The impact of UEFA financial fair play regulations on strategic behavior of the top European football clubs

Abstract

The main aim of the paper is to investigate strategic behavior that would make it possible for football clubs to comply with the newly introduced UEFA financial fair play regulations. For this reason, the most recent annual reports of the top European football clubs were examined and compared with the most important FFP requirements ("aggregate break-even result" and "net debt to total revenue ratio"). The received results revealed that the majority of the top European football clubs would have failed to comply with this set of requirements. The behavioral analysis indicated that there are some strategic trends that are likely to occur and the clubs could follow them in order to successfully fulfill all the requirements in the future: exploiting collective incentives rather than individual incentives; restricting deficits and debts; raising revenue rather than cutting costs; and investing in youth development.