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Application of MCDA to Evaluate Financial Fair Play and Financial Stability in European Football Clubs

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Document pages: 22 pages

Abstract: This paper aims to design a methodology to evaluate financial stability in the football industry. Considering Financial Fair Play Regulations (UEFA, 2012, 2015), it explores how they have worked. This paper adapts Multiple-Criteria Decision Analysis (MCDA) to the football industry. A number of ratios and their corresponding weights are defined. Four MCDAs are used. The results from these four MCDAs are then taken into account to finally classify the financial situation of the clubs. The study was carried out on top European Football clubs for the seasons ending in 2011, 2012 and 2013. The main change in the financial situation of analyzed clubs occurred in season 2011 12, the time when FFP rules were enforced. The results show that big European clubs are financially stable. Moreover, some progressive improvements in stability and sustainability have been encountered. The tool applied in this study may be used by stakeholders in this industry. Moreover, it shows that financial control imposed by UEFA is being beneficial what encourages keeping in this line of action. The paper provides a fast and efficient technique in decision-making to the stakeholders in the football industry.

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