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Vertical restraints in soccer: Financial fair play and the English Premier League

Thomas Peeters () and Stefan Szymanski ()

Working Papers from University of Antwerp, Faculty of Business and Economics

Abstract: In 2010 UEFA, the governing body of European soccer, announced a set of financial restraints, that clubs must observe when seeking to enter its competitions, notably the UEFA Champions League. We characterize these “Financial Fair Play” (FFP) regulations as a form of vertical restraint and assess their impact on the intensity of competition in the English Premier League. We build a structural empirical model to show that introducing FFP would substantially reduce competition, resulting in lower average payrolls, while average revenues would hardly be affected. Depending on the exact regime, wage to turnover ratios would decline by 8% to 15%.

Keywords: Vertical restraints; Soccer; Financial Fair Play (search for similar items in EconPapers)
JEL-codes: L42 L51 L83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-spo
Date: 2012-12
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Persistent link: https://EconPapers.repec.org/RePEc:ant:wpaper:2012028

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