;

    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

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