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French Football

A Financial Crisis Rooted in Weak Governance

University Paris 1 Panthéon Sorbonne

This article contends that a French football exception is not an absent financial crisis but its hidden shape because of undisciplined club behavior and a lack of transparency and disclosure. French football is characterized by a lax financial management and a soft-budget constraint at the club level. The latter results from a weak governance structure in the league and clubs. Shareholders behave as non-profit-seeking investors or patrons. The arms race to enroll the most efficient players fuels wage inflation that is hardly balanced by newly emerging sources of finance. The more a club is able to attract broadcast revenues, the more likely it is to be in the red. Policy recommendations include strengthening the governance structure, restoring financial discipline, and defining compulsory thresholds for some clubs' financial ratios.

Key Words: budget constraint • disclosure • finance • football • governance

References

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This version was published on December 1, 2007

Journal of Sports Economics, Vol. 8, No. 6, 652-661 (2007)
DOI: 10.1177/1527002506297021


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This Article Abstract Free Full Text (Free PDF) Free Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Request Permissions Request Reprints Add to My Marked Citations Citing Articles Citing Articles via Google Scholar Citing Articles via Scopus Google Scholar Articles by Andreff, W. Search for Related Content Social Bookmarking                         What's this?