Financial Fair Play And "Salary C Ap" For European Football Clubs

3502 words - 15 pages

Justification of Financial Fair Play(FFP).
Should UEFA follow the example of NHL establishing an analog of ‘Salary Cap” for European football clubs.

The UEFA (Union des Associations Européennes de Football) and above all the UEFA president Michel Platini are very concerned about recent develop- ments in European club football. Many clubs have reported repeated and worsening deficits which have led to record-high debt levels during the last years. In addition, private investors and other equity partici- pants have increasingly extended their influence into professional football clubs. Hence, some clubs have experienced liquidity shortfalls and have been unable to pay other clubs or their players in time. In contrast others have climbed up to the top of European club football with the help of external money. The best- known example is FC Chelsea with its patron Roman Abramovitch, who has spent about half a billion euros within the past decade to finance the club’s quick ascent to being one of the leading teams in Europe. Moreover, today’s European club football is basically an oligopoly consisting of about ten clubs (including FC Barcelona, Real Madrid, Manchester United, FC Chelsea, AC Milan or Bayern Munich and others, called the “Untouchables” by Deloitte), who will continue to move further away from other cubs until the gap can no longer be closed (Figure).
These developments are thought to threaten the financial stability and distort the competitive bal- ance not only between clubs but also between leagues in European club football. In order to ensure
long-term financial stability and to restore the com- petitive balance, the UEFA’s Executive Committee, in agreement with the European Club Association (ECA), unanimously approved a set of rules called “Financial Fair Play” that will come into force with the end of the current season in 2012 (UEFA 2011a). From the 2013/14 season on, all clubs will have to ful- fil the new rules and requirements in order to obtain a license, the precondition for participating in the UEFA Champions League (UEFA 2010a). Financial Fair Play implies that for the first time there will be a harmonized, European-wide and much tighter reg- ulation for all European clubs. According to the UEFA, Financial Fair Play provides a regulatory framework that prevents clubs from fall into a debt spiral while ensuring competition based only on the resources they generate on their own. Furthermore, Financial Fair Play is based on a more general phi- losophy of sports as recently published in the UEFA’s “eleven key values of sport”, which draws primarily on the European sports model of solidari- ty and subsidiarity (UEFA 2011b).
Fortunately, football is not the first sport where that kind of policy is to be established, so that it is possible to approximately predict the consequences of the limit. National Hockey League ('NHL') has a long-term experience in that case. In ice – hockey there is a policy called «Salary cap», which has...

Find Another Essay On Financial Fair Play and "Salary CAp" for European Football Clubs

MLB Competitive Imbalance- discussion of the imbalance, standard deviation of teams, frequency of playoff qualifiers, and SALARY CAP

872 words - 3 pages revenue made by the teams in baseball. A revenue sharing plan would be tied into the salary cap so that small market teams like Milwaukee and Kansas City would have a chance to approach the salary cap maximum. I believe this system would be effective because the small market teams would be more able to resign their own players. This would be a reward for grooming them. Also, the fans would be very appreciative of this. A good example of this is the

Baseball is in Dire Need of Changes Talks about revenue sharing, salary cap, playoff system, expansion, and realignment

2492 words - 10 pages for some type of salary cap to be implemented. The NBA has a great system that has allowed teams from small markets such as San Antonio, Salt Lake City, Portland, and Sacramento to compete. (Costas 65) Can this happen in baseball today? With the help of a salary cap, yes it can. The fact remains that with no salary cap, teams from Minneapolis, Miami, Tampa Bay, and even Chicago are unable to compete because they cannot afford to pay the

Fair Value Accounting and Financial Crisis

1033 words - 4 pages their firm and their shareholders. The ensuing moral hazard would not disappear as long as the risks that are borne by the firm are not equal to the decision makers. It was rational for selfish “utility-maximizers” and therefore remained a major root of future financial crises. Works Cited 21. Pozen, R. C. 2009. Is It Fair to Blame Fair Value Accounting for the Financial Crisis? Harvard Business Review (November): 85-92. 22. Scott, I.E

“I'm here to play football for the Irish!”

684 words - 3 pages Running onto the Notre Dame football field, as the fans yell from the stands, “Ru-dy! Ru-dy! Ru-dy!” is all Daniel “Rudy” Ruettiger dreamt about. In the beginning of the movie Rudy, Rudy told his father, “After high school, I’m gonna play football at Notre Dame.” Everyone always told Rudy that he could never attend Notre Dame, let alone play football for the Fighting Irish. Rudy was determined to fulfill his dream, and show everyone that he

The American Reputation for Fair Play, by Victor Rauly Haya de la Torre and the Federal Bureau of Narcotics

1089 words - 4 pages Response Paper Reaction to “The American Reputation for Fair play:” Victor Raul Haya de la Torre and the Federal Bureau of Narcotics Victor de la Haya was once a celebrated Peruvian politician. He is remembered primarily as an advocate for democracy and workers' rights in Peru. Haya was often viewed as a great political reformer, who tried very hard to change the way the country was governed. In 1923, Haya is most known for establishing the

Salary Schedules for Public School Teachers: Pros and Cons

1782 words - 8 pages Salary schedules for public school teacher Salary schedules for public school teachers are almost a common feature in public school districts. These schedules largely determine the salaries for the teachers. A single district schedule sets the pay for hundreds of thousands of teachers in thousands of schools (Besharov 1). The key factor that influences the pay for the teachers in the salary schedules include experience in terms of years and

Local And National Provision For Football

2393 words - 10 pages Local And National Provision For Football The game of Football was first organised in England in the 1800s and is now the most popular sport around the world. The World Cup is held every four years and is the most-watched sports event today. Around 70 thousand boys play football, for either a school or club team, at each age level between the age ranges of Under 11 to Under 16, and over 500 thousand play between the

Title: Fair is Foul, and Foul is Fair Macbeth: Who is the true villain in the play?

1330 words - 5 pages there is nothing to worry about. Clearly, Lady Macbeth was the cause of downfall for her once heroic husband. Later on in the play, Lady Macbeth sleepwalks, and reveals her hidden conscience while doing so; many believe that at this point in her life she had gone insane. She then commits the greatest crime of all in Act V scene v when she kills herself offstage. Lady Macbeth is considered the most evil character in the play, and therefore the

Testing and Exercise Prescription for College Football Players

3169 words - 13 pages Introduction The sport of football is an anaerobic sport, which means the players heavily rely on The ATP-PC cycle for energy because the average football play lasts less than 10 seconds. Along with the short duration of play length there is typically long recover time. To be exact, each play lasts on average, 5.6 +/- 2.0 seconds with a work rest ratio of one to six (Rhea, Hunter & Hunter, 2006). The athletes that play football train to gain

Fair Labor Standards Act of 1938 and Fair Wages for Disability Employees

1165 words - 5 pages sheltered workshops and the timed tests used to determine subminimum wages for employees with disabilities. I will then go on to discuss the history of the Fair Labor Standards Act of 1938 and how companies use a section of the legislation to get away with paying their employees with disabilities so little. And finally I will discuss the ethics behind the use of this piece of legislation and also provide a counter argument which supports

Laws for Fair, Balanced and Competitive Business Practice

815 words - 4 pages and interlocking directorates. For example, Section 7 of Clayton Act prohibits mergers and acquisitions that lessen competition or tend to create monopoly. Apart from these three core antitrust acts, most states also have antitrust laws. (FTC, 2014) Apart from Antitrust laws, there are several other laws that promote fair business practices. The Robinson-Patman Act prohibits price discrimination. This act is applicable to business-to-business

Similar Essays

Sugar Daddies In European Football Clubs

1948 words - 8 pages Management Practices. Human Resource Management, 241-255. Sloman, J., & Hinde, K. (2007). Economics for Business, 4th Edition. Harlow: Financial Times Prentice Hall. Szymanski, S. (2003). The conomic Design of Sporting Contests. Journal of Economic Literature, 1137-1187. UEFA. (2012). UEFA Club Licensing and Financial Fair Play Regulations. Nyon: UEFA. Vöpel, H. (2011). Do we really need Financial Fair Play in European Club Football? An economic analysis. CESifo DICE Report, 54-59. Wright, P., McMahan, G., & McWilliams, A. (1993). Human Resources and Sustained Competitive Advantage: A Resource-Based Perspective. Center for Effective Organizations, 1-34.

The "Baseball Salary Cap" And Why We Should Have One

1028 words - 4 pages is this? Why won't baseball put a salary cap on baseball to stop the franchise dynasties such as the Yankees or Red Sox? It's not fair to the "lower priced teams", that they can't receive the "big named" players because all these players want is the money and a championship, so they sign with the bigger teams.This debate has been going on for over 3 decades, the first strike being caused in 1972. Then in 1994, the players refused to accept such

Fair Play For Women Athletes Essay

953 words - 4 pages Do you think that women have fair play in athletics, particularly in college athletics? Why or why not? In 1972, Title 1X was passed giving women equal opportunity in the field of athletics. It stated that no person base on their sex should be excluded from participating in sports or denied benefits. Title 1X gave women athletes a break through in sports and now they are dominating across the board. However, women athletes particularly

A Study Of Salary Cap In Sports Fields For Interview Study

1168 words - 5 pages field is the limit agreed upon by team owners on the amount of money that can spent on the player’s salaries. Reasons to Implement a Salary Cap The two major reason to implement salary cap is: 1) It helps keep the expenditure of the management in control : In the absence of salary caps, owners can be tempted to sign high cost contracts to select star players to achieve success. This may lead to financial instability and can cause the downfall of