Financial Fair Play - Implications for Football Club Financial Reporting

Football activities, both on and of the pitch, are often hitting our news. Despite remarkable revenue growth we have seen numerous well known clubs facing an escalation of player costs, unsustainable debt and clubs suffering financial difficulties, sometimes leading to insolvency proceedings. This has resulted in European football's governing body - UEFA - taking action and introducing Financial Fair Play (FFP) regulations. These regulations are designed to encourage clubs to adopt a more economically rational and sustainable approach to their activities. But will these regulations work and what is the impact on financial reporting for clubs - is the current framework fit for purpose? This report seeks to address these issues through a series of interviews with finance directors at football clubs, football club auditors, football finance experts and representatives of governing bodies and leagues

Football Club Financial Reporting: Time for a New Model?

Purpose - The purpose of this paper is to critically evaluate football club financial reporting with reference to: the long-standing debate on the nature and purpose of accounting; and the implementation of UEFA's Financial Fair Play (FFP) regulations. Design/methodology/approach - The paper is based on a review and analysis of academic literature, accounting regulation and football regulations. Findings - The focus of financial reporting on rational economic decision-makers results in football club financial reports being of limited use to many football club stakeholders. Consideration of the social and organisational context of football, as takes place in FFP, can be used as a catalyst to consider broader approaches to football club reporting. The paper calls for fuller and different pictures to be provided of clubs' performance, in particular broadening the scope of accountability to users beyond that provided by an economic account. Research limitations/implications - The paper is designed to stimulate debate about accounting for and reporting on football club businesses. A necessary next step is an exploratory project, focusing on one or a small number of clubs and their stakeholders, exploring in a practical setting what enhanced football club reporting might look like. Originality/value - While the weaknesses of financial reporting have been considered extensively in the mainstream accounting literature and on occasion in terms of sport, the paper seeks to progress this discussion by linking it to significant football policy initiatives and to wider social and community-based football research

Football clubs on the Stock Exchange: An inappropriate match? The case of Celtic plc

Focusing on the case of Celtic plc, this paper questions the extent to which Stock Exchange listed companies are appropriate vehicles for contemporary football clubs. It adopts an inclusive or stakeholder approach to ownership, focusing not only on the providers of capital as owners but also on the ownership rights of a football club’s community. The paper argues in favour of ownership structures which more fully capture both the economic and social aspects of contemporary football clubs. It concludes by discussing alternative options for the ownership and governance of football clubs, considering in particular structures based on mutual and co-operative principles

Football and finance in Scotland: a dream alliance in Gretna?

On the 3rd of November 2008, Brooks Mileson, the former owner of Gretna Football Club passed away after a long battle against illness. Better known for centuries as a haven for eloping English lovers seeking to wed in defiance of their parents and English law, in recent years, fairy tale romance in Gretna has centred not on fleeing lovers but on the attempts of this English businessman to live his dream through a Scottish football club

Power and logics in Scottish football: The financial collapse of Rangers FC

Purpose - To demonstrate the implications of power imbalance and over-emphasis on commercial logic on the structure and governance of Scottish football. Design/methodology/approach - An in-depth analysis of secondary sources is used to identify the logics at play in Scottish football and to explore implications of the liquidation of Rangers for the structure of the game. Findings - Over-emphasis on commercial logic has led to power being concentrated in two clubs, Celtic and Rangers, and to other clubs and the league itself becoming financially dependent on those clubs. The collapse of Rangers thus threatened the stability of other clubs and the league. The case highlights the challenge of reconciling competing logics and the role played by previously peripheral actors in bringing about change in the field. Research limitations/implications - The on-going nature of the case, related investigations and legal process meant that it was not possible to supplement the secondary source material with primary evidence. Practical implications - It demonstrates the multi-faceted nature of elite contemporary football and of the challenges faced by leagues and governing bodies in accommodating logics and multiple stakeholder interests. It also highlights the need for more effective financial regulation of corporate football clubs and their officials and emphasises the importance of inclusive stakeholder governance. Originality/value - It highlights the risks inherent in football business in small markets dominated by one or a few clubs. It highlights the role that previously peripheral actors can play in bringing about change within a field

FIFA and the ugly side of the beautiful game

A critique of the role played by FIFA in the goverance of world football and the prospects for improved accountability and governance

The Business of Football: Image Management in Narrative Communication

Football at club level has changed markedly in the last decade or so. Indisputably, major football clubs are now complex businesses, intrinsically concerned with financial matters. One of the most important contributory factors in the new business era of football has been television, in particular satellite television, both in terms of the amount paid for broadcasting rights and also in radical alterations to the distribution of that income among clubs. The increasing business orientation of clubs is also evident in other areas: for example, the status of players, where alterations to the transfer system have given players greater freedom of movement and contractual bargaining power, and changes in the ownership structure and governance of clubs. How football, or more accurately, football constituencies or stakeholders, should respond to this economic transformation remains a contested area

Why sponsors may be the only ones who can reform FIFA

First paragraph: That FIFA officials, past and present, are embroiled in investigations for an array of bribery, fraud and money laundering is both shocking and unsurprising. This is not the first time that FIFA has been associated with governance failure and lack of accountability. The way the organisation is set up means that pressure from sponsors could be the only way that things will change. You can read the article on The Conversation's website: https://theconversation.com/why-sponsors-may-be-the-only-ones-who-can-reform-fifa-4250

Football finances

First paragraph: The substantial increases in income enjoyed by top- level football clubs in recent years, coupled with the resultant benefits gained by elite players, have resulted in a markedly increased emphasis on the business of football. Indeed financial performance has become one of the dominant narratives about football, with regular commentary on financial success or failure at both league and club level. This chapter begins with an overview of information available about football finance, identifying academic, professional and new media sources. It continues with an analysis of the financial state of professional football, focusing both on its impressive high- level revenue figures but also on financial challenges faced by some of its leagues and clubs. This provides the context for a discussion on the theoretical case for financial regulation in professional football, and on financial regulation in practice, specifically the Union of European Football Associations (UEFA)'s Financial Fair Play (FFP) regulations. The chapter concludes with a section on political consequences of FFP

Scottish Football: It's a Funny Old Business

The last few years have been financially challenging for Scottish clubs: sustained losses, record levels of indebtedness, several clubs placed in administration. There are numerous reasons why Scottish football finds itself in this state. External factors like changes in the economics of football, in particular changes in football’s relationship with broadcasters have contributed; so too internal factors like poor financial management. While the need to adopt decision making and control procedures appropriate to the present financial circumstances of Scottish football is recognised, there is also a need for structural reform, both at a domestic and European level