Regulatory Arbitrage in the Market for Player Rights: Evidence from European Soccer

Federico Ciliberto, Davide Scotti and Silvio Vismara

No 20534, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: When regulatory compliance depends on accounting measures, firms can restructure transactions to meet formal constraints without reducing risk. We study this type of regulatory arbitrage in European soccer, where Financial Fair Play rules create incentives to inflate capital gains through bilateral player exchanges (“cross-transfers†). Using transaction-level data from 20 European leagues (2015–2023), we find that cross transfers generate €1.37–€2.94 million in excess capital gains. This premium is positively correlated within cross-transfer pairs and absent before FFP. These results provide direct evidence of regulatory arbitrage through asset pricing, with implications for accounting-based regulation more broadly.

JEL-codes: G28 L51 Z20 (search for similar items in EconPapers)
Date: 2025-08
New Economics Papers: this item is included in nep-reg and nep-spo
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