Insolvency in European football

This presentation reports the results of three studies on the insolvency of professional football clubs in England, France and Germany.

The data shows that the principal cause of insolvency is the underperformance of the football club, either in terms of its ability to achieve playing results given the quality of players on the staff, or in terms of its ability to generate a level of revenue consistent with performance in the league. Underperformance leading to insolvency is largely driven by random deviations of performance from expectations and is usually associated with relegation. Contrary to widely held beliefs, the incidence of insolvency is broadly similar in all three countries. As European football looks set enter a new period of financial instability I propose the establishment of an insurance fund to bail out insolvent clubs.

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