Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/94194
Authors: 
Budzinski, Oliver
Szymanski, Stefan
Year of Publication: 
2014
Series/Report no.: 
Ilmenau Economics Discussion Papers 86
Abstract: 
In this paper, we discuss from an economic perspective two alternative views of restrictions of competition by sports associations. The horizontal approach views such restrictions as an agreement among the participants of a sports league with the sports association merely representing an organization executing the horizontal cooperation. In contrast, the vertical approach views the sports association as being a dominant upstream firm enjoying a monopoly position on the market stage for competition organizing services, an important input for the actual product - the sports game. Taking the recent financial fair play (FFP) initiative by UEFA (the Union of European Football Associations) as an example, we demonstrate that the different views lead to different assessments of restrictive effects and, thus, matter for competition policy decisions. The economic story of the potential restrictive effect of FFP on players' and player agents' income may fit more plausibly to the horizontal approach, whereas the potentially anticompetitive foreclosure and deterrence effects of FFP may be economically more soundly reasoned by taking the vertical view.
Subjects: 
European competition policy
sports economics
financial fair play
horizontal agreements
vertical restrictions
European football
antitrust
JEL: 
K21
L41
L42
L44
L83
Document Type: 
Working Paper

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