Financial fair play in European football
Faculty of Applied Economics
Antwerp :Universiteit Antwerpen, Faculty of Applied Economics, 2013
Research paper / University of Antwerp, Faculty of Applied Economics ; 2013:021
University of Antwerp
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.