Abstract
UEFA’s Club Licensing and Financial Fair Play Regulations (FFP) have impacted European club football. After five distinct applications of the break-even requirement, which represents the cornerstone of these regulations, it is time for an assessment. How has the situation in European top-division football changed since the FFP regulation? The most recent financial data show that European club football is characterized by significant financial recovery and further polarization. How has the FFP regulation presumably affected this development? This article discusses plausible reasons why FFP has contributed to financial recovery but has not aggravated polarization. Understanding the drivers of polarization is essential before taking further regulatory steps.
Highlights
European club football has been confronted with a major regulatory intervention, UEFA’s ClubLicensing and Financial Fair Play Regulations (FFP)
After five distinct applications of the break-even requirement, which represents the cornerstone of this intervention, it is time for an assessment: How has the situation changed since FFP first impacted European top-division football?
While pre-FFP European club football was on a trajectory of ever-deepening financial distress until 2011, the data show a continuous improvement since financial year (FY) 2012, the first reporting period entering into a break-even assessment
Summary
European club football has been confronted with a major regulatory intervention, UEFA’s Club. While pre-FFP European club football was on a trajectory of ever-deepening financial distress until 2011, the data show a continuous improvement since financial year (FY) 2012, the first reporting period entering into a break-even assessment. The enhanced overdue payable rule, monitored from June 2011 onwards, is the first of the two new requirements It demands that clubs playing in UEFA competitions must fulfill all their financial obligations towards other clubs, employees, and social or tax authorities punctually. The expenses in the football market are called “relevant expenses” and consist mainly of employee benefit expenses and player transfer amortization Balancing these two factors means that clubs must be able to perform their core football activities without owner contributions and without incurring debt. UEFA publishes on its website summaries of all settlement agreements and of all the decisions of the adjudicatory chamber
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