The financial regulation of competitions sports
In sports leagues, the bulk of financial regulation involves the redistribution of income. The Champions League also distributes the financial gains between the clubs according to criteria of solidarity, sporting results and TV audience. The FIFA World Cup income distribution rules create a financial threshold for teams that reach the semi-finals (Coupé, 2007). Each team participating in the finals won (in 2006) 3 79 million s € . Reach 8 th final reported 1, 59 million € more , the ¼ final 1, 90 million € more . However, a major financial leap was associated with access to semifinals s : 6 , 33 million s €, followed by only 630. 000 € extra for a ccess to the final and 1, 27 million € for win .
T kings problems of financial regulation era currently facing on points whether: c / income distribution in leagues facilitates competitive balance ; b / regulating league allows u not balanced management of clubs; c / we can further balance the Champions League and limit its unbalancing impact on national leagues.
In European football, the attendance of spectators is not strongly correlated with the ranking of clubs in the league (Table 3)[15] . The Gini coefficient indicates that the distribution of attendance between clubs is more unequal in the Italian and Spanish leagues. Several studies have found a significant relationship between the level of competitive imbalance and the disparities in financial wealth between clubs within each national football league with regard to income and payrolls (Szymanski & Ku ypers, 1999; Andreff & Bourg, 2006; Gerrard, 2006). A semi-logarithmic regression of these two variables on the ranking ranks shows a high correlation coefficient in the English and French leagues (Table 3 ). Belief in the glorious uncertainty of sport is on the decline in European football . Sporting results are increasingly determined by the income of clubs and the salaries they pay.
In addition, each national league wants its best clubs to advance to the Champions League and is in favor of a system (promotion / relegation) which selects the best teams; it leaves the financial and sporting differences to widen within the national championship. The big clubs have realized the interest of such a competitive imbalance. The victorious club of a small European league, to behave well in the Champions League, must be "too strong" in its national championship . The clubs of the most unbalanced leagues concentrate the victories in European competitions.
On the other hand, we observe that European football clubs do not strictly respect the constraint of balanced budgets , including French Ligue 1 clubs (Andreff, 2007 c ). If a club remains in activity despite its inability to balance its accounts, it is because its budget constraint is not effective, thanks to the recurring financial bailout of donors, at lost funds. C eci means a serious problem of governance of clubs. The arms race is reflected in the inflation of salaries and transfer bonuses, while the club only learns at the end of the season whether its recruiting strategy has been sound and whether it has garnered revenues covering ex. post the salary expenses incurred. Good club governance is a difficult exercise. The easy way out is to constantly find donors to bridge the gap between expenditure and income. This strategy of softening the budget constraint, the league is better able to lead it given its monopoly on the offer of television broadcasts of football. The crucial problem of a football league is to facilitate or restore the financial equilibrium of clubs incited by the excessive demand for players in a fully liberalized world market .
Ascari & Gagnepain (2006) report, regarding the big Spanish football clubs, that club owners know that Catalan and Castilian banks will always cover the vast financial losses of FC Barcelona or Real Madrid, which are real national institutions. Their bankruptcy is simply not an option and has no chance of happening. The Italian football (Baroncelli & Lago, 2006) has a tolerance of the authorities for financial misconduct clubs. The budget constraints of the clubs are regularly softened by non-financial backers: local authorities, patrons, less observant bankers or shareholder supporters. It is no surprise that several national European football leagues and a significant number of clubs are going through a financial crisis[16] . This is why an alternative to financial discipline in an open league, difficult to impose, is often mentioned : introducing the same regulations ( salary cap, luxury tax, rookie draft ) into the open league as in a closed league ... which would not be effective than by transforming it into a closed league (abandonment of promotion-relegation, entry barrier paying).
League 1 and its clubs have gone through the financial crisis of European football with sports scores second best results and finan cial very honorable (Andreff 2007d ). L Igue the F ootball P rofessional seeks to promouvoi r a league image best governed in Europe whose clubs supervisory instruments should be extended to the entire European football. The French league would be an exception to the financial crisis (Gouguet & P rimault, 2006) thanks to its National Management Control Department (DNCG) which, since 1990, has been auditing club accounts. This did not prevent repeated deficits and the persistent indebtedness of several French clubs. The are three-quarters of the debt League 1 consist of arrears to suppliers of arrears of taxes and social security contributions, whose very existence is an established indication of bad governance there There is no French exception here despite the control of the DNCG. It is thus understood that, outside of France and especially in England, a financial regulation based on DNCG European does not carry the conviction.
We have econometrically tested (Andreff, 2009) a vicious circle in which the league created in a monopoly situation the highest possible TV rights to finance ex post wage inflation (and the recruitment of superstars) uncontrolled and support the finances of clubs in deficit. Despite the DNCG, bad governance is rife in French clubs , as in other European clubs, because the recruitment strategy does not always translate into an increase in productivity in terms of sporting victories in European competitions which would greatly increase income; hence the need for the league to re-negotiate higher TV rights, to fill the gaps created by recruiting, and so on.
With regard to the Champions League , it adopted for the 2004-05 season a system of licenses issued to clubs participating in its competitions under the following conditions. To obtain this license, a club had to provide financial accounting supervised by an audit and prove that it had no arrears of payments and salaries to pay its employees. From the 2006-07 season, this regulation was reinforced: the club must present a “business plan” demonstrating its ability to cover its liquidity needs during the license term, provide a declaration in the event of insufficient liquidity and the how it plans to manage them as well as a notification in the event of deviations from the budget and the announced profit and loss account if any occur during the term of the license. So far, this device has done little to restore a better competitive balance in the Champions League . It is therefore time for the “financial fair play” that UEFA intends to put in place: clubs with excessive debt (over € 45 million) would be banned from participating in UEFA competitions for which they qualified. The idea is that the financial disparities between the participating clubs ( 2 supr a ) , and the resulting deterioration of the competitive balance, at least not be fueled by the ineptitude in the management of the big European clubs and their capacity. to get into debt without limit. The question remains open as to whether the “financial fair play” rule would be really applied if it were to deprive the Champions League of the participation of the four main English clubs ( Big Four ), Real Madrid, AC Milan and others. prestigious clubs.
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