The effectiveness of UEFA Financial Fair-Play: Evidence from England and France, 2008-2018

Purpose – This paper analyses the effectiveness of UEFA’s Financial Fair-Play (FFP) under the break-even requirement. Design/methodology/approach – Data was collected from English and French football clubs competing in the English Premier League (EPL) and in Ligue 1 (L1) for the financial years 2008-2018. Our sample includes 395 club-year observations. Relevant statistical tests have been conducted with the aim of analyzing the effects of pre (2008-2012) and post (2012-2018) FFP enforcement under both profitability and cost efficiency assumptions. Findings – In the EPL, an increase is observed in clubs’ profitability through both operating and break-even results. In L1, this improvement is only significant for break-even results of clubs not participating regularly in European competitions (non Euro-oriented clubs). Player expenditures, measured through two wage-to-revenue ratios excluding trading activity for one and including it for the other, have significantly decreased in the EPL except for the Eurooriented clubs for this latter. Conversely, in L1, this decrease is only significant in both wageto-revenue ratios for non Euro-oriented clubs and for the whole sample when trading is included. Originality/value – This article provides further contribution to empirical studies on FFP effectiveness that have often been focused on a single country. Practical implications – In addition to evidencing contrasting results in FFP effectiveness across countries, our results suggest it is not the sole cause of such an improvement in clubs’ finances. We suggest that UEFA should pursue its efforts to scrutinize the level of clubs’ player expenditures and that there is a need for a wider look at the FFP regulations questioning whether they are fit for purpose in their current format.