| Abstract: |
We provide the first detailed quantitative assessment of the effects of the
Financial Fair Play Regulation (FFPR) introduced by the Union of European
Football Associations (UEFA) on the income statements and balance sheets of
European football clubs. While other studies exist documenting the financial
challenges of the European football industry, to the best of our knowledge
none has yet analyzed the implications of the FFPR. Our analysis relies on two
two sources of information, one we assembled using information from Amadeus
(Bureau van Dijk) and the other collected by the UEFA for the specific purpose
of implementing the FFPR. Drawing on Amadeus data and regression outputs
provided by the UEFA, we consistently find that the introduction of the FFPR
has been followed by a significant improvement in the clubs’ income
statements, which is consistent with the new accounting rules having ‘real
effects’ on the clubs’ management. However, this positive development has yet
to be paralleled also in the club’s balance sheets (notably in terms of debt)
and cash flow statements, which may call for the FFPR to be further extended
in that direction. |