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In this article, we discuss, from an economic perspective, two alternative views of
restrictions of competition by sports associations. The horizontal approach views
such restrictions as an agreement among the participants of a sports league with
the sports association merely representing an organization executing the horizontal
cooperation. In contrast, the vertical approach views the sports association as
being a dominant upstream firm enjoying a monopoly position on the market
stage for competition organizing services, an important input for the actual
product—the sports game. Taking the recent Financial Fair Play (FFP) initiative
by UEFA (the Union of European Football Associations) as an example, we
demonstrate that the different views lead to different assessments of restrictive
effects and, thus, matter for competition policy decisions. The economic story of
the potential restrictive effect of FFP on players’ and player agents’ income may
fit more plausibly to the horizontal approach, whereas the potentially anticompetitive foreclosure and deterrence effects of FFP may be economically more
soundly reasoned by taking the vertical approach
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