The Financial/Accounting Impact of FFP on Participating in European Competitions: An Analysis of the Spanish League

Alberto Calahorro-López, Melinda Ratkai and Julio Vena-Oya ()
Additional contact information
Alberto Calahorro-López: Department of Financial Economics and Accounting, Faculty of Social and Legal Sciences, University of Jaén, 23071 Jaén, Spain
Melinda Ratkai: Department of Finance and Management, Les Roches Education, 29602 Marbella, Spain
Julio Vena-Oya: Department of Business Organisation, Marketing and Sociology, Faculty of Social and Legal Sciences, University of Jaén, 23071 Jaén, Spain

IJFS, 2022, vol. 10, issue 3, 1-19

Abstract: This paper analyses the impact of Financial Fair Play (FFP) on clubs’ finances and on the relationship between them and clubs’ sporting outcomes in the Spanish league. To this end, financial ratios and accounting variables obtained from the clubs’ own annual accounts, published from 2004 to 2019, are analysed, and the Mann–Whitney test is used to describe which differences are significant. The objective is threefold: firstly, we describe the financial/accounting structures of Spanish league football clubs, showing how both their financial statements and ratios have evolved after the application of this law, providing evidence of whether FFP is an adequate tool to guarantee the long-term viability and sustainability of football clubs, as intended by the UEFA. Secondly, we show the relationship between financial/accounting performance and sporting results. Thirdly, the paper looks at whether FFP has impacted the gap between the top clubs and the rest. The results show that, after the implementation of FFP, clubs’ financial/accounting health has improved, and a change in their efficiency in this regard can be observed. Although FFP is a tool that achieves the objective for which it was created, the possibility that the gap between the elite clubs and the rest may be increasing should not be ignored.

Keywords: finance; economic impact; accounting; Financial Fair Play; Spanish league; UEFA; sports profitability (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2227-7072/10/3/81/pdf (application/pdf)
https://www.mdpi.com/2227-7072/10/3/81/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jijfss:v:10:y:2022:i:3:p:81-:d:917269

Access Statistics for this article

IJFS is currently edited by Ms. Hannah Lu

More articles in IJFS from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().