Abstract
Amongst others, it was claimed that UEFA’s Financial Fair Play (FFP) will level the playing field in European soccer leagues making competition more equilibrated and perceived as being fairer. Based on a hand-collected dataset on league results, player market values as well as investor payments of more than 300 European football clubs, we scrutinize the impact of FFP on the competitive landscape in major European soccer leagues. By applying a fixed-effect panel regression difference-in-difference approach we come up with results suggesting that FFP has further amplified competitive imbalance. This might be caused by the fact that FFP raises some barriers against the entrance of new investors. Moreover, we present evidence that FFP supports the former season’s winner in terms of budget shares in the upcoming season. Overall, our results corroborate the criticism that FFP does not make European soccer leagues more equilibrated and even tends to freeze current hierarchies.
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