IDEAS home Printed from https://ideas.repec.org/p/zbw/tuiedp/82.html
   My bibliography  Save this paper

Finanzregulierung und internationale Wettbewerbsfähigkeit: Der Fall Deutsche Bundesliga

Author

Listed:
  • Budzinski, Oliver
  • Müller, Anika

Abstract

[Financial Regulation and International Competitiveness: The Case of the German Bundesliga] The paper discusses the intensively discussed problem of financial crisis, overburdening debts and insolvencies in professional European football. The academic literature identifies several special characteristics of professional football leagues that allegedly lead to a systematic over-investment as well as features of a rat race. As a consequence, there are systemic market failures that warrant a regulative intervention by the competent national and European football associations. However, from an economics perspective, most of these alleged market failures turn out to be normal features of business competition. A closer inspection merely leaves two problems to be solved: (i) the widespread rescue of insolvent clubs (that are too prominent too fail) causing moral hazard issues and (ii) negative externalities on the league competition when an insolvent club would leave the market in the middle of the season. Even though these remaining issues may be viewed to justify regulations on the financial behavior of clubs by the league organizations, a note of caution needs to be issued: intervention may lead to over-regulation that distorts competition and, in particular, serves to cement the status quo competitiveness relations (i.e. preventing the incumbent top clubs from new emerging competitors). Furthermore, existing anticompetitive arrangements in football leagues contribute to the alleged market failure problems, so that more competition and not less competition may be the appropriate answer. A review of the pioneer financial regulations of the German Bundesliga allows for the conclusion that most of the German rules do not yet cross the line to over-regulation. However, the 50+1-rule, restricting newcomers from taking ownership of clubs (while protecting existing investments of the same type) clearly restricts competition and protects anticompetitive rents of incumbents. In the face of the upcoming UEFA-wide financial regulations, a first-mover effect may help German clubs to increase their international competitiveness.

Suggested Citation

  • Budzinski, Oliver & Müller, Anika, 2013. "Finanzregulierung und internationale Wettbewerbsfähigkeit: Der Fall Deutsche Bundesliga," Ilmenau Economics Discussion Papers 82, Ilmenau University of Technology, Institute of Economics.
    • Handle: RePEc:zbw:tuiedp:82
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/76812/1/746323956.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Walter C. Neale, 1964. "The Peculiar Economics of Professional Sports," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 78(1), pages 1-14.
    2. Wladimir Andreff & Stefan Szymanski (ed.), 2006. "Handbook on the Economics of Sport," Books, Edward Elgar Publishing, number 3274.
    3. Helmut M. Dietl & Egon Franck, 2007. "Governance Failure and Financial Crisis in German Football," Journal of Sports Economics, , vol. 8(6), pages 662-669, December.
    4. Wladimir Andreff & Stefan Szymanski, 2006. "Handbook on the Economics of Sport," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00270122, HAL.
    5. Oliver Budzinski & Janina Satzer, 2011. "Sports Business and Multisided Markets: Towards a New Analytical Framework? (Long Version)," Working Papers 109/11, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
    6. Wladimir Andreff, 2007. "French Football: A Financial Crisis Rooted in Weak Governance," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00270019, HAL.
    7. Wladimir Andreff, 2007. "French Football: A Financial Crisis Rooted in Weak Governance," Post-Print halshs-00270019, HAL.
    8. Bastien Drut & Gaël Raballand, 2012. "Why does financial regulation matter for European professional football clubs?," Post-Print hal-01410568, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gallagher, Ronan & Quinn, Barry, 2019. "Regulatory Own Goals: The Unintended Consequences of Economic Regulation in Professional Football," QBS Working Paper Series 2019/02, Queen's University Belfast, Queen's Business School.
    2. Saldsieder Nina & Wentzel Dirk, 2014. "Ordnungsfragen des europäischen Profifußballs: Das Konzept des Financial Fair Play und seine Erfolgsaussichten / The Concept of Financial Fair Play and his prospects of success," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 65(1), pages 229-262, January.
    3. Budzinski, Oliver, 2017. "Market-internal financial regulation in sports as an anticompetitive institution," Ilmenau Economics Discussion Papers 110, Ilmenau University of Technology, Institute of Economics.
    4. Budzinski, Oliver, 2017. "Sind Wettbewerbe im Profisport Rattenrennen?," Ilmenau Economics Discussion Papers 104, Ilmenau University of Technology, Institute of Economics.
    5. Budzinski, Oliver & Pawlowski, Tim, 2014. "The behavioural economics of competitive balance: Implications for league policy and championship management," Ilmenau Economics Discussion Papers 89, Ilmenau University of Technology, Institute of Economics.
    6. Budzinski, Oliver, 2014. "The competition economics of financial fair play," Ilmenau Economics Discussion Papers 85, Ilmenau University of Technology, Institute of Economics.
    7. Saldsieder, Nina, 2016. "Gestaltungspotentiale der Ordnung zweiseitiger Märkte am Beispiel der ersten deutschen Bundesliga," Working Papers for Marketing & Management 4, Offenburg University, Department of Media and Information.
    8. Budzinski, Oliver & Kunz-Kaltenhäuser, Philipp, 2020. "Promoting or restricting competition? - The 50plus1-rule in German football," Ilmenau Economics Discussion Papers 141, Ilmenau University of Technology, Institute of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wladimir Andreff, 2014. "Building Blocks for a Disequilibrium Model of a European Team Sports League," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00971782, HAL.
    2. Jardin, Mathieu, 2009. "Efficiency of French football clubs and its dynamics," MPRA Paper 19828, University Library of Munich, Germany.
    3. Budzinski, Oliver & Kunz-Kaltenhäuser, Philipp, 2020. "Promoting or restricting competition? - The 50plus1-rule in German football," Ilmenau Economics Discussion Papers 141, Ilmenau University of Technology, Institute of Economics.
    4. Wladimir Andreff, 2014. "Building Blocks for a Disequilibrium Model of a European Team Sports League," Post-Print halshs-00971782, HAL.
    5. Budzinski, Oliver, 2014. "The competition economics of financial fair play," Ilmenau Economics Discussion Papers 85, Ilmenau University of Technology, Institute of Economics.
    6. David Alaminos & Manuel Ángel Fernández, 2019. "Why do football clubs fail financially? A financial distress prediction model for European professional football industry," PLOS ONE, Public Library of Science, vol. 14(12), pages 1-15, December.
    7. Armin Wiedenegger & Alexander Kern & Maria Rupprechter, 2012. "The Choice of Legal Form and its Effects on Good Governance: A Case Study of an Austrian Professional Soccer Club," Ekonomika a Management, Prague University of Economics and Business, vol. 2012(3), pages 23-43.
    8. Theodorakis, Nicholas D. & Alexandris, Kostas & Tsigilis, Nikolaos & Karvounis, Serafim, 2013. "Predicting spectators’ behavioural intentions in professional football: The role of satisfaction and service quality," Sport Management Review, Elsevier, vol. 16(1), pages 85-96.
    9. Wladimir Andreff, 2014. "The Winner's Curse in Sports Economics," Post-Print halshs-01243890, HAL.
    10. Wladimir Andreff, 2016. "4 Corruption in Sport," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01279785, HAL.
    11. Dietl Helmut M & Duschl Tobias & Lang Markus, 2011. "Executive Pay Regulation: What Regulators, Shareholders, and Managers Can Learn from Major Sports Leagues," Business and Politics, De Gruyter, vol. 13(2), pages 1-32, August.
    12. Wladimir Andreff, 2017. "Complexity Triggered by Economic Globalisation— The Issue of On-Line Betting-Related Match Fixing," Post-Print hal-03207049, HAL.
    13. Helmut Dietl & Tobias Duschl & Markus Lang, 2010. "Gehaltsobergrenzen und Luxussteuern: Erkenntnisse aus dem professionellen Mannschaftssport," Working Papers 0136, University of Zurich, Institute for Strategy and Business Economics (ISU).
    14. Wladimir Andreff, 2014. "The Winner's Curse in Sports Economics," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01243890, HAL.
    15. Wladimir Andreff, 2017. "Complexity Triggered by Economic Globalisation— The Issue of On-Line Betting-Related Match Fixing," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03207049, HAL.
    16. Budzinski, Oliver & Feddersen, Arne & Kunz-Kaltenhäuser, Philipp, 2023. "Zwischen Wettbewerbsorganisation und Wettbewerbsverzerrungen - Regelsetzungen durch europäische Fußballverbände," Ilmenau Economics Discussion Papers 174, Ilmenau University of Technology, Institute of Economics.
    17. Oliver Budzinski & Anika Müller‐Kock, 2018. "Is The Revenue Allocation Scheme Of Formula One Motor Racing A Case For European Competition Policy?," Contemporary Economic Policy, Western Economic Association International, vol. 36(1), pages 215-233, January.
    18. Daniel Plumley & Rob Wilson & Robbie Millar & Simon Shibli, 2019. "Howzat? The Financial Health of English Cricket: Not Out, Yet," IJFS, MDPI, vol. 7(1), pages 1-17, February.
    19. Patrice Bouvet, 2020. "L'économie du sport professionnel par équipe en Europe : production, monétisation, déficit et régulation Patrice BOUVET," Working Papers hal-02515012, HAL.
    20. Wladimir Andreff, 2016. "4 Corruption in Sport," Post-Print halshs-01279785, HAL.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:tuiedp:82. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/ivtuide.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.