Sugar Daddies in European Football Clubs

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The ‘Sugar Daddy Game’ received an increased academic attention in recent years; researchers observed and compared many aspects and implications of that phenomenon. To start with Dietl et al. (2009) and their analysis of social welfare and difference between profit-maximising and win-maximising leagues; then Lang et al. (2011) analysed benefactors influence on industry competitiveness; then Madden (2012) studied implications towards the economic stability of the industry; then Franck & Lang (2012) observed growing trend towards riskier strategic investments amongst ‘sugar-daddy’ owned clubs; and finally the possible outcome of new UEFA’s ‘Financial Fair Play’ regime (aimed at reducing clubs’ dependence on their wealthy owners) was researched by Vöpel (2011), Müller et al., (2012) and Peeters & Szymanski (2012). As already noticed the growing influence of ‘sugar daddies’ within the football industry leads to even greater focus on win-maximisation objective at the expense of financial stability (Madden, 2012). Franck & Lang (2012) analysed the financial situtation amongst 733 European top division clubs in 2009 and acknowledged that as much as 56% of these football clubs reported net losses, a total of €1.2 billion, even though revenues from all kind of sources increased significantly (Müller et al., 2012). Moreover 37% of these clubs are facing difficulties having debts larger than assets, while almost 10% of them spend more than they can earn in order to pay players’ salaries. For such clubs it is vital to receive money injections from benefactor owners at the end of each season. (Lang et al., 2011) These numbers highlights h...

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Sloman, J., & Hinde, K. (2007). Economics for Business, 4th Edition. Harlow: Financial Times Prentice Hall.

Szymanski, S. (2003). The conomic Design of Sporting Contests. Journal of Economic Literature, 1137-1187.

UEFA. (2012). UEFA Club Licensing and Financial Fair Play Regulations. Nyon: UEFA.

Vöpel, H. (2011). Do we really need Financial Fair Play in European Club Football? An economic analysis. CESifo DICE Report, 54-59.

Wright, P., McMahan, G., & McWilliams, A. (1993). Human Resources and Sustained Competitive Advantage: A Resource-Based Perspective. Center for Effective Organizations, 1-34.

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