Related Party Transactions, Fair Value and Financial Statement Disclosures in Italian Professional Football Clubs

Transactions with related parties (RPTs) are numerous and frequent in the economy of companies; they are often made with different values from the ones in arm‟s length transactions, and sometimes for opportunistic reasons. Many cases of RPTs occur in the football sector too, and they are mostly related to sponsorship contracts revenues. Through the financial fair play regulations, UEFA encourages the clubs which want to get the license for competing in European tournaments, to count on their capability to operate on the basis of their own revenues. The reorientation of the professional football clubs economic governance requested by UEFA also provides specific RPTs disclosure as well as their fair value measurement, suggesting downward adjustments for RPT revenues, and upward adjustments for RPT costs, recorded at different value. However, the procedures and activities underlying the fair value measurement expose to some difficulties - among which the need for specific individual decision on each case, with the consequent high risk of treating similar cases differently - and are likely to undermine the effectiveness of the financial fair play rules. This contribution suggests an alternative hypothesis with respect to fair value measurement of RPTs for the UEFA FFP.