Soft Budget Constraints in French Football through Public Financing of Stadiums

Several football stadiums were built or renovated in France for hosting the 2016 UEFA European Football Championship. This study examines to what extent financial support by local governments for stadium construction or renovation induces soft budget constraints (SBC) for professional sports clubs. We address the research question based on a quantitative case study in the context of the construction and renovation of eight football stadiums that took place in France between 2012 and 2016. Our data shows that the public sector financed on average 78% of the new stadiums’ total construction or renovation costs, and local governments paid on average 60% of the total annual rental costs. The results indicate that local governments in French professional football are “supporting organizations” and help to ensure the financial sustainability and viability of the clubs by allowing them to benefit from financial flexibility, which are typical characteristics of SBCs. In total, we identify 32 forms of public aid that we classified according to different categories of “softness” and whether these aids appeared ex ante or ex post. Public aid constituted financial support that was sometimes very substantial, amounting to several million euros in each case. This financial support is often not taken into account by the regulatory authorities and thus could be interpreted as hidden government subsidies to professional clubs, which in some cases exceeded the subsidy allowance of €2.3 million

What drives sports TV rights? A comparative analysis of their evolution in English and French men’s football first divisions, 1980–2020

This article consists of a comparative analysis of the evolution of TV rights in English and French men's football first divisions over the period 1980-2020. The focus is on four main independent variables: the characteristics of the sporting event, the structure of the TV market, the financial situation of subscription channels and the penetration of the sport in society (watching). Based on this, a framework is suggested with the identification of 16 more specific independent variables. Correlations are calculated between these variables and TV rights in England and France. They allow us to explain why TV rights for the former have become much larger than for the latter. This can be summarised as follows: larger domestic audiences for the English Premier League (EPL) leading to larger revenues for Sky in the United Kingdom and Ireland than Canal + in France with a greater incentive to invest money in TV rights due to more competition leading to better players so better games and larger audiences; and much larger international TV rights for the EPL than for the French Ligue 1 due to the quality of the games and the ability to "sell" the league internationally, in particular in attracting international players

Insolvency in French Soccer

This paper examines insolvency at the highest levels of French soccer. Between 1970 and 2014 we observed 72 cases of insolvency arising from participation in the top two or three (since 1993) divisions. We find that demand (attendance) shocks can account for insolvency to a significant degree. We also find that insolvency can be explained by ownership structure, with the tradition Association form being more likely to lead to insolvency. We also examine the post-insolvency performance of soccer clubs and find that the adverse consequences of insolvency are long lasting

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

French DNCG management control versus UEFA Financial Fair Play: a divergent conception of financial regulation objectives

© 2017 Informa UK Limited, trading as Taylor & Francis Group. The French Football Federation was the first football governing body to put in place, in 1990, a financial regulation system. It might be expected that UEFA’s Financial Fair Play (FFP) system established in 2010 would be similar to French DNCG (National Direction for Management Control) regulations. However, while FFP is concerned with profitability, DNCG is focused on solvency. Hence, a French club may be loss-making and not compliant with FFP, while at the same time being solvent in accordance with DNCG rules. Our research confirms that most French clubs do not conform to FFP rules. As such, it provides further evidence that DNCG has not prevented poor financial management within French clubs. The coexistence of DNCG and FFP– or any other domestic financial regulation and FFP –may result in disparities between domestic clubs. As a consequence, there should be consistent financial regulation in all European leagues

Gouvernance des clubs de football professionnels : Entre régulation et contrainte budgétaire

En analysant le comportement individuel des clubs, cette contribution en propose une typologie fondée sur leur niveau de contrainte budgétaire, induite par la capacité de leurs actionnaires à financer les pertes réalisées. Il est ainsi possible de conclure que seul un très petit nombre de clubs évoluent dans le cadre d’une contrainte budgétaire « lâche » (CBL) caractéristique d’une « mauvaise » gouvernance (Andreff, 2009). Cette recherche permet aussi de montrer que les clubs adaptent leur comportement aux exigences de la régulation sectorielle auxquels ils sont soumis, transférant de fait à cette dernière, une part de responsabilité dans la gouvernance de ces organisations. By analysing clubs’ individual behaviour, this research suggests a typology based on their level of budget constraint, induced by the capacity of their shareholders to fund losses. It is thus possible to conclude that only a very small number of clubs operate under a “soft” budget constraint (SBC) characterising a “bad” governance (Andreff, 2009). This research also enables to show that clubs adapt their behaviour to the requirements of the sectorial regulation that applies to them, transferring to the latter a share of responsibility in the governance of these organisations

Régulation financière et sport professionnel : les conditions de l'indépendance du régulateur

Contrôle de la gestion administrative et financière des clubs professionnels participant aux championnats de sports collectifs en France : régulation financière et indépendance de l'instance de régulation; proposition de critères d'appréciation de l'indépendance d'un régulateur; une application au championnat de football professionnel français : analyse de l'indépendance de la DNCG (Direction nationale du contrôle de gestion); synthèse : l'appréciation de l'indépendance des autorités de régulation dans le sport professionne

Sport professionnel : le coût fiscal des transferts de joueurs

En France, les indemnités de transferts versées ont été requalifiées en immobilisations incorporelles et sont donc maintenant assujetties à la TVA. Cette réforme génère pour la majorité des clubs de football un surcoût fiscal et une perte de compétitivité des clubs français sur le marché des transferts internationaux

Régulation financière des championnats de sport collectif : une révolution en marche en Europe ?

International audienceGroupe Territorial BP 215-38506 Voiron Cedex-Tél. : 04 76 65 87 17-Fax : 04 76 05 01 63-www.territorial.fr Copyright Territorial Éditions-Reproduction interdite-Décembre 2009 Réf. Revue européenne du management du sport n° 25 Uniquement disponible par téléchargement sur www.territorial.fr ou www.acteursdusport.fr Régulation financière des championnats de sport collectif : une révolution en marche en Europe ? Par Nadine DERMIT-RICHARD CETAPS EA 3832 UFR Staps 76821 Mont St-Aignan CEDEX 02 32 10 77 8