IDEAS home Printed from https://ideas.repec.org/p/zrh/wpaper/328.html
   My bibliography  Save this paper

Financial Fair Play in European Club Football What is it all about?

Author

Listed:
  • Egon Franck

    () (Department of Business Administration (IBW), University of Zurich)

Abstract

The new UEFA Club Licensing and Financial Fair Play Regulations have encountered stiff criticism. The concerns are that the new regulations may harm football in three different ways: By forgoing the potential benefits from substantial injections of external money into payrolls, by restricting competition in the player market without at the same time achieving benefits from more balanced competition, and by creating some sort of barrier to entry which could freeze the current hierarchy of clubs. It is the purpose of this paper to take these concerns as a starting point for discussing the likely effects of the new regulations. As a by-product it will become obvious why and in which points the concerns are unfounded.

Suggested Citation

  • 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).
    • Handle: RePEc:zrh:wpaper:328
    as

    Download full text from publisher

    File URL: http://repec.business.uzh.ch/RePEc/zrh/wpaper/328_IBW_full.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Egon Franck, 2010. "Private Firm, Public Corporation or Member’s Association Governance Structures in European Football," International Journal of Sport Finance, Fitness Information Technology, vol. 5(2), pages 108-127, May.
    2. Lazear, Edward P & Rosen, Sherwin, 1981. "Rank-Order Tournaments as Optimum Labor Contracts," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 841-864, October.
    3. M. Dewatripont & E. Maskin, 1995. "Credit and Efficiency in Centralized and Decentralized Economies," Review of Economic Studies, Oxford University Press, vol. 62(4), pages 541-555.
    4. Helmut M. Dietl & Egon Franck & Markus Lang, 2008. "Overinvestment In Team Sports Leagues: A Contest Theory Model," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(3), pages 353-368, July.
    5. Umberto Lago, 2006. "The State of the Italian Football Industry," Chapters, in: Wladimir Andreff & Stefan Szymanski (ed.),Handbook on the Economics of Sport, chapter 50, Edward Elgar Publishing.
    6. J. Kornai & E. Maskin & G. Roland., 2004. "Understanding the Soft Budget Constraint," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 12.
    7. 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 Business and Economics.
    8. Wladimir Andreff, 2011. "Some comparative economics of the organization of sports: Competition and regulation in north American vs. European professional team sports leagues," Post-Print halshs-00677436, HAL.
    9. Maskin, Eric S., 1996. "Theories of the soft budget-constraint," Japan and the World Economy, Elsevier, vol. 8(2), pages 125-133, June.
    10. Wladimir Andreff, 2011. "Some comparative economics of the organization of sports: competition and regulation in north American vs. European professional team sports leagues," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 8(1), pages 3-27, June.
    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. 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.
    2. Barth Michael, 2015. "Contemporary Research in Sports Economics: Proceedings of the 5th ESEA Conference: Besprechung des von Oliver Budzinski und Arne Feddersen herausgegebenen gleichnamigen Tagungsbandes," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 66(1), pages 353-359, January.
    3. Colin Green & Fernando Lozano & Rob Simmons, 2015. "Rank-Order Tournaments, Probability of Winning and Investing in Talent: Evidence from Champions' League Qualifying Rules," National Institute Economic Review, National Institute of Economic and Social Research, vol. 232(1), pages 30-40, May.
    4. Santiago-Caballero, Carlos & Fernández-Roldán Díaz, Alejandro, 2017. "Decomposing competitive balance in the major European football leagues : a Rawlsian approach," IFCS - Working Papers in Economic History.WH 24658, Universidad Carlos III de Madrid. Instituto Figuerola.
    5. Grabar, Vsevolod & Sonin, Konstantin, 2018. "Financial Restrictions and Competitive Balance in Sports Leagues," CEPR Discussion Papers 13154, C.E.P.R. Discussion Papers.
    6. Paul Madden, 2014. "Does Break-Even Regulation of Soccer Clubs Make Sense?," The School of Economics Discussion Paper Series 1405, Economics, The University of Manchester.
    7. Angelo D’Andrea & Donato Masciandaro, 2016. "Financial Fair Play in European Football: Economics and Political Economy a Review Essay," BAFFI CAREFIN Working Papers 1615, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    8. Ariela Caglio & Angelo D’Andrea & Donato Masciandaro & Gianmarco Ottaviano, 2016. "Does Fair Play Matter? UEFA Regulation and Financial Sustainability in the European Football Industry," BAFFI CAREFIN Working Papers 1638, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    9. Stephan Birkhäuser & Christoph Kaserer & Daniel Urban, 2019. "Did UEFA’s financial fair play harm competition in European football leagues?," Review of Managerial Science, Springer, vol. 13(1), pages 113-145, February.
    10. Bernd Frick & Rob Simmons, 2014. "The footballers’ labour market after the Bosman ruling," Chapters, in: John Goddard & Peter Sloane (ed.),Handbook on the Economics of Professional Football, chapter 13, pages 203-226, Edward Elgar Publishing.
    11. Egon Franck, 2018. "European Club Football after “Five Treatments” with Financial Fair Play—Time for an Assessment," International Journal of Financial Studies, MDPI, Open Access Journal, vol. 6(4), pages 1-19, December.
    12. 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.
    13. Oliver Budzinski & Stefan Szymanski, 2015. "Are Restrictions Of Competition By Sports Associations Horizontal Or Vertical In Nature?," Journal of Competition Law and Economics, Oxford University Press, vol. 11(2), pages 409-429.
    14. Gasparetto, Thadeu & Barajas, Angel, 2016. "Reanalisando a competitividade na indústria do futebol: diferença acumulada de pontos," RAE - Revista de Administração de Empresas, FGV-EAESP Escola de Administração de Empresas de São Paulo (Brazil), vol. 56(3), May.
    15. 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.
    16. Budzinski, Oliver, 2014. "The competition economics of financial fair play," Ilmenau Economics Discussion Papers 85, Ilmenau University of Technology, Institute of Economics.
    17. N. A. Osokin, 2018. "Win vs. Profit maximization: optimal strategy for managing organizational performance of russian football clubs," Strategic decisions and risk management, Real Economy Publishing House.
    18. Rohde, Marc & Breuer, Christoph, 2018. "Competing by investments or efficiency? Exploring financial and sporting efficiency of club ownership structures in European football," Sport Management Review, Elsevier, vol. 21(5), pages 563-581.
    19. Stefan Szymanski, 2017. "Entry into exit: insolvency in English professional football," Scottish Journal of Political Economy, Scottish Economic Society, vol. 64(4), pages 419-444, September.
    20. Egon Franck, 2016. "A comment on the newly revised “2015 version” of the UEFA Club Licensing and Financial Fair Play Regulations," Working Papers 362, University of Zurich, Department of Business Administration (IBW).
    21. Budzinski, Oliver, 2017. "Sind Wettbewerbe im Profisport Rattenrennen?," Ilmenau Economics Discussion Papers 104, Ilmenau University of Technology, Institute of Economics.
    22. Ermis Chelmis & Dimitrios Niklis & George Baourakis & Constantin Zopounidis, 2019. "Multiciteria evaluation of football clubs: the Greek Superleague," Operational Research, Springer, vol. 19(2), pages 585-614, June.
    23. Ariela Caglio & Sébastien Laffitte & Donato Masciandaro & Gianmarco Ottaviano, 2019. "Does Financial Fair Play Matter? The Real Effects Of Uefa Regulation For European Football Clubs," BAFFI CAREFIN Working Papers 19119, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    24. 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.

    More about this item

    Keywords

    Financial Fair Play; Soft Budget Constraints; Hard Budget Constraints; Moral Hazard; Rent-Seeking; Sugar Daddies; Competitive Balance; Ossification;

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

    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:zrh:wpaper:328. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Daniela Koller). General contact details of provider: http://edirc.repec.org/data/ibuzhch.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.