Economic Models of French Amateur Soccer Clubs. From One Crisis to the Other: Which Transformation?

Abstract

This article presents economic models at work in French amateur soccer clubs playing National 1 and National 2 tiers. Teams’ sporting performance and clubs’ financial results as well as their revenue and expenditure statistical distribution are analysed by means of Principal Component Analysis. Then a k-means methodology is implemented in view to defining archetypical clusters that characterise French amateur soccer clubs during the 2008-2020 period. The latter span of time opens a window of opportunity for understanding transformations in club economic models since the subprime crisis and up to current global economic recession triggered by the Covid-19 pandemic. Following the club taxonomy, a comparative static analysis shows that more amateur soccer clubs are in more satisficing financial shape at the dawn of the sanitary crisis than when they have been facing the subprime crisis. The so-called “virtuous modesty” cluster includes a greater number of clubs in 2019/20 than in 2008/09.

Keywords:

• economic model
• economic crisis
• amateur sport
• amateur soccer
• Covid-19

Acknowledgements

The authors are grateful to the Club Financial Control Committee of the French Football Federation for the data provided for this research.

Disclosure Statement

No potential conflict of interest was reported by the authors.

Notes

1 https://www.france24.com/en/20200625-fifa-approves-1-5-billion-relief-fund-for-struggling-football-leagues

2 https://sport24.lefigaro.fr/football/ligue-1/actualites/fff-un-plan-de-30-m-pour-soutenir-les-clubs-amateurs-1003694

3 Wrong management consists in clubs being run with recurrent deficits and debts, and sometimes financial doping (in soccer), calling for bail-out or bankruptcy at the end of the day, not to speak about embezzlement, slush funds, fake accounting, and bungs (Andreff, 2019).

4 https://fr.statista.com/statistiques/479446/evolution-annuelle-du-pib-en-volume-france/

5 https://www.insee.fr/fr/statistiques/4653862?sommaire=4473296

6 N1 championship is played by amateur soccer associations together with professional clubs that have been relegated from Ligue 2 at the end of previous season.

7 Keeping only those clubs which have been playing N1 or N2 during at least three out of four selected seasons would have left only 37 clubs in the sample.

8 Most revenues are granted to an amateur soccer club at the dawn of the season (or even slightly earlier) and will not necessarily depend any longer on sporting outcomes witnessed during the current season; revenues rather depend on sporting outcomes during the previous season.

9 Beyond transportation costs for playing away matches (a lump sum per kilometre), FFF aid depends on the club’s license and a financial aid for the development of women’s soccer.

10 Just one club in cluster 4 never played a professional tier: Fleury (even though its female top team plays the French women’s soccer top tier). Six clubs have played Ligue 1 or Ligue 2 during several seasons over 2008/09 – 2019/20.

11 The number of observations in clusters 2 and 4 is too small to make relevant an exercise of comparative static when the season is retained as the observation period.

12 Where a sponsor or a local authority is principal and the club is agent.

13 For technicalities about the exemption, see https://www.urssaf.fr/portail/home/employeur/calculer-les-cotisations/la-base-de-calcul/cas-particuliers–bases-forfaita/lassociation-de-sport/le-sportif-entraineur-personne-q/la-franchise-de-cotisations.html

Additional information

Notes on contributors

Mickael Terrien

Mickael Terrien (Ph.D., University of Caen-Normandie, France) is a senior lecturer in sport management. His research interests include sport economics, finance, and management. He completed his PhD which was awarded the 2017 prize of the best French PhD in sport economics (French Ministry of Sports). He has published several papers in peer-refereed journals in the fields of sports.

Bastien Dufau

Bastien Dufau (Ph.D., University Paris Nanterre – Chaire Economie du Climat - Rexecode) is a teaching assistant in Economics at Bordeaux University. His research activity started with environmental economics and econometrics. He is now work on various topics such as sport economics or corporate social responsibility.

Yann Carin

Yann Carin (Ph.D., University of Limoges, France) works in the faculty of sports sciences and physical education at the University of Lille in France. Hisresearch interests include sport finance, management, and entrepreneurship. He is a member of the National Federal Commission for Club Control. He has produced some studies on the economic effects of Covid-19 in sport. His work has appeared in such journals as the International Journal of Sport Finance and others papers in peer-refereed journals in the fields of sports.

Wladimir Andreff

Wladimir Andreff is an honorary Professor at the University Paris 1 Panthéon-Sorbonne and President of the Scientific Council at the Observatory of the sports economy (French Ministry of Sports), and Honorary President of the International Association of Sports Economists and of the European Sports Economics Association, was awarded the 2019 Chelladurai Award of the European Association of Sport Management.