Events

Addressing Financial Instability in European Soccer: the Case for Restricting the Relegation and Promotion Process

Addressing Financial Instability in European Soccer: the Case for Restricting the Relegation and Promotion Process

Room 101,
Foster Court, UCL
(Off Torrington Place WC1 opposite Waterstones Bookstore)

Wednesday 13th October 2004, 6pm-8pm

Given by:

Professor Stefan Szymanski, The Tanaka Business School, Imperial College London

Synopsis

This paper summarises the discussions of a group of economists from countries representing 11 of the national associations of UEFA.who met at the University of Bologna at Rimini in March 2004 Addressing the question of whether there is a financial crisis in European football they conclude that there is was not a general crisis, as all leagues across Europe have continued to function effectively and their clubs have been able to finance ongoing losses. However, there have been severe localised problems, for example in Italy. There is, however, a general associated problem that the industry across Europe is congenitally unprofitable. This is particularly the case in smaller European leagues where the larger clubs seek to compete in European club competitions without the financial safety net of competing in a league located in a country with a large TV market which can generate higher revenues. This leads to a high level of financial instability at these clubs as incomes vary wildly depending on the degree of success in European competition. The paper concludes that there are two broad approaches to dealing with financial instability in European football. The first is to impose tighter financial regulation from above, as exemplified by the UEFA club licensing scheme. However, within the current system the authors doubts whether such mechanisms can be credible without the strong legal backing such as is provided in the French system. The alternative to tighter regulation is a restructuring of football competition in Europe in order to create a more sustainable basis for smaller clubs in particular. This would involve adopting greater restrictions on the mobility – relegation and promotion – of the clubs up and down the leagues.

Reading

For further details of the papers presented at the Rimini conference

For further details contact:

Sean Hamil

s.hamil@bbk.ac.uk

Tel: 020-7631 6763

View all 2004 Events