Caught in a trap? Financial Fair Play Regulations and the case of Scottish football

Purpose: The study investigates UEFA’s Financial Fair Play Regulations in the context of the European football industry. It seeks to explore whether these regulations are perceived by member organisations as contributing to the creation of a “poverty trap”. In order to do so, this study turns towards what are traditionally perceived as smaller clubs operating in smaller member associations and, in doing so, explores whether the regulations limiting benefactor payments are suitable for smaller leagues.
Research Design: In-depth semi-structured interviews were conducted with key individuals involved in the management of Scottish football clubs. The Scottish context was chosen because of the disparity in revenues amongst competing teams, and the limited broadcasting revenues achieved in comparison to some other European member associations.
Findings: Financial Fair Play Regulations are perceived to be an effective tool for monitoring clubs and ensuring financial stability. However, the findings suggest that participants believe that these regulations consolidate the financial position of larger teams who rely on broadcasting and extant brand power for revenue generation. Further, smaller leagues demonstrate a lesser reliance on benefactor payments, and therefore the restriction on benefactor payments inherent within Financial Fair Play Regulations is posited by participants as holding little consequence and/or relevance within the Scottish football context.
Originality: Most prior studies on Financial Fair Play Regulations have focused on generating quantitative insight into the application of Financial Fair Play Regulations in large, resource-rich European football leagues. Through a qualitative approach, the study provides nascent exploratory insight into FFP regulations from the perspective of smaller leagues.