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Competition between European football clubs

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  1. Introduction
  2. The external environment for football clubs
    1. The Bosman ruling and its consequences
    2. Market regulators
    3. The tax environment : A distinct disadvantage for French clubs
  3. The financing of football clubs in France and in Europe
    1. Manchester United and Olympique CL: two references to the national and continental level
    2. Public funding: French
    3. Other avenues to explore for French clubs
  4. What future for French football ? Is the French model still viable?
    1. The causes of the current situation
    2. A performance model

In Europe, the economic competition is as fierce as the sporting competitions that engage among the professional football clubs, and this fight is somewhat uneven between very large European professional clubs and other smaller clubs. How can we explain the differences in competitiveness between the top clubs in French football and the best of the four other major European leagues (England, Italy, Germany, Spain)?

The basic assumption is that since 1998 and the coronation of the France team during the World Cup, French clubs have been struggling to survive and win on the European stage. The level of competitivenes of French players, however, is not to be questioned. Moreover, if one looks closely, a large majority of players who have made up team France for 10 years have played in major international championships (England, Italy, Spain, Germany). Zidane, Henry and others are in the major European clubs but not of France: a high level of football, spectacular games with full stadiums and financial resources which the French clubs can match.

With the Bosman ruling and the opening of the market that followed, football has lost its independence over the last two decades. It became a full-fledged economic activity and some negative aspects were quickly apparent. For these reasons, the Heads of State and Government of member countries during the last summit in Nice, have addressed this topic. 'Specificity of sport' has been discussed.

The text, from the negotiations, is to guide sport 'so that it is not considered an area like the others but with respect, for example, of the rules of competition'. This characteristic could lead the EU to recognize the 'sporting exception' and thus partially go back to the Bosman ruling which was the consequence of 'unfair' competition.

The first handicap for French clubs: the high taxes and payroll taxes when compared to other countries in the European Union. Despite a good training policy, we understand why the French clubs can not cope with the exodus of French players abroad. But according to Jean-Pierre Karaquillo, director of law and sports economics and author of 'Sports Law' (Dalloz), 'It's not only because of the tax that the clubs of Spanish, Italian or English are attracting our stars'. With an average attendance of 18,000 spectators per game and almost no merchandising, French clubs have not even equivalent taxation, the means to compete with Real, Manchester United, Bayern Munich or AC Milan is less.

The French teams are lagging behind in terms of diversifying their sources of revenue (ticket sales, derivatives, IPO), which does not yet allow them to inflate their budgets and make up to their European neighbors. The award for TV rights to Canal Plus at €600 million per year for three seasons was a real turning point for the economy of French football. The clubs of L1 and L2 hosted games with financial prudence: the contribution of income was invested in the medium term to develop their structure, but the threat of a merger between Canal Plus and TPS group was significant.

Today, French clubs have to follow up European routes as exceptional as was the case during the 2003-2004 season (when Monaco was a finalist in the Champions League, Olympique de Marseille was the finalist in the UEFA Cup and Olympique Lyonnais was in the quarter-finals of the Champion 's League). This is the key to being able to see the future with more confidence. Indeed, the European campaign of 2003-2004 had reported nearly 10 million euros to the OM!

Thus, successful athletes and the rigorous management of French clubs led to interesting results of operations and accounts of clubs started improving significantly. As for European football as a whole, many clubs (mainly English and Italian) experienced unprecedented financial crises (Lazio, Parma, Leeds United). Premier League combines currently 922 million euros of debt. Calcio, as much as 2 billion euros. In Spain, FC Barcelona has accumulated a 150 million debt or the total debt of the L1 clubs!

French clubs have not engaged in an ultra-liberal policy but it is not a bad thing. They now seem to have survived the recession that hit Europe recently, a period which profiles a return to regulatory and fiscal discipline, the French specificities such as public financial support by the community, the existence of a management control, or the pooling of television rights could even become the future model for Europe. If French clubs involved in this year's Champions League made a good course, France could then consider joining its four neighbors, the elites of European football.

Tags: Economic competition, European professional clubs, European leagues, international championships, spectacular games, European Union, European football.

[...] There were two reasons: the shift from 18 to 20 clubs (although the reduction from 20 to 18 clubs operated in 1998 coincided with the beginning of the surge) and the arrival of clubs generating small crowds, such as Ajaccio (Only 4840 spectators on average).Meanwhile, in 2001/02, Saint-Etienne in League who withdrew to the League 1 with a high average attendance of 26,495 spectators The European football is facing a serious financial crisis We can date the beginning of the crisis of European football affairs during thefew months of the 2002 World Cup when, in quick succession, the subsidiary of ITV Digital Television Group English Carlton / Granada and the German group Kirch went bankrupt.The broadcasters' respective English and German championships are in fact unable to keep pace with rampant inflation in terms of TV rights. [...]

[...] We must be a little less teledependants.' Since the 2002-2003 season (AS Monaco and Olympique Marseille respectively were finalists of the Champions League and the UEFA Cup), French clubs have been more successful on the European scene, which proves that there is a direct correlation between operating results and sports scores. DEVELOPMENT 1.The external environment of football clubs .The Bosman ruling and its consequences .1.The origin: the Bosman case Everything started in the summer of 1990 when the Belgian player Jean-Marc Bosman complained of his transfer being blocked by his club. [...]

[...] As for the G14, the wage bill was limited to 70% of the budgets from .2.The real issue: Limit payroll This measure must be a priority not only for the 18 most powerful clubs on the continent, but for the European football to recover. But the French cannot afford to act alone, and the risk of new players of L1 and L2 is prevalent. There should be a cap on salaries, and it should apply to all European clubs at the same time. [...]

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