Description
Book SynopsisExploring why professional team sport clubs are almost always able to survive despite financial mismanagement, inflated player salaries and persistent deficits, this book provides new evidence on how to explain this phenomenon. It looks at the context in which many clubs operate – the soft budget constraint – and how the clubs in this respect resemble state-owned enterprises in socialist countries or big banks in financial crises.
Chapters discuss the challenge of hardening the budget constraint, including UEFA’s Financial Fair Play regulation. They include new data about the soft budget constraint phenomenon, including evidence from Central and Eastern Europe. Leading scholars in the field develop the theoretical approach to the topic using institutional theory, dialogue with critics and discussions on the merits and limits of soft budgets. The book also investigates key case studies of bailouts and liquidation of professional sports teams.
This will be an invigorating read for scholars and students of sports economics and sports management. It will also be helpful to managers and directors in professional sports clubs looking for a better understanding of the soft budget constraint.
Trade Review‘A new strand of literature has developed which applies the soft budget constraints approach to the problems encountered in the European sports industry. Some of the most important authors of this new field, but also a prominent critic, have contributed to this volume, which is a highly recommended read for sports economists and sports managers.’ -- Egon Franck, University of Zurich, Switzerland
‘The concept of the soft budget constraint was first developed by the Hungarian economist Janos Kornai in relation to the planned economies of Eastern Europe. More recently, the concept has been applied to professional team sports in Western as well as Eastern Europe, based on the notion that clubs frequently become insolvent and have to be bailed out by external benefactors. This is consistent with win maximisation models with a tendency to overinvest in players (see in particular the chapters by Wladimir Andreff and Stefan Szymanski). Despite the fact that the book is almost wholly devoted to professional football it is a very useful starting point for those sports economists and others wishing to become familiar with the concept.’ -- Peter J. Sloane, Swansea University, UK and IZA, Germany
Table of ContentsContents: Foreword xvii Miklós Rosta Acknowledgements xx Obituary, János Kornai (1928–2021) xxi Klaus Nielsen 1 Introduction: new research pathways in the soft budget constraint approach 1 Rasmus K. Storm, Klaus Nielsen, and Zsolt Havran 2 Soft budget constraints and institutional logics in European Football 12 Bernt Arne Bertheussen and Harry Arne Solberg 3 Hardening the soft budget constraint in professional team sports: why is it so hard? 33 Wladimir Andreff 4 Budget constraints in French professional football: contrasting situations 77 Nadine Dermit-Richard and Aurélien François 5 Heterogeneity of budget constraints in Hungarian and Polish football 103 Karolina Nessel, Zsolt Havran and Tünde Máté 6 The soft budget constraint syndrome in Hungarian professional football from a Central and Eastern European perspective 130 Zsolt Havran and Krisztina András 7 Is there evidence of softness in the budget constraint in football? Some evidence from English clubs 155 Stefan Szymanski 8 Limits of softness in professional team sport clubs 172 Klaus Nielsen, Christian Gjersing Nielsen and Rasmus K. Storm Index
