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Does Compliance with Financial Fair Play Rules Improve the Football Clubs' Sport Performance and Their Chances to Reach UEFA Competitions?

Author

Listed:
  • Garcia-del-Barrio, Pedro

    (University of Navarra)

  • Agnese, Pablo

    (UIC Barcelona)

Abstract

This paper evaluates the European football clubs' compliance with UEFA Financial Fair Play (FFP) regulations and the effect of financial stability on sport achievements. The empirical analysis uses data of teams competing in the 1st division of four top domestic leagues (Premier League, La Liga, Serie A, and Ligue 1) over the seasons 2009/10 to 2015/16. We control for team quality through the annual wages (in quadratic form) and use the Wage-to-Revenue (WRR) ratio as a proxy variable to measure how close the clubs meet the break-even requirements. Our results reveal that greater financial responsibility implies better sport performance and higher chances to qualify for the Champions and Europa Leagues.

Suggested Citation

  • Garcia-del-Barrio, Pedro & Agnese, Pablo, 2021. "Does Compliance with Financial Fair Play Rules Improve the Football Clubs' Sport Performance and Their Chances to Reach UEFA Competitions?," IZA Discussion Papers 14474, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14474
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    References listed on IDEAS

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    More about this item

    Keywords

    professional football; financial fair play; competitive balance; wage-to-revenue ratios;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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