Financial Fair Play: what is it and does it work?

UEFA believes in the system where revenue and expenditure of clubs should be in balance. But does it really work? Will this measure lead to more equality in soccer games? Thomas Peeters, sports economist and Associate Professor of Applied Economics at Erasmus School of Economics, researches this topic.

Financial Fair Play is failing smaller clubs

Financial Fair Play prevents smaller clubs from being taken over, but must also ensure that revenues and expenditures are in balance. According to Peeters, this system does not contribute to a fair competition. If the goal is to help the smaller clubs, then it’s even a blunder. With a private takeover of smaller clubs, money comes along which enables a club to exploit its potential. Peeters gives the example of Manchester City and Paris Saint-Germain, two sleeping giants brought to life by external money. ‘That route is now cut off for other clubs’, says Peeters.

Limitation of possibilities

In his research, he compares Financial Fair Play with the regulations known in the United States to improve equality between clubs in professional competitions. It does so by placing all clubs at the same level, making the competition unpredictable. In Europe, very unequal income streams between clubs are already known. The Financial Fair Play system further limits the possibilities of these clubs by emphasising this inequality of income streams.