Did UEFA’s financial fair play harm competition in European football leagues?

Birkhäuser, Stephan; Kaserer, Christoph; Urban, Daniel

doi:10.1007/s11846-017-0246-z

Cited by 31 publications

(33 citation statements)

References 13 publications

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“…There is also emerging empirical literature on FFP and especially its effects on competitive balance. Birkhäuser et al (2019) examine league results, player market values, and investor payments relating to more than 300 European football clubs. The study's results are consistent with the view that FFP might have further amplified the competitive imbalance by reducing the equilibrium in European football leagues and freezing current hierarchies.…”

Section: Financial Fair Play Regulationsmentioning

confidence: 99%

“…There are both theoretical (Franck, 2014;Peeters & Szymanski, 2014;Sass, 2016) and empirical analyses of UEFA's FFP, especially on its effects on competitive balance (Birkhäuser et al, 2019;Freestone & Manoli, 2017;Plumley, Ramchandani, & Wilson, 2019). Recent studies have found that the FFP has further amplified the competitive imbalance, but the effect is not uniform across leagues.…”

Section: Introductionmentioning

confidence: 99%

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Has UEFA’s financial fair play regulation increased football clubs’ profitability?

Ahtiainen

Jarva

2020

European Sport Management Quarterly

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Research question: In response to the low profitability of European football clubs, in 2010, UEFA established its Financial Fair Play regulation (FFP) to encourage clubs not to spend more than they earn. We examine whether FFP's break-even rule has increased the profitability of football clubs. Research methods: : We use data from the top five European football leagues (those of England, France, Germany, Italy, and Spain) over the period 2008-2016. Our sample includes 1,094 club-year observations (139 different clubs). Earnings before interest and taxes (EBIT) and profit before tax (PBT) margins are used as profitability measures. The impact of FFP is estimated using the Generalized Estimation Equations (GEE), logistic regressions, and fixed effects OLS models. We control for both domestic and European competition success, leverage, club size, and country/club fixed effects. Results and Findings: In the pre-FFP period, roughly 70 percent of observations are losses, whereas in the post-FFP period, roughly 60 percent of observations are losses. However, the estimated positive effect is significant only in Spain, while for England and Germany we find weak evidence. We cannot rule out that the observed improvement in performance is simply caused by the recovery from the financial crisis. The effect of FFP is insignificant in France and Italy. Implications: The effect of FFP on clubs' profitability has been at best modest. We call upon UEFA and its member associations and leagues to expand their efforts to enforce the break-even rule or to reassess the efficiency of current FFP requirements.

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Section: Financial Fair Play Regulationsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Has UEFA’s financial fair play regulation increased football clubs’ profitability?

Ahtiainen

Jarva

2020

European Sport Management Quarterly

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“…In the past, several studies were conducted on competitive balance (CB) in the big five [5,[27][28][29], and CB was frequently emphasized as a key parameter for the sustainability of team sports leagues [30][31][32][33][34][35][36]. But CB does not look at the sustainability of the sporting competition or its structure.…”

Section: Literature Reviewmentioning

confidence: 99%

A Central Element of Europe’s Football Ecosystem: Competitive Intensity in the “Big Five”

2021

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This study perceives professional European football as one of the most relevant event-related entrepreneurial ecosystems (EEs) worldwide. It also identifies a healthy sporting competition in the five most popular European football leagues (Spain, England, Germany, Italy, and France), the “big five,” as a key pillar for the functioning of this ecosystem. By applying a quantitative approach, competitive intensity (CI) is measured for all big five leagues for 21 seasons (1998/99 to 2018/19). The chosen method does not only convey an overall indication of the competitive health of the entire league but also provides detailed information on the four important sub-competitions (championship race, qualification for Champions League or Europa League, and the fight against relegation). In all five leagues, seasonal CI tends to decrease over time, and especially over the last decade. The main reason is a decline in the intensity of the championship race while all other sub-competitions show relatively robust CI values. Overall, it can be concluded that the competitive health of the big five is intact, but the dwindling CI of the championship races can harm the EE of professional European football in the long run. Accordingly, it should be closely monitored in the future.

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“…La littérature sur les objectifs et l'efficacité du fair-play financier est aujourd'hui abondante (Barajas et al, 2017;Birkhäuser et al, 2019;Franck, 2018;Mareque et al, 2018;Plumley et al, 2018). Il ne nous est donc pas possible d'exposer ici l'ensemble des débats suscités par ce dispositif.…”

Section: Les Régulations Externesunclassified

The economics of team sport in Europe: production, monetization, deficit and regulation

Bouvet

2021

Management Et Organisations Du Sport

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International audience This article deals with the economics of professional sport in Europe. Its objective is twofold: firstly, to propose a "vertical" vision, from production to the necessary regulation, including the study of the conditions for monetising sports shows produced by professional sports clubs in Europe; secondly, to put forward a general explanation for the persistence of deficits (DNCG data and similar organisations) of many of these clubs. This article deliberately places itself, unlike many other contributions, in a global (macroeconomic) perspective. It underlines: the universality and singularity of the production of sports shows, the specific conditions of their monetisation; presents, the origin of the deficits and the means nowadays chosen by professional clubs to try to cope with them and finally leads to an original proposal for regulation. Cet article traite de l'économie du sport professionnel en Europe. Son objectif est double : en premier lieu, proposer une vision « verticale », allant de la production à la nécessaire régulation, en passant par l'étude des conditions de monétisation des spectacles sportifs réalisés par les clubs sportifs professionnels en Europe ; en second lieu, mettre en avant une explication générale de la persistance des déficits (données DNCG et organismes similaires) de nombreux de ces clubs. Cet article se place délibérément, à la différence de nombreuses autres contributions, dans une perspective globale (macroéconomique). Il souligne : l'universalité et la singularité de la production des spectacles sportifs, les conditions spécifiques de leur monétisation ; présente, l'origine des déficits et les moyens aujourd'hui choisis par les clubs professionnels pour essayer d'y faire face et débouche finalement sur une proposition originale de régulation.

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Did UEFA’s financial fair play harm competition in European football leagues?

Cited by 31 publications

References 13 publications

Has UEFA’s financial fair play regulation increased football clubs’ profitability?

Has UEFA’s financial fair play regulation increased football clubs’ profitability?

A Central Element of Europe’s Football Ecosystem: Competitive Intensity in the “Big Five”

The economics of team sport in Europe: production, monetization, deficit and regulation

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