La dimension financière du football en France (document en anglais)

Introduction

Throughout this essay, we will analyze the financial dimension of football in France.

Over the past few years, a new term has appeared to show this new dimension acquired by the football industry in the world: the football business. Originally, these two terms are not related by links; the football has been created to entertain people whereas business stands for a company with an economical purpose.

Nevertheless, by attracting more and more fans, football acquire this dimension. Nowadays it’s not only about the sport spirit anymore. The main goal is to be profitable for the shareholders.

This statement has lead clubs to establish many strategies so as to improve their performances (not only sportive ones but also financial). To achieve this goal, club’s board of directors, has enforced several strategies in order to be as efficient as possible. To the sportive dimension they add communication, merchandising, marketing, sales, associative, international development of the “brand” and real estate strategies.

Together with these new dimensions for clubs has risen a strong interest from Radio and TV channels which are now ready to pay a tremendous amount of money to obtain the broadcasting rights so as to improve their market share with this popular sport. This situation has lead this sport into a kind of snowball effect; each year (even if the results of clubs are good) clubs have to improve their profitability.

We elected this topic because football represents an important part of the life in the European countries’ population. In addition, the new business nature acquired by clubs in Europe has been more and more integrated within the political life of countries. As a matter of fact, we have seen this trend during the French presidential election of 2012, where football players’ revenues have been used as a core topic of the presidential campaigns.

I- Brief introduction to the European/French regulation of football activity.

A. International Organizations

The European football world is precisely regulated by two core organization: FIFA and UEFA.

FIFA (Fédération Internationale de Football Association) has been created in 1904 in Paris so as to regulate this sport which was rapidly growing. This institution is aimed at establishing the common worldwide rules of football activity to harmonize all the countries around the same regulation system. From this point, any club who wants to acquire a professional status has to answer to clearly established rules.

Moreover, this organization is not only managing the game’s rules, but also the financial context of international competition. At this point, the notion of match bonuses has been establish to reward the performance of the players within their national teams.

Nowadays, FIFA is still representing the highest institution regulating the football life of clubs, but it’s more aimed at managing the international football environment.

The second organization which is relevant in our essay is the UEFA. The UEFA (Union of European Football Association) is regulation all the competition within Europe. It’s the most important institution to consider when you are working for a European club or a European national team.

They are organizing the European competitions from the famous Champion’s League to the Europa Cup and the European Cup (competition between the national teams).

This core institution is regulating the financial context of all European clubs. Everyone has to comply with all the rules established by the UEFA. Its rules are covering the sportive dimension as well as the economic one.

They are providing the clubs with the re-distribution of the broadcasting rights according to the results of clubs which are involved in European competition. This part represents an importance source of money for clubs (the only fact of participating to the Champion’s League for example involve a gain of 20M € for each club). UEFA is also validating all the commercial agreements between clubs and brands.

We can easily highlight that the responsibility of this institution is crucial for the regulation of clubs at the European clubs.

B. French Institutions

Nationally, we have to present the FFF (Fédération Française de Football) which is the key regulator of the football environment in France. This institution is managing both the professional and the amateur dimension of the French football environment. It is in charge of regulating the national competitions, the bonuses given to clubs (professional and amateur), the broadcasting rights negotiated between them and TV channels and the development of this sport throughout the country. In fact, this organization is in charge of everything which will ensure that competitions are running well (referees, schedule…).

Together with this institution, another one is exclusive to France; there is no presence of any similar organization in the other European championship: the DNCG. DNCG (Direction Nationale du Contrôle de Gestion) is in charge of regulating all the financial environment of the French teams. It’s a regulation system which ensures that French clubs are in a good financial health. It is in charge of controlling the spending and the revenues of clubs. As a matter of fact, any French clubs can’t be in a deficit situation at the end of the year. If they can’t reach their breakeven point, they could be relegated in a lower division as a penalty. This represents an important break for the French clubs so as to compete with foreign clubs, because in other countries clubs can be in a deficit situation. We will explain that later in another part.

II- DNCG: the French financial regulation

The DNCG is aimed at controlling all the financial aspects of French clubs. That is to say, they are in charge of taking a particular attention to all the financial transactions linked to the activity of clubs.

As a matter of fact, each year, all the professional clubs have to present their financial data regarding the former year of activity. This step takes place between the end of the season and the beginning of the next one. It is mandatory for professional clubs in France to present a “healthy” balance. A French club

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