A football on a field

Manchester City and Saracens – economic theory in action

The Saracens salary cap scandal and news that Manchester City allegedly breached UEFA’s financial fairplay rules have threatened the integrity of the clubs and the sports respectively.

This article originally appeared in The Conversation.

But it should not come as a great surprise. Economic theory predicts that if the rewards are high enough, then there will always be those who are willing to take risks to circumvent the regulations.

In January Saracens, the reigning Premiership rugby champions, were handed a further 70-point deduction which will ensure they finish bottom of the table. The club were initially docked 35 points and fined £5.36 million for breaching the cap between 2016 and 2019 and were subsequently relegated after being unable to prove they could meet the £7 million cap on wages for this season.

In the world of football, Manchester City could face sanctions in the Premier League, potentially being docked points, for the similar alleged Financial Fair Play breaches that resulted in UEFA imposing a two-year ban from the Champions League and €30 million fine (the club is appealing the ruling).

Sports teams have always been deeply embedded in social and cultural life. But the perceived economic role of sports teams, and their economic analysis, is a more recent development in the UK...

Professor Paul Downward, a Professor of Economics in the School of Sport, Exercise and Health Sciences, discusses how the Manchester City news and the Saracens scandal are examples of economic theory in action in the Conversation.

Read the full article here

Notes for editors

Press release reference number: 20/23

Loughborough University is equipped with a live in-house broadcast unit via the Globelynx network. To arrange an interview with one of our experts please contact the press office on 01509 223491. Bookings can be made online via www.globelynx.com

Loughborough is one of the country’s leading universities, with an international reputation for research that matters, excellence in teaching, strong links with industry, and unrivalled achievement in sport and its underpinning academic disciplines.

It has been awarded five stars in the independent QS Stars university rating scheme, named the best university in the world for sports-related subjects in the 2019 QS World University Rankings, University of the Year by The Times and Sunday Times University Guide 2019 and top in the country for its student experience in the 2018 THE Student Experience Survey.

Loughborough is in the top 10 of every national league table, being ranked 4th in the Guardian University League Table 2020, 5th in the Times and Sunday Times Good University Guide 2019 and 8th in The UK Complete University Guide 2020.

Loughborough is consistently ranked in the top twenty of UK universities in the Times Higher Education’s ‘table of tables’ and is in the top 10 in England for research intensity. In recognition of its contribution to the sector, Loughborough has been awarded seven Queen's Anniversary Prizes.

The Loughborough University London campus is based on the Queen Elizabeth Olympic Park and offers postgraduate and executive-level education, as well as research and enterprise opportunities. It is home to influential thought leaders, pioneering researchers and creative innovators who provide students with the highest quality of teaching and the very latest in modern thinking.