Matteo Carcasio Dissertation

1
Financial Fair Play Regulations:
Implications for Italian Football
DissertationMscManagement
Matteo Carcascio

2
Abstract
The purpose of thiscase studyisto discussthe potential implicationsthe UEFA Financial FairPlay
regulationmighthave onthe Europeanfootball andinparticularonthe Italianfootball industry.
In the firstpart the Europeanfootball scenario isintroducedbymakingreference tosome
representative casesthatshowsome of the issuesthe regulationshould deal with.The mainobjectives
and challengesof the regulationare presentedaswell.
In the secondpart some academicsmodelsare discussedinordertoshow the characteristicsof salary
caps. It isargued that the rationale behindsalarycapsisprettysimilartothe break-evenrequirement
one.
The implicationsof the regulationare presented by showingthe advantagesanddisadvantagesof salary
caps inpursuingthe increase of competitive balance inthe European football leagues.
In the thirdpart the researchmethod ispresentedtogetherwith the research designfollowedforthe
case study.The reasons are discussed whythe Italianfootballwouldbe anappropriate exampleto
assessthe actual implicationof the newUEFA regulation.
In the fourthpart the current situationof the Italianfootballindustryisanalysedandcomparedtothe
Europeantopleagues.
In the fifthpartthe opinionsof some topmanagersof Italianfootballindustryare presentedregarding
the Financial FairPlayRegulationanditsimplicationsinthe Europeanlandscape,particularlyinthe
Italianfootball industry.

3
Table of Contents
Introduction..................................................................................................................................5
Football in Europe...............................................................................................................................5
European scenario..............................................................................................................................6
Manchester Derby: clash of business models come to a head............................................................7
The “Hurricane” PSG.......................................................................................................................8
Explicit Research Question...................................................................................................................9
Challenges and objectives of FFPR......................................................................................................11
Literature Review ......................................................................................................................13
UEFA Financial Fair Play Regulation...................................................................................................13
Financial Fair Play implications:.........................................................................................................15
a) Need of cap management..........................................................................................................15
b) Break-even requirement............................................................................................................16
c) Salary caps and FFPR.................................................................................................................17
Advantagesand disadvantagesof Salary Caps:can they improvethecompetitivebalancebetween
participants?....................................................................................................................................24
Methods.......................................................................................................................................29
Case Study Approach........................................................................................................................29
Advantages and Disadvantages of Case Study.....................................................................................30
Advantages ..................................................................................................................................30
Disadvantages..............................................................................................................................31
Why Italian Football?........................................................................................................................32
Data Collection.................................................................................................................................33
Data Analysis....................................................................................................................................34
Case Study...................................................................................................................................37
Italian football industry: financial condition........................................................................................37
Income.........................................................................................................................................38
International Comparison..............................................................................................................41
Costs............................................................................................................................................45
Halved Net Worth.........................................................................................................................46
Chievo’s Oscar for Best Budget.......................................................................................................47
Actual Losses of Serie A .................................................................................................................48
Analysis .......................................................................................................................................49

4
Analysis of answers...........................................................................................................................49
The Role of the Financial Fair Play..................................................................................................49
F.I.G.C. and the Financial Fair Play .................................................................................................52
The “Big” Gap...............................................................................................................................52
Stadiums’Policies and F.I.G.C ........................................................................................................53
Conclusion ..................................................................................................................................56
References ..................................................................................................................................60

5
Introduction
Football in Europe
Some people call it football, others call it Futbol, Fussball or Calcio, but regardless their language - for
millionsof people itisasort of religion;religionsandtherefore football are reluctanttochange. Without
beingblasphemous,I just want to describe what football can mean particularly in Europe and in South
America.Insome societiesfootballis sodeeply rooted into traditions and cultures that we can say that
actuallyitis part of them. Football represents something that goes beyond sport; it can mean passion,
victory,defeat,opportunity, andsenseof belonging:humanfeelings,I would say inner human feelings;
football supporterscryfortheirteamstheyfeel themselvesas parts of their teams. Above all and more
than othersports, football isperceivedas aparaphrase of life where the strongest, the best not always
win and where instead courage, determination, tenacity, enthusiasm or even pure luck can lead to
victoryovermore talentedandphysicallydominantcompetitors. To me this is one of the raisons of the
greater success and popularity of football in Europe (and in South America) than in North America
where it is right and just – one may say – that the best, the most talented win in the end.
Another evidence of how different concepts of sport may explain the different success of football in
Europe and NorthAmericaisinthe marginal relevance of draw inU.S. sports. Draw is hardly considered
as a possible final result of a sport match by the American culture: there should be only winners and
losers. In Europe we consider a draw, in sport as in life, better than a defeat.
Europeanpeople love all these peculiarities of football because they grant at the same time senses of
hope and trepidation. Thisisthe magicof football;there are favourites butnowinnersbefore the endof
a match.

6
In football evenmembersof the poorestsocial classes canhave a chance to get the betterof the richest.
Since itsinception in England, football has been opposed to rugby in the never-ending battle of social
classes:rugbyusedto be the leisure of the aristocraticclasswhile football the emblem of the emerging
workingclass. Nowadays,football iswaymore popularthanrugbynot only in Europe but all around the
globe. Football in Europe involves not only football clubs and supporters; because of its popularity it
attracts the attentionof politicians,policymakers,andscholars. Actually,football is able to involve and
activate several social components and financial interests in Europe; that is the reason why countries’
leaders and policy makers are so interested and close to football.
Despite its huge popularity and the massive amount of capital involved, European football has been
sufferingheavylosses inthe last2decadesbecause of the highdebt of most of European football clubs.
UEFA, the governing body of European football, has intervened many times in order to contain
hazardous behaviours and discipline football clubs’ managements.
The Financial Fair Play Regulation (FFPR) is the most recent intervention made by UEFA – with the
approval andsupport of mostEuropeancountries - to improve the soundness of European football and
its “players”.
European scenario
The FFPR representsa real revolutionary change for European football. Many journalists have pointed
out not only what potential effects the new regulation is having and will have on the most important
football clubs but also how these clubs are dealing with it. Some articles show how some European
football clubs have already found a way to bypass the strict rules of the financial fair play by means of
financial “escamotages”.

7
ManchesterDerby:clash ofbusiness models
come to a head
The week before the 163rd
Manchester derby between Manchester City and Manchester United, the
Financial Timespublished an interesting article by Andrew Bounds regarding the new rivalry between
the mainteamsof Manchesternot onlyinthe Premierleague butalsounderthe financial point of view
because theyrepresenttwodifferentbusinessmodels. “KieranMaguire,afinance expertat Manchester
Metropolitan University, said the game was as much a clash of two business models as two teams”.
(Andrew Bounds, 30th
April 2012) In 2005, the American Glazer family acquired Manchester United
football club. This deal was highly leveraged: this high leverage led the football club to a heavy debt
situation.
The strategy to repay the money was exploiting the worldwide appeal of the team boosting the
commercial revenues. The Glazer family took out of the club approximately 500 million pounds in this
deal.“The Glazers have taken what was already a profitable business thanks to its global appeal, huge
fan base,76.000-seat stadiumandleague andEuropeansuccess, and increased it with more aggressive
commercial activity”.(Andrew Bounds,30th
April 2012) The Glazerfamily not only led United to a heavy
debt situation by the leveraged deal, but they also further increased the debts by buying first class
players by exploiting the United worldwide brand. In 2008, Abu Dhabi United Group acquired
Manchester City football club making City one of the richest clubs in world football.
Manchester City set a new record in British football: it recorded a loss of 195 million pounds in
2010/2011.

8
The owner, Sheikh Mansour bin Zayed Al Nahyon, spent more than 150 million pounds in player
transfers: transfers of Tevez, Dzeko, Aguero generated massive losses.
“The Glazersdida businessdeal,aclassicleveragedbuyout,while the AbuDhabi investmentispurelyan
issue of raising the profile of the emirate. You cannot see it earning a return”. (Andrew Bounds, 30th
April 2012)
At the end of the last season (2011/2012), Manchester City won the title to the detriment of
ManchesterUnitedwitha thrillingfinish. The businessmodelof ManchesterCityis notthe rightone just
because they won the Premier league. As I mentioned before, City has recorded heavy losses.
“City can carry its heavy losses as long as Sheikh Mansour remains involved. But UEFA’s financial fair
playrules,whichwill applytoclubin European competitions from the 2014/2015 season, require them
to be close to break-even”. (Andrew Bounds, 30th
April 2012)
The FFPR 1has been designed to represent a real limitation for those clubs able to suffer heavy losses
such as Manchester City.
The “Hurricane” PSG
On the 13th
July2012, AlbertoCosta,anestimated journalist of Corriere Della Sera dedicated an article
to ParisSaint-Germaintitled “PSG, the hurricane that overcomes the Financial Fair Play”. In this article
the journalisttalksabout the massive investmentsthe royal familyof Qatar,Al Thani,isdoingnotonlyin
the football industry but also in other sectors such as: entertainment (Disney), automotive
(Wolkswagen),real estate (CostaSmeralda), shoppingmalls (Harrods), and TV (Al Jazeera). Apparently,
the royal family of Qatar does not suffer any shortage of financial power.

9
QIA (Qatar InvestmentAuthority)boasts assets for more than 40 billion euros, but this financial power
should not be a pretext to bypass the ties of financial fair play.
Costa defines the financial fair play regulation as a “cage” with many “rips” imposed by UEFA.
The recent signing ups made by PSG get over 100 million of euros, not including salaries and
management costs.
In readingthe article it is easy to understand the stance taken by the journalist; he wants to put under
the spotlight the suspect that from now to 2014 the companies controlled by the royal family Al Thani
will sign sponsorship contracts well over the market value to PSG in order to avoid the issue of the
break-even requirement imposed by the Financial fair Play. The aim is to artificially push up the club
turnover with a view to the full implementation of the financial fair play.
Explicit Research Question
The main purposes of this exploratory case study are:
 Outlining the main objectives and challenges at the basis of financial fair play regulation.
 Investigating on the potential effects of FFPR on the European football industry as a whole.
 Outlininghow similarfinancial modelsand ruleshave been working in other leagues so far and
analysing their advantages and disadvantages.
 Identifyingthe potential impactsof FFPRonItalianfootballindustry by analysingthe interviews
I made to representative insiders.

10
Startingfrom2014/2015 season,all the Europeanfootball clubswill have to comply with FFPR in order
to join in UEFA competitions.
By means of FFPR the governing body of European football, UEFA, aims at creating an environment
where football clubs have to follow strict financial rules with the objective of securing their total
solvency. ActuallyFFPRrepresents a changing route for European football: for the first time European
football clubs are considered as normal companies that have to comply with the rules all other
companies have to respect. In other words, FFPR have been designed by the European football
governing body with the aim of avoiding in the future negative events like, for example in Italy, the
failuresof A.C.Parma(bankruptcyof Parmalat) andFiorentina(bankruptcyof Cecchi Gori Group) or the
troubles suffered by S.S. Lazio (bankruptcy of Cirio).
Italian football used to be the leader in Europe in the 90s; it was the benchmark and an example the
other main leagues were trying to copy.
During the last decade, wrong internal policies and the lack of far-sightedness led the Italian football
industry to lose its predominance on the European scene.
In some respects, Serie A is still the most beautiful and interesting league in Europe because the gap
betweentopteamsand“normal”teamsisnot as large as in other leagues and, therefore, is very hard-
fought. However, in terms of income and worldwide appeal is not even comparable anymore with
Premier League or Bundesliga that have invested a lot in merchandising their brands abroad.
The aim of thisexploratorycase studyisto investigatenotonly onhow FFPR might affect the European
football industry as a whole, but also on how the different “players” are going/expected to react and
respond in different countries.

11
Both Italy’scurrentfinancial issues andthe downturnof itsfootball clubsinthe Europeancompetitions
make the Italianfootball industry agood case study for which an analysis can be conducted in order to
understand the potential effects of FFPR.
Challenges and objectives of FFPR
“We have workedonthe financial fairplayconcepthand-in-hand with the clubs, as our intention is not
to punishthembutto protect them. We have an agreement with the clubs. The philosophy is that you
cannot spend more money than you generate”. (UEFA official website)
FFPRwas one of the elevenpointsof the programof the UEFA activitypresentedbyMichel Platini atthe
2009 UEFA congress of 2009 in Copenhagen.
That program, which represents the beginning of the Financial Fair Play era and the result of several
steps undertaken by UEFA, was unanimously approved on the 27th
May of 2010 in Nyon.
Michel Platini has often underlined that these new regulations are at the same time a challenge and a
great opportunity for football world.
Football once againis called upon to renovate and improve itself, laying the foundations for a durable
and sustainable development.Accordingtothe new rules,welcome bymoststakeholdersof the football
industry (including football clubs), in the years to come football clubs participating to European
competitions will have to comply with specific rules and strict limits on financial side.
The president of Europe Club Association (ECA is the body that represents European football clubs at
UEFA), Karl-Heinz Rumenigge has shown a great optimism about the implementation of FFPR,

12
underliningthe importance andnecessityof those rulestomake football businessmore responsible and
sustainable.
The overarchingprinciple isthatfootball clubsshouldnothave anylongerthe possibility to spend more
than what they generate in terms of income. Of course in the calculation of break-even result some
structural expenditure – i.e. building of stadiums and investments in club’s youth team – are not
considered in order to incentivize a sound and long-term planning.
UEFA Financial FairPlayregulationsare partof a greaterreformstartedyearsago. The official document
is named “UEFA Club Licensing and Financial Fair play Regulations”. On the one hand this document
reformulatesthe UEFA clublicensingsystem(alreadystrengthenedbythe reform of 2004), on the other
hand it lays the foundations for the new and innovative set of rules of Financial Fair Play. All the
European clubs wanting to participate to European competitions have to comply with the set of rules
established by UEFA and approved by football clubs themselves.

13
Literature Review
UEFA Financial Fair Play Regulation
The UEFA’s executive committee approved the FFPR unanimously on 27th
May 2010. The
implementation phase will last four years; in the season 2014/2015 the new regulation will definitely
start effectively.
“The main cornerstone of the regulations, the break-even requirement, enters into force for the
financial statements of the reporting period ending 2012, to be assessed during the 2013/2014 UEFA
club completion season”. (UEFA official website)
FFPR have six main objectives:
 to improve the economic and financial conditions of football clubs by introducing more
discipline and rationality in their finances and increasing their transparency and credibility as
normal companies;
 to incentivize a forward-looking cost management, thus decreasing pressures on salaries and
transfers fees and limiting the inflation effect;
 to encourage investmentsthatcancreate long-termbenefitslike thoseinthe clubs’youthteam
and infrastructures;
 to encourage clubstocompete while relyingontheirownfinancial resources and operating on
the basis of the income effectively generated by their activity;
 to safeguard and enhance the long-term financial sustainability of European football clubs;
 to ensure that clubs timely settle their liabilities thus protecting their creditors/stakeholders
(players, government and all the other involved parties).

14
“Under the financial fair play concept and the regulations, clubs will be encouraged to operate on the
basis of their own revenues and not spend more than their income. Clubs should also settle their
liabilitieswith players, authorities and other clubs in a punctual manner. In addition, they will have to
provide information about future financial planning”. (UEFA official website)
All the stakeholdersof Europeanfootballhave supportedthisnew set of regulations believing that this
reform will be, perhaps, the most radical that has ever been made so far with regard to European
football.Itwill change mostof the establishedpractices,behavioursanddynamics of European football
clubs, with the aim of better ensuring a healthier future to the European football.
Actually nobody seems to disagree with that new set of regulations because, clearly, it appears to be
crucial in order to preserve the very existence of most of clubs and grant a sounder functioning to the
European football system, nowadays apparently affected by a creeping sickness.

15
Financial Fair Play implications:
a) Need ofcap management
The FFPR become applicable in 2012, the current year.
This regulation is an extension of UEFA’s Club Licensing Regulation, which was introduced in 2010 and
followed by another intervention made by UEFA as well in 2004: the Club Licensing System.
“The Club Licensing system represents for UEFA a key project to foster the credibility of the football
industry”. (UEFA official website)
“It was introduced at the beginning of 2004/2005 season with the aim to encouraging European
football clubstolookbeyond the short term and consider underlying longer-term objectives essential
for the game’s continued good health”. (UEFA official website)
Since 2004 UEFA has been putting a lot of efforts in preserving the soundness of football industry
monitoring and regulating European football clubs. By introducing the Club Licensing System in 2004,
UEFA wanted to clarify its stance towards European football clubs management.
“Since 2004, only those European football clubs that have been awarded licenses by UEFA have been
allowed to participate in competitions organized by UEFA, such as prestigious and lucrative UEFA
Champions League”. (Johan Lindholm, 2010, 190-213)
The latestintervention of UEFA, the FFPR, clearly represents a strengthening of club licensing system.
The big impactof clublicensingsystemisvisiblewithin national federations as well. Indeed, after 2004
many national federations started to apply the same principles of the UEFA club licensing system as
requirements for those teams that want to participate to national club competitions as well.
ComplyingwithUEFA’srequirementswould be at the same time a necessary and sensible stance to be
taken by national federations. On the one hand “any teams aspiring to participate will seek to comply

16
with the financial fair play rules”(Johan Lindholm, 2010, 190-213), on the other hand complying with
UEFA’s requirements would mean foster the credibility of national federations worldwide.
Cap Managementisa reallywell knownpractice of American sports teams; basically, cap management
isthe practice that only provides for controlling and managing players’ salaries in order to give teams’
accounts more flexibility and dynamism.
The cap managementisone of the main implications of the FFPR; it means that European football will
have to learnhowto deal withandmanage caps on costs verylikelytakingadvantage of andbuildingon
the long and extensive experience of American sport leagues.
Lindholm reminds, “American professional teams employ personnel whose only task is cap
management”. (Cf. Ari. Nissim, 2004, 257-257)
Cap management is a crucial tool for the management of American sports clubs because it is either
explicitly or implicitly required by regulation applied by different national leagues.
In more general terms,itisrecognisedas a way to increase the flexibility in managing American sports
clubs. After the full implementation of FFPR European football teams will have to handle cap
management as well as American teams have been already doing.
Giventhe absolute predominance of personnel expenses in their cost structure, for European football
clubs cap management mostly means salary cap.
b) Break-even requirement
A conceptevenmore importantthansalarycaps isthe break-evenrequirementthat is to be considered
the core principle of the FFPR “according to which professional football clubs will be denied a UEFA

17
competition license if their expenses exceed their incomes”. (UEFA CLUB LICENSING AND FINANCIAL
FAIR PLAY REGULATIONS, 2010, arts. 58-63)
Break-evenrequirementandsalarycapsare the main changescarriedby the new set of regulations the
FFPR.
The break-even requirement is a new concept as far as sport teams are concerned while it is a
traditionally crucial criteria for “normal” companies, where it is used on the one side by company
managers and shareholders to define budget objectives, on the other side by analysts and markets to
assessthe soundnessof acompany because itis the dividingline betweenbeing on business or starting
accumulating losses. So far, many European football clubs have been experiencing big losses and for
most of them the break-even point is only a mirage.
The implementationof the FFPRwill establishthataclubwill notparticipate toUEFA competitionswhen
its expenses exceed its incomes during a three-year-period.
.
c) Salary caps and FFPR
Salary cap can be defined as the set of rules and measures that fix the maximum amount a club spend
on players’ salaries.
Salary caps and financial fair Play Regulations are distinct but strictly interconnected.
While salarycaps (currentlyinuse) fix the maximum amount – same for all clubs - that clubs can spend
on salaries FFPRhassetup the principle of the equilibriumof incomes and expenses that all clubs have
to follow in order to join UEFA competitions starting from the current year.

18
In other words, football clubs are not requested to respect a maximum payroll limit for a team or a
maximum salary for an individual player; in order to be awarded with UEFA licences, they have to
monitor the balance between relevant expenses and relevant incomes and adopt the necessary
measures including salary caps in order to achieve the break-even result.
Therefore, as I will argue later on, it is fair to say that the salary caps concept represents the natural
consequence of the break-even requirement established by FFPR. Indeed, the purpose of both salary
caps and break-even requirement is pretty the same.
In principle, inorder to satisfy the break-even requirement, a company can try to increase its revenue
insteadof justcontainingcostsbymeansof salary caps.As we will see later in the analysis of European
football clubsbalance sheets,manoeuvringon the revenue sideislesseffectivein the short-to-medium
term because an increase in proceeds requires dedicated strategies and investments that produce
benefitsinthe medium-to-longterm.Thereforesalarycapsrepresentthe mosteffective tool inpursuing
break-even.
In order to better frame and better understand the number of ways salary caps can be designed, it is
necessary to bear in mind some distinctions.
There are three kinds of salary caps currently in use:
 Team salary caps that regulate the total payroll of a team;
 Player salary caps that provide a maximum salary for an individual player;
 Combination of team salary caps and player salary caps.
Furthermore,salarycapscan be differentiatedonthe basisof the possibilityfor teams to exceed limits.
Therefore we can have two different kinds of salary caps:

19
 Hard caps-> teams cannot exceed limits;
 Soft caps-> teams can exceed the salary caps limits under pre-established conditions.
Basically, salary caps rules set up the maximum spending for salaries.
Sometimes, salary caps are combined with a “salary floors”, which are “rules meant to force teams to
spend a minimum amount of money on salaries”. (Johan Lindholm, 2010, 190-213)
Salaryfloorrule protectplayersgivingthem bargaining power. As we can see there are many different
wayssalarycaps can be designed. Salary caps have not been implemented in European leagues so far.
Actually, there is no rule that imposes the implementation of salary cap at European league level.
At national level that was true as well until 1997; in 1997 the United Kingdom was the first country in
Europe where a national sport league imposed to its participants the rule of salary cap. Indeed, the
EnglishRFL,the rugby football league,wasthe firstnational league toimplementasalarycap. Two years
later, in 1999, the English RFU, the rugby football union, did the same. The French rugby league, the
Ligue NationaledeRugby,followedthe Englishexample in 2010 imposing the salary caps concept to its
members as well. It is quite visible that European sports started to change at the end of the 90s
followingthe example of Americansportsleagues. European rugby leagues were the first at starting to
realize thatsalary caps would have been a potential starting point for them to improve and rectify the
serious problems rugby clubs were confronted with. In order to face the raising costs of competition,
European sports leagues have increasingly inclined to import this component of the American sport
system.
This historical change for European sport leagues did not pass unnoticed; indeed it has drawn the
attention of many scholars and policy makers as well.

20
As we have already stated, football in Europe is the main and the most followed sport; it is more than
just a sport and therefore quite reluctant to change. However, European football industry needs to
preserve itsfuture andthereforesetuppolicies able to cure or at least to reduce its weaknesses, even
by means of aggressive and radical innovations.
The FFPR bringsthe newconceptof salary caps into European football; “the introduction of salary caps
in European football will likely have a greater impact on European sports and be subject to legal
challenge due to the massive amount of money involved”. (Johan Lindholm, 2010, 190-213)
The concept of salarycaps will be implementedthroughthe break-evenrequirementin asensibly timed
way by FFPR. Football clubs will have a four-year period to get used to it and deal with it.
However, many football clubs are already adopting internally some kinds of salary caps. Apparently,
teamsimplementingthismethodare enjoyingmanybenefitsonthe financial side.Indeedimprovingthe
financial condition of European football clubs is precisely what UEFA wants to achieve.
Italian clubs that are adopting internally salary cap and cap management are for example S.S. Lazio,
A.C.F.Fiorentina,andUdinese Calcio;theseclubshave been experiencing many positive confirmations
incontrollingthe wagesof football players. They had basically set the maximum payroll that a football
player can get working in one of those clubs. Obviously, each team has a different maximum payroll
level.
Eventhough theory and empirical researches do not recognise salary caps and similar devices, such as
sharing formula and reserve clause, as able to grant necessarily a competitive balance, these Italian
teams are doing pretty good in their national league. At the end of the last season, two out of three
football clubsmentionedabove,Udinese andLazio,confirmedagain that they undertook the right path
some years ago. Moreover, these teams are not experiencing any financial losses; rather, they are

21
accumulatingprofits,althoughitisnecessarytobe extremely careful in talking about profits for Italian
football clubs.
Indeed,asI have alreadymentionedbefore,inItalyonlyF.C.Juventushasthe ownership of its stadium.
The most of incomes comesfromTV Broadcasting, 40% of the total incomes. Relevantprofits come from
transfersof football players,andUdineseand Lazio are really good in finding young and cheap players;
theymake themplay,thusgivingthemthe opportunitytogain experience andvisibilityonthe pitch and
then they sell them at higher prices. We can mention many examples of high capital gains made by
these twoteamsbymeansof players transfers:GokhanInler,purchasedfor1million euros and sold for
17.5 millioneuros(capital gainof 16.5 millioneuros),AlexanderKolarov,purchasedfor0.5 millioneuros
and soldfor22.7 millioneuros(capital gainof 22.1 millioneuros),StephanLichsteiner,purchasedfor1.2
millioneurosandsoldfor10 millioneuros(capital gainof 8.8 million euros), Alexis Sanchez, purchased
for 3 million euros and sold for 26 million euros (capital gain of 23 million euros). (transfermarkt.it)
As profits might be the result of this sort of capital gains instead of an efficient and sound
economic/financial management, we should be careful when we talk about profits of Italian football
teams.
However,those twoteamshave beensuccessfullyefficientnotonlyinfinancial resultsbut also in terms
of sport results that, again, are the premises for further economic and financial gains.
Udinese for the second year in a row has taken into the play-offs stages of UEFA Champions League
2012/2013.
S.S. Lazio is participating into the UEFA Europa League 2012/2013 for the second year in a row.
In order to understand why those teams may have undertook the right path with salary cap, it is even
more relevant and important to consider the performances of the teams that at the end of the season
were behind Udinese and Lazio in the list.

22
F.C.Internazionale,A.S.RomaandS.S.C.Napoli finishedthe lastseasonrespectively sixth, seventh, and
fifth.These teamsare for sure more popular in Europe than Udinese and Lazio and yet they have been
showingdifficulties inachievingthe objectives they were meant to reach. These teams not only have a
payroll level way higher than Udinese and Lazio, but they also invested greater financial resources in
order to purchase first-class players.
Interand Napoli were involvedduring lastUEFA Champions League; thus, they consumed more energy
than Lazio and Udinese. However, no one at the beginning of that season would have ever expected
such final ranking.
Salary Cap and similar devices have not been implemented up to now in European football for many
reasons: “One credible explanation for the lack of such measures in Europe is the difference in how
sport is organized. A club engaged in a sport organized around promotion and relegation between
leagues on different levels, and with partially overlapping competitions on a national and European
level, is more likely to resist a central authority controlling talent distribution”. (Helmut Deitl et. Al.,
2008, 353-355)
ThomasHoen andStefanSzymanskyinone of theirpapersoutlinedthe three maindifferencesbetween
the structure and organization of American Leagues vis-à-vis European leagues.
First, US Leagues are “hermetic” and closed. “They are hermetic because new teams are seldom
admitted to a league, and there is no annual promotion and relegation between junior leagues and
senior leagues”. (Thomas Hoehn and Stefan Szymanski, 1999, Vol.14, No. 28)
“They are also closed, in the sense that member teams do not compete simultaneously in different
competitions;nor,withoccasional exceptions, do teams release players to compete for national team
competitions”. (Thomas Hoehn and Stefan Szymanski, 1999, Vol. 14, No. 28)

23
Secondly,AmericanLeagueshave adifferentapproachinmaintainingthe competitive balance between
clubs. The “Rookie Draft” system clearly represents the stance taken by American Leagues in order to
grant more competitive balance inside the competitions. Before the start of each season those teams
that finished last in the previous season are awarded with being the first to pick the best players who
finished college or high school and enter professional sports.
Thirdly, in US leagues national broadcast revenues are typically shared equally among the clubs (The
Sports Broadcasting act of 1962). In Europe, as Hoen and Szymansky outlined, “Broadcasting
agreements typically include a performance-related element and a fixed share”. (Thomas Hoehn and
Stefan Szymanski, 1999, Vol. 14, No. 28)
JohanLindholmalsohighlightedsome differencesbetweenAmericansports and European football that
are very relevant and peculiar ones.
Being relegated in a lower league could be a real shock for a football club in terms of marketing,
merchandising, commercial contracts, bargaining power towards TV broadcasting, and of course in
termsof prestige andpopularity. Therefore,itisquite clear that American teams, which do not have to
deal with relegation, are in some ways “safer” in comparison with European teams. Furthermore,
American teams do not have overlapping leagues such as: UEFA Champions League for football,
EUROLIGA for basketball, HEINEKEN CUP for Rugby etc.
Those Europeanleaguesinvolve many teams for most of the season and are highly energy consuming.
Therefore, the environments and scenarios where American teams and European teams are involved
are extremely different.

24
Advantages and disadvantages of Salary Caps: can they improve the
competitive balance between participants?
As I stated earlier, indirectly FFPR is bringing into the European football the concept of salary cap
throughthe break-evenrequirement;inotherwords, the break even requirement will “force” football
clubs to be financially wiser and to create in their company’s structure a new department in charge of
the cap management. Therefore, in some ways football clubs will have to deal indirectly with cap
management and, thus, with salary cap if they want to be awarded with UEFA license. In the U.S.A.
where - differently from Europe - salary cap is an established concept and a tool adopted in different
waysby manynational leagues,manyscholarshave analysedthe salarycap concept in order to identify
advantages and disadvantages.
John Vrooman discussed main concepts and assumptions put forward by various schools of thought
about the pros and cons of salary caps. In his paper “A General Theory of Professional Sports Leagues”
he develops some models based on the assumptions made by Quirk and Fort, Lewis and Hunt, Scully,
and Porter.
The main purpose of salary cap is pursuing an acceptable equilibrium to professional sports where big
investorsandmillionsof people are involved.Inotherwords,salarycapshouldrepresent a way to grant
a competitive balance among participants or at least improving it. Theoretically, salary cap should
preserve the competition itself no matter the financial power or the market size.
Vrooman states that the “economics of professional sports has been preoccupied with the dual
proposition that a large market team will dominate a small market team, and that the competitive
imbalance will be invariant under a variety of institutional constraints designed to alter it”. (John
Vrooman, 1995, Vol. 61, No. 24)

25
Grantingthe competitive balance wouldmeanin some ways undermining the rule that says, “Big cities
have winning teams and small cities have losing teams”. (Quirk, James an Mohammed El Hodiri, 1974)
That is a goal at the same time ambitious and difficult to be achieved, I would say; however governing
bodiesof sportshave the dutyto create a platformand sets of regulations that lead to an environment
where rules are respected and equal opportunities granted.
Without rules governing the equal distribution of talent, the system will inevitably move to an
equilibriumwhere onlythe richestownerswill be able togetthe bestplayers and poorest owners none
of them. Salary cap, reserve clause, and similar devices have therefore the aim to create a more
competitive equilibrium in which talents are better distributed and competitiveness is granted.
Followingthe invariance proposition,QuirkandFortcreatedamodel that showsthe impotencyof salary
cap or reserve clause in pursuing the goal of reducing the gap between big market teams and small
market teams. The QF model is based on many assumptions.
The firstassumptionis: if all teamsendupspendinganamountequal to the payroll level established by
a salary cap, the league would end up with all teams having roughly the same playing strength. “The
ostensible purpose of the NBA payroll or “salary” cap was to control spiralling salaries and generate
competitivebalance withinthe league,butsince itsinception,the payroll cap has served to limit player
mobility under free agency, and its effect on competitive balance is subject to question”. (John
Vrooman, 1995, Vol. 61, No. 24)
Basically,the main aim of salary cap was not achieved in the NBA; therefore, the capacity of the salary
cap to restore some competitive balance within a league is quite questionable.
The second assumption is: “Both teams (big market team and small market team) will face the same
market cost per unit of playing strength, and hence the same cost to increase the team’s win/loss
percentage”. (Quirk, James and Rodney D. Fort, 1992)

26
This is a strong assumption meaning that, in order to be effectively valid, the model is based on: no
externalitiesof marketsize, constant marginal costs, and same marginal costs for each team no matter
its winning percentage.
These constraintsare extremelystrictandtherefore theyreduce the applicability of the model into the
real world.Moreoverthe model of QuirkandFort doesnottake intoconsiderationpersonal factors. For
instance, in the QF model, players always move from the small market team to the big market team if
theyhave the chance to dothat. Therefore,the model does not take into account personal factors; but
in the end players are human beings that are influenced by feelings and personal variables as well:
players can behave as non-rational “players” in the real world.
Moreover, this model is based on another relevant factor: the elasticity of the demand for winning.
Indeed, one of the conclusions of the model is that “while the level of dominance or competitive
imbalance insportsleaguesmayvarydependingonthe revenue elasticity of winning, the large market
teamwill alwaysdominate the small market team to some degree”. (John Vrooman, 1995, Vol. 61, No.
24)
However,the “small marketteamcanstill be competitiveif itsfanshave asufficientlyhigherelasticityof
the demand for winning than do the fans in the large market”. (John Vrooman, 1995, Vol. 61, No. 24)
Porterformulatedthe “fickle-fan”propositionarguingthatthe factor really crucial after all is whether a
fan isfickle orloyal.The Porter’s“fickle-fan”propositionsays:“Seeninthislightfanshave a larger stake
in determining the quality of their team not by being loyal, but by being fickle. The more elastic the
attendance response towins,the greater the incentive of the owner to field a winning team”. (Porter,
Philip K., 1992)

27
However,QuirkandFortignoredintheirmodel an important factor: the effect on competitive balance
of increasing marginal costs of playing talents. Indeed, their model is based on the assumption that
marginal cost curves are constant.
When we talk about better distribution of talents, indirectly we talk about players’ wage rate as well.
The reason behind salary cap, reserve clause, and similar devices is not only creating an environment
where there iscompetitive balanceachievedbymeansof anequal distributionof talents,butprotecting
also teams’ balance sheets and financial position from excessive expenses.
Following the model of Quirk and Fort, Demmert noted that larger markets offer many more
opportunitiestoreduce the athleteswage rate and the marginal costs of teams. Therefore, the duality
of large marketteamsandsmall marketteamsmight be in some ways necessary in order to reduce the
wage rate and marginal cost of both of them.
In otherwords,the presence of dominantteamsmightcreate some sortof positive externalities for the
league asa whole;therefore,the systemmightcreate itselfadvantagesforbothlarge market teamsand
small market teams.
In contrast to the Quirk and Fort model, Scully developed another model based on an increasing
marginal cost of talent instead on a constant one. Moreover, Scully’s model does not have a unique
competitive solution as the Quirk and Fort one.
Scullydeveloped a model that in literature is called the “Revenue sharing paradox”. It is crucial to say
that this model was developed without taking into account the negative interdependence of winning
and losing percentage. However, Scully’s model conclusion is widely accepted. The conclusion of the
model is:“a change to an evenshare inthe gate splitwouldredistribute revenuesfromthe bigcityteam

28
to the small city team. Under a 50-50 gate split the marginal revenues of the two teams would be
identical. Hence, the win percentages would tend toward equality”. (Scully and Gerald, 1989)
This conclusion might seem appealing but it is not necessarily true. At first sight, the revenue sharing
mightseema wayto reduce the gap betweenlarge marketteamsand small market and, therefore, the
powerof biggermarkets.The truth isthat thismodel doesnottake intoaccount the paradox created by
the model itself.“Whenateamsharesrevenue,the visitor’s share depends directly on the demand for
winningof itsopponent’sfans,which variesinverselywithits own ability to win on the road. Under the
conditions of winning-elastic revenue sharing, it pays a team to win at home and lose (so that its
opponent can win) on the road”. (John Vrooman, 1995, Vol. 61, No. 24)
Therefore, in this model it is expressly encouraged the away team to lose in order to stimulate the
attendance of home team’s fans. That is why this model is called the revenue sharing paradox. Scully
himself defendshismodel claimingthatthe winningincentiveswouldbe equal becauseof the home and
away match for each team.
Following the model of the revenue sharing of Scully, Noll says that there is only one way in order to
make this model able to increase competitive balance in a sport league. The Scully’s model would be
valid only if the revenue that is transferred from the large market team to the small market team is
winning-inelastic.Vroomaninthe analysisof QuirkandFortmodel claims, “The purpose of the cap may
not be to achieve competitive balance. Instead, the cap could serve as a collusive attempt to control
total player costs, and it would allow the maximization of profits for the league as a whole”. (John
Vrooman, 1995, Vol. 61, No. 24)

29
Methods
Case Study Approach
The case study appears to be the most appropriate research method for my topic and my research
question.
The flexibilityof case studydesigns“allowsthe researchertoretainthe holisticcharacteristicsof real-life
events while investigating empirical events”. (Yin, Robert K., 1984, pp 23)
The topic I have chosen lends itself to the case study design because is quite new as a topic; the
Financial Fair Play Regulation is a current real-life situation that is not even fully implemented yet.
The implementationof the regulationshasstartedinthe currentyearand itwill be fullyimplementedin
2014/2015: an exploratory approach is probably the best way to approach this issue.
ResearcherRobertYindefinesthe “case studyresearchmethodasanempirical inquirythatinvestigates
a contemporaryphenomenonwithinitsreal-life context; when the boundaries between phenomenon
and contextare not clearlyevident;andinwhichmultiple sourcesof evidence are used”.(Yin,RobertK.,
1984, pp 23)
Indeed, I analyse the Financial Fair Play Regulation in its real-life context – the European football
industry – using both quantitative and qualitative sources to make evidence and investigate the
phenomenon.
My case study has no propositions but purposes because is an exploratory case study. “Some studies
may have a legitimate reason for not having any propositions. This is the condition – which exists in
experiments, surveys, and the other research methods alike – in which a topic is the subject of
“exploration””. (Yin, Robert K., 2009, pp 24-65)

30
I triedto gatherfeelingsandsensationsaboutaregulation that will be fully implemented in 2014/2015
season. Only after that we will be able to assess properly if the regulations will be working as it was
meantto. “Everyexplorationstudyshould still have some purpose and it should state it, as well as the
criteria by which an exploration will be judged successful”. (R. Yin, 2009, pp 24-65)
Firstly, mypurpose isto analyse the Italianfootball industry as a whole in order to give an idea of what
the Italian football works and what really needs to get back its former glory.
Secondly, I collect ideas, opinions, and first impressions of experts of both the European and Italian
football industries regarding the UEFA regulation.
Advantages and Disadvantages of Case Study
Advantages
There are many advantages in choosing the case study as a research method.
Case study is a research method that provides a great amount of description and detail giving to the
context and the phenomenon a thorough representation. Furthermore, narrative with this particular
research method is easily retained.
Case studyalsoprovidescontext-dependent(practical) knowledge as opposed to context-independent
(theoretical) knowledge which social science has difficult with.
Predictive theories and universals cannot be found in the study of human affairs. Concrete, context-
dependent knowledge is, therefore, more valuable than the vain search for predictive theories and
universals”. (Flyvbierg B., 2006, pp 219-245)

31
Case studyoffersthe researcherthe opportunitythatallowstoobservethe phenomenonfrom multiple
perspectives.
One of the mainadvantagesof case studyis that itemphasizeson“learning” versus “proof” providing a
“qualitative leap” in the learning process of the research.
Case study can be crucial in Theory Building: “While systematic data creates the foundation for our
theories it is the anecdotal data that enable us to do the building. Theory building requires rich
description.We uncoverall kindsof relationships in our hard data, but it is only through the use of soft
data that we are able to explain them”. (Mintzberg, 1979, pp 587)
Disadvantages
In choosing this research method there do exist some drawbacks too.
Data are often unique to the event or phenomenon and, therefore, they cannot be used for other
researches.
Case selection is biased by the researcher’s choices. Generally case studies are not predictive.
It isextremelydifficult to establish validity or reliability of findings and assumptions (“although a high
degree of conceptual validity is one of the strengths of case studies”); (George, A.L. and Bennett, A.,
2004, pp 19-20)
Conclusions are highly subjective because the context and phenomenon are influenced by the
perception of researcher

32
Why Italian Football?
The Italianfootball industryisone of the 4 topEuropeanleagues.Itusedto be the European benchmark
in the 90s but, over the last decade, it has been losing international appeal and interests in favour of
other leagues for many reasons.
Firstly, the Italian National Federation was not able to make the Serie A an international brand
worldwide;forexample, otherleagues such as the Premier league are pretty well known and watched
abroad.
Secondly, personaltaxesinItalyare veryhigh;therefore,manyfirstclassfootball players oftendecide to
move to other European Leagues where taxes are lower and where the richest football clubs’ owners
are able to pay higher payrolls.
Thirdly, the steadily decreasing presence of Italian clubs in the final stages of European competitions
such as UEFA ChampionsLeague andEuropaLeague has not beenhelpingthe Italian football to go back
to the top.
I have chosen the Italian football because it might be interesting to see how the Financial Fair Play is
affecting the current decisions and strategies of Italian football clubs. Will the Financial Fair Play
represent a long-term opportunity to reduce the gap with the top 3 Leagues or another issue to deal
with?
Moreover, I am Italian and I think that being Italian can be a sort of “value added” for the whole case
study. I would not say that I am a deep connoisseur of football industry in general but I am loyal and
proud supporter of football and I do know how football is important and followed in Italy.
BeingItalianmothertongue hashelpedme duringthe interviews as I interviewed Italian businessmen.

33
Basically,Iknew howtodeal withItalianpeople and how people“live”footballinItaly;therefore, being
Italian has been definitely the value added for my case study.
Data Collection
My exploratory case study is mainly based on three one-to-one interviews, figures and data collected
from financial reports, journal articles, and Official UEFA documents.
I interviewedfourbusinessmenrepresenting four different Italian football clubs: A.C. Milan, Inter F.C.,
S.S. Lazio, and A.C.F. Fiorentina. I would have loved to have more time and chances to interview
representatives of other clubs because of course in a case study the more interviews you make, the
better.Itriedto contact otherItalianfootball clubs butthe majorityof themeither didnotevenreplyor
did not have time during the summer for any appointments. I should have had an appointment to
interview a representative of F.C. Juventus during last summer in Turin but because of the betting
scandal that had involved its main coach Antonio Conte, Juventus did not want to release any
interviews.
I had the chance to visitthe officesof PricewaterHouse Coopers inMilanandmeet the transaction costs
manager Jacopo Drudi that gave me the Report Calcio 2012. PWC makes this report annually in
collaboration with AREL and FIGC. All the data and figures that I used in the case study come from this
report.
The European press – even the financial newspapers like FT and Sole 24 Ore - are giving attention and
importance tothe Financial Fair Play Regulation and the huge debt of European football clubs. I found
some really interesting articles that give the idea of how UEFA regulation is perceived by the press.

34
UEFA official documents have been absolutely crucial to help me in better understanding the actual
changesand innovationsthatwill take place in the imminent future in the European football industry.
Data Analysis
For this research topic I follow a qualitative path with the help of face-to-face interviews.
The regulationsat the basis of mydissertation involvemostof the Europeanclubsthat are interested to
participate to present and future UEFA Club competitions (Champions League and Europa League).
The criteria has been to analyse three teams with different backgrounds, financial condition, and
objectivesinordertobetterinvestigate the impacts and effects financial fair play would have on their
current and future situation and performances.
In this way I have tried to give a sort of 360 vision by gathering information and insights from football
clubs with different characteristics, thus collecting also interesting and, sometimes, surprising,
impressions and considerations on the same topic by people who professionally deal with football
regulations.
I reallywantto saythanksto those people that kindlyhelpedme in my research, notwithstanding their
pressing duties at the start of the new football season.
I had the great opportunity to interview four representatives of four different Italian football clubs:
 Dr. Adriano Galliani, C.E.O of A.C. Milan
 Dr. Ernesto Paolillo, former C.E.O. of Inter F.C.

35
 Dr. Marco Cavaliere, Executive Director of S.S. Lazio
 Dr. Sandro Mencucci, C.E.O. of A.C.F. Fiorentina
I chose/didnotchoose these football clubsforthe following reasonsthatwill be commented on below.
I was supposed to make more interviews; however, as I have already mentioned, is not that easy to
meetrepresentativesof the mainclubs.Inorderto give a crosssectionview of Italianfootballindustry,I
will use only three interviews out of the four I made for the following reasons.
Inter,Lazio,and Fiorentinaare clubs extremelydifferent in terms of history, appeal, trophies, financial
power, and international popularity. Therefore, these teams are ideal to make a cross section of
different football businesses and environments in Italy, while A.C. Milan is quite similar to Inter
regarding all the factors that I mentioned above.
I have chosen Dr. Paolillo’s interview because I was able to get from it more useful information and
insights for the purposes of my case study then from that of Dr. Galliani.
Inter, Lazio, and Fiorentina have different objectives with regard to UEFA club competitions.
Traditionally,F.C.Interhasbeenand aims to be one absolute protagonist of Champions League and its
investmentsin football players make its purposes extremely clear. S.S. Lazio at the moment is a really
virtuous football club for its economic and financial performances and it is again joining a UEFA club
competition after a while (Europa League).
A.C.F.Fiorentinathatwasfor fewyearsone of the most beautiful and exciting new entries in the UEFA
landscape is now experiencing less successful outcomes.

36
In general these interviewshave helpedme to identify and analyse objectives, budgets performances,
and financial condition of three different categories of Italian clubs.
To conduct the interviews,Ipreferred aprèt à porter questionnaire; it is composed by 6 questions, the
same for all the interviewees, in order to compare differences and similarities of views on the same
topic.
The questionnaire covers 4 main areas that are:
 The role of the Financial Fair Play Regulation in both the European and the Italian football
industry
 The stance taken by the F.I.G.C. regarding the Financial Fair Play Regulation
 The actual capacityof the UEFA regulationtoreduce the big gap between top clubs and normal
ones
 The lack of policiesforclubs’ownershipsof stadiums inItalyand the need of an intervention in
this area by the F.I.G.C.

37
Case Study
Italian football industry: financial condition
In the last three seasons Italian football industry had an income about 7.2 billion euros;
its turnover has been affected only slightly by the financial crisis that instead has heavily
hit the European economy. Yet, the industry players have not been able to turn into profits that
considerable income.
The most importantproblemof the Italianfootballindustryisthe cost management: most of the Italian
clubs do not have thoughtful and cost effective policies for athletes’ salaries.
In the season 2010-2011 the total costs for the italian football industry amounted to 2,902 billions of
euros;football players’salarieswere 1,45 billions of euros in the same season, more or less 50% of the
total costs.
As Italianfootball industry we consider the whole aggregate of Serie A, Serie B, Lega Pro first division,
and Lega Pro second division. Recently, “Report Calcio 2012” - the annual report of italian football
carriedout by FIGC,AREL, and PricewaterhouseCoopers – has been released with the aim of depicting
the state of the italian football industry.
During the season 2010-2011 each Seria A club recorded on average an income of 100 millions euros;
each Seria B club 15 millions euros, and each Lega Pro club 2.5 millions euros.
The Italianfootball industryisstillable togenerate income, howeverduringthe lastthree seasons more
than 1.1 billions euros have been destroyed by the bad cost management of the italian football clubs:
only in the last season (2010-2011) the industry recorded losses for more than 420 millions euros.

38
Income
In the 2010-2011 season the value of football industryproduction in Italy was almost 2.5 billions euros:
a 1.2% drop compared to 2009-2010 season. If we exclude the capital gains generated by players’
transfers, the income drops to approximately 2 billions euros ( -0.8% compared to 2009-2010 season).
Italian football industry ( Serie A , Seria B, Lega Pro First and Second Division season 2010-2011)-
Report Calcio 2012
972
865
387
253
Incomes 2.477
TV Broadcasting
Others
Merchandising
Stadium Tickets

39
Italian football industry ( Serie A , Seria B, Lega Pro First and Second Division season 2010-2011)-
Report Calcio 2012
These figures confirm the high dependency of Italian football clubs on national TV rights.
As we can see fromthe annual reportof Italianfootball industry,TV rights amount to 971 million euros.
In particular, the average income for each Serie A team decreased by 3.1% compared to 2009-2010
season; for each Lega pro first division team by 7.4%; for each Lega Pro second division team by 23%.
As a notable exception Serie B instead showed an increase of 6.3% of the average income(from 14.2
millions of euros in 2009-2010 season to 15.2 millions in 2010-2011).
See following charts
1450
528
568
336
Costs 2.882
Salaries
Operating Costs
Amortization
Others

40
Serie A figures 2010-2011 season-
Report Calcio 2012
Serie A figures 2010-2011 season-
Report Calcio 2012
931
574.5
318.4
208.3
Incomes 2.031,2
TV Broadcasting
Others
Sponsor & Merchandising
Stadium Tickets
1159
411
483
254
Costs 2.306
Salaries
Operating Costs
Amortization
Others

41
International Comparison
To compare at international level the relative importance of the various sources of income in football
industry, we needtoresortto the official balance sheets based on fiscal year instead of using, as up to
now, the seasons’ results. Focusing the comparison on the main four European top leagues (Premier
League,Liga,BundesLiga,andSerie A) inthe followingtableswe listthe main components of income in
2010 fiscal year, always excluding the capital gains generated by players’ transfers.
On average, aSerie A football clubreceives41millioneurosfromthe mainnetworks (SKY and Mediaset
premium) broadcasting Serie A matches, 53% of the total turnover of an average Italian football club.
Only 10% of those 41 millions comes from International TV broadcasting: Italian football league has
beenlosinginternational appeal recently. Premier League clubs collect 64 million euros - representing
48% of theirturnovers- fromnational TV Broadcasting.In addition, Premier League can rely on a better
international appeal thanSerie A,asit is clearly the most watched football championship in the world.
PremierLeague owesits outstandinginternational appealtomanyfactors:itshigh percentage of foreign
players; the increasing foreign ownership of its football clubs; the investments to promote its brand
abroad.In particular, foreigners own many British clubs such as Chelsea, Manchester City, Manchester
United, and Liverpool; this situation itself gives to British football a greater visibility and therefore an
easier way to sell its brand abroad in comparison with other European leagues. Moreover, the FA has
invested extensively in countries such as China, India, Japan, and USA, where football is still a minor
sport, in order to sell the product Premier League. FA has succeeded in making Premier League a
worldwide brand getting more than 21 million euros from international TV broadcasting.
Bundesliga football clubs get 28 million euros on average from national TV broadcasting representing
31% of their turnovers.

42
Liga football clubs get 30 million euros on average from national TV broadcasting, more or less 37% of
their turnovers.
Tv Rights Income Top 4 Leagues -Report Calcio 2012
Incomes from marketing and merchandising have been growing for the Italian football industry since
2008 from 317 to 387 million euros. Serie A football clubs get from this source of income 22% of
turnover;PremierLeague clubs21%;Liga football clubs 19%. Merchandising and marketing are instead
the greatest source of income for Bundesliga football clubs with a 34% of turnover.
Merchandising& Marketing Income Top 4 Leagues -Report Calcio 2012
League Turnover Average
Income per
Club
Number of
Clubs
TV Rights
Income
% of Turnover
Serie A 1.576 41.6 20 41 53
Premier
League
2.681 63.8 20 63 48
Bundesliga 1.643 28 18 28 31
Liga 1.640 30.7 20 30 37
Income per
Club
Number of
Clubs
Merchandising
&
Marketing
Incomes
% of Turnover
Serie A 1.576 41.6 20 17 22
Premier
League
2.681 63.8 20 28 21
Bundesliga 1.643 28 18 34 38
Liga 1.640 30.7 20 19 19

43
The source of income StadiumsTicketsrecordedadecrease of 8.0% in the Italianfootball industry (from
275 million euros of 2009/2010 to 253 million euros of 2010/2011). Serie A football clubs get from this
source of income 12% of turnover; Bundesliga football clubs 21%; Liga football clubs 27%.
Premier League is still the league where Stadium Incomes are the highest one in Europe: 31% of
turnover.
Stadium Income Top4 Leagues -ReportCalcio2012
In general,the Italian football has been showing in recent years a worrying disaffection by supporters
whose stadium’sattendancehasdecreasedsteadily. LastseasonSerie A, Serie B, and Lega Pro together
were able to earn from matches and seasonal tickets only 253 million euros (in 2008/2009 season
stadium incomes were 272 million euros) representing only 10% of the total turnover.
Last season, Serie A had only 9 millions of spectators with an average attendance of 24 thousand of
supporters for each match. Stadiums were filled for the 59% of their total capacity.
The total affluence to Bundesliga stadiums was for 2010/2011 13 millions of spectators. On average,
each match-dayhadan attendance of 42 thousandof supportersandstadiumswere filleduptothe 91%
Income per
Club
Number of
Clubs
Stadium
Incomes
% of Turnover
Serie A 1.576 41.6 20 9 12
Premier
League
2.681 63.8 20 31 23
Bundesliga 1.643 28 18 21 23
Liga 1.640 30.7 20 27 33

44
of their total capacity. At the same time, Premier League stadiums had 13.4 million spectators, an
average attendance of 35 thousand, and a filled capacity of 92%.
Liga stadiumshad 10.7 million spectators, average attendance 28 thousand, and filled capacity of 75%.
These top four Leagues have followed different paths and internal policies, thus achieving different
results.
Thanksto massive investmentsmade bythe FA startingfromthe endof 90s, Britishfootball became the
Europeanbenchmarkwiththe Premier league. High stadiums’ attendance, stadiums’ ownership, first-
classplayers,greatmerchandisingof Premierleague worldwide make Britishfootball the firstinEurope.
Germanfootball industryhasbeendoinggreat duringthe lastdecade as a result of policies undertaken
by the national federation in order to improve clubs’ youth teams and stadiums’ management.
Only 10-15 years ago Bundesliga used to be the tail end among the top European leagues but now it
representsamodel formanyEuropeanfootball federations.LastyearBundesligaovertookSeriaA inthe
UEFA ranking, “stealing”aChampionsleague place andpassingfrom3to 4 teamsallowedto participate
to the most important European competition. Looking at the figures published by Report Calcio 2012
and UEFA, La Liga can count on a very high stadiums’ attendance. It must be said that these figures are
strongly biased by Barcelona and Real Madrid performances in terms of stadiums’ attendance. The
presence of these twoclubsisboth a blessinganda curse for the Spanish league. On the one hand, the
outstandingperformancesof bothBarcelonaand Real Madrid in the Champions league give La Liga the
chance to have 4 teamsallowedto jointhisEuropeancompetition;onthe otherhand,the extraordinary
dominance onthe pitch and the excessive financial power of Barça and Real make the National League
pretty repetitive and quite predictable. In June 2010, the sheikh of Qatar Abdullah bin Nasser bin
Abdullah Al Amhed Al Thani bought Malaga C.F. Now Malaga has financial resources adequate to
compete inthe nextfuture withBarçaand Real in La Liga. Will Malaga be the Manchester City of Spain?

45
As I mentioned before,SerieA usedtobe the benchmark inEurope duringthe 90s. In all backgrounds or
environmentsinorder to remain the leader you renew yourself and anticipate new trends but Serie A
didnot. As we have seen,Serie A wasovertakenbyBundesligainthe UefaRanking,itdoes not have any
stadiums’ agreements with national and local authorities, its stadiums’ incomes are the lowest in
comparisonwiththe topLeaguesinEurope,andits internationalappeal is at an all-time low. Rapid and
quick changes are necessary for Serie A in order to compete again with top European Leagues.
Costs
In the last three seasons the aggregate costs of the Italian football industry amounted to 8.3 billion
euros.
In the season2010/2011 120 Italianprofessionalfootball clubs spent 2.881 million of euros; 1,6% more
in comparison with 2009/2010. As we argue below, the cost structure of the Italian football industry
shows a disequilibrium that is hard to fix in order to comply thoroughly with the Financial Fair Play
Regulations. In the season 2010/2011, professional football clubs spent more than 2 billion euros on
expenses referable to “employees”: 1.450 million euros on salaries.
However,lookingatthe average costsof production we cansee that all the minordivisionsin Italyhad a
slightdecrease inthe lastseason:Serie Brecordedadecrease of 3%, LegaPro FirstDivisionone of 4.5%,
and LegaPro SecondDivisionone of 27.8%. In Serie A insteadthe average costsof production increased
by 10.4% between seaon 2008/2009 and season 2010/2011 (from 103 to 115 million euros). This
increase represents a worrying result for the Italian football industry as a whole in a view to the
upcoming full implementation of the Financial Fair Play Regulation.

46
Halved Net Worth
Despite isolatedsignalsof change of route,the management disequilibrium that is affecting the Italian
football industryiscausinga dangerous erosionof the net worth of football clubs. The virtuos example
of JuventusF.C. has not been followed up to now. Among clubs of Serie A and Serie B, Juventus F.C. is
the only one owning its stadium: that grants more income, thus the chance to invest more. The net
worthof the whole Italianprofessional footballdecreased by 50% to 202 million euros between season
2009/2010 and season 2010/2011. This huge contraction is mostly due to the high deficit recorded by
Serie A football clubs. In the last season the deficit was 300 million euros; in the previous one 197
million. The net worth of Serie A is 150 million, that of Serie B 50 million, Lega Pro First Division net
worth is 3 million euros. Lega Pro Second Division net worth is even negative, -1 million euros.
Net worth in the Italian FootballIndustry –ReportCalcio 2012
As we can see from the table above Serie A had a massive drop regarding the net worth. In just a year
the total net worth decreased by 58%.
Division 2008/2009 2009/2010 2010/2011
Serie A 385 354 150
Serie B 57 49 50
Lega Pro
First Division
10 2 3
Lega Pro
Second Division
0 1 -1

47
Chievo’s Oscar for Best Budget
Recently, onSole 24 Ore Gianni Dragoni has analysed the budgets of Italian football clubs in 2011/2012
season in order to assess how efficient was their costs management. An interesting table shows the
ranking for costs-per point: “the production costs declared on budget by Serie A clubs divided by the
points accumulated on the pitch” (Gianni Dragoni, 29th
May 2012); the points scored are related to last
season while the budget to the preceding one.
It was quite predictable thatnoone of the top teams would have led this particular table because they
follow the rule “the more you spend, the higher chances to win you have”. A.C. Milan and F.C.
Internazionale, respectively second and sixth at the end of the season, are the last in this particular
ranking;they were the teams that spent the most for every point scored on the pitch. This strange but
smart rankingforcosts-per-pointwaswonbyChievoVerona(11th
at the endof the season); a team that
reached the Serie A only eleven years ago. “For every point scored in 2010/2011 season (it scored 49),
ChievoVeronaspent722.000 euros.Cataniaissecondwith756.000 eurosper point.With 865.000 euros
per point Bologna comes in third. These teams would have earned the right to play in the Champions
League of budget-efficient clubs”. (Gianni Dragoni, 29th
May 2012)
F.C. Internazionale, the last in this particular ranking, spent a bit more than 5 million euros for every
point gained on the pitch. A.C. Milan, second in the pitch and next to the last in this ranking, spent 4.1
millioneuros per point. A.S. Roma, seventh in the pitch, came third last spending over 3 million euros
per point. These three football clubs would not be allowed to play in the “Champions League budget-
efficientclubs”.F.C.Juventuswonthe lastseason’stitleafterthe “Calciopoli” scandal of 2006. Juventus
came fourth last in the Budget ranking 2.4 million euros spent for every point scored.
Thisclassificationmaybe criticised because itdoesnotreflectthe absolute valuesdemonstrated on the
pitch. However, it highlights in relative terms what the return has been for the money spent by the

48
clubs. Absolute valuesandeffectivecostsmanagementshouldgoforthe Financial Fair Play Regulations
in the same direction.
Actual Losses of Serie A
In the latestseasonforwhichbalances sheets are available, the 2010/2011 championship,the 20Serie A
football clubs recorded a total loss of 300 million euros. This loss represents 18% of all sales that -
excludingthe capital gainsgenerated by transfers - amounted to 1.6 billion euros. (Report Calcio 2012)
However, the actual deficit of Serie A is much greater than 300 million euros because losses are
mitigatedbycapital gainsoriginatedbyfootball transfers (348.5 millioneuros).If we deductfrom losses
onlythe transfers abroad, capital gains originated by internal transfers between Serie A teams should
insteadbe addedto losses“inan ideal consolidatedSerie A budgettheseextraordinaryproceeds would
be added to net losses”. (Gianni Dragoni, 29th
May 2012)
Therefore, if we add to the losses the amount of capital gains generated by football transfers we will
have a total of 648.5 million euros. This figure would probably better describe the actual state of the
Italian football industry.

49
Analysis
Analysis of answers
The Role of the Financial Fair Play
All the 3 interviewees are quite optimistic about the benefits that European football will get from the
Financial Fair Play Regulations.
Dr. Mencucci isreallyproud and impressed of the work that the president of the UEFA (Michel Platini)
and his entourage are carrying forward since the beginning of his mandate.
Dr Mencucci said: “Financial Fair Play represents an extraordinary innovation for the whole European
football industry and is not the only one attributable to Michel Platini”.
The CEO of A.C.F. Fiorentina underlined the great efforts made by Platini to broaden the horizons of
ChampionsLeague to“new”countries.Evenif new horizonsof ChampionsLeague meantfewerchances
for Italian football clubs to get into it, because of the higher competition, Dr. Mencucci agrees 100%
with this new attitude of UEFA because it is “necessary and innovative”.
Therefore, Dr. Mencucci does strongly believe that the Financial Fair Play represents a further step
forward made by UEFA to preserve and improve the whole football system.
Dr. Mencucci said: “Financial Fair Play will help more the “strong” federations rather than the “weak”
ones,because strongfederationshave football clubswiththe worsteconomic and financial situations”.
Dr. Mencucci thinks that Financial Fair Play will have a really good effect over the European football
systembecause itwill be anopportunitytodevelopandfinallyrewardthe entrepreneurship of football
clubs.

50
The onlykindof disadvantages Dr.Mencucci can see inthe short term isthe lossof competitiveness and
appeal of Italianfootball.Anyway,inthe longterm, according to Dr. Mencucci Italian football clubs will
have to improve their abilities in widening their businesses.
Dr. Mencucci andDr. Cavaliere share the same thoughtaboutfootball clubs: “Eventually, football clubs
must be treated as real companies and no longer as just football teams”.
Dr. PaolilloisconvincedthatFinancial FairPlaywillbringtothe Europeanfootball systemthe advantage
that the increase of gross debt will stop necessarily.
One of the potential disadvantages of Financial Fair Play is that some football clubs will maintain
competitive advantage in comparison with other football clubs. As an example Dr. Paolillo cited the
cases of Real Madrid and Barcelona saying: “Real Madrid and Barcelona receive every year a particular
kinds of contributions from their supporters that are not recorded in the balance sheet as
recapitalization for UEFA and, therefore, they are not considered as contrasting with UEFA
requirements”.
Anotherissue isthatnot all the football clubs in Europe are owner of infrastructures such as stadiums.
Therefore,income of football clubscanbe extremely different across Europe and so Financial Fair Play
will favour those clubs that own infrastructures and penalise those that do not.
Dr. Paolillosaid:“Financial FairPlayisnecessarybutIam quite sceptical that it will have the same good
effects on all the European federations. Financial Fair Play will work against the competitiveness of
Italian football vis-à-vis other federations in Europe”.
Dr. Cavaliere isconvincedthatFinancialFairPlayisa reformabsolutelynecessary in order to ensure the
survival of football industry. He said: “It is not fair that some football clubs keep winning just because
they have someone that at the end of each financial year covers its losses with a recapitalization.
Football shouldmeansport,notonlybusiness”.Therefore,he strongly believes in the principle behind

51
thisinnovative reformof football:youcannotspendmore moneythan the one youhave generatedwith
your business.
However, he said:“Iam quite sure that inItalythe break-evenrequirement will work perfectly because
manyfootball clubsare alreadyobserving it. He added that however: ”UEFA should be really careful in
monitoring the aspect of related parties because provisions on that are still weak and can be easily
cheated”.
All the interviewees share the feeling that theoretically FFPR represents a necessary and important
interventiontopreserve the soundnessof Europeanfootball industry, but it must be enhanced as soon
as possible becauseof its leaks.Apparently,the break-even requirement can easily be bypassed as the
example of Paris Saint Germaine shows.
Signingsponsorshipscontractswell overthe marketvalue withrelatedparties pushes up artificially the
turnover of the football club. This method bypasses the break-even requirement.
All the interviewees’ agree that UEFA should not only forbid football clubs to sign sponsorships
agreements well over market with related parties, but also monitor all other strange practices
potentially suitable to bypass the break-even requirement.
All of the interviewees share the same feelings that the Financial Fair Play will bring more advantages
than disadvantagesintothe Italianlandscape.Dr. Paolillo is the only one that is quite concerned about
the possibilitythatthe Italianfootball can lose further even more international appeal and, therefore,
top players will not be interested anymore in playing for Italian football clubs. Actually, it is quite
understandable that the CEO of a football club that every year tries to win the Champions League is
concerned about attracting top players with the constraints imposed by the new UEFA requirements.
Anyway,all the interviewees agree thatthe FFPRwill restore aloyal competitiveness,atleast,inside the
Italian league.

52
F.I.G.C. and the Financial Fair Play
All interviewees agree that FIGC would support proposals to make the new UEFA requirements
compulsorynotonly for those football clubs that want to join European club competitions but also for
all football clubs wanting to join Italian Serie A. Thus, all Italian football clubs will have to follow UEFA
rules and, therefore, the competition within Italian federation would be more guaranteed.
If within the Italian federation all the clubs follow the same good practices the entire Italian football
system will enjoy more credibility and transparency.
The “Big” Gap
There is a great debate on the capacity of UEFA Financial Fair Play to increase the competitive balance
and reducing the gap between top clubs and normal ones.
The interviewees have differentfeelings on this topic, in particular with regard to the chance to reduce
the gap between football clubs in the short term and/or in the long term.
Dr. Mencucci isquite sure that inthe short termthe gap betweentop football clubs will increase but in
the longterm itwill decrease forsure.He said:“If we lookat Englishteamsand German teams what can
we see? English teams are still winning but they do have the biggest debts in Europe, while German
teamsdo notwinbut theydo nothave debt at all. Financial fair Play in the long term will decrease the
gap between English teams and German teams and bring a fair competition back”.
Dr. Paolillo, instead,isquite sure thatthe gapbetween topfootball clubsandmediumoneswillincrease
for sure inthe long termfollowingthe ideathat:“Richest teams will get even richer and poorest teams
will getevenpoorer”.The goodthingisthat eventuallythe entire football systemhasthe opportunityto

53
investmore resources inclubs’youthteamsinordertogrow up new talents and improve the quality of
the game.
Dr. Cavaliere believesthatthe gap will decreaseforsure inside the Italian Serie A between top football
clubsand middle ones. Buthe isquite sceptical aboutthe actual possibilitythatthe gap would decrease
inthe Europeanlandscape aswell. The reason of his scepticism is related to the effective capability of
UEFA to ensure that all European football clubs will follow the requirements in the same fair way.
Stadiums’ Policies and F.I.G.C
In the lastyears,stadiums’ownershiphasbeen one of the most debated topics in Italy. Italian football
clubs realized that only by being owners of the stadiums where they play, they might regain
competitiveness vis-à-vis other European top clubs.
Dr. Mencucci is particularly concerned about the future of Italian football system with regard to the
stadiums’issue.The situationinItalyisquite weirdbecause aswe have seen Italianfootballdepends on
TV rights up to 65% of its total incomes. “Italian football has only two big clients (SKY and Mediaset
Premium) and this situation is potentially dangerous because in other words Italian football does not
have enough bargaining power with them in the short term. Without new infrastructures, which are
newvehiclesforincomes,Italianfootball will be at the mercy of its clients because in the short term is
strictly dependent on them”.
Therefore, it is necessary to tackle the stadium’s topic seriously in order to get out from this impasse
and, furthermore, regain competitiveness.
Dr. Paolillosupportsactivelystadiums’ownershipinItalysaying:“Stadium’srevenuesare a fundamental
and indispensable source of income for a “healthy” balance sheet and Italian football does not have
them”.

54
Dr. Cavaliere agrees with Dr. Paolillo saying: “The intervention of Italian federation with regard to
stadiums’ ownership is absolutely crucial and necessary because without it Italian football will keep
losing ground towards big European leagues”.
All the interviewees agree in stating that the Financial Fair Play Regulations will be crucial in changing
the Italian federation attitude on the stadiums’ issue.
Dr. Paolillo believes that the turning season for Italian football will be 2013/14 because then Italian
football will be confronted effectively withthe problemof stadiums’ownership.Whenthe Financial Fair
Playisdefinitelyimplemented all those football clubs that do not have enough businesses from which
generate incomes will have big problems in terms of competitiveness.
In general the interviews bring out the feeling that Financial Fair Play regulation is an opportune and
necessary intervention on European football industry and therefore on the Italian one.
This regulation would be able to achieve its objectives in the long term for what concerns the
achievement of a better competitive balance and an effective development of youth clubs’ teams
program. To be achieved, these objectives need time and commitment by UEFA and football clubs.
In the short termthere isa sharedconcern aboutthe actual advantagesthisregulationwould bring into
bothEuropeanfootball andItalianone.Financial fairplayregulationhas greatpotential but is still quite
‘weak”.The regulationcanbe bypassedeasilybymeansof financial and corporate “escamotages” (PSG
example). The FFPRshouldbe refined inordertoremove itsweakpoints,atleastthe most visible ones.
However, only after its full implementation the regulation can be refined properly and amended as
appropriate.
The Italianfootball industryneedsas soon as possible an accurate stadiums’ policy. The lack of any full
agreementsbetween the majority of Italian football clubs and national and local authorities make the
reduction of the gap with top European leagues even harder. Stadiums’ income is the most worrying
issue forItalianfootball clubsin comparisonwith the othertop European leagues. In the short term the

55
feeling is that financial fair play will not help weaker leagues to reduce their gap with top ones;
therefore,isabsolutelycrucial tobattendownthe hatches.The Italian federation (F.I.G.C.) has to show
a real commitmentonthat and workby Italianfootball clubs’ side in order to help them to regain their
international competitiveness and appeal.
As I mentioned before, 2014/2015 season will be key to show the actual strengths and weaknesses of
each league, however many indications and insights are already available and therefore European
national federationshave tomake theirassociatesaware of the big changes they will have to deal with
in a couple of years.

56
Conclusion
In thiscase studyI discussed the objectives and challenges of the new regulations introduced by UEFA
underthe name of Financial Fair Play Regulation. On the main Issues, I collected the opinions of some
top managers of the Italian football industry.
This new set of rules is now in the implementation phase and will be fully effective in the season
2014/2015. The importance of football in Europe makes the regulatory initiative by UEFA absolutely
crucial giventhe poorfinancial conditionof manyEuropeanclubs. Bymeansof thisnew regulation UEFA
aimsat improvingthe soundnessof the Europeanfootball industry;onthe one side by redressing some
bad practices that have caused an increasing debt of football clubs; on the other side by incentivising
clubsto investinprojectsable toproduce benefitsinthe long-term, such as strengthening clubs’ youth
team and building their own stadiums and infrastructures. Basically, the whole regulation is meant to
encourage football clubs to adopt a forward-looking approach based also on a rigorous cost
management able to reduce pressures on players’ payrolls and transfers fees.
Actually the exponential increase of players’ cost has been the main factor behind the huge
deteriorationof manyfootballclubs’accounts. Withoutanydoubt, the FFPR represents a revolutionary
change for the entire European football but being a brand new regulation some of its implications are
still unexplored.
The break-evenrequirement is the main pillar of the new UEFA regulation: it establishes that football
clubswill notparticipate toanyUEFA competitionsif theirexpensesexceedtheirincome duringathree-
year period.
It must be said, however, that some clubs seem to have found some loopholes to bypass the FFPR as
highlighted also by the Executive Director of S.S. Lazio. The owner of Paris Saint Germain – the Royal

57
Familyof Qatar Al Thani - is signingsponsorship contracts, well over the market value, with companies
he controls indirectly through the QIA (Qatar Investment Authority); in this way he would bypass in
practice,the implicitprohibition torecapitalize a club by granting it resources not genuinely generated
by its activities. These sponsorship contracts are able to push up the turnover as much as the football
clubwants:the UEFA break-evenrequirementwill be completelybypassedandall the good purposes of
the regulation vanished.
An Italian journalist, Alberto Costa, has deliberately accused Michel Platini, UEFA president, for his
silence onthese manoeuvresmade by PSG.He remindsinhisarticle the very rigid approach adopted by
Platini against Chelsea, Manchester United, and Manchester City and the present lack of intervention
vis-à-visPSG. The journalistoutlined that the son of Michel Platini is one of the executive managers of
the Qatar Sports Investments (part of the bigger QIA) that controls PSG.
In order to achieve the UEFA break-even requirement the FFPR implies that European football clubs
have to deal with cap management. This practice is new in Europe but extremely well known in North
AmericanSports. Actually,NorthAmericanprofessional teamsemploypersonnel whose only task is cap
management;thisshowshowimportant forasport clubbeing able to deal with expenses and incomes
especially in those leagues in which salary caps are present.
Actually, the FFPR does not mention explicitly salary caps, as its cornerstone is the break-even
requirement.
However, the rationale behind salary cap and break-even requirement is pretty much the same:
controlling the cost’s side in order to make the maximization of profits easier to achieve.
That is why an accurate and professional cap management department could be key for European
football clubsinthe nextyearseither toreduce the “big gap” or keep their historical leadership. In a

58
way,the break-evenrequirementrepresents a vehicle to bring into the European football industry the
concept of salary cap and cap management practices.
One of the mostchallengingobjectives the FFPRwantstoachieve is toincrease the competitive balance
among European football clubs. In the literature many authors have debated their models whether
salary caps are able to increase competitive balance into sports leagues. On main conclusion of the
debate can be described as it follows: the purpose of the cap may not be to achieve competitive
balance;however,the capcan be extremely useful to control player costs making the maximization of
profit for the leagues possible.
In the lastthree seasonsthe Italianfootball industryhasrecordedhuge lossesultimately because of the
highplayers’salaries. The accumulationof lossesoverthe recentyearshasledtoan unsustainable debt.
Appropriate costmanagementpracticesare,therefore, absolutelycrucial forthe Italianfootball because
it cannot rely on many other sources of income. Differently from the other European leagues, Serie A
has still toreach an overall agreement with national and local authorities on the stadiums’ ownership.
The role of F.I.G.C. will be key in accelerating the process as confirmed by all the top managers that I
interviewed.
Stadiums’incomesare inotherEuropeanleagues of the mostimportantsourcesof income forafootball
club. Instead,Serie A clubsare still workingonitanddiscussing withthe national federation (F.I.G.C.) in
orderto eventuallysucceed inbuilding their own stadiums and rebuild their competitiveness vis-à-vis
European top clubs as confirmed also by the former C.E.O. of Inter F.C.
Whit this case study I tried to present the main characteristics of Financial Fair Play Regulation and to
analyse some of its potential implications on the European football industry and in particular on the
Italian clubs. It is fair to say that FFPR is going in the right direction addressing thoroughly the main
issuesaffectingthe football industryinEurope.Anadequateevaluation of the real effectiveness of the

59
newsetof rulesinpursuingitsobjectivescanonlybe done whenthe whole systemwill be completelyin
operation.

60
References
Alberto Costa, PSG: L’uragano che Travolge il Fair Play UEFA (“PSG: The Hurricane sweeping the UEFA
Fair Play Regulations”), 13th
July 2012
Andrew Bounds, Clash of Business Models Comes to a Head, 30th
April 2012
Cf.Ari.Nissim, The Trading Game: NFL Free Agency, the Salary Cap, and a Proposal for Greater Trading
Flexibility, 11 SPORTS LAW. J., pp 257-257, 2004)
Flyvbierg,B. FiveMisunderstandings About Case Study Research, Qualitative Inquiry, 12(2), pp 219-245,
2006
George,A.L. and Bennett,A., CaseStudiesand Theory Development in the Social Sciences (BCSIA Studies
in International Security), The MIT Press, pp 19-20, 2004
Gianni Dragoni, Chievo’s Oscar for Best Budget, Sole 24 Ore, 29th
May 2012
Helmut Deitl et. Al., Overinvestment in Team Sports Leagues: A Contest Theory Model, 55 SCOTTISH J.
POL. ECON, pp353-355, 2008
JohanLindholm, The Problem With Salary Caps Under European Union Law: The Case Against Financial
Fair Play, Texas Review of Entertainment & Sports Law, Vol. 12.2, 190-213, 2010)
John Vrooman, A General Theory of Professional Sports Leagues, Southern Economic Journal, Vol. 61,
No. 4, pp 971-990, 1995
Mintzberg, H. An emerging strategy of “direct” research. Administrative Science Quarterly, 24, pp 580-
589, 1979
Porter, Philip K., The Role of the Fan in Professional Baseball, in Diamonds are Forever: The Business of
Baseball, edited by Paul Sommers, Washington Brookings, 1992
Quirk,James,andMohammedEl Hodiri, TheEconomicTheory of a ProfessionalTeam Sports Leagues, in
Government and the Sports Business, edited by Roger Noll, Washington Brookings, 1974
Quirk, James, and Rodney D. Fort, Pay Dirt: The Business of Professional Team Sports, Princeton:
Princeton University Press, 1992
Report Calcio 2012, available on www.figc.it
Scully, Gerald, The Business of Major League Baseball, Chicago: University of Chicago Press, 1989
ThomasHoehnand StefanSzymanski, The Americanization of European Football, Economic Policy, Vol.
14, No. 28, pp 203-240, 1999

61
UEFA official website, www.uefa.com
UEFA CLUB LICENSING AND FINANCIAL FAIR PLAY REGULATIONS, arts. 58-63, 2010
Yin, R.K., Case Study Research: Design and Methods, Newbury Park, CA: Sage, 1984
Yin, R.K., Case Study Research (Fourth Edition), Thousand Oaks: SAGE, pp 24-65, 2009
www.transfermarkt.it

Matteo Carcasio Dissertation

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (17)

Similar to Matteo Carcasio Dissertation

Similar to Matteo Carcasio Dissertation (20)

Recently uploaded

Recently uploaded (20)

Matteo Carcasio Dissertation