Browsing by Subject "financlial fair play"

There has been on going debate about the financial sustainability of European football clubs. Clubs in European football leagues have been making deficits and accumulating debts in recent decades. The governing body of the European football (UEFA) took actions in 2009 trying to take control of the financial situation in European football, by introducing financial fair play regulations. Financial fair play regiuations were implemented on 2011/2012 season. This paper is inspired by the current situation in European and particular in English football and the introduction of financial fair play regulations. The research question is: have financial fair play regulations changed the behavior of the English premier league clubs. Data used in this paper consists of annual reports, which have been collected from companies house Britain and sporting data, which have been acquired from Barclays premier league database. Dataset in this paper covers seasons from 2008/2009 to 2013/2014, for a total of six seasons from English premier league. Total number of observations is 78. Methodologies used in the paper are data envelopment analysis approach and Malmquist index. The data envelopment analysis approach assumes that decision making units are effiicient if they use minimal inputs to produce maximum outputs. The input parameters in this study are overall wages and relevant expenses, which are used to produce maximum outputs relevant income and points acquired in the league. In this context when clubs are efficient they utilize assets effectively, comply the break-even requirement and are successful in sporting activities. The dynamics between seasons are estimated by Malmquist index. Malmquist index gives distance functions for two consecutive seasons and divides efficiency changes into technical change and into technological change. Technical change gives the change in the efficiency of individual club and technological change gives the change in the industry. The results of the estimation with both methodologies indicate increased efficiency after the introduction of the financial fair play regulations. The estimation results also indicate that clubs in England have changed their actions towards more sustainable development.