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The real impact of financial fair play (FFP) came along with the break-even rule which prevents clubs from over-spending through a variety of sanctions. As UEFA limited clubs’ expenses with their incomes, the transfer market took a hit. This paper demonstrates the impact of FFP on Russian Premier League teams’ transfer activity, examines how transf...
Citations
... Most of them were focused on the "Big 5" covering England (Plumley et al., 2021), Italy (Dimitropoulos and Scarfanto, 2021) and France (Barros et al., 2014). Occasionally, some of these covered some of the lesser leagues in European football such as the Russian Premier League ( € Ozaydin, 2020). Our study aims to enhance the contribution of such research further by contrasting the effectiveness of FFP within two of the "Big 5" leagues to provide crossnational comparisons. ...
Purpose
This paper analyses the effectiveness of UEFA's Financial Fair Play (FFP) under the break-even requirement.
Design/methodology/approach
Data was collected from English and French football clubs competing in the English Premier League (EPL) and in Ligue 1 (L1) for the financial years 2008–2018. Our sample includes 395 club-year observations. Relevant statistical tests have been conducted with the aim of analysing the effects of pre (2008–2012) and post (2012–2018) FFP enforcement under both profitability and cost-efficiency assumptions.
Findings
In the EPL, an increase is observed in clubs' profitability through both operating and break-even results. In L1, this improvement is only significant for break-even results of clubs not participating regularly in European competitions (non Euro-oriented clubs). Player expenditures, measured through two wage-to-revenue ratios excluding trading activity for one and including it for the other, have significantly decreased in the EPL except for the Euro-oriented clubs for this latter. Conversely, in L1, this decrease is only significant in both wage-to-revenue ratios for non Euro-oriented clubs and for the whole sample when trading is included.
Practical implications
In addition to evidencing contrasting results in FFP effectiveness across countries, our results suggest it is not the sole cause of such an improvement in clubs' finances. We suggest that UEFA should pursue its efforts to scrutinise the level of clubs' player expenditures and that there is a need for a wider look at the FFP regulations.
Originality/value
This article provides further contribution to empirical studies on FFP effectiveness that have often been focused on a single country.
... A 2020 study conducted an empirical analysis of the Russian Premier League, which is the sixth largest league in Europe by revenue, 129 using a regression discontinuity design to analyze the impact of FFP. The study found that "competitive balance in the Russian Premier League deteriorated in favour of the giants in the league as a result of break-even" requirements, 130 further commenting that the giants of the league "have higher revenues, therefore they are able to spend more which causes the gap between them and lesser teams in the league to widen". 131 Turning With the domestic leagues fossilizing such that the same clubs continually finish at the top, we would then expect these same clubs to continually appear in the Champions League as well. ...
European soccer clubs tend to spend beyond their revenues, causing disruptions in their finances. To minimize these disruptions, UEFA enacted the Financial Fair Play Regulations (FFP). FFP achieves its objectives through the “break-even” requirement, which prohibits clubs from spending beyond their revenues. This article argues that FFP violates Articles 101 and 102 TFEU. While there has been scholarly interest in FFP’s incompatibility with competition law, the focus has been on Article 101. In addition to contributing to the scholarship on FFP’s violation of Article 101, this article presents arguments on how FFP violates Article 102. This article then explores UEFA’s interactions with European regulators as a backdrop for explaining why regulators have failed to address FFP’s violation of Articles 101 and 102. This article concludes by arguing that a change to FFP is imminent and suggests a novel method through which UEFA can maintain FFP’s objectives while complying with competition law.
The study aims to examine the factors impacting the competitive balance (CB) in 22 of Europe's top‐tier football leagues from 2004 to 2021. Three types of influence factors are selected: financial, economic, and sportive. The dataset has a total of 374 observations, comprising 22 countries over 17 seasons. Competitive Balance is measure by three indicators for robustness check. Six Ordinary Least Squares regression models are carried out. Our outputs evidence that play‐offs for relegation, average age, talent concentration, and standard deviation of team values showed negative effect while number of teams in the league, Elo rank, local currency to Euro rate, and Gini index have positive effect. The best level of balance is achieved with a percentage of relegated of 20.9%. Our study explains the change in CB in terms of tournament format, financial indicators, and a wide range of economic variables that have not previously been presented. The empirical results offered here may be useful for UEFA and domestic league organizers in order to improve the competitive level in the European football.
Purpose
The paper analyzes the effects of financial fair play (FFP) in the competitive balance of European football industry throughout a long-term perspective.
Design/methodology/approach
The authors analyze the evolution of the competitive balance in the European football industry through a time-series analysis from season 1992/93 to 2018/19.
Findings
Results indicate an industry by nature dominated by a few clubs showing a general stationary behavior. FFP has had very little impact in local competitions. Just in some leagues, such as the Spanish, German, and French leagues, we can observe an increase in the imbalance in some indicators, but these results are not very robust. The improvement on the financial situation happens especially in a small group of firms that coincide with the big leagues with a strong European market orientation and strict local financial control standards.
Research limitations/implications
Although the study covered 17 European Leagues, there are several leagues not accounted for and thus results should be generalized with caution.
Practical implications
The authors observe heterogeneity of the results of FFP in the competitive balance, associated to how the standard has been implemented in each market. This opens opportunities to study and deepen the local codes and their influence, especially in the recommendations of future financial control standards.
Originality/value
The authors’ main contribution to the literature is to examine the impact of the FFP rules in the competitive balance utilizing a very broad study of 17 European markets with a rich and unusual overview and long-term perspective.
Undoubtedly, broadcasting revenues have become the most important source of revenue for the European football leagues in the past couple of decades. This study investigates the efficiency of broadcasting revenue generation using an output-oriented data envelopment analysis for the 16 major leagues of European football. The results suggest that English and Turkish leagues are operating efficiently whereas the Dutch and Russian leagues are the least efficient ones. Due to the increasing share of broadcasting revenues in total revenues and the adverse effects of the global pandemic on other revenue sources, clubs rely on broadcasting revenues more than ever. Both the broadcasters and policy makers in European football will benefit from the identification of efficient and non-efficient leagues for future broadcasting agreements.
This article assesses the effectiveness of the UEFA Financial Fair Play (FFP) regulations, one of the few financial regulatory tools for open leagues in Europe in two top divisions in Europe. The objective of FFP borrows from the theoretical concept of ‘soft budget constraint’ in sport finance and regulation literature. Introduced by UEFA in 2011 and fully implemented from 2013, FFP requires clubs qualifying for European competitions to comply with the financial concept of “break-even”, where football expenses should not exceed football revenues. This study uses the French Ligue 1 (L1) and the English Premier League (PL) as a case study for analysing the effectiveness of FFP and includes thirteen clubs (seven French and six English) in total. The selection of clubs was guided firstly by data access but was also restricted to clubs regularly participating in European competitions between 2011, when FFP came into effect, and 2018. The scope of the study enabled us to measure the effect of FFP with regard to the break-even rule and the payroll ratios before and after its full application by comparing the periods 2008-2013 and 2013-2018 using descriptive statistics and tests of comparisons. The results are contrasted according to the national context of the clubs studied and the indicators analysed. First, they show a general improvement in the profitability of the clubs in the sample, although the results are statistically significant only in the case of the PL. Concerning the payroll ratios, the first measure (payroll/operating expenses) decreased significantly for all clubs, with significant differences found comparatively in the case of the L1. The second measure (payroll/operating income) also decreased, but the decrease was only significant at the sample level when the trading activity was included in operating income. From a theoretical perspective, this contribution makes it possible to compare the conclusions obtained with existing works, be it predictive or empirical in nature. From a managerial point of view, it calls for UEFA to remain vigilant in respect of FFP. While the results appear to suggest that FFP has been effective in improving the financial equilibrium of clubs and their payroll ratios, the link between better financial health and good governance remains a key challenge for the industry moving forward.
Cet article ambitionne d’évaluer l’efficacité du système de Fair-play financier (FPF), un des rares outils de régulation des ligues ouvertes en Europe. Elle s’inscrit dans le cadre de la régulation financière des ligues de sports collectifs en empruntant des éléments théoriques au concept de « contrainte budgétaire lâche ». Instauré par l’UEFA en 2011 et pleinement appliqué à partir de 2013, le FPF impose aux clubs qualifiés en coupes d’Europe de respecter une règle d’équilibre financier limitant leurs montants de dépenses issues de l’activité football à ceux de leurs recettes, sans l’aide d’apports extérieurs. Pour parvenir à cet objectif, nous avons retenu sept clubs évoluant en Ligue 1 française (L1) et six en Premier League anglaise (PL). Cette sélection a d’abord été guidée par l’accès aux données et a été restreinte aux clubs participant régulièrement aux compétitions européennes entre 2011, année d’entrée en vigueur du FPF, et 2018. Le périmètre ainsi constitué nous a permis de mesurer l’effet du FPF au regard de la règle d’équilibre et des ratios de masse salariale avant et après sa pleine application en comparant les périodes 2008-2013 et 2013-2018 à partir de statistiques descriptives et de tests de comparaisons. Les résultats sont contrastés en fonction du contexte national des clubs étudiés et des indicateurs analysés. Ils montrent d’abord une amélioration générale de la profitabilité des clubs sur l’ensemble de l’échantillon même si, au niveau national, les résultats ne sont statistiquement significatifs que dans le cas de la PL. Concernant les ratios de masse salariale, le premier étudié (masse salariale/charges d’exploitation) a diminué de façon significative sur l’ensemble des clubs même si la significativité des tests de comparaison n’a été constatée, cette fois-ci, que dans le cas de la L1. Le second (masse salariale/revenus d’exploitation) a également diminué mais la baisse n’est significative à l’échelle de l’échantillon que lorsque l’activité de transfert est intégrée aux revenus d’exploitation. D’un point de vue théorique, cette contribution permet de confronter les conclusions obtenues aux travaux existants qu’ils soient de nature prédictive ou empirique. D’un point de vue managérial, elle invite l’UEFA à rester vigilante car, si les résultats sont plutôt flatteurs laissant à penser que le FPF a été efficace dans l’amélioration de l’équilibre financier des clubs et de leurs ratios de masse salariale, le lien entre meilleure santé financière et bonne gouvernance est toutefois interrogé en fin d’article.
Günümüzde futbolcular sporcu kimliklerinin yanı sıra alınan ve satılan bir ticari ürün olarak görülmektedirler. Kulüpler son yıllarda futbolcu alım satımı üzerinden kâr elde edebilmek için çeşitli modeller üretmiş ve uygulamıştır. Çalışmamızın amacı, son yıllarda futbol dünyasında sıklıkla uygulanan "kiralık ordusu modeli"nin tanımlanması ve analiz edilmesidir. Araştırmada kullanılan veriler futbol dünyasında genel kabul gören Transfermarkt veri tabanından alınmıştır. Çalışmada kiralık ordusu modelinin dünyadaki öncüsü olarak kabul edilen İngiliz Chelsea FC'nin, 1 Ocak 1996-31 Aralık 2020 tarihleri arasındaki çeyrek asırlık süreçte gerçekleştirdiği tüm transferler incelenmiştir. 384 futbolcuya ait veriler SPSS 24.0 programına aktarılmış ve bulgular tanımlayıcı istatistikler aracılığıyla yorumlanmıştır. Model ile ilgili elde edilen temel sonuçlar şöyledir; Altyapıdan çıkan futbolcular kiralık ordusu modelinin futbolcu kaynağının neredeyse yarısını oluşturmaktadır (%47,4). Satışların önemli bir bölümü iç pazara yani Birleşik Krallık ülkelerine yapılmaktadır (%38,8). Başka takımlara kiralanma ortalaması 3 olarak bulunmuştur. Futbolcuların büyük bir kısmının Chelsea FC A takımında hiç müsabakaya çıkmadığı saptanmıştır (%65,7). Özellikle 2005 yılından itibaren kiralık ordusu modelini aktif olarak kullandığı gözlemlenen Chelsea FC'nin model sayesinde 149M €'luk gelir elde ettiği tespit edilmiştir. FIFA'nın 22 yaş altı futbolcuların kiralanmasına ilişkin 2022 yılından itibaren yürürlüğe gireceğini açıkladığı kısıtlama kararının, kiralık ordusu modelinin geleceği için ciddi bir tehdit oluşturacağı düşünülmektedir.
Today, footballers are seen as a commercial product that is bought and sold as well as their athlete identity. In recent years, clubs have produced and implemented various models in order to profit from the purchase and sale of football players. The aim of our study is to define and analyze the "loan army model" which has been used frequently in the football world in recent years. The data used in the study were taken from the Transfermarkt database, which is generally accepted in the world of football. In the study, all the transfers made by the British Chelsea FC, which is considered to be the pioneer of the loan army model in the world, between January 1, 1996 and December 31, 2020 were examined. The data of 384 football players were transferred to the SPSS 24.0 program and the findings were interpreted through descriptive statistics. The main results obtained with the model are as follows; Footballers from the infrastructure make up almost half of the footballer resource of the loan army model (47.4%). A significant portion of the sales ise made to the domestic market, in the UK countries (38.8%). The average of on loan to other teams was found to be 3. It was determined that most of the football players never played in Chelsea FC A team (65.7%). Especially since 2005, Chelsea FC, which has been observed to use the loan army model actively, has been found to have an income of 149M € thanks to the model. FIFA's decision to restrict the on player loans under the age of 22, which will enter into force as of 2022, is thought to pose a serious threat to the future of the loan army model.
