Has Financial Fair Play Changed European Football?

Donato Masciandaro (), Ariela Caglio, Sébastien Laffitte and Gianmarco Ottaviano

No 22189, BAFFI CAREFIN Working Papers from BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy

Abstract: In 2011 UEFA, the governing body of European football, introduced the Financial Fair Play Regulation (FFPR), consisting of a set of financial restraints to be met by clubs as a prerequisite for participation to its competitions. The aim of the FFPR was to introduce financial discipline into the clubs’ decision making processes, and ultimately protect the longterm viability of the European football industry. The reform was criticized because of possible unintended detrimental consequences. In particular, Peeters and Szymanski 2014 provided a model-based ex-ante simulation analysis showing that the reform would increase the profitability of clubs, but also tilt the competitive balance in favor of the top teams, thus reducing the interest of fans and investors as one of the main attractions in sports is precisely that the best team does not always win. Exploiting an original dataset between the seasons 2007-2008 and 2019-2020, we provide an ex-post econometric evaluation of the effects of the introduction of the FFPR revealing causal evidence that largely vindicates those ex-ante predictions.

Keywords: accounting measurement; Financial fair play (FFP); financial sustainability; team’s quality; competitive balance. (search for similar items in EconPapers)
Pages: 26
Date: 2022
New Economics Papers: this item is included in nep-spo
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Working Paper: Has financial fair play changed European football? (2023)
Working Paper: Has financial fair play changed European football? (2023)
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