Justification of Financial Fair Play(FFP).
Should UEFA follow the example of NHL establishing an analog of ‘Salary Cap” for European football clubs.
The UEFA (Union des Associations Européennes de Football) and above all the UEFA president Michel Platini are very concerned about recent develop- ments in European club football. Many clubs have reported repeated and worsening deficits which have led to record-high debt levels during the last years. In addition, private investors and other equity partici- pants have increasingly extended their influence into professional football clubs. Hence, some clubs have experienced liquidity shortfalls and have been unable to pay other clubs or their players in time. In contrast others have climbed up to the top of European club football with the help of external money. The best- known example is FC Chelsea with its patron Roman Abramovitch, who has spent about half a billion euros within the past decade to finance the club’s quick ascent to being one of the leading teams in Europe. Moreover, today’s European club football is basically an oligopoly consisting of about ten clubs (including FC Barcelona, Real Madrid, Manchester United, FC Chelsea, AC Milan or Bayern Munich and others, called the “Untouchables” by Deloitte), who will continue to move further away from other cubs until the gap can no longer be closed (Figure).
These developments are thought to threaten the financial stability and distort the competitive bal- ance not only between clubs but also between leagues in European club football. In order to ensure long-term financial stability and to restore the com- petitive balance, the UEFA’s Executive Committee, in agreement with the European Club Association (ECA), unanimously approv...
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... by non-estab- lished clubs. Therefore, Financial Fair Play could ulti- mately and counter-intuitively confirm an unbal- anced competition rather than making it more even. As has been shown, a redistribution of income is additionally needed to restore competitive balance. Furthermore, a more market-based instrument would be less costly than just imposing a ban of equity par- ticipants in football. Alternatively, explicitly includ- ing income from non-football operations into a re- distribution mechanism could lower the incentives for patrons and private investors to become involved in football clubs.
All in all it is highly doubtful whether such a far- reaching and costly form of market intervention like Financial Fair Play is actually justified in economic terms. But only time will show how football will re- spond to Financial Fair Play and how “fair” it really is.
Anyone who has been involved in an organized sport, whether it is backyard football or a high school sports team, knows that these sports all have organizations that are responsible for setting rules, determining conditions of play, and penalizing individuals who infringe the rules. Some of the organizations like the National Football league and the MLB are familiar to most people, the rules they follow are not generally understood by anyone who is not closely associated with the sport. Most fans and sport critics assume that what is happening inside these organizations are of little concern to them. However, this is not the case. In the MLB, the New York Yankees spend an excessive amount of money every year to obtain big name players. A luxury tax was put into effect for teams that go over the spending limit. However, the Yankees are the only team that pays the tax because they are the only team that exceeds the spending limit. The players, coaches, fans, and I have argued that a salary cap would be the best possible way to allow teams in the Major Leagues an equal opportunity getting to the World Series.
A salary cap gives all the teams an equal chance to sign players. It also keeps teams with a lot of money not able to acquire every all-star they want , or any player who is a free agent. Some Major League Baseball teams like the Anahiem Angels and the Atlanta Braves are owned by very wealthy people and companies. The Anaheim Angels are owned by Disney.(Worisnop, 128) So with no surprise the Angels can produce a team which can be very competitive, and have several all-star players. Just recently they exercised this advantage by signing Mo Vaughn for ninety million dollars over seven years.(Antonen, 2) There were at least four other teams that wanted to sign this all-star, but the Angels easily had the money, and outbid everyone who wanted to sign him. If there was a salary cap in Major League Baseball then the Angels would have thought twice about giving that much money to one player. With the its roster for one year. So giving one player 12.8 million dollars for one year does not really make sense if the salary cap is fifty million dollars a year. That would leave only 37.2 million dollars for the twenty-four other players, which equals each player getting on average a little less than one and a half million dollars a year.
An argument can be based on whether or not the NFL should be held liable when players know what a violent sport they participate in. The NFL is 10 Billion dollar a year business and the majority of their income are made through the exploitation of their players (Grove, J 760). The argument can be made that players should seek compensation for injuries because salaries for injured players are not guaranteed beyond the season in which the injury is sustained (Grove, J 760). It has been posed as whether or not the government should step in to help regulate owed compensation. One way the state or federal government can intervene and impose legislative act...
Walter, Andrew. "Point: Salary Caps Provide Parity in Professional Sports." Points of View Reference Center. Alabama Virtual Library, n.d. Web. 2 Jan. 2014.
...salary cap will provide an answer for some of the most serious problems facing the NBA. It will lower ticket prices, allow more teams to be more competitive and eliminate the any future lockouts. If these problems can be fixed by enforcing a hard salary cap, I don't see why it shouldn't be done. The NBA should enforce a hard salary cap.
Third, despite greater citizen awareness, voters still must cope with a scarcity of teams. Fans may realize that subsidized stadiums regressively redistribute income and do not promote growth, but they want local teams. Alas, it is usually better to pay a monopoly an exorbitant price than to give up its product. Prospects for cutting sports subsidies are not good. While citizen opposition has had some success, without more effective intercity organizing or more active federal antitrust policy, cities will continue to compete against each other to attract or keep artificially scarce sports franchises. Given the profound penetration and popularity of sports in American culture, it is hard to see an end to rising public subsidies of sports facilities.
Obviously, the big money sports such as college basketball and football are big revenue sports and paying those athletes might be an easy argument to make. Delving deeper into this topic brings up issues with the lesser interest sports at these same universities. How do you find revenue to pay these athletes? Is it fair to only concern yourself with the “big money” sports and not so much the other sports? I do not claim to have concrete answers to these issues, to be honest. I do not think it is fair to only take care of the sports and athletes that make up most of the money the NCAA brings in. I do feel that with the total amount of money that is out there if enough people get together that solutions can be worked out. I do feel that all of these athletes should be treated equally. If you pay the more popular athletes then you should pay the less popular athletes as
The debate on whether college athletes should be paid to play is a sensitive controversy, with strong support on both sides. College athletics have been around for a long time and always been worth a good amount of money. This billion dollar industry continues to grow in popularity and net worth, while they continue to see more and more money come in. The student-athletes who they are making the money off of see absolutely none of this income. It is time that the student-athletes start to see some of this income he or she may by helping bring the National Collegiate Athletic Association. There are many people who do not think this is in the best interest of the student-athletes or Universities, but that being said there are also many people who are in favor of the change.
Over the past few decades, college athletics have gained supporters all across the United States. Whether it is Football, Basketball, or Baseball, ever since the turn of the century, intercollegiate sports have brought in a surplus of revenue to their respective universities. A recent study found out the University of Texas’ Athletic Program had the highest revenue of any other university at a little over $120 million. Yet with this large sum of money no college athletes are legally paid for their work.The notion of paying college football players has been an ongoing debate since the early 1900’s. With current television revenue resulting from NCAA football bowl games and March Madness in basketball, there is now a clamoring for compensating both football and basketball players beyond that of an athletic scholarship (3). Many people say that athletes do not need to be paid because of many reasons, however college athletes must be paid because they hold down a full time job, college athletes are bringing in huge amounts of revenue for the colleges, and the future of college athletes is very
...ecks and be treated as a farm system for the NFL, NBA, or MLB. If these athletes started getting paid now, at the college level, then the major leagues of these sports would suffer tremendously and lose marketability and money. A final solution to not having players get paid or receive certain benefits is maybe these head coaches of certain universities should not be getting the average 2 million dollars a year to be a coach, in some cases more than the presidents of these universities.(Chicago Tribune) There could be major strides made by simply merging that athletes shouldn’t get paid in whole dollars, but should receive paid benefits in which they would not have to worry about starving, losing scholarships due to injury or sub-par play. That I think would make the world for college athletes a better place, where both the schools benefit and the players benefit.
However, although the number of M&A operations concluded in the world in 2012 has fallen if compared with 2011 (28.500 versus 30.000 in the previous year, with a overall decrease in value of 13%), the choice to undertake a strategic decision in this direction is still very popular. The European market, with the set of problems that characterize it, is the most significant example. In fact, in spite of the actual crisis and the uncertainty it has brought to the investors willingness to trade within the Euro zone, remains the market with the higher percentage of M&A deals stipulated in terms of volume (39% of the global market, 25% in terms of value) . In particular, among all the European countries, the Italian market deserve to be analysed more carefully: although the downturn of the market, for which in 2012 it has been signa...
... to win some silverware. This is the same for Manchester United. This shows that you don’t need money to win the Premier League. Clubs having too much money is corrupting the Premier League as the smaller teams such as Everton and Newcastle don’t have a chance to compete for the Premier League. Clubs like Liverpool, Everton, Newcastle and Aston Villa have been in the Premier League for 21 seasons but have never won the Premier League. All of these teams have a huge amount of talent in the first team, reserves and youth squad however their lack of money means they cannot buy world class players in the transfer windows like the other big clubs. This is just further evidence of how the Premier League is corrupted by clubs having too much money. And if all the clubs do not follow the financial fair play rule the Premier League will continue to be corrupted by money.
Gardiner, op. cit. p. 491 – 493; and DG Jones and AB Smith, Law and the Business of Sport, Butterworths, London, 1997, p. 173-177.
Salary caps in U.S sports have posed many problems and met with animosity. Top players have issue with salary caps and the reasons are
Sports are one of the most profitable industries in the world. Everyone wants to get their hands on a piece of the action. Those individuals and industries that spend hundreds of millions of dollars on these sports teams are hoping to make a profit, but it may be an indirect profit. It could be a profit for the sports club, or it could be a promotion for another organization (i.e. Rupert Murdoch, FOX). The economics involved with sports have drastically changed over the last ten years.