Analysis Of Financial Fair Play - 1087 Words

With the number of clubs which have participated in the UEFA competition over the past 12 years, a sample size of 6 teams will be selected for this dissertation. These clubs who must abide by Financial Fair Play regulations to participate in their competitions are Arsenal, Manchester United, Chelsea, Manchester City, Liverpool and Tottenham. It is also important to note that all clubs selected in this analysis has expense greater than â‚ ¬45 million, as UEFA’s break-even rule is subject to an exception of an acceptable deviation up to â‚ ¬45 million if the shortfall is covered by equity investment. As the Financial Fair Play has been in existence since 2010, financial statements and balance sheets for the selected clubs and the league have been†¦show more content†¦3.4.1 Profitability The Financial Fair Play draws attention to the reported losses made in European football over the past fifteen years. As football started to grow at an exponential rate, the losses started to mount also. As far back as the early 2000s, several clubs football clubs went bankrupt and faced administration while dealing with huge substantial losses. Prior to the season before the financial fair play was introduced, it was noted that 12 out of the 20 clubs reported an overall loss. This led to the Premier League pre-tax losses reaching an all-time unwanted record of  £445 million in 2009/10 and a debt around  £3.1 billion in 2008/2009 (Deloitte, 2011). The profitability of the league and its clubs in relation to the Financial Fair Play is determined by the profit and loss accounts (relevant income minus relevant expenses) which aligns with UEFA’s requirement for clubs to break even and improve their profitability. Another two objectives of the regulations mentioned previously also relate to profitability; which are:  ¥ encourage clubs to compete within their revenues  ¥ introduce more discipline and rationality in club football finances Therefore, this dissertation will discuss the following hypothesis below: 1. Hypothesis (H1): The Premier League and its clubs’ overall profitability improved since the arrival of Financial Fair Play. 3.4.2 Negative Equity NegativeShow MoreRelatedResearch On The Financial Performance Of The English Premier League801 Words   |  4 Pagesexamine whether the financial performance of the English Premier League and the sampled clubs improved after UEFA introduced their Financial Fair Play regulations. This led to the comparison of the results for the league in general and individual clubs over a ten-year period (2004 – 2015). 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