Ownership structure and financial performance in European football

Abstract

Purpose This paper aims to analyse the relationship between ownership structure and financial performance in the five major European football leagues from 2007-2008 to 2012-2013 and examine the impact of the financial fair play (FFP) regulation. Design/methodology/approach The sample used comprises 94 teams that participated in the major European competitions: German Bundesliga, Ligue 1 of France, Spanish Liga, English Premier League and the Italian Serie A. The estimation technique used is panel-corrected standard errors. Findings The results confirm an inverted U-shaped curve relationship between ownership structure and financial performance as a consequence of both monitoring and expropriation effects. Moreover, the results show that after FFP regulation, the monitoring effect disappears and only the expropriation effect remains. Research limitations/implications The lack of transparency of the information provided by some teams has limited the sample size. Practical implications One of the main issues that the various regulating bodies of the industry should address is the introduction of a code of good practice, not only for aspects related to the transparency of financial information but also to require greater transparency in the information concerning corporate governance. Social implications Regulating bodies could also consider other additional control instruments based on corporate governance, such as for example, corporate governance practices, corporate governance codes, greater transparency, control of the boards of directors, etc. Originality/value This study tries to provide direct evidence of the impact of large majority investors in the clubs and FFP regulation on the financial performance of football clubs.

A comparative study to identify a suitable model of ownership for Iran football pro league clubs

“…Ward (2013) suggests that over past decade, there has been a International Journal of Applied Exercise Physiology www.ijaep.com kind of supporter ownership in England football but it has been limited to lower divisions [67]. There have been different research indicating the prevailing success of the member association and supporter trust ownership of the football clubs as well as superiority of this kind of ownership over other private ownerships [48,67,68,69,70,71,72], Also, studies have been conducted on the effect of member associations in channelizing money to the clubs [52], tackling of the income of the sponsors by this kind of ownership in clubs [10], and the change in law and method of 50%+1 ownership in Germany. Krabbenbos (2013) noticed that in member clubs, the contentment is higher than non-member clubs (Table 3).…”

“…This law does not allow that more than 49 percent of the club ownership belongs to companies and sponsors and the 51 percent ownership of the supporters (those who have paid for their ownership) must be preserved. Acero et al (2017) recommend German Bundesliga's corporate governance, which has the best financial and sporting results and also enjoys the best average presence of spectaculars in stadiums, as the football club ownership [48]. The "50+1" law which has prevailed in German clubs is considered a good ownership example.…”

The demise of the members’ association ownership model in German professional football

“…It is clear that the DFB are remaining in favour of the '50+1' ruling for the foreseeable future. In the meantime, the debate will continue over the notable impact differing governance structures can have on a football club's financial performance (Acero, et al, 2017;Franck, 2010;Ziebs, 2004;Vidovich & Currie, 2012;Wilson et al, 2013). Furthermore, there continues to be conflicting viewpoints in the extanct literature about whether differing types of governance structures can hinder or benefit 'on-pitch' success (Callen, et al, 2010;Dietl & Franck, 2008;Enjolras, 2009).…”

Assessing the Financial Performance of English Football Clubs: Arsenal and Manchester City

“…Some studies have investigated the financial performance of football clubs in several countries for example [1], [2] in Greek, [18], [19] in Turkey, [3] in Italy, [10], [12] in France, [11] in Czech, [20] in Spanish, [4], [9], [21] in UK., and [8], [13], [22] in European continent. Different from [20], which uses only Altman [15] model, the present study also utilizes other measurements of bankruptcy, i.e., Springate [16] and Zmijewski [17], to see the consistency of the results.…”

“…Despite the substantial cash inflow of the English football clubs, the clubs' financial situations are problematic [4], [8]. [9] notes that if the English Premier League had been assessed using usual business methods, half of the clubs would be financially distressed.…”