French Football: A Financial Crisis Rooted in Weak Governance

Wladimir Andreff ()
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Wladimir Andreff: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

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Abstract: This article contends that a French football exception is not an absent financial crisis but its hidden shape because of undisciplined club behavior and a lack of transparency and disclosure. French football is characterized by a lax financial management and a soft-budget constraint at the club level. The latter results from a weak governance structure in the league and clubs. Shareholders behave as non-profit-seeking investors or patrons. The arms race to enroll the most efficient players fuels wage inflation that is hardly balanced by newly emerging sources of finance. The more a club is able to attract broadcast revenues, the more likely it is to be in the red. Policy recommendations include strengthening the governance structure, restoring financial discipline, and defining compulsory thresholds for some clubs' financial ratios.

Keywords: budget constraint; disclosure; finance; French football; governance (search for similar items in EconPapers)
Date: 2007-12
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Citations: View citations in EconPapers (49)

Published in Journal of Sports Economics, 2007, 8 (6), pp.652-661. ⟨10.1177/1527002506297021⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00270019

DOI: 10.1177/1527002506297021

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