French 75% tax rate: An opportunity to optimize the attractiveness of the French soccer league

Citation

Terrien M, Scelles N & Durand C (2016) French 75% tax rate: An opportunity to optimize the attractiveness of the French soccer league. International Journal of Sport Finance, 11 (3), pp. 183-203. http://fitpublishing.com/journals/international-journal-sport-finance-ijsf-113

Abstract
This paper analyzes the impact of the French 75% income tax rate on the attractiveness of the French soccer league. The concerns are less about its financial implications for clubs than about the possible decrease in its attractiveness. A classical model of professional team sport leagues is employed to measure the Nash equilibrium competitive balance and the stock of talent to assess the effect of the new taxation. We then propose two hypotheses corresponding to specific situations in the French soccer league: “social and fiscal disparities between clubs” and “sugar daddy” behavior. The new model predicts a polarization of the league and an exodus of talent, which could be mitigated by revenue sharing.

Keywords
competitive balance; professional team sports; sport economics; taxation

Journal
International Journal of Sport Finance: Volume 11, Issue 3