Title: Why does financial regulation matter for European professional football clubs?

Authors: Bastien Drut; Gaël Raballand

Addresses: University of Paris West Nanterre La Défense, EconomiX-CNRS, 200 Avenue de la République, Nanterre, 92001, France; Centre Emile Bernheim, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Av. F.D. Roosevelt, 50, CP 145/1, 1050, Brussels, Belgium. ' Institut Choiseul, 28, rue Étienne Marcel, Paris, 75002, France

Abstract: This paper demonstrates theoretically and empirically that financial regulation is crucial to explain performance in European football competitions; clubs allowed to run deficits hire more playing talents and obtain better sportive results. An empirical study on the five major leagues corroborates the theoretical underpinning. The paper finally investigates the roots of financial regulation divergence in Europe and underlines the main issues regarding the UEFA financial fair-play rules.

Keywords: win maximisation; profit maximisation; sports economics; debt; financial regulation; Europe; professional football clubs; soccer clubs; European football competitions; club performance; UEFA financial fair play; fair play rules; club results; sport management.

DOI: 10.1504/IJSMM.2012.045488

International Journal of Sport Management and Marketing, 2012 Vol.11 No.1/2, pp.73 - 88

Received: 14 Dec 2010
Accepted: 05 Aug 2011

Published online: 16 Feb 2012 *

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