In which way can the Break-Even Requirement benefit European football? A theoretical study of the contest model

Abstract

The background of the introduction of the Break-Even Requirement (BER) by UEFA is the huge funding from rich owners and the significant debt of many professional European clubs. With the BER, the clubs gradually being forced to live within their means. Meaning that clubs cannot use more money than they earn.

The purpose of this thesis is to find an answer on the question. To investigate the effects of BER, this paper presents three different contest models, which indicate different results. The contest model is a two-club league, which are win-maximizing clubs. Two of the models points to the direction that the BER will not benefit the European football. For instance, it indicate a negative trend in competitive balance for the clubs. The big clubs will become bigger, and the small clubs are unable to stop this situation, because they cannot overspend hence to the BER.