Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

George Batta

Rights Information

© 2015 Alexander J. Brugger


The purpose of this study is to investigate the effects of the new Financial Fair Play regulations set forth by the United European Football Association (UEFA) in 2011 on levels of earnings management in European professional football. The Financial Fair Play regulations were imposed as a means of controlling the exorbitant amounts of debt and player’s wages that have threatened the financial stability of many professional football clubs throughout Europe. While UEFA has boasted early success of the new regulations, citing reduced aggregate losses of all football clubs, reduced overdue payables, and less outstanding debt, this study examines levels of discretionary accruals before and after the new regulations were instated to determine if teams are managing earnings to avoid UEFA sanctions.

This study collected data from 137 different teams competing in UEFA competition from 2007 to 2013. Discretionary accruals were estimated using the Jones model (1991) as modified by Kothari et al. (2005). The findings of this study were largely inconclusive as a significant difference could not be found in levels of abnormal discretionary accruals before and after the introduction of Financial Fair Play. These findings may suggest that UEFA has succeeded in creating regulations that have curbed an era of extreme leveraging and club losses while simultaneously restricting additional opportunities for club owners to manage earnings that reduce both earnings quality and financial transparency. Overall, the findings from this study highlight the need for more widely available financial information from European football clubs and additional years of financial data under the new regulations.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.