Financial Doping in the English Premier League

Iorwerth, Hywel; Tomkins, Paul T.; Riley, Graham

doi:10.1080/17511321.2017.1351484

Cited by 10 publications

(8 citation statements)

References 14 publications

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“…These prior studies were typically present either a general critique of the potential impact of FFP (e.g., Szmanskyi, 2014), quantitative insight into the effects of financial fair play after its introduction (e.g., Dimitropoulos, 2016;Gallagher & Quinn, 2019), or legal studies investigating the regulatory impact and aptitude of the regulation (Lindholm, 2010). Prior research typically also focuses on exploring the phenomena within larger leagues, such as the English Premier League (Freestone & Manoli, 2017;Iorwerth et al, 2018).…”

Section: Methodsmentioning

confidence: 99%

Caught in a trap? Financial Fair Play Regulations and the case of Scottish football

Maclean

Cordina

Gannon

2022

QRFM

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Purpose The purpose of this study is to investigate the Union of European Football Associations’s Financial Fair Play (FFP) Regulations in the context of the European football industry. This study seeks to explore whether these regulations are perceived by member organisations as contributing to the creation of a “poverty trap”. To do so, this study turns towards what are traditionally perceived as smaller clubs operating in smaller member associations and, in doing so, explores whether the regulations limiting benefactor payments are suitable for smaller leagues. Design/methodology/approach In-depth semi-structured interviews were conducted with key individuals involved in the management of Scottish football clubs. The Scottish context was chosen because of the disparity in revenues amongst competing teams and the limited broadcasting revenues achieved in comparison to some other European member associations. Findings FFP Regulations are perceived to be an effective tool for monitoring clubs and ensuring financial stability. However, the findings suggest that participants believe that these regulations consolidate the financial position of larger teams who rely on broadcasting and extant brand power for revenue generation. Further, smaller leagues demonstrate a lesser reliance on benefactor payments, and therefore, the restriction on benefactor payments inherent within FFP Regulations is posited by participants as holding little consequence and/or relevance within the Scottish football context. Originality/value Most prior studies on FFP Regulations have focused on generating quantitative insight into the application of FFP Regulations in large, resource-rich European football leagues. Through a qualitative approach, this study provides nascent exploratory insight into FFP Regulations from the perspective of smaller leagues.

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Section: Methodsmentioning

confidence: 99%

Caught in a trap? Financial Fair Play Regulations and the case of Scottish football

Maclean

Cordina

Gannon

2022

QRFM

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“…The growing competitive and financial imbalance in the EPL is predominantly the result of growing revenue from EPL and European competition broadcasting rights (Michie and Oughton, 2004). Between 2010/11 and 2014/15 season, the average difference between league position rank and starting XI average cost rank for the top seven teams ranged between 1.2 and 2.3 (Iorwerth et al , 2018). Given that league position can be predicted by the average cost of the starting XI of an EPL team over a season (Iorwerth et al , 2018), it is surprising that the role of absolute prize fund payments in the EPL has not been explicitly analysed.…”

Section: Supporting Datamentioning

confidence: 99%

An introduction to the challenges of distributive equity in the English Premier League

Bishop

Smith

Read

2021

SBM

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PurposeThis article provides a plain language commentary on the distributive equity structure of the English Premier League (EPL) with the aim of introducing sport business practitioners to a foundational challenge facing professional leagues as they grow financially with market opportunities, namely financial inequality between clubs.Design/methodology/approachIntroducing and discussing data from seasons 2009/10–2018/19, the article reveals that despite maintaining a consistent distribution of the EPL prize fund over time, the financial imbalance within the league has grown throughout the period.FindingsThe EPL's financial distributive equity is exacerbated by growing imparity in the acquisition of sponsorship revenues, the distribution of broadcasting revenues and the implications of policies concerning financial fair play and parachute payments, leading to a problematic differential in the talent distribution and win–wage relationship experienced by the top six teams and the remainder.Practical implicationsThe EPL's market-driven continuation of its revenue allocation policies has led to a broadening financial imbalance, in favour of the top clubs, which could paradoxically undermine the financial security of the teams and league. Sport business practitioners should be familiar with this fundamental challenge for sport leagues that accompanies financial growth.Originality/valueWhilst the percentage difference in prize fund allocation between top and bottom clubs appears minor, there is a significant financial variation across the league, primarily due to the large increase in broadcasting income. This is compounded by positive feedback via the relative dominance of the top six clubs receiving the larger share allocated to higher finishing teams.

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“…Implementace pravidla testu bodu zvratu poměřujícího relevantní náklady a relevantní výnosy tlačí na snižování relativních mzdových nákladů na hráčský kádr ve vztahu k celkovým výnosům (Peeters & Szymanski, 2014). To zvýhodňuje tradiční, ekonomicky silnější kluby a slabší kluby nutí k provádění finanční politiky "na doraz", aby si udržely sportovní konkurenceschopnost (Iorwerth et al, 2018). Finanční agresivita se může projevovat jak v oblasti mzdových nákladů, tak i prostřednictvím získávání hráčů za relativně vysoké přestupové částky (ve vztahu k celkovému sezonnímu rozpočtu), které se rozprostřou přes odpisové náklady do více období.…”

Section: Hypotézyunclassified

“…Alternativně proto např. Iorwerth et al (2018) aplikují index přestupních částek (Transfer Price Index), který počítají jako celkovou sumu, kterou klub vynaložil na přestupy hráčů, v porovnání s hodnotou kádru průměrné ligové zahajovací sestavy. Jak autoři sami uznávají, konstrukce přestupních částek je stále komplikovanější a je obtížné získat veškeré potřebné informace pro určení hodnoty kádru.…”

Section: Modelunclassified

“…V dlouhodobém horizontu pozorovatelná přímo úměrná závislost sportovních výsledků na výši vynakládaných prostředků na hráčský kádr může kluby motivovat k nadměrnému utrácení a chování, které by se dalo označit za specifický případ "race to bottom". Zamezení "finančnímu dopingu" (Iorwerth et al, 2018) a zavedení dlouhodobě udržitelného ekonomického modelu je i jedním z hlavních cílů regulace FFP. Horní panel na obrázku 3 poměřuje vztah mezi ligovým umístěním a finanční agresivitou klubů (FA), která je aproximována jako poměr nákladů na hráčský kádr vztažených k celkovým výnosům klubu.…”

Section: Vztah Ekonomické Síly Finanční Agresivity a Sportovních Výsledkůunclassified

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Are the Financial Fair Play Regulations Fair and Sustainable? Case of English Premier League

Procházka¹,

Vanc²

2021

Politicka ekonomie

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Are the Financial Fair Play Regulations Fair and Sustainable? Case of English Premier LeagueThe paper investigates whether the Financial Fair Play Regulations have contributed to a sustainable economic framework of club football while retaining equal opportunities for sport success. Mutual relations among economic strength of football clubs, their financial aggressiveness in investments into squads and league results after the implementation of the FFP rules are assessed. Using a dataset of the English Premier League clubs over 2011-2017, empirical data reveal that the league is economically sustainable in the long run. However, profitability improves by increasing broadcasting revenue, and clubs' profits are driven by their ownership structure rather than FFP. Furthermore, we identify a statistically significant financial aggressiveness in spending on squads. A regulation aiming at securing sustainable economic development may, thus, curtail sport competitiveness of smaller clubs and boost dominance of teams that are economically strong around the time of regulation launch.

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Financial Doping in the English Premier League

Cited by 10 publications

References 14 publications

Caught in a trap? Financial Fair Play Regulations and the case of Scottish football

Caught in a trap? Financial Fair Play Regulations and the case of Scottish football

An introduction to the challenges of distributive equity in the English Premier League

Are the Financial Fair Play Regulations Fair and Sustainable? Case of English Premier League

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