Proceedings of the 5 th ESEA Conference
Edited By Oliver Budzinski and Arne Feddersen
The American View on Financial Fair Play
Financial Fair Play (FFP) regulations restrict the total spending by football clubs on salaries and other expenses. The policy resembles the restraints on players’ compensation imposed by American sports leagues. FFP is expected to reduce the number of player transfers, and the bidding for their services, lowering the players’ share of the revenues. These outcomes are similar to salary cap results in American sports. Moreover, experience from American college sports suggests that that effective policing and enforcement of FFP regulations will be more costly than desired, thus FPP compliance will be investigated and enforced neither equitably nor efficiently. Last, there is nothing to suggest that FFP will benefit football fans, who would prefer better matches and lower prices.
Financial Regulation, Football Economics, Labor Markets, Financial Fair Play
The Union of European Football Association’s (UEFA) Financial Fair Play (FFP) regulations, the stated intent of which is to restrain excessive spending on the part of European football clubs, bear resemblance to the mandated restraints on players’ compensation imposed by American sports leagues. In contrast to American sports, which have an extensive history of imposing spending restraints, FFP rules are just proceeding, having been introduced in 2010. FFP requires that UEFA member football clubs “break even” financially. Essentially, the new rules require that total spending on player salaries and other expenses does not exceed the club’s generated revenues (Peeters & Szymanski 2013). Clubs found in violation of the rules face UEFA’s punitive measures, which can include exclusion from competition....
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