The soft budget constraint syndrome in Hungarian professional football from a Central and Eastern European perspective

Abstract

The paper implements János Kornai's theory about the Soft Budget Constraint (SBC) syndrome on the case of contemporary Hungarian professional football. The study summarizes the peculiarities of professional football in post-socialist countries and presents the current business results of Central and Eastern European (CEE) football. The aim of the paper is to apply the SBC theory to the current situation of football in Eastern Europe, with special attention to the illustrative case of Hungary. With the method of financial data collection and processing, the main market results are investigated, and an efficiency indicator has been created in nine CEE countries to test whether the operation of professional Hungarian football clubs is characterised by soft budget constraints. Based on the indicator, the research shows that using the same amount of resources Hungarian clubs are much less successful than their regional competitors. This is explained by current public funding patterns and the continuous reliance on bailout, causing a soft budget and inefficient operation.